Surinder Singh Barmi v.

BCCI : 
Analysis of the Competition Law 
principles 

FACTUAL BACKGROUND

1. This case arose on the basis of an information filed by Sh. Surinder Singh Barmi (Informant),
a cricket fan from New Delhi against Board for Control of Cricket in India (hereinafter
“BCCI”) to the Competition Commission of India (hereinafter “CCI”) under Section 19(1)(a)
of The Competition Act, 2002 (hereinafter ”Act”) alleging gross violations of Section 4 of the
Act, based on which the Commission admitted a prima facie case in the favour of the
Informant and subsequently passed an order in his favour.
2. The ​earlier dated order passed by CCI under ​Section 27 of the Act ​found the conduct of the
BCCI to be in total contravention of Section 4 of the Act that prohibits an “enterprise” from
abusing its dominant position in the relevant market.
3. The order stated that organizing private professional cricket leagues/events in India
unequivocally demonstrated BCCI’s dominant position in the market. The representation
given by BCCI under clause 9.1(c)(i) of its IPL Media Rights agreement entered into with the
broadcasters of Indian Premier League (“IPL”), that “​it shall not organize, sanction,
recognize, or support during the Rights period another professional domestic Indian T20
competition that is competitive to the league​” was found to be in contravention of ​Section
4(2)(c) of the Act​, after having clearly assumed the regulatory powers in the commercial
agreement.
4. Aggrieved by the earlier dated order of the Commission, BCCI preferred an appeal before the
erstwhile Hon’ble Competition Appellate Tribunal (hereinafter, “COMPAT”). The
COMPAT, set aside the Commission’s earlier order dated 8th directing the Commission to
start the matter afresh after finding that the earlier order inconsistent with the very significant
principles of natural justice, because the said clause was neither referred in the order, passed
under Section 26(1) nor the Director General (“DG”) recorded any finding with regard to its
 validity and on this count the appellant was not accorded an opportunity to defend the said
clause.
5. The Commission re-directed the DG to conduct further investigation into the matter in
accordance with the directions given by COMPAT.
6. The DG, in its report, cited the pyramid structure of cricket governing bodies; different types
of cricket matches, differences in professional domestic cricket leagues and other formats of
cricket and the similarity of rules and regulations governing organization of cricket events
across India, and concluded that relevant market for the purposes of dominant position is the
‘​organisation of professional domestic cricket league/events in India​’.
7. The supplementary investigation validated the fact that BCCI enjoys a dominant position in
the relevant market by analysing its market share, size, resources and economic power, the
dependence of consumers and high entry barriers. Further, the rules/regulations/bye-laws of
International Cricket Council (hereinafter, ‘ICC’) and BCCI reinforced the absolute
dominance of BCCI in the relevant market.
8. The DG submitted that BCCI’s monopolised rules (Rule 28(b) and (d) of ​BCCI Rules​) did not
authorise any other enterprise to organise a professional cricket league in India and thereby it
amounted to a clear violation of Section 4(2)(c) of the Act.
9. The Commission relied on the supplementary investigation report and opined that Rule 28 of
the BCCI Rules that provides permission for conducting cricket match or tournament will be
accorded only to the members of BCCI and Rule 29 that restrict any player, official, umpire,
member associated with BCCI to partake in a ‘Disapproved Cricket’ tournament was totally
against the spirit and letter of Section 4(2)(c) of the Act. ​Section 32 of ICC Bye-Laws defines
‘Disapproved Cricket’ as any cricketing event that has not been granted a valid sanction of
the member in whose territory it is being played.
10. Thereafter the Commission found the said clause 9.1(c)(i) of IPL Media Rights Agreement
read in conjunction with BCCI’s restrictive rules and ICC bye-laws to be in contravention of
Section 4(2)(c) of the Act.

