Competition | July – September 2025
Enforcement Matters
Supreme Court upholds the penalties imposed on the Kerala Film Exhibitors Federation
On September 27, 2025, the Supreme Court upheld penalties imposed by the CCI on the Kerala Film Exhibitors Federation (“KFEF”) and its office bearers for engaging in anti-competitive practices, overturning a 2016 decision of the erstwhile Competition Appellate Tribunal (“COMPAT”), while also clarifying that prior to the 2023 amendments to the Competition Act the CCI did not have any obligation to issue a separate show cause notice before imposing penalties.
Notably the CCI, in its decision had upheld the allegations made by Crown Theatre, which claimed that KFEF had coerced film distributors into withholding releases at its venue and had called for a boycott of films screened there. Consequently, the CCI imposed a monetary penalty on KFEF and its office bearers; barred the President and General Secretary of KFEF from position in the KFEF for a period of two years; and directed KFEF to conduct competition awareness programmes. However, on appeal, while upholding the findings of the CCI relating to the contravention of the Competition Act, the COMPAT set aside the penalties imposed on the ground that no specific show-cause notice relating to the imposition of penalties had been issued to the individuals, which was a violation of natural justice.
The Supreme Court while rejecting the reasoning of the COMPAT, highlighted that when the findings of the DG report which clearly outlined the charges and identified the individuals involved was shared, parties were given an adequate opportunity to address all aspects of the alleged contravention which may also include imposition of monetary penalties and behavioural and structural remedies. The court further emphasized that individuals in charge of an entity at the time of contravention are statutorily deemed liable and as such no second show-cause notice was required to be given to the parties before imposing penalties since the respondents had been given adequate opportunity to respond.
CCI sub-divides allegations against Google into multiple abuse of dominance cases and comes to different conclusions in two decisions
On 1 August 2025 the CCI issued two separate orders in relation to abuse of dominance allegations against Google. Each of the decisions were based on the same information filed by the Alliance of Digital India Foundation (“ADIF”) inter-alia relating to Google’s abusive conduct qua online display advertising services and online search advertising. However, given that the said allegations related to distinct markets and different products/conducts of Google, the CCI decided to segregate the said matter into three sub-cases.
In Case No. 23(1) of 2024, the CCI made a prima facie observation that Google had abused its dominance in the online display advertising technology (“AdTech”) market and clubbed this matter with an ongoing probe further directing a detailed investigation into the matter. This is because, to the CCI, it prima facie appeared that (a) Google tied its publisher ad server with its ad exchange, forcing publishers to remain within its closed ecosystem thus leading to concerns of self-preferencing and tying; (b) Google restricted access to YouTube’s advertising inventory to its proprietary demand-side platform, limiting competition from rivals; (c) Google’s use of ‘Dynamic Allocation’ and ‘Last Look’ mechanisms, gave its own ad tools an unfair advantage in auctions; (d) Google’s opaque fee structures and allocation mechanisms within its AdTech services could harm publishers and advertisers.
In contrast, in Case No. 23(2) of 2024, the CCI dismissed allegations concerning Google’s search advertising policies, stating that the issues raised had already been dealt with in prior cases. No fresh investigation was deemed necessary. Thus, while the CCI has ordered a full investigation into Google’s conduct in the AdTech market, it has refused to reopen settled matters concerning search advertising, reflecting a split decision based on the distinct legal and factual contexts of each case.
CCI imposes penalty on Federation of Publishers’ and Booksellers’ Associations in India for anti-competitive practices
On 1 July 2025, the CCI found the Federation of Publishers’ and Booksellers’ Associations in India (“FPBAI”) to be in contravention of Section 3 of the Competition Act, which deals with anti-competitive agreements. FPBAI, an umbrella body of publishers and booksellers, was found to have engaged in price fixing, limiting market access, and imposing restrictive trade practices through its Good Offices Committee (“GOC”).
