COMPAT sets aside CCI order, asks fresh probe against IATA

The Competition Appellate Tribunal has set aside the findings of the fair trade regulator CCI, which had given a clean chit to International Air Transport Association (IATA) and its Indian affiliate on alleged violation of competition norms and directed a fresh probe into the issues.
Allowing the appeal by the Air Cargo Agents Association of India, the tribunal has directed CCI's probe unit Director General (DG) to conduct a fresh probe into the allegations of abuse of dominance while determining the rate of cargo agents' commission.
A two member bench of Competition Appellate Tribunal (COMPAT) has observed that while probing, DG has committed "serious illegality by not recording a finding on the allegation of abuse of dominant position" of IATA and International Air Transport Association (India) Private Ltd.

"In the result, the appeal is allowed. The impugned order is set aside and the DG is directed to conduct fresh investigation into the allegations levelled by the appellant against the respondents and submit a report to the Commission ...Within a period of 60 days from the date of receipt of this order," said a COMPAT bench headed by Chairman Justice G S Singhvi.
It further said: "If the DG is unable to submit fresh investigation report within sixty days, then he may approach the Commission for extension of time for submission of the fresh investigation report".
In its strongly worded 72-page order, the COMPAT bench which also consisted member Rajeev Kher observed that CCI's order "is liable to be set aside because the Commission failed to take cognisance and decide the plea raised by the appellant in the context of the said illegality committed by the DG".

"In view of the above conclusion, we do not consider it necessary to deal with and decide the appellant's challenge to the negative finding recorded by the DG on the allegation of violation of Section 3 by Respondent Nos 2 (IATA) and 3 (IATA India which have been approved by the Commission," it added.

COMPAT's order came over an appeal filed by The Air Cargo Agents Association of India, challenging the CCI order passed on June 4, 2015 exonerating IATA for alleged anticompetitive practices and abuse of dominance.
IATA, which represents 260 airlines across the globe,
accredits air cargo agents in all the countries and runs the licensing system for cargo agents.

It prescribes various registration and accreditation requirements, and also enforcing many financial terms and conditions on cargo agents in India.
The issue was taken by the association before the CCI by filing an information on December, 2012 alleging that IATA is unilaterally prescribing the regulatory system and arrogating to itself self-generated regulatory power for registering, accrediting and regulating the engagement of Cargo Agents by Airlines of India.
According to the association, this was without any authority in law by any legal provision runs the licensing system for the IATA registered Cargo Agents.
However, the CCI closed the case against IATA saying that the IATA has not contravened any of provisions of the Competition Act.

According to Pochkhanawalla, despite allegation of abuse of dominant position by the association and production of the sufficient evidence on record to substantiate the same, "the DG neither adverted to that allegation nor recorded any finding".