BCCI’s CONTENTIONS:

1. BCCI contended that is not an ‘enterprise’ within the meaning of ​Section 2(h) of the Act,
placing reliance on the Tamil Nadu Societies Registration Act, 1975, that envisages BCCI as
a ‘not-for-profit’ society established to promote the sport of cricket in India and not engaged
in any commercial activity.
 2. BCCI relied upon the judgment of the Hon’ble Supreme Court in Secretary, ​Ministry of
Information and Broadcasting, Government of India and Others v. ​Cricket Association of
Bengal and Others [​1995 (2) SCC 161​] wherein Supreme Court held that sporting
organisations like BCCI/CAB should not be regarded as an enterprise by placing them at par
with other commercial societies engaged in sponsoring sports events for profits and hence
Section 4 of the Act is inapplicable in the instant matter.
3. The DG erred in chalking out the scenario of relevant market by not taking into consideration
viewpoint of consumers. In support of this contention, BCCI filed an Economist Report that
described the relevant market as a market focussed on securing entertainment for its
consumers during the prime time of entertainment programmes. It further argued that the live
telecast of IPL matches is never aired on sports based channels but entertainment channels
and thereby the scope of the relevant market is much wider in sense of professional leagues.
4. BCCI further stated in its submissions that the Television rating point of other entertainment
programmes increased post IPL which distinctly suggests IPL is not a relevant market.
5. The DG relied upon market share, size, resources and economic power of BCCI, the
dependence of consumers and high entry barriers to conclude that BCCI enjoys a dominant
position in the relevant market.
6. Since BCCI is a not-for-profit organisation and its profits are being used for development of
cricket, its economic strength cannot be considered as a factor to conclude its dominance.
7. The DG’s report inaccurately concluded Rules 28(b) and Rule 28(d) of the BCCI rules
operating as anti-competitive rules, based on the rationale that BCCI prohibits any private
organisation to conduct cricket match/ tournament. However, Rule 28(b) provides that no
member or a Club affiliated to a member or “any other organisation” shall conduct cricket
match or tournament specified therein, without the approval of BCCI.
8. It is pertinent to note here that ‘any other organisation’ does not include private organisations
by reading the principle of ‘​ejusdem generis’​ into it and there is no prohibition on private
organisers to organise a professional domestic cricket league/event.

Dominant Position defined:

There have been myriad number of cases in the past decade wherein industry giants and luminaries have
monopolised the functions and operations of the services rendered by them in the relevant market by using
their financial wrath on small and financially vulnerable entities, which has gone on to create an obnoxious
anti-competitive atmosphere within the realms of the industry. These bulwark enterprises deploy murky
practices by enjoying ‘dominant position’, with the object of thrusting the growth of such vulnerable entities to
operate independently and carve a popular image of their own in the particular sector. Section 4 Competition
Act, 2002) defines Dominant Position as a position enjoyed by an enterprise whereby enables it to:

● operate independently of competitive forces prevailing in the relevant market;

● affect its competitors or consumers or the relevant market in its favour.

The settled position with regard to the dominant position was determined in the ​case ​Fast Track Call Cab Pvt.
Ltd. and Meru Travel Solutions Pvt. Ltd v. ​ANI Technologies Pvt. Ltd.,​ wherein the CCI while determining
whether OLA held a dominant position in the relevant market or not remarked that abuse of dominant position
under Section 4 would be attracted only when the entity under scrutiny holds a dominant position in the
relevant market. CCI also elaborated on the concept of dominant position and stated dominant position as a
position of economic strength enjoyed by the enterprise in the relevant market, which enables it to operate
independently of competitive forces prevailing in the relevant market or affect its competitor or consumer or
the relevant market in its favour.

Such an enterprise will be in a position to disregard market forces and unilaterally impose trading conditions,
fix prices, etc. The abuse may result in the restriction of competition or the elimination of effective
competition.

What Is Abuse of Dominant Position under Section 4 of Competition Act, 2002:

An enterprise in dominant position performs any of the following acts:

● directly or indirectly, imposes unfair or discriminatory practices.

● limits or restricts production of goods or provision of any services in any form.
● indulges in practice or practices resulting in a denial of market access.
● concludes of contracts subject to acceptance by other parties of supplementary obligations
which have no connection with the subject of such contracts; or
● uses its dominant position in one relevant market to enter into, or protect another relevant
market.

An undertaking in a dominant position is entitled also to pursue its own interests. However, such an
undertaking engages in abusive conduct when it makes use of the opportunities arising out of its dominant
position in such a way as to reap trading benefits which it would not have reaped if there had been normal and
sufficiently effective competition. This proposition was explained in the ​case​of ​Jupiter Gaming Solutions Pvt.
Ltd. v. ​Government of Goa & Ors.​, wherein CCI opined that abuse is said to occur when an enterprise uses its
dominant position in the relevant market in an exclusionary or /and an exploitative manner. In the case, the
Government’s tender bid of lottery contained certain conditions which apparently restricted the size of bidders
such as, minimum gross turnover of the participating entity, the participating entity should have experience of
at least three years. The CCI held that the Government of Goa by imposing such conditions abused its
dominant position denial/restriction of market access to the other parties in the relevant market.

