CRITICAL REVIEW OF ANTI COMPETITIVE ISSUES IN SPORTS WITH

REFERENCE TO INDIAN COMPETITION LAW

A DISSERTATION SUBMITTED TO THE AMITY UNIVERSITY, NOIDA

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE
DEGREE OF B.A LL.B.(H)

SUBMITTED BY
AMAN GARG( A11911113176)

UNDER THE SUPERVISION OF

Ms. KOMAL VIG
ASST. PROFESSOR

AMITY LAW SCHOOL, NOIDA

AMITY UNIVERSITY,
UTTAR PRADESH

2
 DECLARATION BY THE CANDIDATE

I hereby declare that the dissertation entitled "Critical Review of anticompetitive issues in
sport with reference to Indian competition law" submitted at Amity University, Noida is the
outcome of my own work carried out under the supervision of Prof. komal vig at Amity
University, Noida.

I further declare that to the best of my knowledge the dissertation does not contain any part of work,
which has not been submitted for the award of any degree either in this University or any other
institutions without proper citation.

Place: NOIDA

Amity University, Noida

Date:

1
 CERTIFICATE OF SUPERVISOR

This is to certify that the work reported in the B.A LL.B.(H) dissertation entitled "Critical
Review of anticompetitive issues in sport with reference to Indian competition law",
submitted by Aman garg at Amity University, Noida is a bona fide record of his original work
carried out under my supervision. To the best of my knowledge and belief, the dissertation:
(i) embodied the work of the candidate himself; (ii) has duly been completed; and (iii) is up
to the standard both in respect of contents and language for being referred to the examiner.

Prof. Komal Vig

Place: Noida

Date: 6TH OCTOBER 2017

2
 ACKNOWLEDGEMENT

This dissertation is the outcome of the study by the Author. Any material used from different sources
has been thoroughly acknowledged. After the successful completion of my work I would like to
thank number of people.

I thank the esteemed director of this institution Mr. Aditya Tomer for inculcating the concept of
preparing a dissertation and allowing me to present my view point in a liberal manner.

I would further like to acknowledge the able guidance provided by my teacher, Prof. Komal vig at
Amity University, Noida, UP, as without her presence the dissertation would not have been possible.
I am highly indebted to my teacher for providing constant support and supervision despite her busy
schedule.

It gives me immense pleasure to express my deep and profound gratitude to Prof. Gargi Bhadoria
whose efforts and dedication made this study conceivable and viable in its present form. Her
untiring assiduity and stimulating response have been a great source of inspiration in completion of
the work.

I also feel pleasantly duty bound to further acknowledge the help extended to me by the Library
staff of Amity University, Noida, UP.

Above all, I appreciate the patience shown by my parents, who showered their blessings and
goodness upon me and who have suffered silently in the hope that this dissertation sees the light of
this day.

AMAN GARG

3
 TABLE OF CONTENTS

Declaration ........................... i

Certificate ............................. ii

Acknowledgment .................. iii

Table of Contents ................. iv-v

CHAPTERS

1. Introduction
1.1. Origin and Definitions: Competition

1.2. Competition Policy, Advocacy and Anti-Competition Practices

Competition Policy Competition Advocacy

Anti-Competitive Practices Monopoly

Abuse of Dominant Position Cartel

Anti-Competitive Agreements and Practices Tying

Arrangements/Agreements Concerted Refusal to Deal Group

Boycott Price-Fixing Agreements Joint Selling of Sports Media

Rights Judicially Crafted Principles Rule of Reason Per se rule

Quick Look

1.3. Sports

Origin and Definitions

International Definitions Indian Definitions Sports and the Law

1.4. Interrelationships

Antitrust and Labour

12
Antitrust and Consumer Protection

Antitrust, Sports and Entertainment

2. COMPETITION LAWS AND

SPORTS IN INDIA
2.1. Competition Law in India: An Introduction

Constitutional Foundation and India's Competition Laws

Constitutional Foundation

India's Competition laws

2.2. Sports in India

Sports Federations and Bodies in India

BCCI

Professional Sports Leagues

Sports Broadcasting

2.3. Anticompetitive Practices in Sports in India

BCCI v. 1CL

Rulings

Conclusions

Bibliography

13
 1. INTRODUCTION

1.1. ORIGIN AND DEFINITIONS:

COMPETITION

People of the same trade seldom meet together even for merriment and diversion,
but the conversation ends in a conspiracy against the public or in some contrivance
to raise prices.1
Legislation on 'competition' is not a naive concept as it dates back to around 50 B.C.,
the time when the oldest example of competition legislation, i.e., Lex Julia De Annona,
was enacted in the Roman Empire.2 It is fair to suggest that the Roman-Dutch jurists had
few illusions about the economic nature of monopoly3 power and the ways in which it may
be secured. 4 Moreover, there perception was clear that 'one of the potent means of
obtaining monopoly power has been attained, it commonly seeks to achieve its ends by the
method of the 'contrived society'.5

Later, in the 19th century, the United States (U.S.) enacted the Sherman Act, 1890
which heralded the age of codified laws on preserving and promoting competition. In other
parts of the world, the competition laws have assumed different names and forms but all
are aimed at creating a market for free andfair competition as an important tool in the
development of any economy.6

1
Adam Smith, The Wealth of Nations: An Inquiry into the Nature & Causes of the Wealth of Nations, 111
(Electronic Classic Series Pub., eprint 2005). The ebook is also available at http://www2.hn.psu.edu
/faculty/ jmanis/adam-smith/wealth-nations.pdf (accessed on 01.04.2014)
2
Late Prof. D.V. Cowan. "Ancient Origins of competition law: A survey on the law relating to the control of
monopoly in South Africa," 20(2) Advocate 38 (Aug; 2007), Also available at http://www.sabar.co.za /law-
journals/2007/august/2007-august-voI020-no2-contents.html (last visited on 01.04.2014). [Advocate journal
is is the mouthpiece of the South African Bar. It is a professional journal which provides information and
guidance on developments in the profession and the administration of justice]
3
Not only monopoly but all type of anticompetitive practices.
4
Supra note 10, at 40.
5
ibid.
6
In the U.K. and country like India, the focus was on curbing and restricting monopolies earlier, however,
later on the focus shifted to promoting competition. In the U.K., Restrictive Trade practices Act, 1956 was
replaced by the Competition Act, 1998 and now Enterprise Act, 2002. Similarly in India, Monopolies and
Restrictive Trade Practices Act, 1969 was replaced by-the Competition Act, 2002.
14
Now let us examine the origins and definitions of the term 'Competition'.

The word 'competition' has been derived from the Latin word competere which means
'to strive together.7

'Competition' has been defined in general terms:8

as involving the idea of struggle between rivals endeavouring to obtain the

same thing, and as meaning the act of seeking or endeavouring to gain what
another is endeavouring to gain at the same time; conflict for advantage; strife
for superiority it is also defined as a competition between rivals; a match; a
contest.

7
Charles T. Lewis and Charles Short, Latin Dictionaiy (Great Britain, 1966).
8
15A CJS Common Scold, § 3, at 114.
15
 1.2. COMPETITION POLICY, ADVOCACY
AND ANTI-COMPETITION PRACTISES
COMPETITION POLICY

As long as there is competition in any walk of life, so there will be some sharp
practice, but at least it is today generally and severely frowned upon where once it
was almost admired.9

Massimo Motta has defined the expression 'competition policy' in a very

lucid manner as the set of policies and laws which ensure that competition in the
marketplace is not restricted in a way that is detrimental to society.10 The goal of the

9
British Life and Thought series, British Sport and Games, (British Council). Extracted from Edward
Grayson Sport and the Law, 108 (Buttersworth, London , 3rd edn., 2000).
10
Massimo Mota, Competition Policy: Theory and Practice, 30 (Cambridge University Press, 2004) in
Justice B. S. Chauhan, "Indian Competition Law: Global Context," 54(3) Jill 321 (Jul.-Sept. 2012).
16
antitrust laws is to protect economic freedom and opportunity by promoting free and
fair competition in the marketplace.11

Competition helps a great deal and in a free market benefits consumers through lower
prices, better quality and greater choices12 It provides commerce the opportunity to have
a fair competition on price and quality by providing a level playing field, unhampered by
anticompetitive restraints.13 The anti-competition laws prohibit various practices which
restrain trade or have 'an adverse appreciable effect on competition',14 such as price-fixing
agreements and conspiracies, mergers which are likely to reduce the competitive vigour
of relevant markets, 15 A and predatory acts designed to create or achieve or maintain
monopoly power and abuse of such dominant position.

