In the first major penalty against anti-competition practices, competition watchdog CCI has imposed Rs 55.5 crore fine on the country's leading bourse NSE for abusing its dominant
market position, and asked it to stop predatory pricing and other unfair trade practices.
Pronouncing NSE guilty of abusing its dominant market position in a 170-page order, the Competition Commission of India (CCI) asked the country's largest stock exchange to pay the penalty of Rs 55.5 crore within 30 days and immediately stop subsidising its services.
According to the order-- passed last evening and made public this afternoon -- there was "a clear intention on the part of NSE to eliminate competitors in the relevant market."
New rulings for making investments The penalty is equivalent to five per cent of the bourse's three-year average turnover, the order said.
This is the first major penal action by CCI, which has been in existence for about two years. Its recent imposition of fine of Rs one lakh each on some film producers on charges of cartelisation was mere token gesture in nature.
The CCI order follows a month-long probe by it in the matter, which began after a complaint from NSE's younger rival MCX-SX.
Reacting to the order, the NSE said it would decide its future course of action after studying the legal aspects.
"We are reviewing the 4-2 majority CCI's order. We will consider our future course of action after reviewing the order and obtaining the opinion of our legal advisors," a NSE spokesperson said in a statement.
NSE can challenge the order either at Competition Appellate Tribunal, or also approach the courts.
On the other hand, MCX-SX said that it would now look at claiming the compensation for the losses and damages suffered by it due to NSE's predatory pricing and other anti-competition moves.
Welcoming the CCI order, MCX-SX's CEO and MD Joseph Massey said: "Our next course will be to claim compensation for the losses and damages that we have incurred till now due to predatory pricing."
While Massey did not quantify the compensation to be sought, sources said the claims from MCX-SX could be estimated at about Rs 450-500 crore, including about Rs 150 crore of losses suffered by the Exchange in currency derivatives business due to NSE's predatory pricing.
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