CCI Orders Probe Into Mrs India Inc

The Competition Commission of India (CCI) has directed the Director General (DG) to investigate Mrs. India Inc. after finding a prima facie case of contravention of Sections 3(4)(a), 3(4)(b), 4(2)(a)(i), 4(2)(b)(i) and 4(2)(d) of the Competition Act, 2002 in a complaint filed by Rinima Borah Agarwal, a participant and first runner-up in the 2024 Mrs. India Inc. beauty pageant.

The informant alleged that after registering for the competition and paying the registration and grooming fees, she was required to sign a Non-Disclosure Agreement and Participants’ Terms and Conditions. After being declared first runner-up and awarded the title of “Mrs. India Galaxy”, she was required to execute a Winners’ Terms and Conditions agreement.

According to the informant, these agreements contained restrictive conditions, including a five-year prohibition on participating in or becoming part of other beauty pageants as a participant, consultant, judge, mentor, founder or co-founder, restrictions on professional engagements without approval of the organiser, and mandatory association with social causes identified by the organiser. 

The informant also alleged that Mrs. India Inc. held a dominant position in the market for services provided by beauty pageant organisers for enabling married Indian women to participate in international beauty pageant competitions meant for married women and had abused such position by imposing the impugned contractual conditions. She further alleged that Mrs. India Inc. and the organisers of the international Mrs. Globe competition had formed a cartel and pre-decided competition winners.

The Commission first examined the allegation relating to cartelisation. It noted that no evidence had been placed on record to show any agreement between Mrs. India Inc. and the organisers of Mrs. Globe from which it could be discerned that winners of the competition were pre-decided. Accordingly, the Commission held that no case of contravention of Section 3(3) of the Act was made out.

With respect to the agreements executed between the parties, the Commission observed that they could not be examined under Section 3(3) as the relationship between the informant and Mrs. India Inc. was vertical in nature. The Commission noted that clauses preventing the informant from participating in or promoting other pageants constituted exclusive dealing arrangements, while clauses requiring participants to associate only with social causes recognised by Mrs. India Inc. were in the nature of tie-in arrangements. The Commission observed that such clauses attracted examination under Sections 3(4)(a) and 3(4)(b) of the Act.

While examining the allegations under Section 4, the Commission observed that beauty pageants for married women constitute a separate market. It noted that major beauty pageants such as Miss World, Miss Universe, Miss Earth and Miss International do not permit participation by married women. The Commission therefore defined the relevant market as the “market for services of beauty pageants for married women in India for sending its winners to major international beauty pageants”.

The Commission further noted that information available in the public domain indicated that Mrs. India Inc. held exclusive licences in relation to major international beauty pageants including Mrs. Globe, Mrs. Galaxy, Mrs. Earth and Mrs. International Summit. The Commission also referred to statements made by Mrs. India Inc. before the Bombay High Court in Mrs. Mohini Sharma, Sole Proprietor, Mrs. India Inc. v. Priya Saggi and Others (Suit No. 11338 of 2024), wherein it stated that it had obtained franchise licences and authorisations for several international pageants. In view of the material available before it, the Commission observed that Mrs. India Inc. appeared to be a dominant player in the delineated market.

The Commission also noted that the requirement to sign the Participants’ Terms and Conditions was disclosed shortly before the finale, while the Winners’ Terms and Conditions were presented after the finale. It stated that such information should have been disclosed prior to registration or payment of the compulsory training and grooming package.

On examining the impugned agreements, the Commission noted clauses prohibiting winners from entering into contracts with any person, firm, business, publicist, charity or corporation without written approval of Mrs. India Inc.; clauses restricting participation in other pageants for a period of five years; clauses requiring participants and winners to join only social causes recognised by the organiser; and clauses requiring prior approval for appearances. Thus, it remarked that these clauses attracted Sections 4(2)(a)(i), 4(2)(b)(i) and 4(2)(d) of the Act.

Holding that a prima facie case was made out, the Commission directed the Director General to investigate the matter under Section 26(1) of the Act and submit a report within 90 days. The Commission clarified that its observations were only for the purpose of forming an opinion and would not amount to a final expression on the merits of the case.