InstaAstro's Abuse of Dominance Allegation is Dismissed by CCI

Nitin Konde, Varun Bhardwaj

Dec 31, 2024 — 3 min read

CCI Dismisses Abuse of Dominance Allegation Against InstaAstro

The Competition Commission of India has denied InstaAstro's petition, which alleged that Astrotalk, an online astrology platform, had abused its dominance. The competition commission, in an order, observed that the "informant" (rival platform InstaAstro) failed to provide data or statistics to substantiate its claims that Astrotalk was abusing its dominance. In addition to dismissing the complaint, the CCI asserted that Astrotalk is subject to competitive constraints due to the existence of numerous well-established competitors in the market. The bench, which consisted of Ravneet Kaur, the chairperson of the Competition Commission of India (CCI), and members Anil Agrawal, Shweta Kakkad, and Deepak Anurag, observed that the mere citation of media reports is insufficient to establish antitrust allegations.

In its complaint, InstaAstro, a competitor platform, claimed that Astrotalk was engaging in practices that were purportedly detrimental to market competition. The complainant also alleged that Astrotalk was recruiting its consultant, who was also "upskilled" by InstaAstro, by offering a higher remuneration of up to INR 5 lakh per month. According to InstaAstro, this resulted in financial losses for the company.

Astrotalk Spreading False News to Attract Consultants

InstaAstro also asserted that Astrotalk executed restrictive agreements with the consultants who were taken away, which forbade them from re-engaging with InstaAstro or other competitors. The complaint also claimed that Astrotalk disseminated "false news" in order to "incite" consultants from competing companies to terminate their contracts and depart their organisations. InstaAstro also referenced Astrotalk CEO Puneet Gupta's statements regarding social media platforms, asserting that the startup possessed 80% of the market. InstaAstro asserted that this implied an abuse of dominance. The order further alleges that Astrotalk is violating the provisions of Section 4 of the Act by poaching astrology consultants and offering them greater remuneration, thereby reducing competition in the relevant market.

Consequently, InstaAstro encouraged the CCI to impose a penalty on Astrotalk and to provide guidance to the latter to cease engaging in anti-competitive practices. It also sought compensation for itself and other participants in the segment that were affected by the alleged anticompetitive practices of Astrotalk. It also requested interim relief in the form of directives to Astrotalk to cease poaching consultants and refrain from engaging into any agreements that would have a detrimental impact on competition. The CCI dismissed the complaint and determined that there was no prima facie case against Astrotalk for violating Sections 3 and 4 of the Competition Act after hearing the case. Consequently, the matter should be immediately resolved in accordance with Section 26(2) of the Act. As a result, the order stated that no case for the grant of relief(s) as sought under Section 33 of the Act has arisen, and the same is also rejected.

CCI Dismissed the Poaching Allegation as well

The CCI stated that the consultants are at liberty to render their services to any entity at their discretion in response to allegations of recruitment. Nevertheless, it stated that these types of cases do not fall within the scope of Sections 3 and 4, which is the section under which InstaAstro filed the complaint. The Commission also stated that the informant's failure to submit any data or statistics impeded its capacity to exhibit any abuse of market power by Astrotalk. Regarding the allegations of 80% market share, the CCI stated that the commission has taken note of the informant's assertion that Astrotalk's dominance is solely based on the media pronouncements of its CEO, who claims to hold 80% of the market. The Commission is of the opinion that the dominance of any entity cannot be exclusively determined by media statements, which are frequently intended to enhance the entity's market position. As a result, Astrotalk's dominance in the pertinent market is not established.