India’s NCLAT Issues Notice to CCI, Uber in Meru's Appeal Alleging Anti-competitive Practices

India’s NCLAT Issues Notice to CCI, Uber in Meru's Appeal Alleging Anti-competitive Practices
Photo: forbes.com.br 04.10.2023 555

Despite Meru's appeal having been filed in October 2021, the NCLAT issued notice in the case in October 2023.

The National Company Law Appellate Tribunal (NCLAT) on October 4, issued notice to the Competition Commission of India (CCI) and cab aggregating Uber in a plea by radio taxi company Meru.

In October 2021, Meru appealed against Uber, alleging that the latter engaged in anti-competitive practices from 2014 to 2017, including offering steep discounts to customers. This made it impossible for Meru and other competitors to survive in the Delhi-NCR market. Meru's lawyer presented this argument to the appellate tribunal, stating that several of Uber's competitors have either gone out of business or are on the verge of shutting down. However, the NCLAT issued a notice in the case in October 2023, despite Meru having filed the appeal two years earlier.

The NCLAT recognized that Uber was a new player in the Indian market from 2014 to 2017 and that the law allowed new companies to offer discounts to establish themselves. However, lawyers for Meru, Udyan Jain, and Abir Roy argued that Uber's practices had a negative impact on the ride-hailing industry. As a result, the NCLAT has issued a notice in the case and scheduled it for a hearing in January 2024.

Casefile:

In 2015, Meru moved the CCI against Uber alleging that the company was indulging in anti-competitive practices. It alleged that Uber was superior in terms of size, resources, and economic power to its competitors in Delhi-NCT. Furthermore, the company was making the consumers depend on it by offering lower fares and steep discounts thus establishing itself as a dominant player in the market.

Meru also alleged that Uber was using an incentive policy which is not economically justified, the policy is aimed at exclusively engaging the drivers to its network so as to exclude its competitors having access to such drivers.

In 2016, the CCI rejected Meru's complaint noting that it found no prima facie case against Uber. Meru took Uber and CCI to the appellate tribunal, which asked the Director General (DG) to conduct an investigation into Meru's allegation and submit a report accordingly.

Uber filed an appeal against this order at the Supreme Court. In 2019, the Supreme Court upheld the appellate tribunal's order and directed the DG to complete the investigation against Uber and file a report in six months. SC observed "Uber was losing Rs. 204 per trip in respect of every trip made by the cars of the fleet owners, which does not make any economic sense other than pointing to Uber’s intent to eliminate competition in the market.

The DG accordingly conducted an investigation and filed a report in August 2020. The DG concluded that Uber was not a dominant player in the market as it has active competition from Ola and other cab services. Since it's not in a dominant position, the other allegations stood rejected.

In July 2021, the CCI passed an order dismissing Meru's plea and accepting DG's report. Meru has approached the NCLAT against this order.

Source: Moneycontrol

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