Sh. Surinder Singh Barmi vs Board For Control Of Cricket In … on 8 February, 2013 – Case Summary
In the case of Sh. Surinder Singh Barmi vs Board For Control Of Cricket In India (BCCI) on 8 February 2013, the Competition Commission of India (CCI) was presented with a case that questioned the practices of the Indian Premier League (IPL) and the Board of Control for Cricket in India (BCCI). The case was brought forward by Sh. Surinder Singh Barmi, an avid cricket fan and enthusiast, who alleged that the IPL and BCCI were contravening the provisions of the Competition Act, 2002.
Facts of the Case
Barmi was particularly concerned about the tendering/bidding process adopted by the IPL for the teams and other associated contracts. He alleged that the unfair process distorted the competition in the market, with the possibility of IPL/BCCI officials earning major profits through kickbacks. Barmi cited various news reports from April 2010 that pointed to potential irregularities in the IPL bidding process, including allegations of money laundering, match fixing, and unfair tactics used by Shri Lalit Modi, the then chief of IPL.
Barmi also alleged a lack of transparency in the bidding process for eight IPL franchises, favoring particular companies for granting media rights with longer exclusive periods, and flouting of the bidding process for event management contracts and other services used during the IPL tournaments. He further alleged that BCCI and IPL manipulated the bidding process for awarding contracts related to the franchisees of eight IPL cricket teams, creating barriers of entry for new entrants in the market.
Issues Raised
The case raised several issues, including whether the BCCI and IPL were in a dominant position in the market for Twenty-20 cricket league and whether they had abused this position by favoring certain parties in awarding contracts. The case also questioned the transparency and fairness of the bidding process for IPL franchises and other associated contracts.
Court’s Observations and Findings
The CCI, after considering the information, directed the Director General (DG) to investigate the matter. The DG’s investigation found that BCCI, being a society registered under the Tamil Nadu Societies Registration Act and mandated for the development of cricket in India, fell within the purview of the definition of an ‘enterprise’ under section 2(h) of the Act. The DG concluded that the BCCI-IPL enjoyed a monopoly status for the Twenty-20 format of cricket and consequently had a monopoly for the economic activities related to organizing such events in the relevant market.
The DG also found irregularities in the award of franchise rights, with some franchises changing their status or shareholding pattern after being awarded tenders. The DG concluded that BCCI had abused its dominant position by entering into agreements with different franchisees on its unilateral terms and conditions, which were unfair and discriminatory in nature and resulted in restricting the relevant market for other players.
In response, BCCI denied that it was engaged in any anti-competitive or abusive behavior in violation of the provisions of the Act. BCCI contended that it is a not-for-profit society and is not covered under the definition of ‘enterprise’, to be liable under the provisions of the Act. BCCI also argued that the DG had erred in defining the relevant market and conducting competition analysis.
The case presents a significant examination of the practices of major sports organizations and their compliance with competition laws. The outcome of the case could have far-reaching implications for the conduct of such organizations in the future.