On 12 December 2024, the Competition Commission of India (“CCI”) directed the Table Tennis Federation of India (“TTFI”), the Suburban Table Tennis Association (“TSTTA”), Maharashtra State Table Tennis Association (“MSTTA”) and the Gujarat State Table Tennis Association (“GSTTA”) (together referred to as the “OPs”) to cease and desist their anti-competitive practices.

Background 

TTFI is the national sports federation for table tennis (“TT”) in India, as recognized by the Ministry of Youth Affairs and Sports (“MYA&S”) under the National Sports Code 2011. It is responsible for conducting national ranking tournaments and selection of players from various States to represent India in international competitions. TTFI is recognized by the International Table Tennis Federation and is also the affiliated member of the Indian Olympic Association for regulation of the sport in India.

MSTTA is the state body for Maharashtra, responsible for conducting open state ranking tournaments in the State of Maharashtra as well as for selection of players from its affiliated districts to represent the State. TSTTA is the district body headquartered in Mumbai, responsible for conducting open district ranking tournaments for the selection of players to represent the State. GSTTA is the State body for Gujarat with similar objectives. The primary objective of each of the above associations is the development and promotion of the game of TT in the States.

The matter arose from a complaint filed by the TT Friendly Super League Association (“TTFSL/ Informant”), an NGO dedicated to promoting TT. The Informant alleged that the OPs issued advisories and maintained clauses in their constitutions to restrict participation in tournaments organized by ‘unaffiliated entities’.

Facts 

On 30 October 2020, the General Secretary of TSTTA posted a circular / notice on a WhatsApp group addressed to players/ parents/ coaches/ clubs, prohibiting them from joining any unaffiliated organisations or play matches conducted by them (“WhatsApp Advisory”). It further warned that any member club or academy that enters into any arrangement with any other unaffiliated TT body, would not be allowed to participate in any of the tournaments held by TSTTA or MSTTA. As a consequence of the notice, many players allegedly refused to register as members of the Informant.

In addition, the Informant alleged that certain clauses in the TTFI’s Memorandum of Association were anti-competitive such as those relating to the definition of ‘tournament’, sanction for open tournament, restriction of players from participating in any unrecognised tournament and right to prohibit unauthorised tournaments.

Based on the review of complaint filed, on 17 November 2021, the CCI directed the Office of the Director General (“DG Office”) to conduct a detailed investigation into the allegations levelled against the OPs. Interestingly, on 21 December 2021, the CCI had also issued an interim order restraining the OPs from issuing any communications or threats to TT players, coaches, clubs etc. from participating in tournaments not ‘recognized’ by the OPs.

Decision 

Federations as ‘Enterprises’ 

At the outset, the CCI evaluated the contentions of the OPs that they cannot be termed as ‘enterprises’ under the Competition Act, 2002 (“Competition Act”), and accordingly cannot be held liable under the statute.

The CCI clarified that it is immaterial whether the activities undertaken by the OPs are profit making/ commercial in nature as long as there is an economic nature to the activities discharged by the entities concerned. Observing that the OPs were engaged in organizing/ conducting TT tournaments, distributing prize money, receiving sponsorships, advertising revenue etc., the OPs would indeed qualify as ‘enterprises’ under the Competition Act.

Abuse of dominance 

The CCI found TTFI to be dominant in the following relevant markets:

(i) Market for organization of TT leagues/ events/ tournaments in India; and
(ii) Market for provision of services by the players for TT leagues/ events/ tournaments in India.

On account of the apex regulatory function exercised by TTFI at the head of the pyramidal structure and the recognition by government and international sports bodies, TTFI was found to have monopoly power in the relevant markets. In addition, the TSTTA, MSTTA, and GSTTA were also held to be dominant in their respective geographies, by virtue of their affiliation with TTFI.

Specifically, the CCI found the following conduct of the OPs to be abusive:

(i) Communications prohibiting participation in rival tournaments: The CCI noted that the WhatsApp Advisory not only restricted persons from associating with or participating in non-affiliated clubs and organizations but also warned of consequences of non-compliance, such as suspension or rejection of their entries to participate in TT tournaments. The CCI further observed that TSTTA continued its restrictive practices and did not alter its conduct despite several petitions/ communications from the Informant. Similar communications from MSTTA and TTFI restricting other rival leagues were also found to be anti-competitive.

(ii) Clauses in OPs’ Rules/MOAs: The CCI noted that TTFI’s MoA restricted organisation of TT tournaments without TTFI approval and prohibited players from participating in non-affiliated events. It noted that such conduct also amounted to denial of market access by TTFI. Similar restrictions imposed by MSTTA and GSTTA were also found to be anti-competitive.

In fairness, the CCI upheld the rules imposed by TSTTA requiring clubs, gymkhanas or academies to affiliate with TSTTA and mandating that referees/ umpires are appointed exclusively by TSTTA. It noted that such restrictions were regulatory in nature with the aim of upholding the quality and discipline of tournaments.

Anti-competitive vertical restraints 

In the past, CCI has observed that a sports federation may be a seller of various rights associated with the event and correspondingly there would be a separate set of consumers for such rights.^[1] Further, it has recognized that sports federations and players exhibit a vertical relationship as the sports federations provide services/ resources to the players and also procure their services to organize sporting events.^[2] Interestingly, under the recent amendments to the Competition Act, agreements involving ‘end consumers’ are explicitly excluded from the purview of anti-competitive vertical agreements under the Competition Act; in case of sports, the CCI considers the viewers of sports events as the end consumers.^[3]

In this case, the CCI found the WhatsApp Advisory to be a vertical restraint imposed upon the TT players in the nature of exclusive distribution and refusal to deal. The CCI noted that the directions are likely to cause an appreciable adverse effect on competition by creating entry barriers, foreclosing competition and restricting opportunities available to TT players.

