An appeal filed by Uber against the inquiry initiated by the Competition Commission of India, for looking into anti-competitive practices was rejected by the Supreme Court of India.
The complaint by Meru and COMPACT laid down details of many abusive practises followed by Uber to establish a monopoly, mostly by the way of discounts and incentives.
Allegedly Uber’s expenditure is $885 million to generate revenue of $415 million. According to the complainant COMPACT, the size of discount and incentives proves that either there is a new business model or there could be an anti-competitive stance to it.
The Competition Commission of India had rejected this complaint earlier this year stating the incompetence of matching Uber’s technology cannot be named as an entry barrier in the industry. Later, the commission ordered for a full investigation by Director General into Uber’s anti-competitive practices.
The Supreme Court bench led by Justice Rohinton Fali Nariman and Justice Surya Kant observed that there is a loss of Rs.204 per trip by Uber due to the current incentives and discount offered, which is nothing but intent to eliminate other competitors.
The Apex Court looked into Section 4(1) of the Competition Act, which talk about the dominant position of a competitor and its abuse. The predatory prices of services imposes a direct and indirect threat to the competitors in the market, which is an abuse of dominant position according to section 4(2)(a) of the Competition Act.
The Director General is directed to complete the investigation within a period of six months.