Surinder Singh Barmi v. Board for Control of Cricket in India (BCCI) [2013]113 CLA579 (CCI), 2013 CompLR 297 (CCI), [2013]118 SCL 226 (CCI)
The fact of the case - Surinder Singh is an informant here he filed an information inquiry under section 191 a of the Competition Act to the Competition Commission of India, his allegation was irregularities with BCCI, 1. grant of franchise right for team ownership. 2. Media’s right for coverage of the league. 3. Sponsorship rights and other local contracts. In the organization of the IPL, twenty-20 leagues run annually in India.
Here, the commission to pursue the above information passed an order under section 26(1) on 19 December 2010 directing the DG to investigate the matter the DG submitted its report on February 21 2012.
The issue arose in this case
1. Whether BCCI is an enterprise for the Competition Act to be imposed on it?
2. What is the de facto status of BCCI whether it is a regulator of cricket in India or an organiser of cricket events in India?
3. does the actions of BCCI associated with the organisation of IPL contravene any of the provisions of the Competition Act, in section 4 of the Competition Act?
Here, the 1st issue arose because of the scope of section 19(1) (a) of the act complaint with CCI alleging irregularities with BCCI, this investigation can be conducted by the commission under section 4 only for an enterprise, reason the section 4 states that 'No enterprise or group shall abuse it’s dominant position’.
CCI held that BCCI is an enterprise under competition, because the BCCI’s role as the ICC governing body for cricket in India was “custodian” for the game and “organiser” of the matches, therefore the BCCI was a “not for profit” society but its activities were revenue generating (e.g. it sold media’s right as well as the ticket) it is given de facto recognition even though the government of India does not recognise the BCCI it enjoys the Monopoly as regulator as it was the first mover.
In the case of Hemant Sharma v. Union of India,2012 Delhi High Court held that BCCI is an enterprise because it has an economic content accordingly CCI held that insofar as their entrepreneurial revenue-generating conduct is concerned all sports associations are to be regarded as enterprises for the act and treated at par with other business establishments the competition act will be applicable on BCCI.
2nd issue - what is relevant market -relevant market means the market which may be determined by the commission with reference to the relevant product market or relevant geographical market or with reference of both markets. Here, the commission differentiated - 1) sports from other forms of television entertainment, 2) cricket from other forms of sports, 3) international cricket (for example test matches, one day international) from cricket played in a “private professional league ” like IPL the differentiation is based on the qualitative and subjective demand considerations as well as on view data, the commission observed that cricket cannot be substitutable with other sports or entertainment. But the commission checks whether there are differences between two broad categories of the event viz. International events and private professional leagues, therefore the commission opined that the relevant market is the organisation of private professional cricket leagues in India.
3rd issue - CCI held, that undountedly the most significant source of dominance is the regulatory power of BCCI. In this case, BCCI was already the Monopoly organiser of first-class/ international cricket leagues and matches in India. With the private professional league, BCCI extended its Monopoly to the new cricket genre in establishing the IPL. CCI held that the BCCI abused its dominant position by, >denying market access to potential competitors to the IPL by binding itself to organise sanction or recognise any private professional domestic leagues other than the IPL. >Limiting the number of franchises in one private professional league (IPL).
BCCI has gained hugely from the IPL format of cricket in financial terms. There are no other competitors in the market Nov was anyone allowed to emerge due to the BCCI strategy of monopolising the entire market. BCCI had kept out other competitors and used its position as a de facto regulator body which prevented many players from having opted for the competitive league its violation of section 4 (2) © of the act.
Decision - CCI concluded that BCCI was abusing its dominant position and violating section 4 (2) © of the act and imposed a penalty of the amount of 52.24 crores, directing the BCCI to cease any practice in future denying market access to potential competitors. Also asked to desist from using its regulatory powers while deciding on any commercial matters and also directed that BCCI shall set up an effective internal control system which will work in good faith and after due diligence.