CCI Directions 

The corrective measures undertaken by the OPs during the course of the investigation were well noted by the CCI and therefore, no monetary penalties were imposed. Notably, TTFI and GSTTA had lifted the restrictions against participation in unauthorized tournaments. The CCI did issue a cease-and-desist order, directing the OPs to refrain from engaging in anti-competitive practices in the future.

Competition violations by sporting bodies in other Jurisdictions

Given the inherent pyramidal structure of sports governance, sports federations have routinely had run-ins with competition authorities across the world. The federations act in a dual capacity, as a regulator of a sport – introducing and implementing the regulatory framework governing the stakeholders of a sport, and also as an economic beneficiary of the sport – by organising sporting events, engaging in sponsorship deals etc.

The Court of Justice of the European Union (“CJEU”), in its landmark decision of Meca-Medina had clarified that even purely ‘sporting rules’ (for instance, on doping) made by sporting bodies could be subject to competition law if they caused economic effects in the market.^[4] Further, in Greek Motorcycling Federation (Motosykletistiki Omospondia Ellados NPID (MOTOE)) v Elliniko Dimosio, the CJEU opined that a sporting body that mixes regulatory functions with economic activities should be subject to the application of EC antitrust law. The court observed that sporting bodies must adopt consistent and transparent criteria for organization of sports events by other parties.^[5] Recently, in European Super League^[6] and International Skating Union,^[7] the CJEU again highlighted the issues of conflict of interest arising out of the regulatory powers vis-à-vis the economic benefits derived by the sporting federations from such regulatory mandates. There is similar ongoing scrutiny of sports governance in the United States. Recently, both the National Collegiate Athletic Association^[8] and Ultimate Fighting Championship^[9] have been required to amend their restrictive policies in respect of their athletes.    

Conclusion

This is the 7^th instance of the CCI evaluating the conduct of a sporting federation. Previously, it has examined similar conduct in cricket,^[10] hockey,^[11] volleyball,^[12] chess,^[13] baseball^[14] and athletics^[15] with findings of contravention against the sports federations of cricket, chess and baseball.^[16]

With the growth of technology and internet penetration, the market for sports is expected to continue to expand exponentially. By some estimates, the sports market in India is anticipated to grow by a CAGR of 14% and reach USD 130 billion by 2030.^[17] It is therefore likely that the CCI will increase its scrutiny of the sector in the near future to ensure a fair, equitable and level playing field for all stakeholders.

Such cases also highlight the growing importance of awareness and compliance with competition laws by other government bodies that may be playing a dual role of regulator and enterprise in a given market. 

Authors – Sonam Mathur – Partner; Shubhang Joshi – Managing Associate and Devika Dhawan –  Associate 

Footnotes: 

^[1] Dhanraj Pillay and Ors. V. Hockey India (Case No. 73 of 2011) (see here).

² Dhanraj Pillay and Ors. V. Hockey India (Case No. 73 of 2011) (see here), Hemant Sharma & Ors. V. All India Chess Federation (Case No. 79 of 2011) (see here), Shravan Yadav and Ors. V. Volleyball Federation of India and another (Case No. 1 of 2019) (see here).

³ Dhanraj Pillay and Ors. V. Hockey India (Case No. 73 of 2011) (see here).

⁴ David Meca-Medina and Igor Majcen v. Commission of the European Communities (Case C-519/04P), paragraphs 26-27 (see here).

⁵ Motoe v. Elliniko Dimosio (Case C-49/07), paragraphs 22-26 (see here). 

⁶ European Superleague Company SL v. EUFA, FIFA (Case C-333/21), paragraph 38 (see here).

⁷ International Skating Union v. Commission (Case C-124/21), paragraph 91-94 (see here).

⁸ National Collegiate Athletic Association v. Alston (Case No.20-512) (see here).

⁹ Cung Le, Nathan Quarry and Ors. V. Zuffa, LLC and UFC (Case No. 2:15 -cv-01045-RFB-BNW) (see here).

¹⁰ Sh. Surinder Singh Barmi v. Board for Control of Cricket in India (Case No. 61 of 2010) (see here).

¹¹ Sh. Dhanraj Pillay and Ors. V. M/s Hockey India (Case No. 73 of 2011) (see here).

¹² Shravan Yadav and Ors. V. Volleyball Federation of India & Anr. (Case No. 1 of 2019) (see here).

¹³ Hemant Sharma & Ors. V. All India Chess Federation (Case No. 79 of 2011) (see here).

¹⁴ Confederation of Professional Baseball Softball Clubs v. Amateur Baseball Federation of India (Case No. 03 of 2021) (see here).

¹⁵ Department of Sports v. Athletics Federation of India (Case No. 01 of 2015) (see here).

¹⁶ The sports federations of volleyball, athletics and hockey were not found to have contravened the Competition Act based on the peculiar facts of each case. Nonetheless, the CCI recommended the federations to be conscious of the potential conflict of interest arising out of their monopolistic position and to thereby conduct themselves in a fair and transparent manner.

¹⁷ Unlocking India’s $130B Sports Potential, Deloitte and Google (See here) 

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