Competition Commission Finds No Abuse Of Dominant Position By Indian Railways, IRCTC

Fair trade regulator Competition Commission of India has absolved Indian Railways and its arm IRCTC Ltd. of allegations of unfair market practices.

The order came after the regulator in November 2018, ordered a detailed probe into the allegations of abuse of dominant market position against Ministry of Railways and IRCTC for charging higher price than actual base fare on the sale of e-tickets.

The complainants -- Meet Shah and Anand Ranpara -- had alleged that Indian Railways and IRCTC abused their dominant position by charging higher price than actual base fare for the sale of e-tickets in contravention of Section 4 of the Act.

It was alleged that the two entities round off the actual base fare to the nearest higher multiple of Rs 5 to arrive at the total base fare, and the practice amounted to an imposition of unfair condition in the market for sale of rail tickets in India, particularly for online booking.

After taking into consideration the investigation report, CCI concluded that "the Commission is convinced that in the facts of the present case, no case of contravention of the provisions of Section 4 of the Act arise against Opposite Party No. 1 and Opposite Party No. 2.

OP-1 and OP-2 refer to Ministry of Railways and IRCTC respectively.

Section 4 of the Competition Act pertains to abuse of dominant position.

Indian Railways, during the course of investigation, justified the rounding off of fares on the grounds of logistic issue relating to handling of exact change at the ticket counters as lakhs of tickets are booked daily, rationalisation of passenger fares due to huge deficit between cost incurred and revenues realised in passenger segment, no increase in passenger fares in last decade and huge social obligation cost incurred by railways.

CCI noted that the policy of rounding off of fares has been "stated to be duly backed by commensurate social and commercial justification and thus such conduct cannot be classified as exploitative abuse by a dominant enterprise."

It also said that rounding off has efficiency parameters and helps the OPs (OP-1 and OP-2) to service their passengers better, especially those passengers who book tickets through offline mode, as many a time each minute saved helps the queue move faster at the ticket counter.

In addition, it saves huge time and effort by OP-1, especially of logistics and infrastructure.

"Rounding off of fares though on first blush may appear to be unfair qua passengers, but on a fair assessment and on weighing the scale evenly, does not seem to have potential to adversely affect the interest of consumers from a competition standpoint, particularly when there is no evidence that any of the passengers have been discriminated against vis--vis others," CCI said.