CCI, in a significant order, has rejected allegations of anti-competitive conduct against Ola and Uber, through common ownership, in absence of any material or discernible effect.

Four separate cases were filed by Meru Travel Solutions. It was alleged that they have common investors and in future that might serve as a platform to facilitate collusive arrangement or exchange of sensitive information between them.

CCI held that:

(a)  In absence of any “discernible effect”, it would legally be untenable to hold that Ola and Uber would be influenced by the Directors having common shareholding, and that they could reach an agreement under Section 3 of the Competition Act.

(b)  The existence of alleged abusive conduct in assessment of dominance is a sine qua non to order investigation. It cannot be concluded that overlapping investments by common investors in competing firms can be a proxy for anti-competitive conduct.

(c)   Although no prima facie case can be established under Section 3 and 4, CCI will not hesitate to take action, if allegations of anti-competitive behavior found later. It shall closely monitor any such violations.

(d)  The market dynamics post common investments is yet to fully effectuate. The details regarding the impact of common investments are yet to unfold i.e. whether the common ownership has translated into control, etc.

(e)  The economic theory has not yet produced a definitive, tested prediction that establishes a causal relation between common ownership and softening of competition. It only suggests where common ownership translates into control; there can be potential harm to the competition in concentrated market.

For more information: https://www.cci.gov.in/sites/default/files/25%20-%2028%20of%202017.pdf