The Competition Appellate Tribunal (Compat) on Tuesday upheld the penalty of Rs 55.50 crore levied on the National Stock Exchange by the competition watchdog for abusing its dominant market position. The CCI in 2011 had initiated a probe and levied the fine on the exchange on the basis of a complaint filed by MCX stock exchange.
The penalty was determined as 5% of the bourse's three-year average turnover of R1109.66 crore. Additionally, CCI had directed NSE to cease and desist from unfair pricing, exclusionary conduct and unfairly using its dominant position in other markets to protect the relevant currency derivative market with immediate effect. Subsequently, NSE had moved Compat which, in turn, had passed an interim order staying the CCI order, pending final adjudication of the dispute.
Rejecting NSE's plea for modification of the CCI order, the tribunal headed by Justice V S Sirpurkar held: “In our considered opinion, CCI has in fact practised restraint in ordering only 5% of the average turnover, when it could have gone up to 10% of the average turnover. Considering the total turnover, average turnover, in our opinion the CCI was quite justified in ordering penalty at the rate of 5%.”
The tribunal, however, directed that another order of CCI directing NSE to maintain separate segment-wise accounts should be deleted.
NSE said it would appeal against the decision.
MCX-SX welcomed the decision and said dominant entities have a special responsibility not to distort competition. Its MD Saurabh Sarkar said: "Healthy competition is always in the interest of overall development of Indian financial markets.”