The Competition constitutes an important ingredient of any economy. Without free and
fair competition, all parties suffer whether the consumer or the manufacturers/suppliers or
the State. In the absence of competition, the trade practises will become monopolistic in
nature to the detriment of consumers.16 It discourages efficiency and innovation which
competition stimulates, thus making the society at large, suffer. 17 Competition gives a
whole gamut of choices and alternatives which leads to customer satisfaction.

o COMPETITION ADVOCACY

Competition advocacy together with competition law enforcement in individual

infringement cases a very important pillar relied upon by competition agencies around the
world when promoting effective competition.18

11
http://www.justice.gov/atr/about/mission.html. (last visited on 21.03.2014).
12
ibid
13
ibid.
14
Section 3 of the Competition Act, 2002. The section has been discussed in Chapter IV.
15
Anand and Kumar, at J-71-72. [the discussion on various anticompetitive practices have been discussed
in the next sub-chapter].

17
Ibid
18
Anand and Kumar, at J-71-72. [the discussion on various anticompetitive practices have been discussed
in the next sub-chapter.
17
The International Competition Network (TCN) in its report titled as 'Advocacy and
Competition Policy, 2002' defines the Competition Advocacy:19

Competition advocacy refers to those activities conducted by the competition authority

related to the promotion of a competitive environment for economic activities by means of
non-enforcement mechanisms, mainly through its relationships with other governmental
entities and by increasing public awareness of the benefits of competition.

In India, competition advocacy forms an integral part of the Competition Act.20 As stated
in the Concept note on Advocacy activities of CCI, 'the aim of Competition Advocacy is
to foster advice that will lead to more competitive market structure and business behaviour
without a direct intervention of the competition law authority, namely the Competition
commission of India.21

o ANTI-COMPETITIVE PRACTICES

The following are some of the recognised anticompetitive practises and the same have
been discussed conceptually hereinafter:

MONOPOLY

The term Monopoly means:22

In commercial law. A privilege or peculiar advantage vested in one or more

persons or companies, consisting in the exclusive right (or power) to carry

19
International Competition Network, Report: Advocacy and Competition Policy: (Advocacy Working
Group (iCN), 2002), Available at: www.internationalcompethionnetwork.org/Advocacyfinal.pdf (last
visited on 24.03.2004)
20
Competition Advocacy is under Section 49 in Chapter VII of the Competition Act, 2002 which is
reproduced hereunder: Sec. 49 (1) The Central Government may, in formulating a policy on competition
(including review of laws related to competition) or on any other matter, and a State Government may, in
formulating a policy on competition or any other matter, as the case may be , make a reference to the
Commission (Competition Commission of India) for its opinion on possible effect of such policy on
competition and on the receipt of such a reference, the Commission shall, within sixty days of making such
reference; give its opinion to the Central Government, or the State Government, as the case may be, which
may thereafter take further action as it deems fit.
21
Dr. S. D. Asrani, "Competition Law in India - A story of work in Progress," XXXVI (07) CS (Jul. 2006).
22
Henry Campbell Black, Black 's Law Dictionary, 1202 (WestPub. Co., 3rd ed., 1933).
18
 on a particular business or trade, manufacture a particular article, or control
the sale of the whole supply of a particular commodity.

In Volvo North America Corporation v. Men's International Professional Tennis

Council (MIPTC), the purport and ambit of Section 6 of the Clayton Act, 1914 was
explained:23

The offense of monopolisation consists of two elements, firstly, the

possession of monopoly in the relevant market; and secondly, the wilful
acquisition or maintenance of that power, as distinguished from growth or
development as a consequence of a superior product, business acumen, or
historic accident. It also speaks of attempted monopolisation which
constitutes three elements, (I) anti-competitive or exclusionary conduct; (2)
specific intent to monopolize; (3) a dangerous probability that the attempt
will succeed. The third is conspiracy to monopolize which consists of (1)
concerted action; (2) overt acts in furtherance of conspiracy; and (3) intention
to monopolise.

 ABUSE OF DOMINANT POSITION

The European Court of Justice explained the meaning of 'dominance' under Article,

European Community (E.C.):24

The dominant position just referred to [by Article 82] relates to a position of
economic strength enjoyed by an undertaking which "enables it to prevent
effective competition being maintained on the relevant market by affording
it the power to behave to -an appreciable extent independently of its
competitors, customers and ultimately of its consumers.

It has been held that the dominance must be seen in the relevant market as explained
above. Being dominant is not a violation of any competition law. The law on abuse of

23
857 F. 2d. 55 (1988). (Internal footnoting, quotations and references have been omitted.)
24
Philip Landolt, Modernised EC Competition Law in International Arbitration, 75 (Kluwer Law
International,
Netherlands, 2006)]

19
dominant position enunciates several instances of abuse of dominant position such as
excessive pricing25, predatory pricing26, price discrimination27, refusal to supply28, tying
arrangements29, limiting production30 etc. Abuse of Dominant position is to be seen in the
relevant market defined for the economic activity and then an investigation is undertaken
to assess the presence of abuse in the relevant market by a dominant enterprise.

 CARTEL

A Cartel is an association by agreement of companies or sections of companies having

common interests, designed to prevent extreme or unfair competition and to allocate
markets, and perhaps also to exchange scientific or technical knowledge or patent rights
and to standardize products, with competition in quality, efficiency and service for price
cutting.31

 ANTI-COMPETITIVE AGREEMENTS AND PRACTICES

Justice Brandeis while deciding the illegality of an agreement in Board of Trade

Chicago v. United States which is remembered as the Rule of Reason's most eloquent
statement, observed that:32

The legality of an agreement or regulation cannot be determined by so simple

a test, as whether it restrains competition. Every agreement concerning trade,
every regulation of trade, restrains. To bind, to restrain, is of their very
essence.-The true test of legality is whether the restraint imposed is such as
merely regulates and perhaps' thereby promotes competition or whether it is
such as may suppress or even destroy competition. To determine that

25
It must not be above the competitive value of prices.
26
Setting of prices which are sufficiently low in order to force the competitor out of the market.
27
Price discrimination becomes avusive if there is absence of any objective justification for differences.
28
Explained under Concerted Refusal to deal
29
Explained under Typing Arrangements.
30
this abuse is directed at the market in general.
31
54 AM. JUR. 2d, Monopolies et https:// bulk.resource.org/courts.gov/c/US/246/246. US.231.98.html).
32
246 US 231 (1918). (Available at https:// bulk.resource.org/courts.gov/c/US/246/246. US.231.98.html).
20
 question the court must ordinarily consider the facts peculiar to the business
to which the restraint is applied; its condition before and after the restraint
was imposed; the nature of the restraint and its effect, actual or probable. The
history of the restraint, the evil believed to exist, the reason for adopting the
particular remedy, the purpose or end sought to be attained, are all relevant
facts. This is not because a good intention will save an otherwise
objectionable regulation or the reverse; but because knowledge of intent may
help the court to interpret facts and to predict consequences.

■ Quick Look

The "quick look" test is applied when the practice has obvious anticompetitive effects,
such as price fixing. Under the quick look, it is unnecessary to examine whether the
defendant possessed market power.33

After having introduced the anti-competition practices and the rules of interpretation
universally recognised in different courts let's see the concept of sports.

1.3. SPORTS

Sport is part of every man and woman's heritage and its absence can never be compensated
for.34

Sport is a fundamental pillar of civil society. 35 The term 'Sports' cannot be uniquely
defined and therefore there is no universally accepted single reference definition. But the
term has over the years, acquired various definitions - some are restrictive, some wide and
some illustrative.71 For the purposes of understanding some have been outlined here:

33
Patrick K. Thornton, Sports Law, 140 (Jones and Bartlett, USA, 2011). .
34
Pierre de Coubertin (1863-1937), founder of modern Olympic Games.
35
Extracted from www.coe.int/t/dg4/epas/about/history_en.asp (last visited on 22.03.2014).
21
 o ORIGIN AND DEFINITIONS

The term 'sport" derives its origin from a French determined Middle English verb spurial
meaning 'to divert",36 and also the term desport meaning 'to divert'.37

Basically sport, like religion, defies definition. In a manner, it goes beyond

definitive terminology. Neither has the substance which can be identified. In
a sense, both sport and religion are beyond essence.38

Sport is 'an activity pursued for exercise or pleasure, usu. requiring some degree of
physical prowess, as hunting' fishing, racing, baseball, tennis, golf, bowling, wrestling,
boxing, etc. or a particular form of pastime.39

 INDIAN DEFINITIONS

In Indian statutes, the term sports' as a field or genre, has not been clearly defined. The
term has been classified and categorised in the List II - State List of the Seventh Schedule
of the Constitution of India, 1950 under the entry 'Entertainment'.40 It also finds mention
in the Arms Act and Indian Income Tax Act.41 However, these are context specific and
do not take into account the characteristics of the term 'Sport' within its ambit.

