The Competition Commission of India has imposed a fine of INR 52.24 crore on the Board of Control for Cricket in India for anti-competitive practices in the allocation of the Indian Premier League media and broadcast rights.
“The assessment of the Commission clearly brings out that the impugned clause in the IPL (Indian Premier League) Media Rights Agreement has been pursued by BCCI consciously to protect the commercial interest of the bidders of broadcasting rights as well as the economic interest of BCCI,” the CCI observed in its 44-page order.
The CCI also pronounced that the BCCI should “cease and desist from indulging in conduct that is anti-competitive in nature”. The BCCI is found to be guilty of the “abuse of dominant position” and indulging in practice resulting in the denial of market access”.
The CCI has found a clause in BCCI’s IPL media rights agreement, assuring the broadcasters that it “shall not organise, sanction, recognise, or support during the Rights period another professional domestic Indian T-20 competition that is competitive to the league” in a contravention of the provisions of Section 4(1) read with Section 4(2)(c) of the Competition Act, 2002 (Act).
The CCI while upholding a penalty of INR 52.24 crore has also ordered that the BCCI “shall not place a blanket restriction on the organisation of professional domestic cricket league/events by non-members”, and allowed the board to stipulate “conditions while framing/modifying relevant rules for approval or while granting specific approvals”.
The BCCI is also asked to issue a clarification about the rules to organize cricket leagues or events in India, involving either members of the board or third parties and guidelines for applying and consideration of applications. The board will have to file a compliance report on the CCI directions within 60 days.
The CCI has passed the order on a complaint filed in 2010 regarding IPL’s monopoly over league cricket played in India. The CCI in the same matter had observed on 8 February, 2013, “virtually, there is no other competitor in the market nor was anyone allowed to emerge due to BCCI’s strategy of monopolizing the entire market.
“The dependence of competitors on BCCI for sanctioning of the events and dependence of players and consumers for the same reason has been total. BCCI knowing this had foreclosed the competition by openly declaring that it was not going to sanction any other event,” added the CCI before it pronounced the sanctions as a result of BCCI’s anti-competitive attitude, cricbuzz has reported.
The BCCI, challenging the CCI findings, had argued that it was a not-for-profit organization and did not qualify as an enterprise to come under the ambit of the CCI, and whatever revenue it generated through cricket was used for the development of the game.
The CCI has dismissed BCCI’s argument and observed that the enterprise status does not depend upon profit motive alone., If a person or entity is involved in any economic activity, no matter with or without profit motive, it would be considered an enterprise as it interfaces with the market and hence, with other alternatives for the product or service in question, the CCI has further noted.
The BCCI also argued that its stand to restrict players and match officials from participating in competition not sanctioned by the board was in the interest of the sport.
The CCI dismissed the argument and said that such restrictive rules deprived the market for the sport and that BCCI’s “self-imposed restriction of not organizing, sanctioning, approving or supporting another T20 cricket event” was detrimental to the interest of cricket.
The BCCI has also argued that the IPL competes with all forms of entertainment programmes on television, including other sports, and therefore it does not enjoy a dominant position in the competitive market.
The CCI dismissed the argument and observed that characteristics of these television programmes and regional distribution of their target audience are different and not comparable with professional domestic cricket leagues like IPL.