t n nlu a l m c 2018nlujodhpur.ac.in/uploads/18681802020340.pdf · the competition commission of...

THE NINTH NLU ANTITRUST LAW MOOT COURT COMPETITION, 2018

National Law University, Jodhpur

In association with

The Competition Commission of India

And

Shardul Amarchand Mangaldas & Co.

KNOWLEDGE & RESEARCH PARTNERS

CLARIFICATIONS

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1. Is Bohemia a developed/developing economy? What is the GDP of Bohemia? What is

the index of economic disparity among the people of Bohemia, if any?

Response: Bohemia is a developing country, as a result of which there are varying levels

of economic disparity among the Bohemian people. The GDP of Bohemia is not

relevant to the proposition, and all other details provided in the Proposition are

sufficient.

2. What is Lutyen’s market share in the market for sale and manufacture of televisions in

Bohemia?

Response: Lutyen has a market share of 40% in the market for manufacture and sale of

televisions in Bohemia, and a higher share in the market for manufacture and sale of

Full-HD televisions in Bohemia.

3. What is Lutyen’s market share in the market for sale and manufacture of Full-HD

televisions in Bohemia?

Response: Please refer to the response to clarification 2 above.

4. Is the Tojo Stick compatible with non-HD televisions in Bohemia?

Response: No.

5. Are the casting devices compatible with CRT (Cathode Ray Tube) Monitors?

Response: The information provided in the Proposition is sufficient and this fact is not

material to the arguments.

6. What were Lutyen’s assets and turnover in 2017?

Response: Lutyen’s assets in Bohemia for the financial year ending 31 March 2016 were

BNR 2000 crores. In addition, please read the asset and turnover figures in paragraph 5

of the Proposition as applying for the year ending 31 March 2016.

7. Is there any clause for retrospective application in the 27 March 2017 notification

released by the MCA (Ministry of Corporate Affairs, Bohemia)?

Response: The notification is identical to the notification of the same date issued by the

Ministry of Corporate Affairs, India (S.O. 988(E) and S.O. 989(E)).

8. Is the penalty imposed on Lutyen of 53 crores in Case No. 1 of 2018 and Case No. 2 of

2018 a joint penalty? If yes, what is the quantum of penalty separately for each of these

violations? (The two parts of the joint penalty being-: a.) Under section 27 of the Act for

indulging in resale price maintenance and tie-in arrangement b.) Under section 42 of the

Act for violating CCB’s order of conditional approval of the Lutyen’s acquisition of the

casting technology division of Tojo.)

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Response: The details provided in the Proposition are sufficient. Additionally, the

penalties imposed in Case Nos. 1 & 2 of 2018 are in conformity with the Competition

Act and its associated regulations.

9. When (the exact date) did CCB approve the acquisition conditionally?

Response: The CCB approved the acquisition on 27 July 2017.

10. What is RK’s market share in market for sale and manufacture of casting devices only

compatible with Full HD as well as Ultra HD televisions in Bohemia?

Response: The details provided in the Proposition are sufficient.

11. Para 10. "There would be no exclusive arrangement between Lutyens TV's televisions

and the Tojo Stick and that the Lutyens TV must be compatible with all casting devices"

Clarification: What do refer by 'No Exclusive Arrangement'? Does it refer to tie-in or any

other specific anti-competitive arrangement? Secondly, is Lutyens TV compatible with all

other casting devices? Thirdly, is there any time limit for such modification?

Response: For the first part of the question, the details provided in the Proposition are

sufficient. For the second part, there is no allegation to this effect. For the third part, the

restriction is for three years, but this is not material to the current dispute.

12. Para 13. "Sandy store is renowned for stocking all television brands" Clarification: Did

Sandy store stocked Lutyens TV before the acquisition of Tojo Stick and the allegation

of Resale Price Maintenance ?

Response: The details provided in paragraphs 13 and 14 of the Proposition are sufficient.

13. Para 17. " The CCB passed an order finding Lutyens TV guilty of Resale Price

Maintenance and Tying-in" Clarification: Was the conviction for tying-in under S.3(4) or

4(2)(d) or any other provision of the Competition Act?

Response: The CCB’s findings related to both provisions. Counsels are at liberty to make

all arguments which they would consider relevant.

14. When did Lutyen begin its operations in Bohemia? Was it ever a competitor of Tojo in

market for manufacture and sale of CRT TV’s?

Response: Lutyen TV was incorporated in 1989 and was initially a competitor in the

market of CRT TVs.

