Monday, February 15, 2016

Govt. isn't abusing its powers if it requires employees to travel via Air India to avail of LTC

Where Government employees were asked by Government to undertake air travel under LTC from OP airlines, Government being consumer enjoyed liberty to exercise its choice of airlines and no case of contravention of sections 3 and 4 was made out against Government and OP airlines


a)  The informant, a Government employee, filed information against Air India, its subsidiaries and the Government of India alleging contravention of section 4 of Competition Act, 2012
b)  It was alleged that Government forced through its policy/directives orders employees to avail air travel services offered only by Air India for Leave Travel Concession (LTC) Scheme at a price which was much higher than those offered by its competitors in market.
c)  The informant also stated that, despite being conscious of the said anti-competitive practices of Air India and Other Airlines such as Jet Airways, Spice jet Airlines, Indigo Airlines, Go Air Airlines and Vistara Airlines had remained silent which might be attributed to a cartel amongst them or because of the fear of a regulatory backlash from Government of India
d)  The informant prayed before the Commission to inter alia impose penalties on Air India for engaging in abuse of dominant position, direct Government to discontinue its present practices of favouring Air India

The Competition Commission of India held as under:

1)    The Government was consumer of air travel services as tickets purchased under LTC scheme were funded by it and being a consumer, the Government enjoyed liberty to exercise its choice even if such exercise of choice caused a favourable treatment for Air India or other player operating in market. Thus, no case could be made out against Government under any of provisions of Act

2)    Once Government had exercised its free choice to avail services of Air India, allegation of abuse for charging excessive (unfair) price against Air India also did not hold. Thus, no case of contravention of provisions of either section 3 or 4 of the Competition Act, 2002 could be made out against Opposite Parties – [2016] 66 22 (CCI)

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