Thursday, December 31, 2015

No abuse of dominance by 'Uber' in providing taxies at low fares; CCI rejects complaint of Meru Cabs


Where there was existence of yellow taxis which posed a significant competitive constraint on other taxi operators in the city of Kolkata. In such a scenario, it was difficult to accept the contention of the Meru cabs regarding UBER Group’s dominance in providing the radio taxi services in Kolkata


Facts:


a)  Meru Travel Solutions Pvt. Ltd. (‘Meru cabs’) filed information against Uber Group alleging abuse of dominance by latter in the radio taxi service market in Kolkata. It was alleged that Uber Group was following the practice of predatory pricing in Kolkata and was able to offer low prices as it had received huge global funding.

b)  Meru cabs also alleged that before Uber entered the relevant market, the average per price kilometre was Rs 20 in Kolkata and after its entrance to the market it started offering Rs 9 per km even when it was incurring losses

c)  The Meru Cab prayed CCI to direct the DG to investigate the matter and hold the conduct of Uber Group to be abusive in the relevant market.


d)  However, Uber Group contended that the active presence of yellow taxies in Kolkata poses a strong competitive constraint on radio taxis which warrants inclusion of yellow taxis in the relevant product market definition.

The Competition Commission of India held as under:

1) The existence of yellow taxis poses a significant competitive constraint on the behaviour of other taxi operators in the city of Kolkata. In such a scenario, it was difficult to accept the contention of the Meru cabs regarding Uber Group’s dominance in the relevant market. The Commission dismissed the complaint filed by Meru cab against Uber group and held that the UBER Group did not hold a dominant position in the relevant market. - MERU TRAVEL SOLUTIONS (P.) LTD. V. UBER INDIA SYSTEMS (P.) LTD. [2015] 64 TAXMANN.COM 408 (CCI)
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