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CCI Remarks: In the Absence of Unfair or Discriminatory Conduct, the Dominant Position Not Abused

Introduction

In the recent case of Ravi Shankar Tiwari v. Automattic Inc[i], the Competition Commission of India (‘Commission’) discussed the nature and scope of s. 4 of the Competition Act, 2002 (‘Act’). It remarked that in cases alleging the abuse of a dominant position, the examination begins with identifying the relevant market, followed by assessing the dominance exerted by the alleged party in the relevant market. The Commission also reminded that implementing the forum guidelines or the agreed code of conduct by the dominant party alone does not constitute abuse of dominant position in the absence of any unfair, unreasonable, or discriminatory action taken against the other party.

Brief Facts

  • Mr. Ravi Shankar Tiwari (‘informant’) was a software developer based in Kolkata who was engaging with the opposite party (‘OP’) while developing plugins[ii] that could be used during the development of websites through WordPress.org.

  • The OP is the parent company of the website WordPress.org and is primarily engaged in developing open-source software, applications, plugins, websites, etc. WordPress.org is a content management system (‘CMS’). Developing websites typically requires a specific set of coding skills. Still, the CMS platform simplifies the website development process for less skilled people by providing a predesigned set of templates, plugins, and customisation options in a user-friendly manner.

  • The informant listed two plugins, Way2enjoy image optimiser and Regenerate Thumbnails plugin, on WordPress.org. It was alleged that the OP had banned the informant’s account from the CMS without any explanation. It also banned the informant’s plugins that were developed subsequently without any communication.

  • Consequently, the informant filed a complaint under s. 19(1)(a) of the Act alleging that the action by the OP was an abuse of their dominant position amounting to a contravention of s. 4 of the Act, leading to the denial of market access, and was motivated by their desire to promote their own plugins that were listed on the CMS, Wordpress.org.

  • The OP submitted that its actions aligned with the Detailed Plugin Guidelines (‘guidelines’), which warranted delisting or ban in case of violations. Based on the same, 35 developers, including the informant, were banned from the CMS.

Held

  • The Commission held that no prima facie case against the OP for the abuse of the dominant position under s. 4 of the Act could be made out. Hence, the information was closed following the provisions in s. 26(2) of the Act and confidentiality was granted to certain documents and information submitted by the OP for a period of 3 years. Furthermore, it stated that no case for the grant of interim relief under s. 33 of the Act could be made out, so the same was rejected.

  • Taking note of the informant’s primary grievance against the delisting of its plugins from WordPress’s Plugin directory, the Commission stated that the first step in the examination of information alleging the abuse of dominant position in contravention of s. 4 of the Act is the identification of the relevant market. The Commission identified two broad markets of relevance: product market and geographic market.

  • Herein, the product market comprises the CMS providers, and the geographic market is limited to the territory of India. Recognising the 62.5% market share of the OP despite the presence of multiple other players like Wix, Squarespace, Shopify, Joomla, and Drupal offering similar website building and management services, the OP was inferred as a dominant player. However, the lack of interoperability of plugins across different CMS platforms further narrowed the relevant product market. Therefore, the WordPress-Specific Plugin Directories Market in India was identified as the final relevant market for assessing the position of dominance and analysing the conduct of the OP.

  • Examining the conduct of the OP, the Commission noted that the ban on the informants was neither unfair nor discriminatory since it was executed for the maintenance of the quality of the service and protection of both the user and the developers. Repeated violations of guidelines and persistent misconduct warranted action, and the same did not constitute abuse of the dominant position. Further, the guidelines were deemed reasonable, non-discriminatory, and applied uniformly to all developers.

  • Dismissing self-preferencing claims, the Commission observed that the OP’s plugin offered a wide range of features. In contrast, the informant’s plugin was a one-point solution with a single feature. Based on the substantial difference in the scope and depth of the features of both plugins, no legitimate direct competition between the two could be perceived.

Our Analysis

This case reaffirmed that in cases complaining against the abuse of a dominant position by a market player, their dominant position alone should not factor into ascertaining its abuse. A clear, unfair, discriminatory code of conduct detrimental to other market players should be established. Also, there should be a direct nexus between the action alleging abuse and the suffering caused to the other market players. Maintaining the quality of services and adapting to the market forces can make a market player dominant in the relevant market, but that alone should not raise suspicions of its abuse.

The allegations of self-preferencing should be based on substantial facts, not mere apprehensions. The law does not regulate based on individual perceptions but on trusted and accepted legal principles. This decision highlights the distinction between platform maintenance of standards and abuse of dominant market position. It will also impact how plugin developers engage with major CMS platforms, emphasizing adherence to set rules to avoid conflicts.





End Notes

[i] [2024] 162 taxmann.com 366 (CCI).

[ii] A plugin is an add-on feature that enhances the capabilities of a website created using a content management system.





Authored by Shivangi Bharadwaj, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.

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