Examination Break.

This shall be our last post till the end of May due to examinations. (Yes, being a law student unfortunately still stuck with them :\ ). Will be back as soon as possible in the month of June.  :)

Lost the race to Economic Times. :P

We were planning a detailed post with a critical analysis on the Department of Justice (DoJ) complaint filed against the five publishers (Hachette, Penguin, Simon and Schuster, Macmillan and Harper Collins) alleging their agreement with Apple to be anti-competitive, but unfortunately, The Economic Times (ET) beat us to it !!

Being an excellent article, we would like to only add to what Avinash Celestine has written in his article.

What we fail to understand is that as publishers,  the copyrights to the E-Books, be it on Amazon or Apple, are owned by the publishers themselves. Why did they not simply negotiate better terms with Amazon on wholesale prices on E-books ?!?! Also, as of now, they don’t really have a lot to complain about regards pricing, as per this blogpost, which claims that publishers may ultimately end up earning approximately seven dollars per E-Book copy “sold” (this is primarily due to the new agency model which publishers forced Amazon to implement, but more on that below.)

Also, if they were so concerned about the consequent fall in wholesale and retail prices of print books, why did they enter into the E-Books market in the first place ?!?! The publishers are themselves also partly to blame for there conundrums and add to that they decide to counter it by digging their own graves even deeper through an agreement with Apple. (this is the exact sentiment expressed by another blogger involved with the publishing business). Britannica realised that whether the organisation or customers liked it or not, it was time to go digital. The publishers should have learnt the same. They should have made a choice. In fact, to quote Jorge Cauz, president of Encyclopedia Britannica, Inc.

“print may not completely vanish from the market, but I think it is going to be increasingly less important. Many publications will never have a print analog and will only be printed on digital formats.”

Also, the Apple-publishers deals seems to be a classic case of a corporate panic attack with adverse consequences. Publishers should have realised that despite all the hype around E-Books, the fact remains that hard copy books will never really go out of fashion. Libraries will continue to buy them for quite some time. People like the author himself (who does not own a Kindle and is not even interested in getting one) prefer hard copy books over E-Books any day and always will. There is always a certain special comfort which one derives from actually holding a paper book and to be able to physically turn the pages with your fingers. granted, their demand shall fall as compared to today, but the losses could have easily been recouped through a better deal with E-Book retailers.

Which bring us to the other side of the story, which is exactly what publishers did in the agreement with Apple. Therefore, how exactly is it anti-competitive ?? After all, some would even say that Amazon was playing dirty, so the publishers decided to play dirty as well. This is probably the reason why Apple and the publishers who have not settled are willing to fight it out. The problem lies in the fact that they later used this agreement to force Amazon to do the same as well, i.e., sell the books under the exact same condition as Apple, effectively leading  to the abuse of  a re-emerged dominant position in the E-Book market.

It is intriguing how Amazon, which isn’t exactly innocent itself, has managed to gain the most out this entire quagmire and has largely escaped legal censure. However, in conclusion, we would like to stress on the fact that in a way, the reason for such disputes is because of the media revolution which we are experiencing right now on a daily basis. Laws are unfortunately till a large extent still ambiguous, with situations and cases as we are facing today never having been predicted when they were enacted, and it is safe to assume that such disputes shall arise for quite some time to come till one gains clarity. Till that extent, it really isn’t anybody’s fault. Not Amazon’s. Not the publishers. Not Apple’s.

Advocates/Law Firms for Empanelment

The CCI has decided to constitute a panel of Advocates / Firms and Senior Standing Counsels for representing the Commission and DG before various Courts and Tribunals in the Country.

Further details, including minimum qualifications, can be found here.

Legal Analysis of Google’s AdWords Programme and its Conflict with Indian Competition Law (An Update)

Please click here to see an update on the previous post.

2nd International Competition Law Conference 2012

The Competition Law Bar Association  is organising the 2nd International Competition Law Conference 2012 on 28th April, 2012.

The venue for the event is the Shangri – La’s Eros Hotel, new Delhi, India

The details of the conference can be found here.

National Level Essay Competition, 2012.

The CCI is once again organizing an Essay Competition on Competition Law. The last date for submission of entries is 30th June, 2012.

Further details regarding the competition can be found here.

Why the Communications Sector Should not be Exempted From the Competition Act.

Communications Today reported on 19th March, 2012 that the Telecom Department will ask the Union Cabinet to exempt the communications sector from the country’s Competition Act. According to the article, “the move comes after the competition watchdog-Competition Commission of India (CCI)-recently raised the red flag over the telecom ministry’s plans to allow mergers and acquisitions (M&As) if the combined market share of merged mobile phone companies was less than 60 percent.”

We shall not comment upon the logic or exigencies which compel the Telecom Department to make such a demand but shall only list below point by point reasons the reason why we feel the Telecommunications sector should not be exempted under the Competition Act, irrespective of the complaints which support the request. They are as follows:

1. As of December, 2011. there were exactly fifteen different players in the Sector (Bharti Airtel, Reliance Comm., Vodafone India, Idea Cellular, BSNL, Tata Teleservices, Aircel, Uninor, Sistema Shyam Teleservices, Videocon Tele, MTNL, S Tel, Loop Telecom, Etisalat DB, HFCL). Granted, there are maybe players one too many in the sector, but the fact remains that six of the above are extremely small players, with atleast two of them confirmed to be losing subscribers as per TRAI. Only the first eight are predicted by analysts to be major market players in the sector, and it is expected that these players shall in all probability fade away on their own.   This is exactly what is envisaged in a competitive sector. The players in the relevant market which fail to grow and develop themselves in the relevant market should leave.

2. Continuing from the above, talking from the consumers perspective, tariff rates in the telecom sector in India can hardly be considered as an issue as frankly, they are one of the lowest in the world and even if assuming that they are raised in the near future, users can well afford the market rates, despite the recent cease fire in price wars. Admittedly, quality of service is a problem,  but the reason for that is primarily lack of infrastructure rather than excess of competition, and merging companies shall certainly not help improve the same. What is required is some seriously heavy investment in infrastructure, rather than simply buying out smaller players in the market, and additionally maybe even some corporate restructuring.

3. The Supreme Court has recently cancelled all 2G licenses issued during A. Raja’s tenure as Minister of Telecommunications. With the Judgement it self being questionable as regards its ratio and till a certain extent, its reasoning, and at the same time a Presidential reference also having been filed asking for clarifications to the same, it is best to follow a wait and watch policy and act only after receiving the Supreme Court’s reply on the Reference.

4. As per the Economic Times, there is a new round of Spectrum wars that’s about to begin with the upcoming re-auctioning of spectrum. Again, it is best to wait till the conclusion of the auction before deciding on such issues.

5. Clause 5(3) of the The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 provides that form may be filed preferably where “the parties to the combination are engaged in production, supply, distribution, storage, sale or trade of similar or identical or substitutable goods or provision of similar or identical or substitutable services and the combined market share of the parties to the combination after such combination is more than fifteen percent (15%) in the relevant market”. In light of this sub-clause, it is best to maintain harmony between various government policies  and the Act and regulations made under it in order to prevent unnecessary conflicts and confusion between the CCI, the Government and the Industry. In fact, the government, in its National Competition Policy, has sought to bring about harmony between the Act and policies and has suggested an elaborate mechanism to achieve the same.

6. Finally, if such an exemption is allowed, it will set a bad precedent in general and may encourage industries to lobby for exemptions in their favour.

The source of all data and statistics is The Economic Times