TEAM NO.

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COMPETITION LAW - MOOT COURT MEMORIAL, 2024

Before

THE HONOURABLE HIGH COURT OF COUNTRY X UNDER ARTICLE 226 R/W

ARTICLE 227

WRIT PETITION NO. - - - /2024

CARDCORP PVT.LTD………………………….……………………. APPELLANT

V.

NATIONAL COMPETITION AUTHORITY (NCA) ………….……..RESPONDENT

MEMORIAL ON BEHALF OF THE RESPONDENT

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TABLE OF CONTENTS

LISTS OF ABBREVIATIONS………………………………………………………………3

INDEX OF AUTHORITIES………………………………………………………………3-4

STATEMENT OF JURISDICTION………………………………………………………...5

STATEMENT OF FACTS……………………………………………….……………...…6-7

ISSUES RAISED……………………………………………………………………………..7

SUMMARY OF ARGUMENTS…………………………………………………………….8

ARGUMENTS ADVANCED…………………………………………………….……….9-
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ISSUE 1- WHETHER CARDCORP POSSESSED SUBSTANTIAL MARKET POWER.

1.1 The relevant market is not Competitive.

1.2 Card Corp - Ability to operate Independently.
1.3 National Competition Authority (NCA) Judgment.

ISSUE 2- WHETHER THE CONDUCT HAD THE PURPOSE OR EFFECT OF

SUBSTANTIALLY LESSENING COMPETITION.

1.1 Applicability of the Appreciable Adverse Effect of substantially lessening

competition.
1.2 Discount – Inherently Anti- Competitive.
1.3 Effect of the Agreement - Does lead to market foreclosure.

PRAYER…………………..……………………………………………………………….. 14

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LISTS OF ABBREVIATIONS

Abbreviations Expansions
CA Companies Act,1956
Hon’ble Honourable
HC High Court
Art. Article
& And
Ors. Others
Anr. Another

TABLE OF AUTHORITIES

STATUTES:

 Companies Act of Country X

 Competition Act,2003 of Country X
 Constitution of India, 1950
 Sherman Antitrust Act, 1890

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OTHER COUNTRIES:

 Antitrust Act, 1890

LIST OF CASES:

Shri Neeraj Malhotra, Advocate vs. North 2011 SCC Online CCI 20
Delhi Power Ltd. & Ors.
Google LLC vs. CCI. 2011 SCC Online CCI 57
Umar Javed vs. Google LLC. 2019 SCC Online CCI 42

BOOKS :

 Company Law.
 Competition Law of Country X.
 Constitution of India.

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STATEMENT OF JURISDICTION

It is most humbly submitted that the Respondent concedes this Hon’ble Court has the
necessary Jurisdiction to adjudge this Appeal. However, it is our humble submission that the
appellant has erred in approaching this Hon’ble Court1.

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226. Power of High Courts to issue certain writs.—(1) Notwithstanding anything in article 32 3
***, every High Court shall have power, throughout the territories in relation to which it exercises
jurisdiction, to issue to any person or authority, including in appropriate cases, any Government,
within those territories directions, orders or writs, including 4 [writs in the nature of habeas
corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement
of any of the rights conferred by Part III and for any other purpose.] (2) The power conferred by
clause (1) to issue directions, orders or writs to any Government, authority or person may also be
exercised by any High Court exercising jurisdiction in relation to the territories within which the
cause of action, wholly or in part, arises for the exercise of such power.
______________________________________________
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STATEMENT OF FACTS