15. What are the asset/turnover values in 2017, both- in Bohemia and outside Bohemia of

Lutyen for each of its division?

Response: Please see response to clarification 6 above.

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16. Whether Lutyen is still manufacturing and selling other kinds of televisions (Full HD,

CRT TV’s, Plasma) apart from UHD TV’s. If yes, what is its market share in the market

for manufacture and sale of these other kinds of Televisions?


17. Which are the others players involved in manufacturing and sale of other kinds of

televisions (Full HD, CRT, Plasma) and their respective market shares in each of these

segments?


18. Does the phrase “witnessed declining profits” used in Paragraph 4 Line 2 means that

Tojo has been incurring losses for almost a decade? Can exact figures/Balance Sheet

Extracts of profits/ losses from CRT Division from 2008-2017 be provided?

Response: The details provided in the Proposition are sufficient. Additional data as

sought is not relevant.

19. Whether Tojo Stick works with televisions only or other devices as well such as set- top

boxes, smartphones/tablets/laptops through OTG cables etc?

Response: The Tojo stick is compatible with all devices having an HDMI port.

20. When did the research begin for Tojo Stick? For how many years was the product in the

pipeline?


21. Who were the other players involved in the market for manufacture and sale of casting

devices in Bohemia (apart from RK and Tojo) and their respective market shares in

2015(just before the launch of Tojo Stick)? Whether their casting devices supported Full

HD/ Ultra HD Formats?

Response: The details provided in the Proposition are sufficient. There were other

players present in the market for casting devices supporting both full HD and Ultra HD

format and their shares were lower than both Tojo and RK separately.

22. Could more details of the acquisition of Bohemian Startup (Para 4 Line 4) be provided-

in terms of date of acquisition, transaction size, share/asset purchase value be provided?


23. What was impact on the market shares (in % terms) of other players in the market for

manufacture and sale of casting devices in Bohemia after Tojo’s launch of its casting

device both-before the acquisition of Bohemian start-up and after the acquisition?

Response: There were no significant changes as a result of the acquisition of the

Bohemian start-up. Tojo’s casting devices were doing well in the competitive market for

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casting devices before being acquired by Lutyen, but did not have a market share as large

as RK’s.

24. Whether the asset size i.e. BNR 1231 Crores in Bohemia of Tojo mentioned in Para 5

Line 1 includes assets worth BNR 438 Crores from its Casting Technology Division?

Response: Yes.

25. Whether the gross turnover of BNR 1448 Crores of Tojo (outside Bohemia) mentioned

in Para 5 Line 2 contains portion of outbound turnover of its Casting Technology

Division?

Response: The turnover of BNR 1448 crores is not from outside Bohemia.

26. What is the asset size of Tojo abroad and turnover in Bohemia?


27. What are the asset and turnover values (outside Bohemia) for Casting Technology

Division of Tojo in 2017(before acquisition by Lutyen)?


28. On what date did the order approving the Combination under Section 31(Para 10 Line 2)

come out?


29. Whether “all distribution agreements” (referred to in para 12 line 4) constitutes

agreements with online distributors as well?

Response: Yes.

30. Which are the other distributors (apart from Sandy Home) for UHD TV’s and other

kinds of Televisions manufactured in Bohemia and their respective market shares?

Response: There are various other distributors, including online sellers. The difference

between the market share of Sandy Home Store and its closest competitor is

approximately 12 - 15%. There are numerous smaller distributors as well with market

shares in the range of 2-5% each.

31. Which are the players involved in manufacture and sale of UHD TV’s apart from Lutyen

and Sandy Home and their respective market shares before Lutyen’s acquisition of Tojo’s

casting technology division and after the launch of the festive offer? What is the market

share of Sandy Home in 2017 in the “market for manufacture of UHD TV’s” and

“market for other kinds of Televisions in Bohemia”?

Response: There are various other TV manufacturers in Bohemia. Lutyen is the largest,

followed by Sandy Home Store. The difference between the market share of Sandy

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Home Store and its closest competitor is approximately 10%. There are numerous

smaller manufacturers as well with market shares in the range of 2-5% each.

32. What is the market share of Sandy Home in 2017 in the “market for manufacture of

UHD TV’s” and “market for other kinds of Televisions in Bohemia”?

Response: The details provided in the Proposition along with clarifications provided to

clarification 31 above are sufficient.