The Ministry of Justice, Government of India defines Sport as:42

1. hunting or shooting for sport or amusement.
2. some game or play

36
Webster's New Collegiate Dictionary, (Webster's, New York, 1995). The same has been referred to in
Mukul Mudgal, supra note 3.
37
S- Gardiner et al„ Sports Law, (Cavendish, London, 2nd ed., 2001).
38
Howard Slusher, Men, Sport and Existence: A Critical A nalysis iPhiladelphia: Lea and Febiger, 1967).
39
The Macquarie Dictionary, 1666 (Macquarie Library Pty. Ltd., 1981). [internal citations have been
omitted].
40
Entry 33.Theatres and dramatic performances; cinemas subject to the provisions of entry 60 of List I,
sports, entertainments and amusements. (7'h Schedule of the Constitution of India, 1950).
41
The Arms Act refers to the term "sport' for the purpose of licensing, while in the Income Tax Act it is
referred to for ascertaining income which does not form part of the total income, (extracted from Mukul
Mudgal, at 1).
42
The Ministry of Law, Government of India, Legal Glossary, 269 (Official Language (Legislative)
Commission, New Delhi, 1971).
22
The Kerala Sports Act of 2000 defines 'Sport' as:43

'Sports' shall include such activities organised as out-door games, athletics,

cames conducted in open place or country sports, indoor games and aquatic
sports and popular games such as equestrian, show jumping, cycling, motor
racing, mountaineering, boat racing, rifle shooting, kalaripayattu, fencing,
yoga and such other outdoor and indoor sports and games, chess,
gymnastics, wrestling, weightlifting, cycle polo and other Olympic
disciplines and include other physical activities which the State Government
may, by notification in the gazette specify as sports or games on the
recommendation of the State Sports Council.44

o SPORTS AND THE LAW

Sport in itself is a unique field as it is e in bounded with laws or rules of different nature
which are namely:

1. Playing rules, e.g. rules prohibiting unfair or fowl play;

2. Playing penal laws, e.g. field sanctions, yellow card in football;

3. Laws of administrative nature, e.g. suspensions, life bans imposed by governing

bodies;

4. National laws, e.g. civil (antitrust) or criminal.

The term 'sports law' is a misnomer.45 There is no specific sports law as such, and it'
would be more meaningful to adopt the rubric of 'sports and the law', for describing the

43
The Kerala Sports Act, 2000 is accessible at http:/www.sportscouncil.kerala.gov.in/Kerala_Sports_Act
2
JM0.php (last accessed on 25.02.2014).
44
The Act is available at http://mvw. dsya.kerala.gov. in/acts htm (last accessed on 02.03.2014).
45
id. at 22.
23
`various laws that govern different aspects of sports.46 Sports law is a conglomerate of
many laws which arise out of an interaction with other areas of law.47

The significance of studying sports and the law has increased with professionalization and
commercialisation of sports across the world including India, and the subsequent increase
in financial stakes in sports events, many disputes are becoming conspicuous and one such
ie which has been gaining momentum is anticompetitive practises in sports. The focus of
present study is to examine one such relationship which is Sports and Antitrust.

1.4. INTERRELATIONSHIPS

Sports leagues and associations may be monopolies. However, the question is whether
their actions run afoul of the antitrust laws. 48 The importance of antitrust litigation in
sports will not be abated and is the continued tool of choice for leagues or satellite
networks and media rights. 49 This sub-chapter discusses briefly the interrelations and
overlapping of Antitrust laws and other areas of law with pointed references to Sports field
to help understand appreciate the coming chapters.

o ANTITRUST, SPORTS AND ENTERTAINMENT

Sir Denis Follows in his potentially posthumous Loughborough College lecture in 1983
explained how:50

Sport at top level has become much more part and parcel of the entertainment world and
particularly so during the past thirty years. We have reached the stage where sport at top
level has become almost completely show business with everything one associates with
show biz - the cult of the individual, high salaries, the desire to present the game as a

46
ibid.
47
Sport law can broadly be deviled in to three categories: Amateur sport is vocational and there is no
remuneration and the sport is played for amusement and pleasure, played at school, university- levels. In
professional sports, athletes get paid for their participation and the relationship is contractual. International
sport is played at the international level where the athletes represent their respective countries.
48
Waiter T. Champion Jr., Fundamentals of Sports Law, 527 (Thomson West, USA, 2ndedn., 2004).
49
Id., at 527-528.
50
Edward Grayson, Sport and the Law. 106 (Buttersworth, London, 3rd ed., 2000).
24
spectacle — with more money, less sportsmanship, more emphasis on winning (emphasis
added) - and all this has largely come about through television.

He concludes by saying that:51

I have no fear for the future of sport at grass root level. But I do profess a fear for sport at
top level.

In my lifetime I have more or less seen an entertainment industry born and die. I refer to
the cinema. Is there any God given gift that protects League Football, [Sports
Organisations, Sports Boards]52 and County Cricket from such a fate.

The United States have had a long history of Sports and Antitrust laws. The association
even extends to the labour laws when antitrust laws are applied. In the U.S., antitrust laws
have been applied to sports differently.53 It goes without saying that the US' antitrust laws54
greater federal powers to examine the anticompetitive practises, antitrust law has had a
profound impact on professional sports.55 In addition, two of the three other major sports
leagues, as well as a number of now-defunct sports leagues, have frequently faced antitrust
challenges.56

In the U.S. unlike the 19th century the sports was unorganised but in the early first quarter
of the 20th century the professional sports leagues came into being. These leagues have
been responsible in holding various sports competitions within the State. Being the only
body-available in a particular sport their dominance comes naturally.

51
ibid.
52
The words spelled out in the brackets have been intentionally added to emphasise the growing
involvement of money and allied activities and practises which are rampant in the sports' governing
bodies/Sports Leagues leading to antitrust issues.
53
In Federal Baseball Club, Inc. v. National League of Professional Baseball Clubs 259 U.S. 200 (1922).
(in this case the sport Baseball was given the exemption unlike other sports like Football, Basketball etc
from antitrust laws.] The case has been discussed in detail in chapter II.
54
The Sherman Act, 1890 and the Clayton Antitrust Act, 1914.
55
Gary R. Roberts, Professional Sports and the Antitrust Laws, in The Business of Professional Sports, 135
(Paul D. Staudohar & James A. Vlangan (ed.), 1991) [quoted in John R. Gerba, "Instant Replay: A Review
of the Case of Maurice Clarett, the Application of the Non-Statutory Labor Exemption, and Its Protection of
the NFL Draft Eligibility Rule," 73 FLR 2385 (2005).]
56
ibid.
25
The equations tilted in favour of these bodies with the advent of television and media and
changed the face of the Sports. The liberalisation of the TV markets and the technical
developments in the TV and new media markets has created new opportunities for private
57
operators to provide media services to the public. Television has helped in
democratization of sports viewing.58 At the same time, this has created new unprecedented
demand for sports media rights.59 Across the world the value of TV rights are commonly
known. It is a big source of revenue alongside ticket sales and sponsoring. These are what
termed as 'Economic aspects of Sports.60 This has resulted in the concentration of rights in
the hands of sports federations which have the hegemony over the availability of such
rights and gets reduced further when these are distributed on an exclusive basis sold in
large packages, for a long duration and/or covering a large number of events. 'A cartel
remains a cartel even if it works in the sale of media rights of sports events' 61 and is a
subject to antitrust scrutiny.62

The field of sports is raising complex anticompetitive issues.