 In the bustling markets of Country X, The Central Bank of Country X (CBCX)

introduced an initiative known as least-cost routing (LCR), designed to empower
businesses by allowing them to select the most cost-effective network for processing
debit card transactions.
 This initiative aimed to enhance competition among payment networks, encouraging
retailers to choose from various options, including CardCorp, Visa, and Eft Pay, with
Eft Pay often being the most affordable choice.
 However, just as the LCR initiative was gaining traction, the National Competition
Authority (NCA) began to investigate claims that CardCorp, one of the major players
in the payment processing sector, was engaging in conduct that could undermine the
very competition the initiative sought to promote.
 The NCA alleged that CardCorp entered into strategic agreements with over 20 major
retail businesses, including popular supermarket chains, fast-food franchises, and
well- known clothing retailers. These agreements provided retailers with discounted
interchange rates for credit card transactions, but with a catch: they had to agree to
direct a significant portion of their CardCorp-Eft Pay debit transactions exclusively
through Card Corp's network.
 As a result, many retailers, under pressure to capitalize on the discounts, began to
limit their use of the Eft Pay network, which had traditionally offered the lowest
processing costs. This shift not only stifled competition but also had a ripple effect on
smaller retailers, who found themselves at a disadvantage. Many smaller businesses
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reported feeling pressured to comply with Card Corp's agreements, which restricted
their ability to choose the more cost-effective Eft Pay network.
 The investigation revealed that Card Corp's debit and credit cards were widely
accepted throughout Country X, with a substantial number being dual-network cards,
capable of being processed through either CardCorp or Eft Pay.
 The NCA investigated the issue and decided against CardCorp,
 The Carp Corp has appealed against the order to the High Court of Country X. The
authority argued that Card Corp’s actions constituted a violation of the Competition
Act
 of Country X, which prohibits conduct by firms with significant market power that
lessens competition. The NCA requested various remedies, including financial
penalties and a halt to the alleged anti-competitive practices.
 the case held the potential to set significant precedents regarding the enforcement of
competition laws in Country X, the responsibilities of firms with substantial market
power, and the importance of preserving competitive dynamics in the payments
industry.
 The court's decision would not only impact CardCorp. However, it could also reshape
how payment networks operate in the future, ensuring that the benefits of CBCX's
LCR initiative were fully realized for businesses and consumers alike.

ISSUES RAISED:

ISSUE 1- WHETHER CARDCORP POSSESSED SUBSTANTIAL MARKET POWER.

1.1The relevant market is not Competitive.

1.2 Card Corp - Ability to operate Independently.
1.3 National Competition Authority (NCA) Judgment.

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ISSUE 2- WHETHER THE CONDUCT HAD THE PURPOSE OR EFFECT OF

SUBSTANTIALLY LESSENING COMPETITION.

2.1 Applicability of the Appreciable Adverse Effect of substantially lessening

competition.

2.2 Discount – Inherently anti- competitive.

2.3 Effect of the Agreement - Lead to market foreclosure.

SUMMARY OF ARGUMENTS

ISSUE 1- WHETHER CARDCORP POSSESSED SUBSTANTIAL MARKET POWER.

It is most humbly submitted before the Hon’ble High Court that Card Corp has entered into a
strategic agreements with 20 major retail businesses, popular supermarkets, fast food
franchise. Acting as a major player in the debit cards transaction sector, and provided that
Card Corp has started giving lot of discounts to the retail shops in the result shopkeepers were
majorly using Card Corp as a best transaction source. In the later Investigation it has been
observed that card Corp Debit and Credit cards are widely used throughout the country at the
expense of other competitors. This has extreme adverse impact on the competition in the
market.

ISSUE 2- WHETHER THE CONDUCT HAD THE PURPOSE OR EFFECT OF

SUBSTANTIALLY LESSENING COMPETITION.

It is most humbly submitted before the Hon’ble High Court that Card Corp has indulged in
many strategic agreements which is purposely affecting the concept of competition from the
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market, because many retail businessman were using the Card Corp as a best deal for the
transaction sources as they were getting a good amount of discounted interchange rate of
credit card transactions. Market is losing power purpose of the competition is getting ruined.

ARGUMENTS ADVANCED

ISSUE 1- WHETHER CARDCORP POSSESSED SUBSTANTIAL MARKET POWER.

