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CCI, TRAI and Regulation of Predatory Pricing

Getting Regulation Right Blog Aspect
Dr Archana Gulati
Published Aug 20, 2017
Updated Sep 03, 2023
Recently there was a news item about a letter written by CCI to TRAI highlighting the role and expertise of CCI in post facto assessment of occurrence predatory pricing in any sector. This was in response to TRAI’s consultation paper on Regulatory Principles of Tariff Assessment. 
This paper  seeks to address inter alia the issue of regulation of promotional offers and prevention of anti-competitive conduct in this regard.
TRAI’s jurisdiction as regards telecom tariff is outlined in 
 Section 11(2) of the Chapter III of the Telecom Regulatory Authority of India Act, 1997 [that] lays down that: “(2) Notwithstanding anything contained in the Indian Telegraph Act, 1885 (13 of 1885), the Authority may, from time to time, by order, notify in the Official Gazette the rates at which the telecommunication services within India and outside India shall be provided under this Act including the rates at which messages shall be transmitted to any country outside India: Provided that the Authority may notify different rates for different persons or class of persons for similar telecommunication services and where different rates are fixed as aforesaid the Authority shall record the reason therefor.”
As brought out in the consultation paper,
 Currently, except for the tariffs for national roaming, fixed rural telephony and leased lines, tariffs for other telecommunication service are under forbearance
TRAI’s recommendation (not binding on government) powers include inter alia measures to facilitate competition. 
The concepts of Significant Market Power in telecom regulation mostly apply to ex ante regulation of bottleneck facilities such as EU’s erstwhile regulation of leased lines. This concept based on percentage of ownership of resources is simplistic and too crude to handle a complex issue such as predation / abuse of dominance.
It is generally understood that given the existence of a Competition Regulator namely, Competition Commission of India whose jurisdiction includes telecommunications, TRAI’s role is ex ante facilitation of competition; CCI’s role is ex ante as far as merger control/review is concerned but ex post as  regards anti-trust matters such as abuse of dominance including predatory pricing.
Yet the Consultation paper after quoting liberally from various sections of the Competition Act  including those relating to delineation of relevant markets and abuse of dominance, (inexplicably)  still seeks views of stakeholders on inter alia:
 What should be the different relevant markets – relevant product market & relevant geographic market – in telecom services? 
 How to define dominance in these relevant markets? Please suggest the criteria for determination of dominance.  
As someone who has several years of telecom policy experience and some degree of expertise in Competition law, I would agree with CCI’s viewpoint that  definitions of product and geographic markets and post  facto analysis of abuse of dominance including predatory pricing are best left to CCI. The Competition regulator has sophisticated tools and relevant expertise at its disposal, as also ample experience in these matters. It would conduct analysis on a case by case basis. This would include an appropriately nuanced approach to delineation of markets rather than being tied down by rigid  definitions based on percentages and technologies which are not only too simplistic, crude and blunt, but easily rendered irrelevant and obsolete. 
A multiplicity of definitions and approaches could also create a real danger of forum shopping by service providers to avoid effective regulation of competition. In any case, the already beleaguered telecom sector in India could do with less ambiguity and more clarity and certainty on regulatory matters.