CCI penalizes sports broadcasters Globecast & ESCL for bid rigging

Published: Jul 11, 2018

BY TIOLCorplaws News Service

NEW DELHI, JULY 11, 2018: THE Competition Commission of India today imposed penalty on Globecast, a subsidiary of the Orange Group (earlier France Telecom Group), a global service provider of broadcasting services and ESCL, a technology service provider in India since 1998 with specialisation in media broadcasting, for indulging in bid-rigging in tenders floated by sports broadcasters for procurement of end-to-end broadcasting services, such as ground segment services as well as satellite bandwidth services, for various sporting events during the period July 2011- May 2012 including Indian Premier League 2012 (IPL-2012).

This case was taken up by the Commission suo motu u/s 19 of the Competition Act, 2002 based on the disclosure by Globecast India Private Limited and Globecast Asia Private Limited u/s 46 of the Act r/w the Competition Commission of India (Lesser Penalty) Regulations, 2009. Subsequently, the Essel Shyam Communication Limited (ESCL), now Planetcast Media Services Limited, also approached CCI as lesser penalty applicant during investigation.

From the evidence collected in the case, the Commission found that the ESCL and Globecast operated a cartel amongst them in the various sporting events held during the years 2011-12 including IPL-2012. While submitting bids for the tender floated by various broadcasters during the period July 2011- May 2012 for provision of end-to-end broadcasting services, they exchanged information and quoted bid prices as per the arrangements arrived at amongst them . As a result, they committed an infringement of the provisions of Section 3(3)(d) r/w Section 3(1) of the Act during this period.

Considering contravention of provisions of the Act by Globecast and ESCL, an amount of Rs 31.94 Crores and Rs 1.33 Crores was computed as leviable penalty on ESCL and Globecast, respectively, in terms of proviso to Section 27 (b) of the Act. While computing leviable penalty, the Commission took into consideration all relevant factors including duration of cartel & mitigating factors and decided to levy penalty at the rate of 1.5 times of their profit for the period July 2011 – May 2012. Additionally, considering totality of facts and circumstances of the case, penalty leviable on individual officials of Globecast and ESCL was computed at the rate of 10% of the average of their income for preceding three years.

Keeping in view the stage at which the lesser penalty application was filed, co-operation extended in conjunction with the value addition provided by the evidences furnished by the lesser penalty applicants in establishing the existence of cartel, the Commission granted Globecast and its individuals 100 percent reduction in the penalty and 30 percent reduction in penalty to ESCL and its individuals. Pursuant to reduction, penalty imposed on ESCL was Rs 22.36 Crores.