Who Governs Market Power in India? The Significance of Jiostar v. CCI

Introduction

The Kerala High Court's decision in Jiostar India Pvt. Ltd. v. Competition Commission of India is a significant advancement in India's competition law concerning regulated marketplaces. Beyond the details of pricing and marketing agreements, the verdict was driven by a challenge to the Competition Commission of India's jurisdiction to investigate allegations of abuse of power in the broadcasting business. A key concern about sectoral regulation and competition law is whether regulatory monitoring can protect dominant businesses from competitive scrutiny. By refusing to subordinate competition law to sector-specific regulation, the Court affirms the autonomous purpose of the Competition Act as a market-wide protection against exclusionary conduct, with implications that extend well beyond the broadcasting business.

I. THE DISPUTE AND THE DEEPER QUESTION: FROM BROADCASTING DISCOUNTS TO INSTITUTIONAL AUTHORITY

A legal disagreement between a dominating broadcaster in Kerala's broadcasting ecosystem and a regional multi-system operator is Jiostar India Pvt. Ltd. v. Competition Commission of India. The Informant said that Jiostar used "marketing agreements" to provide a competitor distributor preferential treatment and discriminatory pricing since it controlled important sports and local entertainment content. It was claimed that these arrangements operated as indirect discounts outside of the TRAI framework's tariff limitations, disadvantageously affecting the informant's ability to compete and gain entry to the market.

The Competition Commission of India responded to these allegations by using its jurisdiction under Section 26(1) of the Competition Act to issue a preliminary opinion that the behaviour warranted an inquiry and directed the Director General to investigate possible abuse of dominance under Section 4. Jiostar challenged this ruling in the Kerala High Court, claiming that the TRAI Act and the 2017 Regulations plainly applied. Citing CCI v. Bharti Airtel, it argued that the CCI had no power to begin an inquiry until the sectoral regulator had investigated and assessed the alleged regulatory infractions.

II. REGULATION AND COMPETITION AS DIFFERENT LEGAL-ECONOMIC PARADIGMS

The Kerala High Court's rationale is based on the premise that sectoral regulation and competition legislation are meant to remedy fundamentally distinct market failures. Sectoral regulation functions ex ante, establishing technological standards, tariff structures, and behavioural requirements to preserve orderly operations within a particular industry. On the other hand, competition law steps in ex post when market power is employed in a way that distorts competitive circumstances. Consequently, rather than being interchangeable, the two regimes are complementary. This way while ex ante regulation seeks to prevent harm through pre-set obligations, ex post enforcement intervenes when market power is exercised in a way that distorts rivalry or excludes competitors.

Crucially, the analysis of market power is not finished by following regulations. The institutional ability of sectoral regulators to assess whether a dominating firm's actions hinder competition is lacking. Their missions do not include assessing exclusionary intent, examining long-term entry obstacles, or conducting counterfactual evaluations of how markets might function in the absence of the challenged activity. Therefore, regulatory compliance may be accompanied by serious harm to competitiveness.

This difference is based on modern antitrust economics. The foundation of traditional Chicago School thought was the notion that market power was adequately regulated by regulation and that more competitive intervention risked the risk of over-enforcement. This perspective has been refuted by modern Post-Chicago research, which demonstrates how dominant businesses can utilise strategic tools, selective discounts, loyalty-inducing incentives, or contractual asymmetries to eliminate rivals without breaking formal regulatory restrictions. This idea holds that market power is employed through consequences rather than form. The Court's reasoning slightly reflects this modern perspective. By focusing on the economic impact of conduct rather than its legislative classification, it acknowledges that dominance mixed with strategic behaviour may affect competition even in regulated marketplaces.

III. SECTION 26(1), INVESTIGATIVE AUTONOMY AND MARKET DUE PROCEDURE

The Kerala High Court's unwillingness to intervene with the CCI's ruling under Section 26(1) of the Competition Act demonstrates a thorough understanding of the institutional logic of competition enforcement. A Section 26(1) order is not an adjudication of rights or obligations; rather, it is an administrative action made upon the formulation of a prima facie view that the charges require inquiry. It has no criminal or civil consequences and does not influence the outcome of the inquiry. If such an order were considered justiciable at the threshold, the Competition Act's basic difference between investigation and adjudication would be compromised.

This restraint is particularly crucial in cases of misuse of authority. These instances are inherently fact-intensive and exhibit significant informational asymmetry. Almost all relevant evidence, such as price data, incentive programs, contractual terms, and internal communications, is under the supposedly dominant firm's control. It is unrealistic to expect the informant or the regulator to accurately identify exclusionary effects in the early phases. Therefore, if definitive proof were needed before inquiry, competition legislation would be practically unenforceable against established market strength.

The Court's approach aligns with global enforcement norms. The EU Commission has the power to conduct intrusive investigations, including surprise inspections, prior to bringing any formal accusations. Civil investigative requests are a common tool used by US antitrust regulators to gather significant pre-complaint discovery. All countries' competitive regimes place a high value on investigative independence as a need for important decisions. In this sense, rather than being a restriction on companies, Section 26(1) functions as a procedural due process for markets. By meddling with the very procedures designed to detect and assess exclusionary activity, early court action at this stage would not protect competition and run the danger of strengthening monopolies.

