The Competition Commission of India (CCI) (Respondent) has ordered a probe against Google Inc. for allegedly abusing its dominant position in 'On line search' advertising on a complaint filed by Mr. Vishal Gupta, a busin

CS Professional · Multidisciplinary Case Studies · PYQS · December 2020
The Competition Commission of India (CCI) (Respondent) has ordered a probe against Google Inc. for allegedly abusing its dominant position in 'On line search' advertising on a complaint filed by Mr. Vishal Gupta, a businessman. Gupta has alleged that companies owned by him had been submitting advertisements in Google Adwords from January 2013 to October 2013, before the account was terminated by the Google. On 15th April, 2014, the Competition Commission of India (CCI) passed an order under section 26(1) of the Act based on the prima-facie opinion, directing the Director General (DG) to investigate into the matter. The Google Inc. (Appellant) filed an application for receiving the investigation order as it was passed without, giving them an opportunity of hearing. The application was dismissed by Competition Commission of India (CCI) on 31st July, 2014 for the following reasons: CCI was of the prima-facie view that a case for investigation under section 26(1) was made out. Issues could be dealt with at a later stage post competition of the investigation. In any event, the power of review was not conferred upon CCI under the Act and therefore, it is impersonable in law for an authority to review/recall its orders. As there was no statutory provision for appeal against such an order, the appellants filed a writ petition before the Delhi High Court against the impugned order. Appellant's Argument: Applicant contended that CCI had ordered the investigation without affording an opportunity of hearing. The application for recalling the order was dismissed by CCI on grounds of lack of territorial jurisdiction. The appellant relying on Supreme Court's ruling in Competition Commission of India Vs. Steel Authority of India (SAIL) submitted that merely because Section 37 of the Act had been deleted by 2007 amendment to Act which took away the power of review does not mean that the power to recall an order also ceases, as recall and review are not the same. Respondent's Argument: Counsel for the respondent submitted that though CCI did have their power to review its order before 2007 amendment, but with the deletion of section 37 of the Act, the said power has been taken away. The scheme of the act does not permit review or recall of the orders. CCI also submitted that since investigation was at initial stage and not determinative in nature, the appellant would not suffer any prejudice and therefore, no right for hearing existed. Respondent further submitted that the application was made only to receive complete hearing at initial stage, which can be entertained even at a subsequent stage. Power of substantial review is expressly prohibited, any interference in the investigation would only lead to unnecessary delay in the proceedings as CCI jurisdiction to deal with the matter is a mixed question of fact and law. The Act does not permit any interference in the investigation once set in motion. CCI classified that the applicability of Section 26(1) of the Act is at a preparatory stage and, therefore, not applicable. Whether CCI has inherent powers to recall/review its investigation orders in exercise of powers u/s 26(1) of the Act?

Answer & Explanation:

Hon'ble Delhi High Court in the case of Google Inc. and Others v. Competition Commission of India, W.P. (C) No. 7084/2014 has held that the order of the CCI in exercise of power under Section 26(1) of the Competition Act, 2002 with direction to the Director General to cause investigation, is capable of review/recall under its inherent powers. In this regard, Hon'ble Delhi High Court observed that deletion of section 37 relating to power of CCI to review its orders by the Competition (Amendment) Act, 2007 cannot be a conclusive indication of the legislature having intended to divest the CCI of the power of review. Further, in this regard, Hon'ble Delhi High Court, also noted that, it is possible that the legislature deleted Section 37 finding the same to be superfluous in view of the inherent power of the CCI to review/recall its orders. Taking note of the judgment passed by the Hon'ble Supreme Court of India in CCI vs. SAIL , Delhi High Court also observed that "Just like it is in the discretion of the CCI to hear or not to hear the person / enterprise complained/referred against at the stage of Section 26(1) of the Act, CCI cannot be held to be without jurisdiction to recall/review the order." Hon'ble Delhi High Court cautioned and clarified that "....we are not to be understood as conveying that in every case in which CCI has ordered investigation without hearing the person/enterprise complained/referred against, such person/enterprise would have a right to apply for review/ recall of that order." Hon'ble Delhi High Court also noted that the power of review/recall has to be sparingly exercised and ensuring that the reasons which prevailed with the Supreme Court in CCI vs. SAIL for negating a right of hearing to a person are not subverted.

Topics: Competition Law

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