CCI Rejects Anti-Competitive Conduct Claims Against DIAL, Upholds IGIA Security Tender Process

The Competition Commission of India (CCI) on 16 July closed an information alleging abuse of dominance and anti-competitive conduct against the Airports Authority of India (AAI), the Ministry of Civil Aviation (MoCA) and Delhi International Airport Limited (DIAL).

A Bench comprising Chairperson Ravneet Kaur and Members Sweta Kakkad and Deepak Anurag held that DIAL awarded security service contracts at the Indira Gandhi International Airport (IGIA) through a competitive and arm's-length bidding process in compliance with the Operation, Management and Development Agreement (OMDA), and found no prima facie case of violation of Sections 3 and 4 of the Competition Act, 2002. They noted:

“...based on the material placed on record by DIAL, the Commission is of the view that the allegations raised regarding contravention of Section 4(2)(a)(i) of the Act are not established.”

Swam Kartik Sharma, Director of Galaxy Security and Allied Services Private Limited, filed the information against AAI, MoCA and DIAL, alleging contravention of Sections 3 and 4 of the Competition Act, 2002. He claimed that DIAL had awarded security service contracts at IGIA to RAXA Security Services Limited, a GMR Group company, for nearly two decades without following a fair and transparent competitive bidding process.

He also contended that DIAL's decision to award contracts to RAXA violated the OMDA, denied market access to other players and amounted to abuse of DIAL's dominant position, and sought a direction for investigation by the Director General into the alleged anti-competitive conduct.

DIAL, however, submitted that it awarded the contracts through a competitive tender process in accordance with the OMDA and that RAXA emerged as the successful bidder.

The Commission observed that DIAL had furnished documents showing that it followed competitive bidding processes for the relevant tenders, including publication of tender notices, technical and financial evaluations, and participation of multiple bidders.

After examining the report of the independent probity auditor, the Board resolution and other records, the Commission found that DIAL awarded the impugned tender in compliance with the OMDA and on an arm's-length basis. It further held:

“In catena of cases, the Commission has already opined that the procurer must have freedom to exercise its choice freely in the procurement of goods and services following the law of the land. Therefore, the Commission deems it appropriate not to interfere with the commercial decisions made by the entities in the normal course of business unless the same raise any anti-competitive concern.”

The Members also stated that the Informant failed to substantiate the allegations of abuse of dominance under Section 4 of the Competition Act. Further that the Informant did not place any material on record to indicate bid-rigging or collusive bidding so as to attract Section 3 of the Act, which prohibits anti-competitive agreements.

Accordingly, the CCI closed the information, holding that the Informant failed to establish any prima facie case of contravention of Sections 3 or 4 of the Competition Act, 2002.