‘REPORTABLE’

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 641 OF 2017

UBER INDIA SYSTEMS PVT. LTD.                    Appellant(s)

VERSUS

COMPETITION COMMISSION OF INDIA & ORS.          Respondent(s)

WITH  

CIVIL APPEAL NO. 7012 OF 2019  (Arising out of Diary No. 3043 of 2017)

J U D G M E N T

R. F. NARIMAN, J.

Having  heard  lengthy  arguments  of  Shri  Dhruv  Mehta,

learned senior counsel appearing for the appellant, and Shri

Raju Ramchandran, learned senior counsel appearing on behalf

of the respondent, we are of the view that interference in

these appeals is not called for.

The only reason we do so is because we were shown, as

part  of  information  that  was  provided,  the  following

statement:

“23. Uber’s discount and incentive offered to consumer pale  in  comparison  with  the  fidelity  inducing discounts offered to drivers to keep them attached on

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CIVIL APPEAL NO. 641 OF 2017 etc.

its network to the exclusion of other market players. Uber pays drivers/car owners attached on its network unreasonably high incentives over and above and in addition  to  the  trip  fare  received  from  the passengers.  A summary of the incentives provided to one fleet owner attached to Uber’s network, having 4 cars, which were driven by 9 drivers is reproduced below.

Statement period 1st June to 28th June

Total Trips 1,135

Billed to Consumer (Uber’s Collection from Consumer)

Fare 256,187

Surge 18,621

Surcharges & tolls 23.499

298,307

Operates Earning [Car Owner’s Earning]

Operator’s Share out  of Consumer Revenue  Service Tax

100% 274,808

Surcharges & Tolls  Reimbursed

4.94% (12.946)

Others 518

Incentives Received  from Uber

230,464

Operator’s net earning 516,343

Uber’s Earning

Revenue Share (Out of  Fare and Surge)

0% 0

Incentives Paid to  Drivers

(230,464)

Other adjustments (518)

Net earning (loss) 515,346

Uber’s Earning

Revenue shares (out of Fare and Surge)

0% 0

Incentives Paid to  Drives

(230,464)

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CIVIL APPEAL NO. 641 OF 2017 etc.

Other adjustments (518)

Net earning (Loss) (230,982)

Per trip Consumer revenue 242

Per trip Uber Net Loss (204)

In light of the abovementioned statement, it can be seen that Uber was losing Rs.204 per trip in respect of the every trip made by the cars of the fleet owners, which does not make any economic sense other  than  pointing  to  Uber’s  intent  to  eliminate competition in the market.  Copies of the statements of aforesaid fleet owners’ along with a summary for the period June 1 to June 28,2015 is annexed herewith as Annexure A-15 Colly.”

Based on this information alone, we are of the view

that it would be very difficult to say that there is no prima

facie case under Section 26(1) as to infringement of Section

4 of the Competition Act, 2002.

Section 4 is set out hereinbelow:  

4. Abuse of dominant position.-(1) No enterprise or group shall abuse its dominant position.

(2) There shall be an abuse of dominant position under sub-section (1), if an enterprise or a group,—-

(a)  directly  or  indirectly,  imposes  unfair  or discriminatory—

(i)  condition  in  purchase  or  sale  of  goods  or service; or (ii)  price  in  purchase  or  sale  (including predatory price) of goods or service.

Explanation.— For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to  in  sub-clause  (ii)  shall  not  include  such discriminatory  conditions  or  prices  which  may  be

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CIVIL APPEAL NO. 641 OF 2017 etc.

adopted to meet the competition;  or

(b) limits or restricts—

(i) production of goods or provision of services or market therefor; or (ii) technical or scientific development relating to  goods  or  services  to  the  prejudice  of consumers; or

(c) indulges in practice or practices resulting in denial of market access in any manner; or

(d)  makes  conclusion  of  contracts  subject  to acceptance  by  other  parties  of  supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or

(e) uses its dominant position in one relevant market to enter into, or protect, other relevant market.

Explanation.—For  the  purposes  of  this  section,  the expression— (a) “dominant position” means a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to—

(i) operate independently of competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant market in its favour;

(b)  “predatory  price”  means  the  sale  of  goods  or provision of services, at a price which is below the cost,  as  may  be  determined  by  regulations,  of production of the goods or provision of services, with a  view  to  reduce  competition  or  eliminate  the competitors.

(c)“group” shall have the same meaning as assigned to it in clause (b) of the Explanation to section 5.”

There are two important ingredients which section 4(1)

itself refers to if there is to be an abuse of dominant

position -

(1) the dominant position itself.

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CIVIL APPEAL NO. 641 OF 2017 etc.

(2) its abuse.

‘Dominant  position’  as  defined  in  Explanation (a)

refers to a position of strength, enjoyed by an enterprise,

in the relevant market, which, in this case is the National

Capital  Region  (NCR),  which:  (1)  enables  it  to  operate

independently of the competitive forces prevailing; or (2) is

something that would affect its competitors or the relevant

market in its favour.   

Given the allegation made, as extracted above, it is

clear  that  if,  in  fact,  a  loss  is  made  for  trips  made,

Explanation (a)(ii) would  prima facie be attracted inasmuch

as this would certainly affect the appellant’s competitors in

the appellant’s favour or the relevant market in its favour.

Insofar as ‘abuse’ of dominant position is concerned, under

Section 4(2)(a), so long as this dominant position, whether

directly or indirectly, imposes an unfair price in purchase

or  sale  including  predatory  price  of  services,  abuse  of

dominant position also gets attracted.  Explanation (b) which

defines ‘predatory price’ means sale of services at a price

which is below cost.   

This being the case, on the facts of this case, on this

ground alone, we do not think it fit to interfere with the

order made by the Appellate Tribunal.   

The appeals are dismissed with no orders as to costs.

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CIVIL APPEAL NO. 641 OF 2017 etc.

The  Director  General  is  requested  to  complete

investigation within a period of six months from today.

…………………………………………………………………., J. [ R. F. NARIMAN ]

…………………………………………………………………., J. [ SURYA KANT ]

New Delhi; September 03, 2019.

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