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CCI orders antitrust probe against IRCTC for allegedly restricting e-ticketing progress


This is big: The Competition Commission of India (CCI) has ordered an antitrust probe against Indian Railways and The Indian Railways Catering and Tourism Corporation (IRCTC) for alleged unfair trade practices by IRCTC while providing online train ticketing and others services, reports The Hindu Business Line. Read the CCI order here.

CCI says this probe was ordered since it believes prima facie, there is a case of violation of the provisions of the Competition Act based on the complaints filed against the Railways ministry and IRCTC. The organization has now directed the director general to investigate this matter and submit his report in the next 60 days.

While we couldn’t find a mention of this in the CCI order, the report also says that CCI is studying a complaint on IRCTC being the only online platform to provide (train ticketing) services.

IRCTC Is Allegedly Restricting Developments To E-ticketing

As per the CCI order, Railways is allegedly restricting technical and scientific developments related to booking of e-tickets using IRCTC and is imposing unreasonable conditions on its recently launched e-wallet scheme. It is also levying premium charges for calls made to 139 and limiting the provisions of IRCTC authorized agent services.

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Remember that IRCTC had introduced a one-time registration process last year and made it mandatory for all users who intend to book train tickets through third party websites like Cleartrip, MakeMyTrip, Yatra and others, to have an IRCTC account before booking a train ticket online.

Following this, MakeMytrip and Cleartrip had added an extra step of IRCTC account registration during ticket booking and allowed users to synchronize their accounts with the IRCTC account, so the user doesn’t have to remember the IRCTC ID, although an unregistered user will still have to enter an IRCTC ID each time.

Cleartrip had also disabled its train booking feature on its Android app, about a week after it had introduced the feature. While the company hadn’t commented on why the service was disabled, train ticketing came back on the app about five months later and Cleartrip said there will be no additional service fees for booking train tickets through the app and one will end up spending the same amount as booked through IRCTC.  Back in 2010, IRCTC had also restricted web service agents like Itz Cash Card, Suvidhaa from booking online Tatkal tickets.

Other complaints from the order

– Tickets booked online doesn’t permit any concessions except for senior citizens and doesn’t allow users to reserve tickets with break journeys. Users are apparently permitted to book only 10 tickets per month

– IRCTC charges a premium on the e-ticket pricing on top of which it charges a non-refundable service charge and payment gateway charges. There is also a extra agent service charge if ticket is booked through an IRCTC authorized agents.

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– Huge amount of Tatkal tickets are hoarded and sold at a huge premium of Rs 400 over the normal price. These bookings start only one day in advance thereby creating artificial scarcity and illegal practices by touts and agents.

– Limiting the availability of IRCTC agents by charging high fees for agent appointments. IRCTC currently charges a one-time fee of Rs 20,000 and an annual fee of Rs 5,000, which apparently acts a barrier for smaller agents.

CCI notes that the dominance of Indian Railways is indisputable due to the statutory and regulatory framework however it believes these measures indicates the abusive conduct of Indian railways and IRCTC, which is in violation with the provisions of section 4 of the Competition Act.

We are a bit curious to see whether (and how) this probe will affect IRCTC’s monopoly over online train ticketing business in India. Will online train ticketing be finally opened beyond IRCTC? Having multiple companies offer train ticketing could also incentivize IRCTC to offer a better (or at least a decent) service to its consumers and finally fix its long-pending site load issues.

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