1. It is most humbly submitted before the Hon’ble High Court of Country X that the conduct
of Card Corp shows that they were trying to possess substantial market power. In
achieving the same Card Corp has made strategic agreements with 20 major retail
businesses.
2. That The Counsel of the respondent humbly submits that Card Corp has substantial
market power in the relevant market and card Corp has given lot of Discount interchange
while making the transactions.
3. It is most humbly contended that as card Corp was purposely engaging lot of retailers by
giving lot of discounted interchange in several transactions, many retailers, under
pressure to capitalize on the discounts, began to limit their use of the Eft, Pay network,
which had traditionally offered the lowest processing costs, this shift not only stifled
competition but also had a ripple effect on smaller retailers, who found themselves at a
disadvantage. Many smaller businesses reported feeling pressured to comply with Card
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Corp’s agreements, which restricted their ability to choose the more cost-effective Eft
Pay network. In the case of Shri Neeraj Malhotra, Advocate vs North Delhi Power Ltd. &
Ors.2
it was held that high market share is a relevant factor to be considered in
determining the dominant position of an enterprise.
4. This is contrary to the spirit of the CBCX's LCR initiative, which was intended to
empower merchants to choose the best network for their needs.

1.1 The relevant market is not Competitive

That the Counsel of the Respondent humbly submits that, the relevant market is not
competitive because here in the Country X market Card Corp has made the Strategic
Agreements with 20 major businesses which made barrier for other companies to enter,
many retailers, under pressure to capitalize on the discounts, began to limit their use of
the Eft Pay network, which had traditionally offered the lowest processing costs. This
shift not only stifled competition but also had a ripple effect on smaller retailers, who
found themselves at a disadvantage. Many smaller businesses reported feeling pressured
to comply with Card Corp's agreements, which restricted their ability to choose the more
cost.

1.2 Card Corp - Ability to operate Independently.

It is Humbly submitted before the High Court that, Card Corp had the ability to operate
independently as it is mentioned in the above problem that Card Corp enough ability to
operate the market by making the strategic agreements in major businesses and giving the
lot of discounts during the transactions also which is not giving the small retailers options
to operate other transactions companies. Card Corp has also made the agreements with
popular supermarket chains, fast-food franchises, and well-known clothing retailers.
These agreements provided retailers with discounted interchange rates for credit card
transactions.

1.3 National Competition Authority(NCA) Judgment.

2
2011 SCC Online CCI 20.
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Counsel of the Respondent would like to mention that Judgment given by the
NCA(National Competition Authority) can be considered as Valid because Card Corp
actions has affected both small and big scale retailer and ruined the concept of the market
competition by making the exclusive agreements. NCA’s claimed that Card Corp’s
behaviour undermines the competitive dynamics intended by the CBCX’s LCR initiative,
which was designed to allow businesses to select the most cost-effective network for debit
card processing. By restricting the ability of merchants to freely choose their payment
networks, Card Corp’s conduct has negatively affected both retailers and consumers,
reducing overall market competition in the debit card payment processing space.

ISSUE 2- WHETHER THE CONDUCT HAD THE PURPOSE OR EFFECT OF

SUBSTANTIALLY LESSENING COMPETITION.

It is humbly submitted before the Hon’ble High Court that any conduct by an enterprise with
a dominant position with the purpose or effect of substantially lessening competition in the
market is prohibited under section 4 of the Competition Act of Country X 3. Card Corp has
made the agreements purposely and through which market got affected a lot to small- and
large-scale businesses because they were not getting any other payment options to deal with.
In accordance with the proposition laid down in the case of Shri Neeraj Malhotra, Advocate
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vs. North Delhi Power Ltd. & Ors Card Corp’s behaviour constitutes an abuse of market
power that harms competition. Under pressure to capitalize on the discounts the other entities
began to limit their use of the Eft Pay network, which had traditionally offered the lowest
processing costs. This shift not only stifled competition but also had a ripple effect on smaller
retailers, who found themselves at a disadvantage. Many smaller businesses reported feeling
pressured to comply with Card Corp's agreements, which restricted their ability to choose the
more cost-effective Eft Pay network.
3
Act No. 14 of 2004.
4
Supra Note 2.
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2.1 Applicability of the Appreciable Adverse Effect of substantially lessening

competition.