57
ibid.
58
Lovely Dasgupta, "Sports Broadcasting in India - Towards an Integrated Legal Framework," XXVIII-
XXIX DLR127 (2006-07).
59
SUPRA NOTE 131.
60
The economic aspect of sports is a well acknowledged judicial principle wherein the Courts case by case
basis severe the commercial aspects from the pure sport which is the actual game of play including the rules
and regulations governing the sports.
61
Supra note 131.
62
The issue has been elaborately dealt with in the Chapter LI and Chapter III.
26
CHAPTER-2

27
 COMPETITION LAWS AND
SPORTS IN INDIA
The present chapter has been devoted to a discussion on India's competition laws and how
the competition authority has dealt with the anti-competition issues in sports in India.
At the outset, it may be pertinent to mention that the present chapter has been divided into
5 sub-chapters. The sub-chapter 4.1 briefly introduces the topic with respect to India and
deals with the evolution of competition laws in India since Monopolies and Restrictive
Trade Practises Act, 1969 era till present and the need for enactment of the same. The sub-
chapter 4.2 has been devoted to discussion of Sports in India. The next sub-chapter 4.3 has
been crafted to discuss the case laws in the field of sports raising anticompetition issues in
India. Keeping up with the legacy of the 1st two chapters, the last sub-chapter concludes
the discussion under the present chapter.
4.1. COMPETITION LAW IN INDIA:
AN INTRODUCTION

The purpose of the Act'63 is not to protect businesses from the working of the market; it is

to protect the public from the failure of the market. The law directs itself not against conduct
which is competitive, even severely so, but against conduct which unfairly tends to destroy
competition itself. It does so not out of solicitude for private concerns but out of concern

for the public interest.64

....the only legitimate goal of Competition law is the maximisation of economic welfare'. 65

o CONSTITUTIONAL FOUNDATION

63
The Act is referred to Sherman Act, 1890. However, the quote can be used for stating the purpose
of any competition law or policy which restrains anticompetitive practises and promotes competition.
64
Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993),at 458.
Government of India, Report: A High Level Committee on Competition Policy and Law (Ministry of
65

Corporate Affairs, 1999)vat 29.The Committee is also known as Raghavan Committee as it was
constituted under the chairmanship of Mr. S.V.S. Raghavan.
28
 AND INDIA'S COMPETITION LAWS

• Constitutional Foundation

The enactment of the then Monopolies Restrictive Trade Practises Act, 1969 (MRTP)66

and the Competition Act, 200267 bore its origins to the Constitution of India, 1950. Articles

3868 and 39 (c)69 of the Constitution of India are the driving force which from a part of the

Directive Principles of State Policy70 are the guidelines to the State forming a part of Part

IV of the Constitution of India.71 The Article 37 defines the objectives of the Directive

66 The MRTP Act has been repealed and has been replaced by the Competition Act,
2002. The MRTP Act was enacted after the recommendations of Monopolies Inquiry
Committee (MIC) appointed under the Commission of inquiry Act, 1952. The major
terms of reference of MIC was to enquire into the extent of concentration of economic
power in private hands and steps to be taken to check the prevalence of monopolistic and restrictive
practices in important sectors of economic activity.
67
The Competition Act, 2002 [as amended upto date]. The Act has been amended twice one in 2006
and other in 2009.
68
Article 38. The State to secure a social order for the promotion of welfare of the people.—(1) The
State shall
strive to promote the welfare of the people by securing and protecting as effectively as it may a
social order in
which justice, social, economic and political, shall inform all the institutions of the national life.
(2) The State shall, in particular, strive to minimise the inequalities in income, and endeavour to
eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also
amongst groups of people residing in different areas or engaged in different vocations.
69
Article 39. The State shall, in particular, direct its policy towards securing—...
(c) that the operation of the economic system does not result in the concentration of wealth and
means of
production to the common detriment.
70
Hereinafter referred to as the Directive principles.
71
The Directive principles have been described as forerunners of the United Nations convention on
Right to Development as an inalienable human right.However, these are not enforceable in any court
of law.See, Air India Statutory Corporation v. United Labour Union (1997)9 SCC 377, at 415-416, at
para 38.
29
principles which state that 'the principles therein laid therein are nevertheless fundamental
in the governance of the country and it shall be the duty of the State to apply these principles
in making laws'.

Thus, the principles behind the Competition policy are sanguine and have an objective to
promote and propagate an all round welfare and protection of interests in the society.

• India's Competition laws

India started its journey with the enactment of MRTP Act.72 However, with the passage of

time and especially after the time wlien economic reforms got introduced in 1991, the
existence of MRTP Act was found to be obstructive to private investment. The need to look
at the alternative regime led to the setting up of a High Level Committee on Competition

Policy and Law73 in 1999. The report stated that [the then] existing law (MRTP Act) was

ineffective in curbing anticompetitive practices. It further gave primacy to the rule of reason

over the per se test. 74 The committee found that the Act was inept at dealing with the

challenges posed by anticompetitive practices like abuse of dominance, cartel, collusion,

boycott, refusal to deal, bid rigging, predatory pricing, tying arrangements, etc. The
Committee was convinced that the government undertakings should be brought under the
purview of competition law barring the sovereign functions of the government. It also
stressed on competition advocacy due to low awareness of competition issues among

stakeholders and the governments.75

This paved the path to a new competition regime. The new competition law that is, the
Competition Act, 2002 got enacted in January 2003 with the Statement of objects and

Reasons that this Act is:76

72
Amitabh Kumar. 'The Evolution of Competition law in India," in Vinod Dhall, at 479.
73
The committee was constituted under the chairmanship of Mr. S.V.S. Raghavan and came to be
popularly referred to as Raghavan Committee.
74
The per se test and the rule of reason tests have been discussed in Chapter I elaborately.
75
As discussed earlier, competition advocacy finds place as Section 49 of the Competition Act, 2002.
76 The Competition Act, 2002 was passed by the Parliament in December 2002 and received the assent of the President of India
on 13 Jan. 2003. Refer, Government of India, Gazette of India, Extraordinary (Jan. 14th , 2003).

30
..to provide, keeping in view of the economic development of the country, for the
establishment of a Commission to prevent practices having adverse effect on competition,
to promote and sustain competition in markets, to protect the interests of consumers and to
ensure freedom of trade carried on by other participants in markets, in Indi, and for matters
connected therewith or incidental thereto.

Under the Act, the Competition Commission of India (CCI) was established on 14 October
2003. However, it got started functioning only until 2009. The CCI is the regulatory body
under the Act which job is to curb the anticompetitive practices like Anti-competitive

agreements, 77 abuse of dominant position 78 and regulation combinations'. 79 It has its

77
Section 3. (I) No enterprise or association of enterprises or person or association of persons shall
enter into any agreement in respect of production, supply, distribution, storage, acquisition or
control of goods or provision of services, which causes or is likely to cause an appreciable effect on
competition within India.
(2) Ay agreement entered into in contravention of the provisions contained in sub -section (1)
shall be void.
(3) Any agreement ......including cartels........'.which (a) directly or indirectly determines purchase
or sale
prices; (b) limits or controls production, supply, markets, technical development, investment or
provision of services; (c) directly or indirectly results in bid rigging or collusive bidding, shall be
presumed to have an
appreciable effect on competition {per se rule)...______(4) Any agreement ...including (a) tie-in
arrangements; (b)
exclusive supply agreement; (c) exclusive distribution agreement; (d) refusal to deal; (d) resale price
maintenance, shall be an agreement in contravention of sub-section (1) if such agreement causes or
is likely to cause an appreciable adverse effect on competition in India. .[Relevant part has been
reproduced. For rest of the section, see the Competition Act, 2002].
78
Section 4. (I) No enterprise or group shall abuse its dominant position. The section further explains
the kinds of practises employed by the dominant positioned firms. Explanation (a) is relevant and
has been reproduced hereunder: 'dominant position means a position of strength, enjoyed by an
enterprise, in the relevant market, in India, which enables it to—(!) to operate independently of
competitive forces prevailing in the relevant market [defined under section S. 19 (4), (5)-(7)]; or (ii)
affect its competitors or consumers or the relevant market in its favour'.
79
See, the Competition Act, 2002 for Ss. 5 and 6. Also refer, T. Ramappa, Competition Law in India:
Policies,
Issues and Development, 183-255 (Oxford University Press, 2nd edn., 2009).
31
specialized investigative wing of the Commission. In short, the establishment of the
Commission and enactment of the Act was aimed at preventing practices having adverse
effects on competition to protect the interest of the consumer and to ensure fair trade carried
out by other participants in the market in India and for matters connected therewith or

incidental thereto.80

4.2. SPORTS IN INDIA

Sports have had deep roots in India since ancient times.81 India has been a witness and

origin of sports even played today. Chaturang or Chess as it is called today developed

during the period of Ramayana.82 With the coming of British to India, India got introduced

to the sport of Cricket which later on became the staple of Indians' diet. India has been the
originator of the sport of Hockey and has been a major participant in various regional and
international tournaments and games like Olympics, Asian Games. Commonwealth Games,
etc. In India, Sports is gradually becoming a big sector attracting many viewers and fans
and is thus becoming the most enterprising and. lucrative field commercially. So much so.
that the sports federations which were earlier dependent on State funds have become
financially independent and earning whopping profits in their respective fields. For
instance, the BCCI earned a profit of $ 49.996 million in 2QJ 1-12, leaving the second-

placed England and Wales Cricket Board (ECB) way behind.83

o Sports Federations and Bodies in India

In India, the Ministry of Youth Affairs and Sports84 is in charge of formulating policies for

sports in India. Its role is to support National Sports Federations which are responsible for
organising, developing, and coordinating sports in India. The National Sports Policy was

80
CCl v. Steel Authority of India Ltd, (201G) 10 SCC 744, at 756.
81
Mukul MudgaL at 18.
82
ID., at 19.
83
Qaiser Mohammad Ali, "Richie Rich BCCI remains highest profit earner amongst 10 Test nations"
Mail Today, Jun. 10,2013.
84
The Ministry portal is www.yas.gov.in.
32
first formulated in 1984 which was scheduled to be reviewed every five years.85 The policy

was reformulated in 2001.86 The Ministry of Youth Affairs and Sports released the National

Sports Development Code. 201187 to promote good governance in the management of

sports development, including sporting excellence, in the country. The ministry proposed

to table the National Sports Development Bill. 2013.88 These are some of the developments

which have started taking place in India for the betterment of sports industry in India. Now
let's move forward to examine the structure of sports in India, respective sports bodies and
their status.

