On October 29, 2019, the CCI dismissed the allegations of contravention of Section 3 and 4 of Act against RCI India Private Limited ('RCI'), filed by Ms. Vijayachitra Kamalesh ('Complainant'), a former employee of RCI.1
The Complainant alleged that RCI was making illegal transactions with its clients by virtue of various agreements to create barriers to competition for its rival in the timeshare2 exchange market and in this respect specifically mentioned the agreements entered between RCI Europe, Covington and Mahindra (India). The CCI analysed the Complainant's allegations and noted that RCI was not even a formal party to the agreement between RCI Europe, Covington and Mahindra (India). The CCI also held that the impugned transaction was an acquisition by Covington and did not appear to raise any competition concern. Moreover, the CCI stated that the provisions of the Act are only attracted when the impact of the alleged conduct has some nexus to the competition in markets in India and is likely to cause an appreciable adverse effect on competition on the Indian market. Further, the CCI also observed that while it has the power to extend its jurisdiction to conducts taking place outside India, the alleged anti-competitive act has to have an impact on India.
The CCI noted that the alleged agreement had no impact on the competition in the Indian markets since the subject matter of the agreement i.e., sale of resorts/part of resorts on time share basis was meant for consumption outside India (the target Holiday Club had resorts only in Finland, Sweden and Spain). Therefore, with no competition being affected in India and no evidence being submitted by the Complainant to prove otherwise, the CCI closed the matter under Section 26(2) of the Act.
1 Case 29 of 2019, Order dated October 29, 2019
2 Timeshare is a model in which customers own a right to use certain property/ properties, owned by timeshare companies, for a fixed duration every year for a certain number of years, subject to availability. The timeshare model can apply to many different types of properties, such as condominiums, homes, campgrounds, vacation resorts etc.
Originally published - January 2020
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