The NCA’s central concern is that Card Corp's conduct in entering into exclusive agreements
with major retailers (including supermarket chains, fast-food franchises, and clothing
retailers) has the effect of undermining the competitive environment that the Central Bank of
Country X’s LCR initiative sought to establish. The LCR initiative was meant to give
retailers the freedom to choose the most cost-effective payment network, with Eft Pay often
being the lowest-cost option for debit transactions. By coercing retailers into directing a
substantial portion of their Card Corp- Eft Pay debit transactions exclusively through Card
Corp’s network, Card Corp has allegedly diminished competition and restricted choice for
both retailers and consumers. Counsel of the Respondent would also like to mention the key
Aspects of the NCA’s Argument Regarding AAEC that- Substantial Market Power and
Market Share, Exclusive Agreements and Coercive Conduct, Harm to Competition and
Consumers, Exclusivity as a Barrier to Entry, Impact on Market Dynamics. It was held in the
case of the Google LLC vs. CCI5, that any creation of significant entry barriers to operate in
the market would be considered anti-competitive practice and deemed to be abuse of
dominant position as enriched under section 3(4)(c) of the Competition Act of Country X.

2.2 Discount – Inherently anti- competitive.

Counsel of the Respondent would like to mention that the key issue here is that the discounts
offered by Card Corp come with conditions that require retailers to limit their use of Eft Pay
—a competitor offering lower-cost processing. This exclusive discount arrangement,
combined with the requirement to direct a significant portion of transactions through Card
Corp’s network, is what the NCA argues substantially harms competition. the conditions
attached to them raise competition concerns. Specifically, the NCA argues that Card Corp’s
exclusive agreements with retailers lead to a reduction in the use of Eft Pay, which is

5
2011 SCC Online CCI 57.
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typically the cheapest option for processing debit card transactions. By requiring retailers to
process a significant portion of their Card Corp-Eft Pay transactions exclusively through Card
Corp, the effect of these agreements are as follows-

 Limit retailer choice in selecting the most cost-effective payment network.

 Harm consumers by reducing the cost competition between payment networks.
 Exclude or disadvantage smaller competitors, like Eft Pay, by limiting their market
access

2.3 Effect of the Agreement - Lead to market foreclosure.

That the Counsel of the Respondent would like to mention that Card Corp’s conduct
specifically, the strategic agreements between Card Corp and over 20 major retail businesses
have the effect of foreclosing competition in the payment processing market. The Card Corp's
exclusive discount arrangements for dual-network cards, tied to the condition that a
significant portion of transactions be routed through Card Corp’s network, substantially
reduces competition and distorts the competitive landscape, potentially leading to market
foreclosure. When a dominant player like Card Corp uses its market power to foreclose
competition, it prevents rivals such as Eft Pay from accessing enough customers or market
share to compete effectively, thereby limiting consumer choice and potentially raising costs.
That the exclusive agreements between Card Corp and the retailers have a foreclosing effect
on the market. It was held in the case of Umar Javed vs. Google LLC6 the CCI imposed
severe penalty on Google for abusing its dominant position in various markets of the Android
Mobile Ecosystem, by entering anti-competitive practices. Hence, it is humbly contended that
Card Corp shall be penalised on the same terms of abusing its dominant position. Therefore,
it is contended by the counsel of respondent that Card Corp’s conduct, through its exclusive
agreements with major retailers, had both the purpose and effect of substantially lessening
competition in the payment processing market

6
2019 SCC Online CCI 42.
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PRAYER FOR RELIEF

Wherefore in the light of the issues raised, arguments advanced and authorities
cited, it is humbly prayed that this Hon’ble High Court of Country X may be
pleased to adjudge and declare that:
 Uphold the decision of NCA(National Competition Authority).
 Declare all strategic agreements as anti- competitive and void.
 Declare conduct had the purpose of substantially lessening competition.
 Dismiss the Appeal petition with cost.

And pass any order, direction, or relief that this Hon’ble High Court of Country X may deem
fit in the interest of justice, equity, and good conscience.

All of which is humbly prayed

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COUNSELS FOR THERESPONDENT

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