The National Company Law Appellate Tribunal (NCLAT) New Delhi has rejected petitions filed by ride
sharing players Meru and Fast Track Call Cab against Ola alleging predatory pricing ways and anti-
competitive practices in Bengaluru market.
The appeals were filed by the entities against ANI Technologies, which run the app-based taxi service
under the brand name Ola.
It was alleged that Ola indulged in abuse of dominant position and entered into anti-competitive
agreements with drivers in the Bengaluru market.
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The appellate tribunal has upheld the order passed by the Competition Commission of India (CCI),
which in July 2017 had rejected the allegations of abuse of dominant position against Ola.
While rejecting the petitions, NCLAT also said that Ola was not in a dominant position in the
Bengaluru market.
“Moreover, since Ola is not in dominant position the question of abuse of dominant position through
predatory pricing also does not get attracted. In sum, we do not think the orders of the Commission
dated 19.7.2017 require any interference. Both the appeals are, therefore, dismissed,” the appellate
tribunal said in an order on January 7,2022.
It was alleged that Ola indulged in predatory pricing by offering discounts to customers and
incentives to drivers with the sole intention to monopolise the radio taxi services in Bengaluru after
receiving four series of funding from their investors.
“Looking to the market behaviour of Ola, we hold a clear view that Ola was providing a mobile-app
based solution to the riders and drivers in a new and easy way for taxi rides which includes taxi
booking and payment,” NCLAT said.
According to the appellate tribunal, Ola employed a pricing strategy to establish its brand and
network to provide much more efficient and user-friendly services to customers in real-time at any
place and anytime, to edge out the competitors who were already present in the radio taxi market in
Bengaluru, which cannot be faulted as being predatory pricing.
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The strategy is that once demand rises, Ola has to bring in more drivers in its network, and therefore
its incentives to drivers are engineered to attract them to the network, the appellate tribunal said.
“Therefore, we are of the view that Ola is working on generating demand through customer
discounts and then bringing in more drivers to cater to the increased demand. Ola tries to create a
win-win for the riders and drivers, and of course to its enterprise,” NCLAT said.