The Sports federations in India are also structured as other sports associations in the world.
It follows a pyramidal structure. A club is a basic unit at the grass root level with at the top,

the international sports bodies for each sport made up of national bodies in each State.89

These national bodies comprise of state sports bodies. These clubs and bodies are formed
under the law of societies' law in the form of autonomous non-profit making private

bodies.90 These autonomous bodies come under the wings of the ministry like All India

Chess Federation (AICF). 91 Archery Association of India (AAI) 92 , Haryana Olympic

85
Mukul Mudgal, at 43.
86
Ibid. The primary objective of NSP 2001 is mass participation in sports.
87
Accessed pib.nic.in/newsite/erelease.aspx?relid=69503(last visited 11.04.2014). Based on the
Development Code, the National Sports Bill, 2013 and Prevention of Sporting Fraud Bill, 2013 were
drafted by the Sports Ministry and put up for suggestions. However, they never be tabled in the
Parliament
88
Accessed pib.nic.in/newsite/erelease.aspx?relid~971 18(last visited 11.04,2014).
89
MukuI Mudgal, at 122.
90
lbid. These associations are established under the Societies Registration Act, 1860.
91
AICF is the administrative body for the game of chess in India and gives affiliation to states' chess
associations. Its website is www.aicf.in.lt is affiliated to an international body F6d6ration
International des Echecs (FIDE).
92
AAI is affiliated with the IOA, International Archery Federation & Asian Archery Federation having
its 27 state Archery associations and 06 other para military forces and other organisations. More
information can be accessed at mvw.indianarchery.info/.(last visited on 11.04.2014).
33
Association, Indian Olympic Association (IOA) 93 National Anti-Doping Agency

(NADA)94 National Playing Fields Association of India, etc. Their main source of revenue

generation comes from awarding broadcast and telecast rights.

Various courts and tribunals have held that these bodies perform functions which are in the
public realm and therefore, writs can be enforced them as any other public or government

authority.95 In Shri Girdhari Lai v. AICF,96 The Central Information Commission (under

the Right to Information Act, 2005) has ruled that AICF is a public authority under the RTI

Act. Again, the Delhi High Court in IOA v. Veeresh Malik,97 observed that IOA and the

Commonwealth committees are public authorities and therefore, fall within the ambit of
the RTI Act. The judgment acknowledges and recognises the 'dominance' of the sports
bodies controlling the field of sports in India which reads as under:

Having regard to the pre-eminent position enjoyed by the IOA, as the sole representative
of the IOC as the regulator for affiliating national bodies in respect of all Olympic sports,
armed with the power to impose sanctions against institutions -even
individuals....................The IOA is the national representative of the country in the IOC; it
has the right to give its nod for inclusion of an affiliating body, who, in turn, select and

93
IOA is responsible for the preparation and participation of competitors in the Olympic games as
well as regional events like Commonwealth and Asian Games. There is a separate federation at
national level in each game/sport which assists 10A. In addition to federations there are State
Olympic association. National Sports Federations and the State Olympic Associations are affiliated
to die IOA. Information can be accessed at http://www.olympic.ind.in/ (last accessed on 11.04.2014).
94
NADA is the national organization responsible for promoting, coordinating, and monitoring the
doping control programme in sports in all its forms in the country. Information can be accessed at
http://www.nada.nic.in/index 1,asp?li nk id=355(last visited on 11.04.2014).
95
See, Ajay Jadeja v. Union of India (2001) 2 IL.R Del. 306.
96
CIC/PBC/2008/00947/LS. Accessible at www.rti.india.gov.in/cic_decisions/LS-20032009-12.pd{(iast
visited on 11.04.2014).
97
W.P. (C) No. 876/2007. Accessible at lobis.nic.in/dhc/SRB/judgement/20-0I-2010/SRB07012010C
W8762007.pdf (last visited on 11.04.2014).
34
coach sportsmen, emphasizes that it is an Olympic sports regulator in this country, in

respect of all international and national level sports.98

o BCCI

BCCI is a non-profit-making organisation registered under Tamil Nadu Societies

Registration Act, 1975 which controls officially organised game of cricket in India.99 BCCI

is perhaps the only sports organisation .in India which earns foreign exchange and is neither
controlled by any governmental agency nor receives any financial assistance or grants, of

whatsoever nature.100

The Supreme Court was faced with an important question in Zee Telefilms Ltd. v. Union

of India.101 The question before the constitution bench was whether the BCCI, which is a

current cricket controlling authority in terms of the ICC102 Rules answers the description

of "other authorities" within the meaning of Article 12 of the Constitution. It was held by a
3:2 majority that BCCI was not a State. However, for the present purpose of the study the
observations of the Court are pertinent. While applying the test laid down in Pradeep Kumar

Biswas v. Indian Institute of Chemical Biology,103 the majority observed that:104

Para 23.

1. The Board is not created by a statute.

2. No part of the share capital of the Board is held by the Government.

98
W.P.(C) No. 876/2007, at 51.
99
Secretary, Ministry of Information & Broadcasting. Govt, of India v. Cricket Assn. of Bengal (1995)
2 SCC 161, at 217.
100
Ibid.
101
(2005) 4 SCC 649.
102
CC is the international body to which States's cricket boards are affiliated to. It is a parent body
overseeing the development of Cricket in the world.
103
(2002) 5 SCC 111.
104
Supra note 508, at 679.
35
3. Practically no financial assistance is given by the Government to meet the whole or
entire expenditure of the Board.

4. The Board does enjoy a monopoly status in the field of Cricket but such status is
not Slate conferred or State protected. (Emphasis added)

5. There is no existence of a deep and pervasive State control. The control if any is
only regulatory' in nature as applicable to other similar bodies. This control is not
specifically exercised under any special statute applicable to the Board are not
public functions nor are they closely related to governmental functions.

6. The Board is not created by transfer of a government owned corporation. It is an

autonomous body.

Based on the aforesaid observation BCCI was held not to be 'State' and thus, not amenable
to the writ jurisdiction. In the same case Justice S. B. Sinha and Justice S. N. Variava gave
dissenting opinions which make an interesting reading for the purpose of the present study
and are reproduced hereunder:

55. Our Constitution is an ongoing document and, thus should be interpreted liberally.
Interpretation of Article 12, having regard to the exclusive control and management of the
sport of cricket by the Board and enormous power exercised by it calls for a new

approach.105

173. The traditional tests of a body controlled financially, functionally and administratively
by the Government as laid down in Pradeep Kumar Biswas would have application only
when a- body is created by the State itself for different purposes but incorporated under the
Indian Companies Act or the Societies Registration Act. Those tests may not be applicable
in a case where the body like the Board was established as a private body long time back.
It was allowed by the State to represent the State or the country in international fora. It
became a representative body of the international organisations as representing the country.
The nature offunction of such a body becomes such that having regard to the enormity
thereof it acquires the status of monopoly for all practical purposes ; regulates and controls

105
Supra note 508, at 679.
36
the fundamental rights of a citizen as regards his right of speech or right of occupation,
becomes representative of the country either overtly or covertly and has a final say in the'
matter of registration of players, umpires and others connected with a very popular
sport.....[for these reasons] is essentially a State function in terms of Entry 33 List II of the
Seventh Schedule of the Constitution. In such a case, different tests have to be applied.