Before deliberating upon the issue of BCCI’s alleged abuse of its dominant position within the relevant
market, it is imperative to construct the regulatory/custodian status of BCCI and whether it is an enterprise to
be incriminated under this act. BCCI has repeatedly flouted significant provisions of competition laws in the
current past, escaping its penal provisions by contending that under no circumstances its functional/operational
structure and financial dynamics (that form part of its transactions) qualify to be services of an ‘enterprise’ that
is covered under this Act. However, a thorough and comprehensive reading of the provision suggests BCCI’s
functioning and structure do not take it out of the ambit of the definition of ‘enterprise’ even though it is a
non-profit organisation. A detailed explanation with regard to BCCI’ regulatory/enterprise status has been
discussed in the next segment.

COMMISSION ORDER:

1. The CCI in its detailed order ruled that BCCI’ actions and conduct are ​de jure within the
realm of ​regulatory function/role​. By virtue of laying down the rules of the game and team
selection, affiliation to International Cricket Council (“​ICC​”) and operation Section 32 of the
ICC Manual, that authorizes BCCI to sanction/ approve cricket events in India (“Disapproved
Cricket”) BCCI continued to function as a statutory body having regulatory functions and
thereby is a ​de facto r​ egulator of cricket in India.
2. The Commission further noted that the Legislature intended to draft the Act that is primarily
centred upon the mechanisms and operation of an enterprise rather than the structural form of
the entity. It elaborated the definition of an enterprise by relying on ​Hemant Sharma & Ors. v.
Union of India & Ors, ​(​W.P. (C) 5770 of 2011​) wherein the Commission held chess
federation as an enterprise within the meaning of Section 2(h) of the Act and on similar lines
held BCCI accountable as an enterprise under Section 2(h) of the Act.
 3. The activities of sports organisations quite certainly fall within the ambit of an ​“enterprise​”
and the mere fact that BCCI is a “​not-for-profit”​ organisation does not take it out of the ambit
of definition of an “enterprise.
4. While determining the relevant market for the purposes of the dominance of powers, the
Commission carried out an extensive analysis of the market factors, the producer on the
supply side, the consumer on the demand side and the underlying product or service. I​ t based
its judgment on the reasoning that the Act considers the relevant market to comprise of goods
and services which could be interchangeably used by consumers which are to be tested on the
touchstone of a consumer’s perspective based and not the producer’s supply side.
5. Further the Commission after considering all the factors that carve out a systemic portrayal of
success of a Professional Cricket League in India (TRP ratings), held that even though
entertainment is the desired result of organising a Professional Cricket League, definition of
relevant market, in this case, cannot be replaced by other forms of sporting events and
entertainment programmes.
6. The Commission established the relevant market by differentiating between First Class/
County Leagues and Private Professional Leagues wherein foreign cricketers partake in large
numbers and held that the relevant market is the organisation of these Professional Cricket
Leagues.
7. With regard to the BCCI’s dominance in the relevant market, the Commission observed that
the anti-competitive rules deployed by BCCI (Rule 28(b) and (d) of BCCI Rules) in putting a
blanket ban on any member, official, umpire affiliated with BCCI to form an association with
an entity that organizes “Disapproved Cricket” (Section 32.1.1 of ICC Regulations 2011)
amounted to a clear dominance in the relevant market.
8. The Commission in its final statement laid down that owing to its regulatory role, monopoly
status, control over infrastructure, players, ability to control entry of other leagues and
historical evidence that BCCI is in a dominant position in the market for organizing private
professional league cricket events in India.
9. It further noted that the said clause (Clause 9.1 (c) (i)) and Rules 28(b) of BCCI Rules that
allow BCCI to dismiss the functioning of any event it fears being competitive to IPL clearly
and unequivocally amounts to a practice through a contractually binding agreement resulting
in denial of market access to any potential competitor, and is without a shadow of doubt
violation of Section 4(2)(c) of the Act.

PENALTIES IMPOSED BY THE COMMISSION:

1. BCCI shall cease and desist from indulging into the aforesaid conduct, which is found to be in
contravention of the provisions of Section 4(2)(c) read with Section 4(1) of the Act;
2. BCCI shall not place blanket restriction on organization of professional domestic cricket
league/ events by non-members.
3. Penalty of INR 52.24 Crores.