In its order, the CCI inter alia observed that the FPBAI: (a) published inflated currency exchange rates through GOC circulars for import of books and journals; (b) issued mandatory commercial terms including prices, credit periods, and interest rates to be followed by members; (c) previously fixed discounts to be offered to institutions, which remained publicly accessible despite an earlier cease-and-desist directive by the CCI in 2021; and (d) issued advisories to libraries and institutions discouraging them from dealing with non-members.
The CCI concurred with the Director General’s (“DG”) findings that such conduct amounted to anti-competitive practices. However, while no formal contravention was found in respect of the earlier discount policies, the CCI noted that FPBAI’s failure to implement the CCI’s 2021 order by not informing members of the CCI’s directions had weakened compliance.
The CCI imposed a monetary penalty of INR 256,000 (approx. USD 2,913.15) on FPBAI and INR 376,000 (approx. USD 4,278.68) on three office bearers. It also directed FPBAI to: (a) circulate the order to all members and affiliates; (b) remove anti-competitive circulars from its own as well as its affiliates’ websites; (c) publish a summary of the present and the 2021 order in its FY 2024–25 annual report; (d) conduct competition law awareness programs nationwide; and (e) submit a compliance report within two months.
CCI directs investigation against Asian Paints for alleged abuse of dominance
On 1 July 2025, the CCI directed the DG to investigate Asian Paints Limited (“Asian Paints”) for alleged abuse of dominant position. The complaint was filed by Grasim Industries Ltd. (Birla Paints Division) (“Birla”), a new entrant in the decorative paints market with its brand ‘Birla Opus’.
Birla alleged that Asian Paints, a market leader in the paints industry, engaged in exclusionary and coercive practices to block its entry and limit competition. These included: (a) offering arbitrary incentives (e.g., foreign trips) to dealers in exchange for exclusivity; (b) penalizing dealers who engaged with Birla through reduced credit, increased targets, withdrawal of benefits, and termination of relationships; (c) coercing dealers to reject Birla’s tinting machines; (d) pressuring raw material suppliers, warehouse landlords, clearing and forwarding agents, and transporters to cease associations with Birla; and (e) orchestrating smear campaigns to damage Birla’s reputation.
The CCI delineated the relevant market as the market for the manufacture and sale of decorative paints in the organized sector in India and observed that Asian Paints held a dominant position with a 39.05% market share in 2022–23, which was more than three times that of its closest competitor. The CCI further noted high entry barriers due to Asian Paints’ extensive dealer network, vertical integration, and financial strength.
The CCI prima facie found that Asian Paints’ conduct amounted to: (a) imposition of unfair conditions on dealers; (b) denial of market access through input foreclosure; and (c) imposition of supplementary obligations unrelated to performance. Accordingly, the CCI directed the DG to initiate an investigation against Asian Paints.
Asian Paints later challenged the CCI’s decision before the Bombay High Court, arguing that the investigation was unjustified as similar allegations had previously been dismissed in other cases. The court rejected this argument, holding that the current complaint involved distinct facts and legal issues. It also held that the CCI was not required to provide a hearing to Asian Paints before initiating the investigation, since the process is administrative and not judicial in nature. The court found no procedural error or legal barrier to the investigation and dismissed the petition.
CCI Approves Acquisition of AAM India Manufacturing Corporation Private Limited by Bharat Forge Limited with Behavioural Safeguards Amid High Market Concentration Concerns
On 25 July 2025, the CCI published its decision dated 22 April 2025, approving the acquisition of AAM India Manufacturing Corporation Private Limited (“AAMCPL”) by Bharat Forge Limited (“BFL”). AAMCPL manufactures and sells axles for commercial vehicles, while BFL primarily produces metal-forged vehicle components, including parts used in axle assemblies. Moreover, certain promoters of BFL had controlling interests in two joint ventures (“JVs”) that also operated in the axle manufacturing space, covering commercial, off-highway, and defence vehicles.
