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India – CCI Initiates Investigation Into Maharashtra State Electricity Board.

13 October, 2014

 


CCI has initiated an investigation into an allegation of abuse of dominance by Maharashtra State Electricity Distribution Limited (‘MSEDL’). The investigation was initiated on the basis of information filed by Vidarbha Industries Association (‘Informant’), which is a trade association in the Vidarbha region of Maharashtra.

 
CCI defined the relevant market in this case to be the market for electricity distribution, in the licensed area of MSEDL in the state of Maharashtra, i.e. all areas of Maharashtra except Mumbai. In this context, MSEDL is the seller, and end-consumers of electricity are the buyers. Given that MSEDL is the only licensee for electricity distribution in the specified area, it was determined that MSEDL was dominant in the relevant market. The allegations against MSEDL were that: (i) it purchases power only from Maharashtra State Power Generation Co. Ltd. (‘MSPGCL’), its group company, even though MSPGCL is less cost efficient in comparison to other electricity producers, which translates to higher tariffs and consequently higher prices for consumers, which amounts to unfair pricing under Section 4(2)(a)(ii) of the Competition Act; (ii) it denies open access to consumers, i.e. prevents consumers from accessing cheaper, alternate sources of electricity which amounts to denial of market access to other power generating companies in violation of Section 4(2)(c) of the Competition Act.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com

Shuva Mandal, AZB & Partners 
shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com

Percy Billimoria, AZB & Partners 
percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

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