IV. MARKET DEFINITION, DOMINANCE, AND THE MARKETING AGREEMENT PROBLEM

The Kerala High Court's decision is based on its substantive interpretation of dominance and exclusionary behaviour under competition law. Even at the prima facie stage, the Court tacitly recognises certain dominance signs. Jiostar's ownership over "must-have" programming, particularly premium sports rights and regional general entertainment channels, makes it impossible for distributors to escape its level of market dominance. This dominance is reinforced by downstream distributors' economic dependence on access to such material, a glaring imbalance in bargaining power, and vertical integration between content production and delivery. When combined, these components aid in determining market dominance.

Furthermore, the relevant market is closely constrained. Rather than broadcasting services in general, the product market consists of television programming with restricted replacement, linguistic distinctiveness, and customer loyalty. The geographic market is Kerala, while distribution infrastructure, language, and viewing tastes further restrict competition possibilities. A market definition like this is in line with accepted competition law concepts that give demand-side substitutability precedence over formal industry classifications.

In this situation, the Court's treatment of marketing agreements is very crucial. Though officially distinct from subscription or tariff arrangements, these agreements function outside of regulatory pricing limitations and may function as opaque rebates. By lowering the effective price paid by preferred distributors, they may force out rivals who do not have the same benefits, distorting the competitive environment. Because of this, the Court is determined to consider economic impact instead of contractual form.

This tactic complies with international antitrust legislation. According to U.S. decisions like ZF Meritor v. Eaton and United Shoe Machinery, as well as European instances like Intel, Michelin, and Post Danmark, rebate-type arrangements may be unfair when they promote loyalty or exclude equally effective rivals.

V. BHARTI AIRTEL RECALIBRATED: Preserving Competition Jurisdiction and Setting the Scene

The most controversial doctrinal issue in Jiostar v. CCI was the extent and consequences of the Supreme Court's decision in CCI v. Bharti Airtel Ltd. The Kerala High Court's approach meticulously but crucially recalibrates that precedent. It begins by describing the real choice made by Bharti Airtel. The disagreement, which sprang from a technical connectivity problem in the telecom sector, was already under the jurisdiction of the Telecom Regulatory Authority of India. Important jurisdictional issues, such as the presence of regulatory non-compliance, were not settled. In that specific case, the Supreme Court decided that the sectoral regulator should investigate the technical issues before assessing the consequences for competition law.

What is equally important is what Bharti Airtel did not decide. It did not create a general notion of sectoral supremacy, necessitate the exhaustion of remedies before sectoral regulators, or put a general ban on the Competition Commission of India's original authority. Moreover, it did not suggest that regulatory supervision in markets governed by specific acts would take the place of the Competition Act.

The Kerala High Court corrects the temptation to overgeneralise Bharti Airtel by re-anchoring the business to its institutional and factual setting. By doing this, it prevents powerful companies from exploiting the decision as a jurisdictional veto and "de-exceptionalizes" it. However, the Court merely rejects the claim that sectoral regulators' presence precludes competition analysis, without diminishing their role. By resisting Bharti Airtel's extension into a theory of regulatory primacy, the judgement preserves the independence of competition law as an independent check on economic power and prevents precedent from being utilised as an instrument of regulatory capture.

VI. Conclusions AND WIDE-RANGE IMPLICATIONS

Beyond its immediate circumstances, Jiostar v. CCI has significant constitutional, legislative, and international repercussions. Within the framework of Article 19(6) of the Constitution, the judgement views competition legislation as a kind of structural rationality that justifies restrictions on commercial freedom in the purpose of maintaining competitive markets. Therefore, initiating a competition inquiry is not a breach of the freedom to trade under Article 19(1)(g), but rather a permissible means of preventing the concentration and abuse of economic power. Concurrently, the Court's reasoning is consistent with Article 14, by functioning as economic arbitrariness, preferential arrangements and selective discounts impair market equality of opportunity. As a result, maintaining competitive neutrality is the responsibility of the Competition Commission of India, an institutional equaliser.

The decision has similarly wide-ranging cross-sector implications. Exclusionary access to power exchanges and transmission networks can no longer be shielded from inspection by tariff compliance in energy markets. Competition law still governs discriminatory pipeline access and margin manipulation in the petroleum and gas sector, notwithstanding regulatory scrutiny. Banking and payment systems, including card networks, UPI agreements, and online lending platforms, cannot utilise financial legislation as a defence against dominance probes. The same logic applies to aircraft activities like slot hoarding and monopolised ground handling, as well as digital marketplaces where self-preferencing and algorithmic discrimination pose systemic concerns.

The decision makes India compliant with internationally recognised antitrust rules. The European Union's competition-first approach, the United States' rejection of antitrust immunity in the absence of express legislative protection, and the United Kingdom's concurrent regime all reflect the same principle.