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Sunday, August 01, 2021

CCI rejects anti-competitive conduct charges against Uber

Meru had alleged that low prices charged to customers and high incentives offered to drivers by Uber were aimed at eliminating competition.

Written by Karunjit Singh | New Delhi |
July 15, 2021
Meru had also alleged that Uber had entered into exclusivity contracts with drivers to prevent them from working with other taxi operators.

The Competition regulator on Wednesday dismissed allegations of antitrust violations against cab aggregator Uber levelled by Meru, noting that the former is not a dominant player in the market.

Meru had alleged that low prices charged to customers and high incentives offered to drivers by Uber were aimed at eliminating competition. Meru had also alleged that Uber had entered into exclusivity contracts with drivers to prevent them from working with other taxi operators.

“… despite the alleged practices of Uber, which have been argued to be anti-competitive, Ola has grown in the market in almost equal measure. The competitive constraints posed by Ola and Uber on each other outweigh the anti-competitive effects alleged by Meru,” the Competition Commission of India (CCI) said in its order. It added that incentives offered by Uber did not meet “the legal test” of an exclusionary agreement that would cause an appreciable adverse effect on competition.

The order dismissing the charges came despite a conclusion by the investigative arm of the CCI that Uber and Ola had adopted a “below-cost pricing strategy” in the Delhi-NCR radio taxi market between January 2014 and September 2017 as neither company was a dominant player.

MM Sharma, head of competition law at Vaish Associates said, “There is lacunae in the present Act because it does not address the attempt to monopolise, which both Ola and Uber can be accused of indulging in,” adding that the platform-based models of Uber and Ola had destroyed the level-playing field between platforms and asset-based models through their strong network effects and the use of advanced analytics.

Sharma did, however, note that the CCI order was well reasoned and based on a sound economic analysis under the existing legal framework. “CCI could have waited for more time to see the effect on Competition instead of closing the case,” he said.

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