IndiGo may face CCI enquiry over alleged abuse of market dominance amid flight cancellations: Report
India’s antitrust regulator, the Competition Commission of India (CCI), may launch an investigation against the country’s largest airline, IndiGo, to detect any violations of antitrust rules, especially those related to abuse of market dominance to restrict services or impose unfair conditions on passengers. Economic Timesreferring to a senior government official.
There is a “strong case” for the agency to launch an investigation and aviation regulator Directorate General of Civil Aviation (DGCA) will continue to lead the government’s investigation into the IndiGo crisis, the official told ET.
In a statement to the news portal, the official said that CCI is following the matter closely and will soon take a final decision on whether to initiate an investigation.
Collapse at IndiGo
Indigo, a major player in India’s aviation industry, has canceled more than 5,000 flights this month due to severe crew shortages resulting from its failure to implement new regulations for pilots.
Flight cancellations have left thousands of passengers stranded at airports across the country during peak travel times. Although the airline needed 2,422 pilots, it had only 2,357 pilots.
DGCA’s action
On Saturday, the DGCA issued a notice to IndiGo’s CEO Pieter Elbers and COO Isidore Porqueras, giving them 24 hours to respond. But they informed the aviation regulator on Monday that it would take longer to determine the exact causes of the network collapse due to the airline’s extensive and complex operations. According to the report, they requested additional time to respond, citing DGCA regulations that allow for a 15-day response period.
Section 4 of the Competition Act prohibits a dominant undertaking from abusing its position by, among other restrictions, imposing unfair or discriminatory conditions on the purchase or sale of goods or services, limiting or restricting production or services, or imposing unfair or discriminatory conditions on consumers.
The law empowers the competition regulator to initiate investigations independently or upon a complaint, information from stakeholders or others, or a direction from the Center or state governments.
If, after investigation, the CCI finds a prima facie case of anti-competitive practices by a company, it directs its Director General to initiate a formal investigation and submit a report for further action. The report stated that if no prima facie evidence is found, the matter will be closed.
Notably, this is not the first time that IndiGo has come under the CCI lens for anti-competitive conduct. But the antitrust regulator reportedly dismissed two cases in 2015 and 2016: one filed by an individual over unfair conditions imposed on passengers and the other by Air India over predatory hiring practices.
