CCI by its order dated June 04, 2015 had exonerated IATA for alleged anticompetitive practices and abuse of dominance. The instant case was filed by Air Cargo Agents Association of India (ACAAI) against International Air Transport Association (IATA) and International Air Transport Association (India) Pvt. Ltd (IATAI) alleging contravention of sections 3 and 4 of the Act. It was alleged that IATA unilaterally prescribes the regulatory system assuming to itself the regulatory power for registering, accrediting and regulating the engagement of cargo agents by the airlines in India. IATA runs the licensing system for the IATA registered cargo agents, among others, prescribing various registration and accreditation requirements, and also enforcing many financial terms and conditions on cargo agents in India; IATA was about to unilaterally introduce a Cargo Accounts Settlement System (CASS) in India. Under CASS, the cargo agents are required to make full payment on stipulated due dates for freight and other dues to all airlines through IATA-CASS office which would disburse the relevant amount to each individual airline. It was further alleged that CASS rules were anti- competitive andfixation of rate of commission @ 5% to be anti-competitive and would affect the cargo agents. CCI, forming a prima facie view, directed the Director General (DG) to investigate the matter.
After considering the contentions of the parties and report of Director General (DG), CCI observed that
- Via-a-vis the current physical system of clearance in the air cargo industry, CASS is scientific and efficient. It was observed that CASS is a global phenomenon, having much advantage to both the carriers and agents and, it will enhance administrative efficiencies, reduce operational costs, and provide economies of scale, standardization, and automation in the collection and distribution of revenue, lead to creation of neutral settlement office, elimination of loss of invoice, enhanced financial control, reduced personnel and administrative costs.
- The Commission noted that IATA plays the role of self-regulator and as such the accreditation provided by IATA is not mandatory and hence, cannot per se be taken as anti-competitive. Further, it was observed that such accreditation would help the stakeholders in providing assurance about the quality of services provided by the cargo agents. Accordingly, it cannot be termed as anti-competitive within the meaning of section 3(3) read with section 3(1) of the Act.
- The practice of fixing 5% commission to the cargo agents has been practiced since 2006, on account of the intervention of Ministry of Civil Aviation, Government of India and hence, cannot be said to be arbitrary.
Considering the above, the Commission held that the introduction of CASS is not anti-competitive in terms of section 3(3)(b) of the Act, as alleged by the ACAAI and the fixing of 5% commission by the Ministry of Civil Aviation does not amount to violation of section 3(3)(a) of the Act.