Competition LawRulings

CCI holds that “adding value for consumers” not contrary to competition, dismisses compliant against NIIT

Ms. Pankaj Gupta vs. NIIT Limited

CCI holds that improving efficiency in the market and adding value for the consumers is not contrary to the dynamics of competition in the relevant market.

In the present case, Ms. Pankaj Gupta and Shri Lakshmi Reddy Eddula (Informants) filed complaint against  NIIT Limited (OP). Informants had alleged that OP had abused its dominant position which was in contravention of Section 4 and OP had further indulged in anti- competitive practices in contravention to Section 3 of the Act. Informants as franchisees of the NIIT Limited had granted rights to offer the Post Graduate Diploma in Banking Operations (PGDBO) course conducted by the OP in collaboration with ICICI Bank but, subsequently, the OP had revoked the rights for offering the said course from the Informants.  Hence, Informant alleged that the OP had unfairly continued the same course at its own centre at Basheerbagh, Hyderabad. Informant further OP had directly entered into an agreement with ‘Accenture’, a global management consulting and professional service provider, for its courses by offering highly discounted prices as compared to the prices available for Hyderabad city, thereby eating into the revenue of the Informants.

CCI considers relevant market as ‘market for the provision of computer education and training services in India’ and further holds that there are many other players such as Aptech, CSC Computer Education Private Ltd., Jetking, HCL Career Development Centre, IICT Computer Academy, APOLLO Computer Education and DUCAT operating in the relevant market and offering similar courses in the area of computer education as offered by the OP. CCI further holds that OP is operating in a competitive environment and faces immense rivalry from a large number of the similarly placed players.

CCI further clarifies, “Even if the relevant market is narrowed to the city of Hyderabad, the OP is not the dominant player with presence of large players like Jetking, Aptech etc in the market.”

CCI holds that OP does not possess the market power to act independently of the competitive forces in the relevant market or has the ability to affect its competitors or consumers in the relevant market in its favour. Therefore, the OP is not found to be in a dominant position in the relevant market.

CCI observes that almost all the services including professional training are imparted through online mode rather than through the traditional classroom mode to meet growing requirements of the consumers.

Further with regard to the allegation of discrimination between franchisees, CCI observes that difference of the price was due to differences in the factors such as lower awareness in non-metro areas, lack of affordability by the student in non metros, responsibility of marketing and job placements of students etc.. Hence, CCI holds the differential pricing of courses and revenue sharing agreement by the OP is not to arbitrary and thus the allegations of the Informants cannot be said to be justified.

Accordingly, CCI dismisses the complaint against NIIT Limited.

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1 thought on “CCI holds that “adding value for consumers” not contrary to competition, dismisses compliant against NIIT”

  1. How I wish a one sided report was not published without ascertaining the other side. The order favouring NIIT is marred by material illegality. CCI has the unethical practice of permitting its retired officials to appear in proceedings and represent clients. The outcome is obvious. CCI did not even provide the Informants a complete set of documents filed by NIIT. NIIT was represented by Vinod Dhall, a former Chairperson of CCI. Two writ petitions have been filed seeking quash of CCI orders before High Court of AP and Telangana, one of them being WP 42223/2017. CCI order is contradictory to its own order dated 14 June 2017 where the winning party was represented by Vinod Dhall and where Hyundai was fined Rs 87 crores by CCI. CCI has been directed by High Court to file all the cases papers on or before 18 Jan 2018. People should know the truth about CCI and how orders can be engineered by using the services of retired officials.

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