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?
Response: The details provided in the Proposition are sufficient.
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?
Response: The details provided in the Proposition are sufficient.
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?
Response: The details provided in the Proposition are sufficient.
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?
Response: The details provided in the Proposition are sufficient.
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?
Response: The details provided in the Proposition are sufficient.
27. What are the asset and turnover values (outside Bohemia) for Casting Technology
Division of Tojo in 2017(before acquisition by Lutyen)?
Response: The details provided in the Proposition are sufficient.
28. On what date did the order approving the Combination under Section 31(Para 10 Line 2)
come out?
Response: Please see response to clarification 9 above.
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?
Response: Please see response to clarification 30 above.
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?
Response: The details provided in the Proposition are sufficient.
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?
Response: The details provided in the Proposition are sufficient.
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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?
Response: The details provided in the Proposition are sufficient.
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.
Response: The details provided in the Proposition are sufficient.
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?
Response: The details provided in the Proposition are sufficient.
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?
Response: The details provided in the Proposition are sufficient.
49. Is Tojo a manufacturer of television?
Response: The details provided in the Proposition are sufficient.
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?
Response: The details provided in the Proposition are sufficient.
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?
Response: The details provided in the Proposition are sufficient.
55. If you could provide us about the details of the "start up" as mentioned in Para 4 of the
proposition.
Response: The details provided in the Proposition are sufficient.
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?
Response: Please refer to the response to clarification 6 above.
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?
Response: Please refer to the response to clarification 6 above.