The Competition Commission of India (CCI) has slapped a penalty of ₹45.2 million (US$725,000) on US-based ACI Worldwide and its subsidiaries in India and Singapore for abuse of dominance, following a complaint brought by Financial Software and Systems (FSS).
ACI Worldwide licenses software for electronic banking to banks in India. FSS provided software modification and customization services to banks that use ACI software.
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In May 2013, ACI sent letters to all the banks using its software saying it would not allow them to use FSS or any other third party to customize its software beyond July 2013.
FSS alleged that ACI abused its dominant position under section 4 of the Competition Act, 2002, by not allowing banks to choose a service provider of their choice to modify ACI’s software; imposing unfair conditions on the purchase or sale of goods or services through exclusive supply arrangements with banks that used the software; and directing the banks not to use the services of FSS.
The CCI found there was a prima facie case of contravention by ACI of the provisions of sections 3 and 4 of the act. It ordered the Director General (DG) to investigate the matter and also granted an interim stay against the allegedly contravening conduct of ACI.
The DG found that ACI had abused its dominant position in contravention of various provisions of section 4 of the act, by imposing unfair and discriminatory conditions on the banks. It also found that ACI used its dominance in the upstream relevant market to enhance its presence in the downstream relevant market, thus violating section 4(2)(e) of the act. The CCI upheld the findings of the DG.
JSA advised ACI Worldwide on the matter. The team comprised partner Amitabh Kumar, senior associate Gautam Shahi, associates Kabita Das and Lagna Panda, and junior associate Ela Bali.
Luthra & Luthra advised FSS.
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