TRAI and CCI can act independently even in overlapping cases, says Kerala HC

New Delhi: The Kerala High Court, on Tuesday, remarked that the Competition Commission of India (CCI) and the Telecom Regulatory Authority of India (TRAI) are both sectoral regulators and in case of some overlapping of jurisdiction, one will not oust the other.

The court was hearing a writ petition that alleged a conflict of jurisdiction between the two sectoral regulators and upheld the independent jurisdiction of the two, asserting that the two do not dilute the authority of either body. 

The statement comes after a legal dispute arose between Asianet Digital Network Pvt. Ltd. (ADNPL), a subsidiary of Asianet Satellite Communications, and Kerala Communicators Cable Ltd. (KCCL), two prominent multi-system operators (MSOs) in Kerala. Both companies had separate agreements with broadcaster Star India Pvt. Ltd. (SIPL) for access to its bouquet of channels.

ADNPL approached the court alleging that SIPL had abused its dominant position in the market by extending preferential treatment to KCCL. ADNPL claimed that SIPL was offering discriminatory discounts to KCCL, which was distorting fair competition.

ADNPL argued that this was not only a violation of Section 4 of the Competition Act, 2002 - pertaining to abuse of dominant position - but also breached the regulatory framework laid down by TRAI, including its Tariff Orders and Interconnection Regulations. Collectively, it is referred to as the New Regulatory Framework. 

The framework mandates that broadcasters are to treat distributors non-discriminatorily and offer discounts on fair and transparent terms to ensure a level playing field.

According to ADNPL, SIPL, in violation of the maximum discount of 35% (split as 15% towards discount and 20% towards distribution fee) allowed by the new regulatory framework, offered a discount of up to 50% to KCCL. 

Thereby, ADNPL was forced to increase the price of its channels higher than those of KCCL. This resulted in the loss of consumers to the former and a corresponding gain to the latter.

ADNPL stated that SIPL and KCCL entered into sham agreements purporting to advertise the petitioner's channel 'Asianet' on KCCL's Test channel. 

This Test channel, it was alleged, has no real viewership as it merely shows these advertisements full-time. The aforesaid actions of SIPL were alleged to be violations under the Competition Act.

At the heart of the case was a larger regulatory question: when a dispute involves both technical regulations and allegations of anti-competitive conduct, which authority takes precedence - TRAI or the CCI?

In earlier proceedings, SIPL had contested the jurisdiction of the CCI to investigate such matters, arguing that the regulatory space was already occupied by TRAI, and hence, the CCI should refrain from intervening.

It was argued that the aforementioned case relates to broadcasting services and therefore, the TRAI Act, being a special law, should prevail over the Competition Act, which is a general law. In such circumstances, TRAI is the appropriate and only regulator and no other authority should entertain the complaints.

However, the Kerala High Court dismissed this argument and clarified that both TRAI and CCI can exercise their powers independently. The court observed that while their areas of operation may occasionally overlap, this does not render either body’s role redundant or subordinate to the other.

According to the court, TRAI’s role as a sector-specific regulator is to ensure orderly growth, consumer welfare, and technical compliance in the telecom and broadcasting industries. It deals with issues such as interconnection agreements, quality of service, pricing, and licensing.

In contrast, the CCI’s role is broader and lies in maintaining market competition across all sectors. The court reiterated that CCI has the exclusive mandate to look into anti-competitive practices, including abuse of dominance and cartelisation, under the Competition Act.

“Both the authorities operate in different and distinct fields, and some overlapping of the jurisdiction will not oust the jurisdiction of one sectoral regulator at the expense of the other. The CCI, which is the sectoral regulator for dealing with anti-competitive practices in the relevant market and misuse of the dominant position, will have the jurisdiction to deal with the said allegation and not the TRAI. 

If there are allegations regarding violation of the terms of the license conditions or the provisions of the Regulations framed by the TRAI, the TRAI, being the sectoral regulator of the field, would assume jurisdiction to deal with those allegations. This Court, therefore, is of the view that there is no conflict insofar as the jurisdiction of the two sectoral regulators is concerned,” Kerala HC stated.