Ola is not dominant player, CCI rejects Meru's pricing allegation

It appears that the Competition Commission of India (CCI) is adopting a policy of wait and watch and is in no mood to meddle into the price-war which is being played by tech-based cab operators in the country.

In a fresh decision, the CCI has dismissed allegations against cab aggregator Ola, owned by ANI Technologies Pvt. Ltd, predatory pricing filed by two Bengaluru-based radio taxi operators – Fast Track Call Cab Pvt. Ltd and Meru Travel Solutions Pvt. Ltd.

The two companies had approached the government body in 2015 alleging that Ola had forcefully captured the cab market by offering discounts to passengers and large incentives to cab drivers.

The complainants added that the cab-hailing company had violated the Competition Act of 2002 with its pricing move. The other companies did not have the means to offer similar discounts and incentives to commuters and drivers, respectively.

CCI has ruled in favour of Ola, dismissing the petition on the grounds that the evidence on record did not establish the dominance of Ola in the relevant market.

“At this stage, it is difficult to determine with certainty the long-term impact of this pricing strategy as the market is yet to mature,” the six-member bench comprising CCI chairperson Devender Kumar Sikri and Justice GP Mittal said.

The Commission had passed a judgment based on an inquiry led by the director general of investigation.

The inquiry into the allegations brought out the fact that Ola does have a pool of finance through external funding, but at the same time, it does not enjoy a dominant position in the relevant market.

The company’s market share had declined following the entry of global peer Uber Inc., which had a total capital investment of 15 to 20 times more than Ola’s financial resources.

The report also observed the other competitors like Meru and Mega Cabs were lagging much behind from Ola.

During the hearing, ANI Technologies’ counsel argued that the company is a facilitator between taxi service providers and commuters; therefore, it is not in the same business as the complaints, who were radio taxi service providers.