The Competition Commission of India has, by its order dated 28   ^th   February, 2014 ordered an investigation into the matter of decision by ICAI not to grant recognition to any outside organization for holding CPE seminars.

The direction was given in response to complaint filed by CA Arun Anandagiri (informant) against ICAI (OP). The order was passed under Section 26(1) of the Competition Act, 2002.

The “extracts” of the order passed by the Commission are as under:

“It is this CPE policy of OP (ICAI) which has been challenged by the informant in the present matter being discriminatory and abusive in terms of Section 4 of the Act. The Informant is a qualified Chartered Accountant and is aggrieved by the discriminatory CPE policy of the OP which does not allow any other organization to provide the service of organizing CPE seminars other than the OP’s recognised Program Organising Unit (“POU”).”  

“It is stated by the informant that OP was dominant in the relevant market of organizing CPE Seminars as it, through the CPE Policy, had allowed only the Program Organising Units (“POU”) recognized by OP to conduct the seminars which carry CPE credits. OP has entrusted the task of setting strategic directions and overseeing CPE activities of POUs to the Continuing Professional Education Committee (“CPEC”), a non-standing committee of the Council of OP Informant further states that while the Council has the power to grant recognition to any other unit for conducting CPE seminars, not a single external organization has been accorded recognition for the same. Informant alleges that the POUs are the CPE study circles which are nothing but an extended arm of ICAI as the OP has full control over them, right from granting the approval to submission of accounts to transfer of surplus etc. There are over 100 study circles in India that currently organize CPE seminars.”

“It is alleged by the informant that one of the reasons that OP has refused accreditation to any independent organisation for conducting CPE seminars was to further the self-interest of its 600+ elected members as these members run the show at the CPE seminars either as conference directors or conference coordinators or speakers. The aforesaid information shows that OP through its CPE Study Circles was the sole provider for organizing CPE Seminars for CPE credits required by its more than 2 lakh members to move up in their professional ladder.  As such prima facie, OP appeared to be a dominant player in the relevant market.

“There seems to be force in the allegations of the informant that the restriction put in by OP in not allowing any other organization to conduct the CPE seminars for CPE credits, created an entry barrier for the other players in the relevant market.  Further, the choice of the consumer (members of OP) in this case was being limited.  The members of OP had no option, but to attend the seminars organized by OP (whatever be the quality of seminars) to get the requisite CPE credits. The restriction put on by OP does not meet the objectives sought to be achieved by the policy. There are hundreds of seminars and conferences organized every month across India by reputed chambers of commerce like CCI, FICCI, ASSOCHAM, NASSCOM, etc. However, these seminars/conferences are not recognised by OP for CPE credits. Prima facie, it appears to be an unreasonable restraint and the members CA of OP are left with no option but to compulsorily attend seminars organized by OP and its organs.  ............ on its non-regulatory function of organising CPE Seminars, restricting the same only to itself and its organs, prima facie appears to be an arbitrary exercise of its powers and thus in contravention of the provisions of Section 4 of the Act.”

The Commission further observes that, it is not the case that the activity of OP in organizing CPE seminars is a not-for-profit exercise.  Informant has pointed out in his information that the 64th Annual Report of OP for the Financial Year 2012-13 shows that the OP earned gross revenues of Rs. 45 crores from organizing seminars and conferences, which is around 8% of the OP’s total revenue.” 

“Accordingly, the Commission directs the Director General(DG) to cause an investigation to be made into the matter and to complete the investigation within a period of 60 days from receipt of this order.  If during the course of investigation, involvement of any other party is found, the DG shall investigate the conduct of such other parties including the conduct of group companies, if any, in terms of the proviso to section 27 of the Act.”

Download Full Order of CCI Click Here >>

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