The CCI raised concerns due to the significant overlap between the merging entities, both of which were leading, well-established players in the axle market for medium and heavy commercial vehicles (“MHCVs”).
Key issues identified included (a) the potential for a sharp rise in market concentration, with the combined entity projected to control 60–65% of the MHCV axle market, while the nearest competitor would have a market share of just 5–10%, it was also noted that post-merger, the Herfindahl-Hirschman Index , would exceed 4,500, with an increase of around 1,900, indicating a highly concentrated market; (b) the deal also threatened to eliminate competition between closely matched players i.e., the JVs and AAMCPL; (c) additional concerns stemmed from significant entry barriers, as establishing a new axle manufacturing operation requires considerable time, investment, and extensive validation; (d) the market also showed limited supply-side flexibility due to long-term contracts and technical constraints, making switching suppliers costly and inefficient; (e) buyer power was likely to diminish, as purchasers would be left with fewer credible suppliers to choose from.
In response, BFL initially proposed certain voluntary remedies, but these failed to fully satisfy the CCI’s concerns, prompting a Phase II investigation. During this extended review, BFL revised its commitments and provided further clarifications, which were eventually accepted by the CCI. These behavioural remedies, binding until December 2031, are structured to preserve competition between AAMCPL and the JVs post-transaction. The measures include (a) maintaining independent governance structures; (b) ensuring separate branding and marketing for AAMCPL; (c) establishing strict information barriers to prevent the sharing of competitively sensitive data; (d) In addition, both entities i.e., JVs and AAMCPL are required to submit bids independently to avoid coordination; and (e) BFL’s nominee directors on JVs’ boards must abstain from participating in any discussions related to AAMCPL.
Developments in the Legal Framework
Parliamentary Committee Urges Reconsideration of Digital Competition Bill, Calls for Cautious Regulation of Digital Markets
On 11 August 2025, the Parliamentary Standing Committee on Finance (“Committee”) presented its Twenty-Fifth Report (“Report”) titled “Evolving Role of Competition Commission of India in the Economy, Particularly the Digital Landscape” before the Parliament. The Report undertakes a comprehensive review of the CCI’s regulatory role in the rapidly evolving digital economy and builds upon expert recommendations made in previous policy discussions. The Committee broadly endorsed a shift from the traditional ex-post enforcement of competition law to a more ex-ante approach as proposed under the Draft Digital Competition Bill, 2024 (“DCB”). However, it also identified significant concerns that, in its view, warranted the withdrawal and redrafting of the DCB.
Among the key issues highlighted by the Committee was the broad and rigid nature of DCB’s ex-ante obligations, which, it warned, could impose disproportionate compliance burdens on digital platforms without adequate market evidence. There was also concern that the DCB’s design could stifle innovation, discourage foreign investment, and unduly impact startups and Micro, Small, and Medium Enterprises (“MSMEs”). In this regard, the Committee noted that the proposed thresholds for the designation of Systemically Significant Digital Enterprises (SSDEs”), could risk prematurely capturing smaller digital players. As such it recommended not only refining these thresholds but also introducing a rebuttal mechanism for entities to contest such designation.
On merger control, the Committee suggested reviewing the current deal value threshold, expressing concern that acquisitions of innovative MSMEs in the tech sector might escape CCI scrutiny under current norms.
Additionally, it called for a broader scope in CCI’s market studies, advocating for assessment of harms beyond price such as data concentration, privacy risks, and innovation harms.
On the question of regulating artificial intelligence, the Committee recommended deferring such regulation until the CCI builds adequate technical capacity.
Overall, the Committee’s Report reflects a nuanced and critical approach to regulating digital markets, recognizing the need for proactive oversight while cautioning against premature or excessive intervention that may disrupt innovation and competition.
For more information contact:
Zenia Cassinath
Partner & Practise Head – Competition
zenia.cassinath@veritaslegal.in
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