(Emphasis supplied)106

209. The object of Part II I of our Constitution is to curtail abuse of power and if by reason
of the Board's activities, fairness in action is expected, it would answer the description of

"other authorities".107

They propounded different ingredients for the test to be applied on such bodies, and
observed that:

174.............The tests, thus, which would be applicable, are coercion test, joint action test,
public function test, entertainment test, nexus test, supplemental government activity test

and the importance of sports test.108

The above test laid down provide for more objectivity and pragmatic approach which takes
care of the unique nature of the Sports and its bodies. The minority opinion also observed
very categorically that Mt [BCCI] has not only the monopoly status as regards the
regulation of the game of cricket but also can lay down the criteria for its membership and

furthermore make the law for the sport of cricket. 109 It further remarked on the financial

clout the BCCI enjoys that 'the Board is in position to expend crores of rupees from its own

106
Ibid.
107
Ibid.
108
Ibid.
109
ibid.
37
earnings. The tender in question would show what sort of amount is involved in distributing

its telecasting rights for four years......,110 The BCCI is a de facto monopoly.111

From the above discussion it would not be extraneous to say that in terms of monopolistic
position of sports federations, the dominance of sports federations is evident and their
financial clout is going to increase further with professional sports league system.

 Professional Sports Leagues

Global sports industry is by far the most promising industry in the 21st century. The second
edition of our outlook for the sports industry predicts that global sports revenues will grow
to US$145.3 billion over the period 20l0 - 2015, at an annual compound growth rate of 3.7

percent. 112 The professional sports leagues now form an intrinsic part of every sports

system. It is viewed as an important tool to promote and develop sports.

Like the U.S. sports system, in India the professional sports leagues have started
mushrooming which are being billed to change the future of the way the sports are played
in -India. Many European clubs and US leagues have started taking interest in Indian sports

arena which has further fuelled the upcoming of leagues system in India.113 To name a few

some of the leagues like Indian Premier League (Cricket), Indian Hockey League, Indian

Super League114 (Football) and Indian Badminton League have started gaining popularity

and are proving to be money spinners for the sports bodies. Thus, one could expect that, as
has been the experience in the U.S., that anticompetitive issues are expected to surface

110
M. at 728.
111
Ibid The Court (minority opinion) further observed that the BCCI not only represents the country
but also regulates the entire field of competitive cricket. It further remarked that there is every
reason the Board's activities may impinge on the fundamental rights of citizens.
112
Price Waterhouse Coopers, Report: Changing the Game- Outlook for the global sports market
to 2015 (Dec. 2011). The Report is accessible at http://www.pwc.com/gx/OT/hospitality-leisure/
changing-the-game-outlook-for-the-global-sports-market-to-2015.jhtml.(accessed on 11.04.2014),
113
http://ww.sportskeeda.com/basketbaIlM (visited on 12.04.2014).
114
Accessed http://timesofindia.indiatimesxom/spo soccer-through-Indian-Super-
League/artieIeshow/33712666.cms(last visited on 14.04.2014).
38
especially in the field of sports broadcasting with the impending professionalization and
commercialisation of sports in India.

• Sports Broadcasting

Airwaves constitute public property and must be utilized for advancing public good. No
individual has right to utilise them at his choice and pleasure and for purposes of his choice
including profit. The right of free speech guaranteed by Article 19 (1) (a) does not include

the rieht to use airwaves, which are public property.......115

Television has led to democratisation of sports in India.116 The Supreme Court held in the

Hero Cup case, that the sports broadcasting fall within the meaning of the freedom of

speech and expression. 117 The broadcasters have the right to broadcast events of their

choice. However, these are subject to restrictions. The Court emphasized that monopoly
over information produced and disseminated either by the government or private

broadcasters is dangerous.118

This led to the Government of India bring the two state owned broadcasters, the
Doordarshan and All India Radio under one holding company namely the Prasar Bharti

under the statute Prasar Bharti (Broadcasting Corporation of India) Act, 1990.119 Later, the

Government of India enacted the Sports Broadcasting Signals (Mandatory Sharing with

Prasar Bharti) Act, 2007120 with an objective 'to provide access to the largest number of

115
Secretary Ministry of Information and Broadcasting, Govt, of India v. Cricket Association of
Bengal, (1995) 2 SCC 161. This case is also referred to as Hero Cup Case.
116
Lovely Dasgupta, "Sports Broadcasting in India - Towards an Integrated Legal Framework,"
XXVIII-XXIX DLR 127 (2006-07).
117
Vidushpat Singhania, "Sports Broadcasting Rights in India," 3-4ISU60 (2007).
118
Supra note 523, at 135.
119
Mukul Mudgal, at 194.
120
The Act got the assent of the President on Mar. 19th, 2007 and came into force retrospectively
on Nov. 11th. 2005. [hereinafter referred to as Sports Broadcasting. Act]. The Centre has legislative
competence to enact law on broadcasting under Entry 31 List I (Union List) of the Seventh Schedule
of the Constitution of India, 1950.
39
listeners and viewers, on a free to air basis of sporting events of national importance through
mandatory sharing of sports broadcasting signals with Prasar Bharti and any matter
connected and incidental.

With this, India got a specific legislation which bars any broadcaster from having exclusive

rights to any match or game of sport which is of "national importance'.121 Satellite television

broadcasting is considered as a separate right across the world.122 However, it is still to be

seen that whether the Sports Broadcasting Act is applicable to the matches of the
professional sports leagues which have started sprouting up.

4.3. ANTICOMPETITIVE PRACTICES IN SPORTS

IN INDIA

The Sports Associations and federations are bestowed with an enormous amount of power
and money and have been accused of misusing their dominance and for unilateral decision
making. The picture would become clearer in the later discussion.

• BCCI v. ICL

The issue between the BCCI and Subhash Chandra promoted, the then Indian Cricket
League (ICL) is still fresh in the minds of a cricket enthusiast. The episode is an illustration
of the fact that how BCCI as a sole authority of Cricket 'abused its dominant position' and
actually dismissed the players from playing Cricket and using stadiums for participating in

121
Section 2 (1) (s) of the Sports Broadcasting Act defines 'sporting events of national importance' as
such national or international sporting events , held in India or abroad, as may be of national
importance. However, the Act leaves the ambiguity as to the whole tournament is of national
importance or the semi-final/ matches. The Issue is similar to the UEFA case as discussed in chapter
III where the UEFA challenged the United Kingdom ruling to declare the EURO tournament as of
national importance.
122
See, AA Associates v. Prem Goel AI R 2002 Del 142; ESPN STAR Sports v. Global Broadcast News
Ltd (2008) 38 PTC 477 (Del.).
40
the ICL. The slugfest between the BCCI and the rival ICL123 went to such an extent that it

invited an investigation by the then anti-monopoly watchdog MRTPC.124

The watchdog MRTPC took a sua motu cognisance and ordered an investigation to look

into the threats to players with a life-term ban on joining the ICL.125 It also directed an

inquiry into the steps taken by the BCCI by expelling some of the former cricket players
on joining ICL. The Commission suspected that the BCCI was adopting restrictive trade
practices banned under the MRTP Act. Another point of enquiry was the BCCI
anticompetitive conduct shown by denying the infrastructure to the ICL the national

stadiums and machinery despite the fact that these are national assets.126

BCCI was previously pulled up by the MRTPC way back in 1994 after being found guilty

of adopting restrictive trade practices.127 The conduct of the BCCI and orders passed by the

anticompetitive authorities raise more questions than answer any. The case of the BCCI
illustrates that BCCI came under the scanner of the anticompetitive watchdog not once but

123
A leading cricketer of his time Kapil Dev was sacked by the BCCI. Other players like Hemang
Badani and Dinesh Mongia were also dismissed. However, later under the Amnesty plan the BCCI
took the players back in the fold. But that happened only after ICL got defunct.
124
'Monopolies Restrictive Trade Practices Commission.
125
Cover Story. "BCCI's threat to 'rebels' under MRTPC scanner (Express India, Sep. 06, 2007). "BCCI
termed those players as 'rebels'. Accessible at
expressindia.indianexpressxom/news/ful!story.php?newsid=9l8l6# (last visited on 12.04.2014).
126
Though taking a suo motu cognisance of the reports published by the MRTPC and ordering
investigations, the probe could not actually take place because of BCCI offering an amnesty plan and
taking back the dismissed players back into its fold.
127
Ibid. In 1994, MRTPC had looked into agreements BCCI had entered into with the players. In the
agreement, BCCI had restrained players from writing in newspapers, magazines and journals.
Players were also not entitled to take part in activity related to TV or broadcasting, and they could
not publish articles or book on cricket until 12 months after the completion of any tour. [PTI,
"MRTPC orders probe into BCCI 'threat' " The Hindu, Sept. 8,2007]. (the copy of the order could
not be traced online).
41
thrice128 for its restrictive practices. It also lays open that how despite the cease and desist

orders129 of the anticompetitive authority, the BCCI has not been reined in.

