‘REPORTABLE’

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 641 OF 2017

UBER INDIA SYSTEMS PVT. LTD. Appellant(s)

VERSUS

COMPETITION COMMISSION OF INDIA & ORS. Respondent(s)

WITH

CIVIL APPEAL NO. 7012 OF 2019

(Arising out of Diary No. 3043 of 2017)

J U D G M E N T

R. F. NARIMAN, J.

Having heard lengthy arguments of Shri Dhruv Mehta,

learned senior counsel appearing for the appellant, and Shri

Raju Ramchandran, learned senior counsel appearing on behalf

of the respondent, we are of the view that interference in

these appeals is not called for.

The only reason we do so is because we were shown, as

part of information that was provided, the following

statement:

“23. Uber’s discount and incentive offered to consumer

pale in comparison with the fidelity inducing

discounts offered to drivers to keep them attached on

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CIVIL APPEAL NO. 641 OF 2017 etc.

its network to the exclusion of other market players.

Uber pays drivers/car owners attached on its network

unreasonably high incentives over and above and in

addition to the trip fare received from the

passengers. A summary of the incentives provided to

one fleet owner attached to Uber’s network, having 4

cars, which were driven by 9 drivers is reproduced

below.

Statement period 1

st

June to 28

th

June

Total Trips 1,135

Billed to Consumer (Uber’s Collection from Consumer)

Fare 256,187

Surge 18,621

Surcharges & tolls 23.499

298,307

Operates Earning [Car Owner’s Earning]

Operator’s Share out

of Consumer Revenue

Service Tax

100% 274,808

Surcharges & Tolls

Reimbursed

4.94% (12.946)

Others 518

Incentives Received

from Uber

230,464

Operator’s net earning 516,343

Uber’s Earning

Revenue Share (Out of

Fare and Surge)

0% 0

Incentives Paid to

Drivers

(230,464)

Other adjustments (518)

Net earning (loss) 515,346

Uber’s Earning

Revenue shares (out of

Fare and Surge)

0% 0

Incentives Paid to

Drives

(230,464)

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CIVIL APPEAL NO. 641 OF 2017 etc.

Other adjustments (518)

Net earning (Loss) (230,982)

Per trip Consumer revenue 242

Per trip Uber Net Loss (204)

In light of the abovementioned statement, it

can be seen that Uber was losing Rs.204 per trip in

respect of the every trip made by the cars of the

fleet owners, which does not make any economic sense

other than pointing to Uber’s intent to eliminate

competition in the market. Copies of the statements

of aforesaid fleet owners’ along with a summary for

the period June 1 to June 28,2015 is annexed herewith

as Annexure A-15 Colly.”

Based on this information alone, we are of the view

that it would be very difficult to say that there is no prima

facie case under Section 26(1) as to infringement of Section

4 of the Competition Act, 2002.

Section 4 is set out hereinbelow:

4. Abuse of dominant position.-(1) No enterprise or

group shall abuse its dominant position.

(2) There shall be an abuse of dominant position under

sub-section (1), if an enterprise or a group,—-

(a) directly or indirectly, imposes unfair or

discriminatory—

(i) condition in purchase or sale of goods or

service; or

(ii) price in purchase or sale (including

predatory price) of goods or service.

Explanation.— For the purposes of this clause, the

unfair or discriminatory condition in purchase or sale

of goods or service referred to in sub-clause (i) and

unfair or discriminatory price in purchase or sale of

goods (including predatory price) or service referred

to in sub-clause (ii) shall not include such

discriminatory conditions or prices which may be

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CIVIL APPEAL NO. 641 OF 2017 etc.

adopted to meet the competition;

or

(b) limits or restricts—

(i) production of goods or provision of services

or market therefor; or

(ii) technical or scientific development relating

to goods or services to the prejudice of

consumers; or

(c) indulges in practice or practices resulting in

denial of market access in any manner; or

(d) makes conclusion of contracts subject to

acceptance by other parties of supplementary

obligations which, by their nature or according to

commercial usage, have no connection with the subject

of such contracts; or

(e) uses its dominant position in one relevant market

to enter into, or protect, other relevant market.

Explanation.—For the purposes of this section, the

expression—

(a) “dominant position” means a position of strength,

enjoyed by an enterprise, in the relevant market, in

India, which enables it to—

(i) operate independently of competitive forces

prevailing in the relevant market; or

(ii) affect its competitors or consumers or the

relevant market in its favour;

(b) “predatory price” means the sale of goods or

provision of services, at a price which is below the

cost, as may be determined by regulations, of

production of the goods or provision of services, with

a view to reduce competition or eliminate the

competitors.

(c)“group” shall have the same meaning as assigned to

it in clause (b) of the Explanation to section 5.”

There are two important ingredients which section 4(1)

itself refers to if there is to be an abuse of dominant

position -

(1) the dominant position itself.

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CIVIL APPEAL NO. 641 OF 2017 etc.

(2) its abuse.

‘Dominant position’ as defined in Explanation (a)

refers to a position of strength, enjoyed by an enterprise,

in the relevant market, which, in this case is the National

Capital Region (NCR), which: (1) enables it to operate

independently of the competitive forces prevailing; or (2) is

something that would affect its competitors or the relevant

market in its favour.

Given the allegation made, as extracted above, it is

clear that if, in fact, a loss is made for trips made,

Explanation (a)(ii) would prima facie be attracted inasmuch

as this would certainly affect the appellant’s competitors in

the appellant’s favour or the relevant market in its favour.

Insofar as ‘abuse’ of dominant position is concerned, under

Section 4(2)(a), so long as this dominant position, whether

directly or indirectly, imposes an unfair price in purchase

or sale including predatory price of services, abuse of

dominant position also gets attracted. Explanation (b) which

defines ‘predatory price’ means sale of services at a price

which is below cost.

This being the case, on the facts of this case, on this

ground alone, we do not think it fit to interfere with the

order made by the Appellate Tribunal.

The appeals are dismissed with no orders as to costs.

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CIVIL APPEAL NO. 641 OF 2017 etc.

The Director General is requested to complete

investigation within a period of six months from today.

…………………………………………………………………., J.

[ R. F. NARIMAN ]

…………………………………………………………………., J.

[ SURYA KANT ]

New Delhi;

September 03, 2019.

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