Tuesday, September 16, 2014

CCI orders investigation against 'ICAI' as it was creating entry barriers to outsiders providing CPE seminars


Investigation was to be conducted against Institute of Chartered Accountants of India for abusing its dominant position in creating entry barrier to outsiders in providing CPE seminars.

Facts:


a)The informant was a qualified Chartered Accountant while opposite party was the Institute of Chartered Accountants of India (ICAI).

b)The Informant alleged that ICAI introduced CPE Scheme for its existing members, however, it did not allow any outside organization to provide CPE seminars other than program organizing units (‘POUs’)recognized by it.

c)The informant contended that ICAI had created an entry barrier for the others using its dominant position in the relevant market of organizing CPE seminars. Thus, informant had challenged the CPE policy of ICAI, being discriminatory and abusive in terms of section 4 of Competition Act, 2002 (‘the Act).

On appeal, the Competition Commission of India held as under:

1)There seemed to be force in the allegations of the informant that the restriction put in by ICAI in not allowing any other organization to conduct the CPE seminars for CPE credits, created an entry barrier for the other players in the relevant market.

2)Further, the choice of the members of ICAI in this case was limited. The members of ICAI had no option, but to attend the seminars organized by ICAI (whatever be the quality of seminars) to get the requisite CPE credits.

3)The restriction put on by ICAI did not meet the objectives sought to be achieved by its policy. There are hundreds of seminars and conferences organized every month across India by reputed chambers of commerce like CCI, FICCI, ASSOCHAM, NASSCOM, etc.

4)However, these seminars/conferences were not recognized by ICAI for CPE credits. Prima facie, it appeared to be an unreasonable restraint and the members of ICAI were left with no option but to compulsorily attend seminars organized by ICAI and its organs.

5)While ICAI, as a regulator of the accounting profession, had all the powers to prescribe a policy for continuous upgradation of its member through the CPE policy and recognition of POUs, however, on its non-regulatory function of organizing CPE seminars, restricting the same only to itself and its organs, prima facie appeared to be an arbitrary exercise of its powers and thus in contravention of the provisions of section 4 of the Act.

6)Therefore, the Director General was to be directed to investigate into allegation of misusing dominant position by ICAI.– ARUN ANANDAGIRI V. INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA [2014] 48 TAXMANN.COM 298 (CCI)

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