CITIZEN GRIEVANCES REDRESSAL FOUNDATION (INFORMANT) VS. MUMBAI INTERNATIONAL AIRPORT PVT. LTD. (DEFENDANT)

Applicable Act: The Competition Act, 2002 (The Act)

ALLEGATIONS

The informant alleged the Mumbai and Delhi Airport of abuse of dominance under section 4 of the Act for charging high parking rates from the customers in comparison to other airports in India.

BRIEF OF FACTS

• The two airports were owned and operated by consortiums which had bid for the entire airport project and the contract went to the bidder offering the highest share of revenue to Airport Authority of India (AAI).
• The agreement included providence of aeronautical and non-aeronautical services. The joint ventures were free to fix charges for non-aeronautical services and vehicle parking was included in the same.
• The parking charges at Mumbai and Delhi airports were excessively high while the parking rates charged at Kolkata and Chennai airports were relatively low. At Chennai and Kolkata, the rates offered for both aeronautical and non-aeronautical services are regulated and approved in advance by AAI.

CONCLUSION

The violation of Section 4(2)(a)(i) of the Act is to be seen in view of the allegation of fixing of charges of non-aeronautical services, which are not regulated in Mumbai and Delhi.

The earnings from non-aeronautical services form an important part of income for an Airport project owned by a consortium and hence it is given the liberty to fix prices on its own. But each such service cannot be bifurcated from the point of view of cost audit or pricing to decide if the price charged is fair / unfair. Concluding that the vehicle parking rates are higher for the defendant would mean that a consortium prices its services individually based on individual costs (and hence price is excessive in relation to cost of provisioning).

The defendant had 2-3 times more passengers than Kolkata and Chennai airports. The principle of demand and supply would come into play to discourage passengers from using parking space at airport and to promote the use of public transport, fixing the parking rate as per the market demand is helpful.

DECISION

From the above facts, there does not appear to be any competition issues involved. The Commission is prima facie of the opinion that merely because the parking rates of the defendant are higher than other airports, it is not a fit case for issuing directions for causing an investigation to be made by the DG and the case deserves to be closed under section 26(2) of the Act.