Moreover, it is one of the instances which reveal that these sports bodies enjoy enormous
degree of dominance in the respective fields of sports. As discussed before that with the
introduction of Leagues based sports like in the U.S. the problems and grievances relating
anticompetitive practices are expected to rise and thus, the issue of antitrust in sports in
India has gained attention.

The following sub-chapter discusses important decisions of CCI in sports and case laws.

o Rulings

 Surinder Singh Barmi v. BCCI130

(Cricket)
A cricket enthusiast tiled the information before the CCI against the BCCI ("Board")
alleging anticompetitive conduct of the Board. The CCI after finding a prima facie case
directed its investigative wing, the Director-General ("DG") to investigate into the
information. The allegations were made regarding the organisation of Indian Premier
League (IPL) - a Twenty 20 professional cricket tournament that there were irregularities
in granting franchise rights, media rights and award of sponsorship rights and other
contracts for the league.

• Questions Referred to DG

Primarily two issues were referred to the DG for investigation;

128
The third instance came in Surinder Singh Barmi's case which is discussed in the next section.
129
Cease and Desist orders are the most common form of orders passed by any anticompetitive
authorities to the defaulting person or authority to halt the anticompetitive practice and prevent
itself from engaging into such activity on future. The power to pass such an order is incorporated
in Section 27 of the Competition Act, 2002. See, Section 27 of the Competition Act, 2002 for further
reading.
130
20I3 CompLR 0297 (CCI).
42
 1 Whether the BCCI is an 'enterprise' as defined under Section 2 (h)538 of the
Competition Act, 2002?
2 What is the relevant market and whether the Board is dominant and has abused its
dominant position in the relevant 'market contravening Section 4 of the Act ?

 Findings of DG
A. BCCI is an enterprise within the meaning of Section 2 (h) of the Act. The DG
dissected the nature of organisation and its conduct with respect to IPL entailing
grant of franchise rights, media rights and sponsorship rights involving huge

amount of money. The DG also drew parallels with Hernant Sharma's131 case.

B. The DG' rejected the contention of the BCCI that relevant market is separate for

every right and is intrinsically different. 132 The DG rejected the contention and

identified the relevant market as the "underlying economic activities are ancillary
for organising the IPL Twenty 20 cricket tournament being carried out under the

aegis of BCCI."133

C. The DG found that the BCCI enjoys a monopoly as it is the only governing body
controlling the game of cricket in India. No recognised competitive cricket can be

played within or outside the country.134 The DG also took note of the history of

BCCI's anticompetitive behaviour when ICL a rival league was formed. BCCI had
not only rejected the application of IGL for recognition but also ensured that no
cricket stadium is made available to the ICL and also restrained players from

playing.135 The DG held that BCCI is in a position of strengthin relevant market.

131
Discussed later.
132
2013 CompLR 0297 (CCI), at 0305-0306.
133
Id, at 0306.
134
ibid.
135
The restrictions are similar to the one already discussed in chapter II and ill earlier. These
restraints are
43
D. The DG answered the question of abuse of dominant position in respect of three
categories of rights. The DG found that the terms of the franchise agreement were
anticompetitive and discriminatory, contravening Sections 4 (2) (a) (i), 4 (2) (b) (i)
and 4 (2) (c) of the Act. The term in the agreement concerning media rights was
found to be excessive and creates foreclosure of market. The grant of other rights
was violative of Section 4 (2) (c) of the Act.

• Findings of the CCI

The findings of the CCI have been outlined point wise herein below:

A. De facto Regulator and Duality of Roles: At the outset, the CCI differentiated
between the duality of roles BCCI has in being a regulator of cricket in India and
an organiser of events like selling of various rights - franchise rights, media rights,
sponsorship rights, etc that is, commercial exploitation of the sports. It observed
that BCCI is no alien to the concept of pyramidal structure of sports federations in
sports and it is the conduct and not the form of organisation in question. It observed
that organising an event like IPL is a business activity. It agreed to the contention
of the informant that BCCI has a monopoly status and has a 'first mover advantage

in organisation to cricket events'.136

B. BCCI is an 'enterprise': The Act looks into functional aspect and not the institutional

aspect. 137 The activities associated with the organisation of events are definitely

economic activities bringing revenues to the BCCI. It concluded that alt sports
associations are to be regarded as an enterprise in so far as their entrepreneurial

conduct is concerned and treated at par with other establishments'.138

C. Assessment of Abuse of Dominance in Relevant Market: The Relevant market was

identified as 'Private Professional Cricket Leagues/Events in India'. The cricket

Players' restraints, obstruction to free movement of players.

136
Supra note 540, at 0316.
137
Id., at 0317.
138
Iid., at 0319
44
 match was found to be insubstitutable as the entertainment being the ultimate aim.
The rise of private professional leagues saw the merger of media and entertainment

to raise the level of cricket to a different height altogether. 139 The Commission

attributed the dominance of BCCI to the pyramidal structure which gives it a natural
monopoly which is vested with regulatory powers and an economic beneficiary and
thus is a de facto regulator. This power gets extended with the clout of BCCI over
cricket infrastructure.

Thus, owing to regulatory role, monopoly status, control over infrastructure, control over
players, ability to control of other leagues, historical evidences, Commission found BCCI
to be in a dominant position which abused its dominant position under section 4 (2) (c) of

the Act.140 The BCCI was penalised with Rs.52.24 Crores.141

Another complaint came to be filed against the BCCI in Pan India Infra projects Private

Limited142 v. BCCI143. The Informant Pan India sought cease and desist orders against the

BCCI and further asked for the separation of regulatory powers of the BCCI from its
commercial powers.

The CCI dismissed the complaint citing the reasons that the investigation concluded against
the BCCI in Surinder Singh Barmi's case were similar to the one prayed for and same
allegations had been raised against the BCCI. Moreover, it stated that the matter is already
pending before the appellate tribunal. However, it suggested the informant to approach the

139
ida., 0320.
140
id., at 0323.
141
The BCCI has moved in appeal against the decision before the Competition Appellate Tribunal
(COMPAT). The BCCI was granted an interim stay against the order of the CCI on 09* May 2013 in
The BCCI v. CO. Appeal No. 17/2013. However, the BCCI was asked to deposit 25% of the penalty
imposed with the COMPAT. The matter is still pending.
142
Formerly known as Esse! Sports Private ltd. The Informant was the promoter of the ICL. Both
parties have been at loggerheads since the [forced} winding up of the ICL and been fighting
litigations in various courts.
143
Case No. 91/2013. The order was delivered on Jan. 16th 2014.
45
commission if BCCI still persists with its practises under relevant provision in the

Competition Act 2002.144

As discussed earlier, the BCCI has been found using restrictive trade practices to impose
players' restraints and monopolise the market of cricket in India for which it has received
adverse orders from the anticompetitive authorities.

Hemant Sharma v. Union of India145

(Chess)

The action was brought against the AICF to prevent the sport federation from banning the
chess players. The grievance of the chess players was that they were affiliated to the AICF
but should not be prevented to play chess in the tournaments which are not recognised by
the AICF it was alleged by the Petitioners that the AICF conduct is highly anticompetitive
and monopolistic. It being the internationally recognised sports federation is exploiting
dominant position to impose such unreasonable restrictions/restraints on the rights of the
players.

The court prima facie found that AICF used its 'dominant position to stifle growth of any
other association of chess players, by threatening the chess players registered with it, with
disciplinary action/expulsion and a virtual boycott in case they (petitioners) participate in

tournaments organised by other associations 146 and the anticompetitive conduct called for

an examination by the CCI. It also observed that one of the purposes of the said Act is to
prevent practices having adverse effect on competition and" may not necessarily be

connected to trade or commerce.147 The Delhi High Court refused to grant a stay against

the probe of the CCI of AICF.148

144
Refer, Section 42 of the Competition Act, 2002.
145
186 (2012) DLT 17.
146
id, at 23.
147
Id., at 27.
148
The CCI is still to come out with the report on alleged anticompetitive practices of AICF.
46
 4.4. CONCLUSION - INDIA CHAPTER

The journey of India in the field is relatively new in the whole gamut of anticompetitive

cases in sports. One reason is attributed to the coming into force of CCI as late as 2009. 149

The other reason could be sluggish and late growth of sports in India. Though sports is deep
rooted in India but its growth has been poor which has been left poorer with an overstress
on Cricket. But the situation is changing with infrastructure being developed for other
sports as well. As discussed above the Ministry of Sports has formulated new Sports code
and has drafted a new sports legislation to meet challenges which are arising in sports in
India.

