CCI asks Hockey India to split regulatory, commercial roles

NEW DELHI: Expressing its concern over possible transgression of lines between Hockey India’s dual role as a regulator and an organiser, fair trade regulator CCI has asked it to put in place an effective internal control system to keep the two roles separate.

“…possible conflict of interest between ‘regulatory’ and ‘organising of events’ roles of Hockey India, has raised certain potential competition concerns in the mind of the Competition Commission of India,” the watchdog said, although it has dismissed the complaints of alleged abuse of dominance and other charges against Hockey India for the time being.

The observations have been made by the CCI in its 64-page order on Hockey India, after an over 18-month long probe into complaints filed by India’s former hockey team captain Dhanraj Pillay against the game’s governing body in the country.

Drawing parallels with cricket governing body BCCI, against whom CCI has previously imposed a fine of Rs 52 crore for abuse of dominance in IPL, the fair trade watchdog said that the structure of Hockey India “being akin to BCCI, having dual role of regulator as well as organiser, the possibility of transgression of the lines shall always remain there”.

The CCI said it did not find enough evidence against Hockey India (HI) in present case, but “as and when any new facts come to its notice, the Commission shall consider them in the light of responsibilities enjoined upon it by the Act and shall act accordingly”.

“The CCI felt that it would be appropriate if HI were to put in place an effective internal control system to its own satisfaction, in good faith and after due diligence,” it said.

Such system would need “to ensure that its regulatory powers are not used in any way in the process of considering and deciding on any matters relating to its commercial activities; and also set up a streamlined fair and transparent system of issuing NOCs to the players for participating in events organised by foreign teams/clubs,” it added.

“HI’s economic power is enormous as a regulator. Virtually, there is no other competitor of HI. The dependence of competitors on HI for sanctioning of the events, as also dependence of players, has been total…

“The CCI concluded that though these regulations are inherent and proportionate to the objectives of sports federation, the manner of application is always a concern given the duality of roles leaving scope for possible violations of the Competition Act,” the order said.

Passing its order, CCI said “a regulator must necessarily follow the dictum that ‘Caesar’s wife must be above suspicion’.

“In this case, the Director General’s report points out circumstantial evidence which, though not establishing violation of the Competition Act, further persuades the CCI about the inherent potential of violation, and the need for clear articulation and separation of the two roles of HI.”

CCI further said that “the nature of the present system, with the possible conflict of interest between ‘regulatory’ and ‘organising of events’ roles of Hockey India, has raised certain potential competition concerns in the mind of CCI.

In its earlier order against BCCI, which has been challenged before the appellate authority, the CCI had said that BCCI’s objective to promote and develop the game of cricket has been compromised due to its dual role of custodian of cricket and organiser of events, as its role overlap restricted the benefits of competition.

CCI had begun looking into the matter after a complaint was filed by Dhanraj Pillay and others, including other former players, against Hockey India in November 2011.

The case centred on the events leading to the organisation of World Series Hockey (WSH) League by Indian Hockey Federation in collaboration with Nimbus Sport.

HI was accused of imposing restrictive conditions on players for participation in “un-sanctioned prospective private professional leagues resulting in undue restrictions on mobility of players and on prospective private professional leagues leading to denial of entry to competing leagues”.

HI is the country’s national sports federation for the game of hockey and is affiliated to the Indian Olympic Association (IOA), Asian Hockey Federation (AHF) and International Hockey Federation (FIH).

In December 2010, IHF and Nimbus had announced the WSH league, designed and conducted on a franchisee model and the first tournament was scheduled to be organised from November 2011 to February 2012.

However, HI adopted regulations relating to unsanctioned events and accordingly modified its Code of Conduct (CoC) agreement with players to include the clauses related to disciplinary action such as disqualification from Indian National Team for any participation in unsanctioned events.

In this backdrop, HI along with FIH also announced that they intended to introduce their own league in India in 2013.

Subsequently, HI was accused of misusing its regulatory powers and promoting its own Hockey League at the exclusion of WSH and of engaging in practices resulting in denial of market access to rivals, in contravention of the Competition Act.

It was also alleged that HI was using its dominance in conducting international events in India to enter into the market of conducting a domestic event in India.

The CCI had subsequently ordered a probe into the matter by its Director General, which concluded in its report that FIH had indeed abused its dominance to maintain their control over hockey sports in India.

After taking into account the DG’s report and the submissions made by the involved parties, CCI, however, ruled that there were not enough evidence available to prove charges against HI, although the scope remains for possible violations in future.