CCI has recently passed an order against BCCI in case of Sh. Surinder Singh Barmi v BCCI. The case is related to Franchisee, Media rights distribution by BCCI with respect to IPL matches. BCCI enjoys de facto monopoly over Cricket in India. It is generally known fact that BCCI is a very rich sports authority. We discuss the anti-competitive behavior of BCCI in this post. In a similar caseFédération Internationale de Football Association's conduct was examined for anti-competitive effect. The judgement is available here.
In every case of abuse of dominance, there is a four step process.
1. proving an entity enterprise or group of enterprise.
2. Defining relevant market (substitute products or services)
3. Establishing dominance in relevant market
4. Abuse of dominance
So in this case, BCCI was contending that it is not an enterprise because it is a non profit organisation.
Section 2(h) in The Competition Act, 2002
(h) " enterprise" means a person or a department of the Government, who
or which is, or has been, engaged in any activity, relating to the
production, storage, supply, distribution, acquisition or control of
articles or goods, or the provision of services of any kind, or in
investment, or in the business of acquiring, holding, underwriting or
dealing with shares, debentures or other securities of any other body
corporate, either directly or through one or more of its units or is
located at the same place where the enterprise is located or at a
different place or at different places, but does not include any
activity of the Government relatable to the sovereign functions of the
Governm divisions or subsidiaries, w ether such unit or division or
subsidiary nt including all activities carried on by the departments of
the Central Government dealing with atomic energy, currency, defence and
space. Explanation."
Concluding after analysing this definition profit is not the retirement anywhere. In the similar case Hemant Sharma and Others Vs. Union of India Chess Federation of India was considered enterprise by the Delhi High Court.
Organisational Structure of BCCI
BCCI is a registered society under Tamilnadu Societies Registration Act. It does not have any statutory authority. However having or not having statutory authority does not affect anti-competitive liability. BCCI issues franchisee, media rights. It is a commercial activity. And it is an enterprise under Competition Act 2002.
Defining Relevant Market
Defining relevant market is very complex phenomena in abuse of dominance. Anti-competitiveness depends upon how the relevant market is defined. An activity can be anti-competitive in narrow relevant market whilst same activity can be not anti-competitive due broad market definition due to increase in market share. Vice-versa can also be true. In a broader defined market a firm can be dominant. In a narrow defined market an enterprise may not have dominance. As in Google case, considering all types of advertisements. It has almost 99 percent market share. If all types of advertisements are treated as different market, it may not have dominance in the relevant market.
Similar is the case with BCCI as well. BCCI is a de-facto regulator of Cricket in India. Perhaps it gets the monopoly due to the membership of International Cricket Council (ICC).
So considering Indian Cricket as a relevant market BCCI has dominant position.
Regarding the substitutability of Cricket with other games, it need not be discussed that Cricket is not substitutable with any game in India. Though SSNIP is the economic test used for this analysis. SSNIP is examining the effect of 5-10% price rise on the demand. So here 5-10% rise in price is not expected to have any bearing on demand of Cricket.
Anti-competitive Issues
Irregularities in the grant of franchise rights for team ownership.
b. Irregularities in the grant of media rights for coverage of the league.
c. Irregularities in the award of sponsorship rights and other local contracts related to organization of IPL.
CCI held that BCCI has abused its dominant position.
Food for Thought:
1. Whether considering whole cricket sport as a relevant market is right?
2. If no, what should be the criteria for defining market?
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