Keeping the salient points in mind, the following conclusions have been drawn which arc
outlined as under:

1. Sports Federations in India:

Natural Monopoly and Dominance

Like other sports federations and sports associations all over the world, the sports
federations in India are pyramidal in structure. In other words, there is one International
body which has its state affiliate bodies in each country. This State affiliate is the national
federation which is the only controlling regulatory authority of that sport in India like
BCCI. AICF, etc. Such structure is important for universalisation of rules and regulations
and for better coordination amongst the spoits bodies. The pyramidal structure imparts a
status of natural monopoly to these sports bodies.

It was further observed that the monopoly status of BCCI, Hockey League, and AICF etc.
has been recognised by various authorities. Being a monopoly their dominance in
controlling the sports is also evident. These two positions have made these bodies as the
most powerful bodies in India which has raised anticompetitive concerns in India.

2. Professional Sports Leagues

In India

149
The CCI was established in 2003 itself.
47
Indian sports is becoming "accustomed to Professional Sports League terminology as
everyone keenly following sports is eyeing this to be a game changer in the future. The
system is not same as that of US' but its functioning is almost similar. To name a few IPL
(Indian Premier League in cricket), IBL (Indian Badminton League), i-League (Football),
etc, they have already started creating buzz.

The League system carries with itself certain advantages. Firstly, it promotes sports with a
mix up of entertainment which adds value to it. Secondly, it creates favourable
opportunities for the players for showcasing their talent as well as helps them in earning
money.

3. Anticompetitive issues and practices

in Sports in India
The major cases which have arisen are mainly concerning violation of Section 4 (1) if the
Competition Act, 2002, that is, the sports federations have been found abusing their
dominant position and thus in conflict with the provisions of the Act. The abuse of
dominance in sports is the major concern of CCI which also gets reflected in the Hockey
India case.

It has been observed that these federations perform a dual role of being a regulator as well
as an organiser of sporting events which has raised antitrust concerns in India as well. As
seen in the US, such dominant players have abused their position to foreclose the rival
leagues. .

Due to their dominance in the relevant market certain anticompetitive practices have come
to light such as exclusive selling of media rights, restraining players from playing in the
rival leagues, etc.

4. Sports Broadcasting

In India post Hero Cup case, the sports broadcasting rules have become more transparent
and clearer. With the enactment of Spoits Broadcasting Signals (Mandatory Sharing with
Prasar Bharti) Act, 2007. it has become mandatory to not to give exclusive licenses of any
match or game which is of national importance. However, it is still not clear which sports
events will be termed as of national importance. The anticompetitive issues relating to

48
sports broadcasting is regarding distribution of rights which involve huge amount of
money.

5. Inherence-Proportionality Principle

In Dhanraj Pillay case, the CCI has unequivocally stamped its approval on the application
of Inherence-Proportionality principle as propounded in Meca Medina case.

The principle makes every rule or regulation, on a case to case basis, subject to antitrust
scrutiny. Such rule or regulation shall be exempted if it is proportionate to its sporting
objective which must be for the benefit of the sport. In other words, even if a rule is
inherently restrictive but it passes the proportionality test, it will be exempted. This means
that the CCI has accepted the position given in the Meca Medina case.

This marks an end to discussion on India. The next chapter V is the last concluding chapter
with an overview of the whole work accompanied with suggestions.

***

49
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50
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58
 APPENDIX

THE

REGISTRATION OF SPORTS FEDERATIONS

BILL, 2014

59
 THE REGISTRATION OF SPORTS FEDERATIONS

BILL, 2014150
STATEMENT OF OBJECTS AND REASONS

Of late, it has been observed that there has been increase in the foray of sports federations,
sports associations and sports controlling bodies in business and trading activities. The
Competition Commission of India has expressed its -concern on the exploitation of dual
roles (being a regulator and organizer of events) by such sports bodies which are raising
anticompetitive concerns.151 This issue has also perplexed the lawmakers in the U.S. and
E.U. jurisdictions. Presently, these bodies are still registered under 19th century Societies
Registration Act, 1860 and claim themselves to be non-profit organisations. They do claim
exemptions from various laws including the Competition Act, 2002.

It is further acknowledged that the sport is distinct from other fields. Due to pyramidal
structure of sports federations, these bodies enjoy natural monopolistic position in sports.
In lee Telefilms Ltd. v. Union of India152 the majority opinion of the Constitution Bench of
the Supreme Court held BCCI not to be a State. However, the minority opinion did raise a
pitch on the monopoly these bodies enjoy in respective sports.

The Ministry of Youth Affairs and Sports had proposed the Sports Development Bill, 2011
and later its revised version National Sports Bill, 2013153 but they were focused more on
issues of sporting disputes, selection of members in federations, etc. It is desirable,
therefore, to enact a separate legislation for registration of such sports bodies and also
provide for separation of regulatory and commercial aspects of such bodies.

The present Bill does not intend to amend the pyramidal structure of federations in sports
or transgress the independence of these bodies but provide for an independent legislation

150
The bill is an original work of the Researcher.
151
The CCI has delivered its decisions in Surinder Singh Barmi V. BCCI, 2013 CompLr 0297 (CCI) and
Dhanraj Pollay V. Hockey India, Case No. 73/2011 (may 31 st 2013).
152
(2005) 4 SSC 649.
The Bill never reached beyond the stage of invitation of objections and thus, never got tabled in the
Parliament.
60
for their registration to bring clarity in the legal status and nature of functions these bodies
perform.

THE REGISTRATION OF SPORTS FEDERATIONS

BILL, 2014

A Bill for registration of Sports Federations or connected sports bodies in India.

Preamble - Whereas it is expedient that provisions should be made for bringing clarity to
the legal status of sports federations and associations established for the promotion of
sports and iron out anticompetitive concerns owing to commercial nature of the activities
these bodies are engaged in; it is enacted as follows:-

BE it enacted by Parliament in the Sixty-fifth year of Republic of India as follows:

1. Short title, extent and commencement

(1) This Act may be called as the Registration of Sports Federations Act, 2014.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on such date as the Central Government may. by
notification, appoint a date as published and notified in the Gazette of India.

2. Definitions

In this Act, unless the context otherwise requires,

(a) "sporting event" means any domestic, professional league sports, national or
international sporting event thereof held or proposed to be held in India and includes
an international sporting event held outside the country in which Indian team or
member from India participates or any event held in India between non-Indian
teams. It also includes the franchises under the professional leagues sports events
matches held in India or outside India in direct control and supervision of the sports
federation registered in India or through any agency appointed by such sports
federation.

(b) "Sports federations" means a union of sports associations which purpose is to

bring together the affiliated sports groups and licensed players, with the aim of
61
 organising the sport, notably through competition. 154 Sports federations shall
include Sports federations at the national level and Sports federations at the state
level.

(c) "Sports Registrar' is the appropriate authority for registration established

under the Act at the national level and the State level.

3. Registration with Sports Registrar

(1) There shall be National Sports Registrar and every State shall have its own
State Sports Registrar.

(2) The National Sports Registrar shall ensure that there shall be only one
registered Sports Federation at the National level per sport affiliated to its
respective International Sports Federation and duly accredited by the Ministry
of Youth affairs and Sports, Government of India.

(3) The State Sports Registrar shall ensure that that there is only registered Sports
Federation at the State level per sport affiliated to its respective Sports
Federation at the national level and duly accredited by the Ministry of Sports,
Government of that State.

(4) The State Sports Registrar may register any number of sports associations or
sports clubs operating within the State for the promotion of sports and are
affiliated to the respective Sports federation at the State level.

(5) Only the registered sports federations shall be eligible for accreditation.

4. Registration Fees

(1) The registration fee shall be payable for the registration with the National
Sports Registrar as may be prescribed by the Central Government in the
Gazette of India from time to time.

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 (2) The registration fee shall be payable for the registration with the State Sports
Registrar as may be prescribed by the State Government by publishing in the
State Gazette from time to time.

(3) The registration shall have to be renewed after every 3 years.

5. Separation of activities of Sports Federations

(1) Every Sports federation under its rules and regulations shall provide for the
separation of Regulatory and Commercial activities within its structure.

(2) Regulatory Division The Regulator}' Division shall handle al! the regulatory
aspects connected with the sports for which the sports federation is registered.

(3) Commercial Division The Commercial division shall handle all the activities
connected with organizing of sporting events including distribution of media
rights or any other trading activity connected with that sport.

6. Registration of Sports Federations under Societies Registration Act, 1860

Any sports federation registered under Societies Registration Act, 1860 or any other
Act shall have to be registered under this Act within one year of this Act coming
into force.

7. Powers to make rules

The Appropriate Government may, by notification, make rules to carry out the
purpose of this Act.

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