Airtel Loses Crucial Case Against Jio; Competition Commission Says Jio Has Not Broken Any Law By Offering Free Services

 

In yet another huge setback for Airtel, Competition Commission of India (CCI), which is the fair trade regulator, has dismissed Airtel’s complaint against Jio. In their judgement, whose copy is with us, the Commission has clearly stated that offering free, cheap services to penetrate a market is not illegal, in any matter.

The highlight of the 17-page order by CCI is the observation that offering free services by a new player does not raise competition. As per the order, if the same free, cheap services are being offered by a established player, then it raises competition, and disrupts the market.

The order stated that Jio “has not been found as prima facie contravening the provisions of the (Competition) Act prohibiting unfair pricing including predatory pricing,” adding, “It would not be anticompetitive for an entrant to incentivise customers towards its own services by giving attractive offers and schemes.”

Jio’s Free Service Is Well Within Law – CCI

In February, Airtel had filed a complaint with CCI, stating that Jio’s free services is a case of predatory pricing, aimed at snatching away existing players’ market share.

Dismissing such allegations, and directly supporting Jio’s business model, CCI in their order stated,“Such short-term business strategy of an entrant to penetrate the market and establish its identity cannot be considered to be anti-competitive in nature and as such cannot be a subject matter of investigation under the Act,”

The fact that Jio holds only 7% share of the overall telecom market in India was also attributed by CCI, as a reason for dismissing the case filed by Airtel. As per CCI, “In the absence of any dominant position being enjoyed by Reliance Jio in the relevant market, the question of examining the alleged abuse does not arise,”

Airtel’s Strategic Moves Are Failing Against Jio?

This recent verdict by CCI, quashing Airtel’s case against Jio is in continuation with their series of defeats, against Jio – both in terms of service, and legal matter.

Recently, TRAI scolded Airtel, along with Vodafone and Idea after Jio complained that they are offering different set of services to different users, with the sole intention of stopping them from moving to Jio.

Earlier this month, Airtel was comfortably beaten by Jio in terms of providing 4G speed, across India; and this was third month in continuation that Airtel was beaten by Jio.

Besides, even Airtel’s advertisements are being slammed for being false, and pretentious. And rating agencies are downgrading Airtel’s outlook for business, due to Jio’s aggression.

And, interestingly, there is another case being heard by CCI, in which Jio had complained against Airtel and other telecom players for alleged cartelisation in order to stop Jio’s growth and expansion. The issue was related to interconnect points being denied to Jio, which led to massive call drops when Jio customers called other telecom’s subscribers.

The verdict for this case is expected to be announced by end of June.

We will keep you updated.