NCLAT dismisses plea seeking probe against Ola and Uber on price fixing
The National Company Law Appellate Tribunal (NCLAT) has dismissed an appeal seeking investigation into alleged fixing of prices by cab aggregators Ola and Uber by using algorithms.
A three-member NCLAT bench upheld the order passed by fair trader regulator CCI, which had earlier rejected a plea seeking probe against Ola and Uber alleging unfair price fixation mechanism and abuse of dominant position by them.
The appellate tribunal observed that the allegations against the cab aggregators had no substance.
We are of the considered opinion that even on the merits there is no substance in the allegations emanating from the Informant, NCLAT said.
Graphic by Gokul K
The opinion of the Commission in regard to non-existence of a prima facie case warranting closure of the information cannot be faulted on any ground. We find no legal infirmity in the impugned order. There being no merit in this appeal, it is accordingly dismissed, it added.
The bench comprises NCLAT Acting Chairperson Justice B L Bhat, and Justices Venugopal M and Shreesha Merla.
NCLAT observed that none of the two enterprises Ola and Uber are independently holding dominant positions in the relevant market of providing services and not operating as a joint venture or a group.
This proposition of fact being an admitted position in the case, question of abuse of dominant position has to be outrightly rejected, it said.
On November 6, 2018, the Competition Commission of India (CCI) had rejected a plea filed by Samir Agrawal, an independent law practitioner, and closed the matter declining a probe into the issue.
Agrawal in his plea alleged that the two ride-hailing platforms used their respective algorithms to facilitate price fixing between drivers.
He had alleged collusion on the part of drivers through the cab aggregators' apps, which purportedly used algorithm to fix prices which the drivers were bound to accept.
CCI findings were challenged by Agrawal before NCLAT, which is an appellate authority above the fair trade regulator, contending that CCI has erroneously concluded on the genuineness and legality of the pricing model of Ola and Uber.
He contended that CCI has erroneously implied that price fixing done by way of an app is immuned from scrutiny.
Moreover CCI's observations that the app determined pricing on many occasions goes lower than what an independent driver would have charged' does not legitimise the price fixing, he added.
In its reply filed before NCLAT, Ola had rejected the allegations and said that it merely acts as an intermediary which connects two ends of the supply chain - taxi driver and the commuter.
Regarding pricing mechanism, it stated that there are numerous variables such as distance, time, availability of cab, weather etc, based on which the Ola App algorithm sets the fare of the trip which makes it impossible for anyone to fix prices.
While Uber said the price structure offered by it is comparable to metered taxis as well as auto rickshaws which follow standard price mechanism at different points of the day.
Moreover, the driver partners are free to charge any amount which is lower than the one recommended by the app. They are also free to pick up passengers not using the Uber App, it added.
Opposing it, the appellant submitted that Uber unilaterally fixes/restricts the price leaving Transportation Service Providers (TSPs) and ultimate riders with no choice on pricing as Uber has total control on the pricing.
Rejecting his plea, the appellate tribunal pointed out that the petitioner has no locus standi to file a complaint as he has failed to show that he suffered any loss through Ola and Uber.