33. Which are the other distributors (apart from Sandy Home) for UHD TV’s manufactured

by Lutyen and/or other players in Bohemia and their respective market shares?


34. Which are the distributors for casting devices manufactured by Tojo, R.K and/or other

players and their respective market shares?

Response: Please see the response to clarification 30 above. For the most part, casting

devices are sold through the same distribution network as televisions.

35. What is the market share of RK in “market for manufacture and sale of sticks compatible

with UHD Technology” and “market for manufacture and sale of sticks compatible with

Full HD Technology” respectively pre and post bundling? Also, can Profits/Loss Figures

of RK post bundling be provided?


36. Whether RK has foreign presence?

Response: No.

37. Does the entire MCA notification of 27 March, 2017 apply to the problem, or is it just

the specified paragraph in para. 8?

Response: The entire notification is applicable.

38. Can the penalty imposed in para. 11 on Lutyen be assumed to be 1 % of Lutyen and

Tojo's joint turnover/assets as per s. 43 A of the Competition Act, 2002.

Response: No such assumption should be made. The penalty imposed is of any amount

up to 1% of the turnover of the combination.

39. Para 15 mentions, "Even though such bundling was only at distributor's level, RK lost

substantial sales" while Para 12 mentions, "Lutyen TV also added a clause to all

distributorship agreements that the Lutyen TV Television and Tojo Stick must be sold by

the distributors as a package?" So was the package, that included Tojo stick and Lutyen

TV Television, sold by Lutyen as a package only till the distributor level or even the end

customers?


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40. Regarding para 14 'for violation of the provisions of the Competition Act'. Which

provisions are being referred to, in particular here?


41. We wanted to know whether any regulation/ notification coming on 4 March, 2018 will

have to be taken into consideration as per s. 20(3).

Response: Only regulations and notifications already in force as on date of release of this

clarification need to be considered.

42. Whether Lutyen TV was granted a hearing before CCB dismissed the case no. 3 of 2018,

disagreeing with the DGs report which had found Sandy Home Store indulging in refusal

to deal in Lutyen TV's product?

Response: No.

43. Please elaborate upon 'upstream markets and downstream markets' as mentioned in para

10.


44. Did the CCB find Lutyen TV to be guilty of tying with respect to distributors and

consumers both (by virtue of the distributorship agreement) or merely with respect to

distributors (as alleged by RK).

Response: The details provided in the Proposition are sufficient. The allegation by RK

was not limited to tying with respect to distributors.

45. What is the corporate structure of Tojo Ltd?


46. Does the turnover and assets of Tojo (1231 Cr. and 1448 Cr. respectively) include those

of Tojo Stick?

Response: Yes.

47. Whether the acquisition of shares (3%, 4%, 5%) by Lutyen was made in Tojo or Tojo

Stick?

Response: The details provided in the Proposition are clear on this aspect.

48. When was the Asset Purchase Agreement consummated?


49. Is Tojo a manufacturer of television?


50. In paragraph 12 it is stated “Subsequent to receiving the CCB’s approval”. Which

approval is being referred to here?

Response: The details provided in the Proposition are clear on this aspect.

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51. Whether the bundling of the Lutyen Tv and the Tojo Stick was only at the distributor

level or at the retailer level also?

Response: The bundling was at both the distributor and retailer level with the intention

that customers purchase the bundled package.

52. Whether the 10% Discount Cap was applicable to the retailers as well as the online

sellers of Lutyen Tv?


53. “In fact, Lutyen TV’s board documents and presentations suggest that Lutyen TV intended to purchase

at least 25% of Tojo’s shareholding, in order to enable it to make an open offer with a view to acquire

controlling rights over Tojo and eventually sell off Tojo’s non-profitable businesses.” This information

was available to all or was restricted to the board members of Lutyen Tv?

Response: This information was not available in public domain.

54. In the Joint Investigation conducted by the DG (Para-17) and further in the charges

framed by CCB on basis of that investigation, whether Lutyen TV is charged for abusing

its dominance?


55. If you could provide us about the details of the "start up" as mentioned in Para 4 of the

proposition.


56. Whether the Counsel from the Respondent's side is supposed to make separate issues for

each party?

Response: Yes.

57. What is the net worth, asset value and gross turnover of Lutyen TV during the course of

transaction?


58. Whether Lutyen TV Pvt. Ltd. is a listed company in Stock Exchange?

Response: No.

59. What is the value of assets and turnover of Lutyen TV Pvt. Ltd?


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