The ruling has come on a complaint filed by four chess players. After a detailed probe, the watchdog concluded that the federation violated competition norms.
The Competition Commission of India (CCI) has imposed a fine of Rs 6.92 lakh on the federation and the amount is equivalent to 2 per cent of the grouping's three-year average annual turnover for the period from 2014-15 to 2016-17, as per its order.
The four chess players (informants) faced disciplinary action from AICF for participation in a chess event not authorised by it. The matter pertained to several stipulations of the federation, including on chess players, organisation of chess tournaments and discretionary nomination of players.
AICF is registered under the Tamil Nadu Societies Registration Act, 1975 as the National Sports Federation (NSF) for chess. It is also affiliated to the Federation Internationale des Echecs (FIDE) -- the apex international body governing chess.
For the case, markets for 'organisation of professional chess tournaments/ events in India' and for 'services of chess players in India' were considered as the relevant ones.
In a 45-page order, the regulator directed the grouping to cease and desist from indulging in anti-competitive practices.
"AICF shall lay down the process and parameters governing authorisation/ sanctioning of chess tournaments. In doing so, AICF will ensure that they are necessary to serve the interest of the sport and shall be applied in a fair, transparent and equitable manner," it noted.
Further, the CCI asked the federation to take all possible measures to ensure that competition is not impeded while preserving the objective of development of chess in the country.
According to the CCI, the undertaking prescribed by AICF regarding non-participation of its players in events not authorised by it amounts to restraints that are in the nature of exclusive distribution and refusal to deal as per certain provisions of the Competition Act.
Further, non-compliance of such undertaking would result in banning of the player and removal of their ELO rating, it added.
"These consequences create entry barriers, foreclose competition and restrict opportunities available to chess players. The said restrictions are likely to have appreciable adverse effect on competition...," the order said.
While emphasising that disciplinary action taken by AICF should be proportional, fair and transparent, the regulator also asked it to review the actions against the informants and other similar players.
The complaint was filed with the CCI pursuant to directions issued by the Delhi High Court and the regulator called for a detailed probe in February 2012. After the investigation was completed, the federation filed a petition before the Madras High Court, which stayed the CCI proceedings in December 2012. The stay was vacated by the Division Bench in April 2017, following which the regulator re-started the proceedings.
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