Competition Commission imposes Rs 6.75 crore fine on ITPO

CCI not only penalised the company for abusing its dominant market position but also asked it to 'cease and desist' from anti-competitive practices

The Competition Commission of India has imposed a Rs 6.75 crore penalty on the Indian Trade Promotion Organisation, a central government agency, for indulging in unfair business practices.

Besides penalising ITPO for abusing its dominant market position in holding trade shows and exhibitions, the CCI asked it to "cease and desist" from anti-competitive practices.

The ruling pertains to ITPO's conduct with regard to trade shows and exhibitions held at Pragati Maidan in the national capital.

ITPO is the government's nodal agency to promote external trade and it accords approvals for holding of international trade fairs in India and abroad. The agency organises and facilitates various industrial trade fair and exhibition shows in India and overseas.

The CCI had ordered its investigation arm, the Director General, in May last year to probe ITPO following a complaint by the Indian Exhibition Industry Association.

According to the probe findings, ITPO imposed time gap restrictions for trade shows and gave preferential treatment to its own fairs over competing fairs at Pragati Maidan.

"...It is evident that by stipulating favourable time gap restrictions for its own events as compared to third-party organised events, opposite party 2 (ITPO) imposed unfair and discriminatory conditions on the third-party event organisers at Pragati Maidan," CCI said in an order released today.

The CCI also found the agency imposed discriminatory conditions on other organisers by taking a long time to confirm allotment dates and did not consider applications on a first-come-first-serve basis. It incorporated unfair conditions in agreements entered with other organisers in case of cancellation or re-scheduling of events.

The CCI said it considered it "appropriate to impose penalty at 2% of the average of the income/receipt/turnover for the last three preceding financial years..." amounting to a penalty of Rs 6.75 crore.

"The Commission directs opposite party 2 to cease and desist from indulging in such anti-competitive practices which have been found to be abusive in terms of the provisions of...The (Competition) Act," the watchdog added.

The CCI, which had also ordered a probe against the Ministry of Commerce & Industry in the matter, observed that "though no specific allegations are levelled against the ministry, yet the same was presumably arrayed as a party due to its role in policy formulation with regard to development of trade, commerce and industry in the country as well as implementation projects."

"The Commission is of the considered opinion that the aforesaid functions of the ministry do not qualify it to render an enterprise within the meaning of...The (Competition) Act," it added.