An Appraisal Of 10 Years Of Competition Law Enforcement

[Madri Chandak, a student of Hidayatullah National Law University is in her second year and has a keen interest in the economic and commercial aspects of the law.]

INTRODUCTION

India had the Monopolies and Restrictive Trade Practices Act, 1969 to regulate the competition fairly in the economy, which was then repealed. The statute was replaced with the Competition Act, 2002 on the recommendations of the Raghvan Committee. Furthermore, the Act was amended in 2007 and various provisions in regards to the prohibition of anti-competitive agreements and dominant position of entities were notified in May 2009.

The amendment in 2007 led to the establishment of CCI and the Competition Appellate Tribunal to regulate the prevalent competitive environment in the Indian Economy. The Competition Commission of India (CCI), India`s competition regulator is a statutory body which enforces the provisions of Competition Act, 2002. In addition to this, the Indian government had replaced the Competition Appellate Tribunal (COMPAT) with the National Company Law Appellate Tribunal (NCLAT) in 2017.

THE FUNCTIONING OF THE CCI

The CCI celebrated its 10th Annual Day on 20th May 2019 which marks the notification of the substantive enforcement provisions of the Competition Act, 2002.[1] Throughout the decade of its functioning, the commission undertook several measures to prevent unfair practices in trade and provide for freedom of trade concurrently. New challenges have also erupted for the CCI with the growth and development in technology and business models. An effective balance in regards to innovation and available resources have to be managed.

The CCI, comprising of a chairman and not less than two and not more than 10 members, appointed by the Centre, engages with all stakeholders to ensure a fair competition. It performs the functions of regulating combinations like acquisitions and mergers that may affect the competition within India.

The commission keeps the welfare of the consumers as their first priority and formulates competition in a way that it results in faster economic growth and development. It also performs activities to promote competition through competition advocacy. The CCI acts as a dynamic organisation by acting as an antitrust ombudsman for smaller organisations which are not able to defend themselves against large corporations.

Since 2009, the CCI has reviewed 1010 antitrust cases, 660 merger filings and has held more than 700 advocacy events.[2] The chairperson of the CCI mentioned in its speech the enforcement mechanism used by the CCI in regards to Cartels, abuse of dominant position, regulation of combination etc.[3] It has also been established that even a foreign company with its presence in India through an acquisition or merger can come under the scrutiny of CCI.

In regards to cartelisation, the CCI is known to have imposed a fine of Rs. 63.07 billion on 11 cement companies in June 2012. These companies were accused of meeting regularly to fix prices, control market share and hold back supply, leading to them gaining illegal profits.[4] Many trade associations have even revised their policies to make them accustomed to the principles of competition.

The dominance and abuse by a firm are also proscribed under unilateral anti-competitive conduct. The CCI had even imposed a penalty on the Board of Control for the Cricket in India (BCCI) in 2013 for misusing its dominant position as the ownership agreements were not fair. The agreement allowed wide powers to the BCCI without any plausible justification. The commission also issues modifications to such discriminatory clauses in agreements.

Quick approvals for Mergers and acquisitions are also being formulated to fight global companies and avoid the adverse effects of the competition. The CCI plays an active role and has even fined Google on its failure to comply with certain directions. The CCI also looked into the matter of cartelisation by certain cellular operators against Reliance Jio.

The CCI provides for innovation in the economy as well in its own functioning as well. An automatic system for approvals of mergers and acquisitions has been introduced under the Green Channel. It has also focused on the leniency regime to secure evidence against cartels. The advisory measures have also been initiated enthusiastically.

CONCLUSION

CCI, as a market regulator, holds a dynamic position in this highly inter-dependent world. The increase in private and government investments can bring in a lot of development for India through the regimes of Public-Private partnerships. Thus, CCI also has to modulate its functions to keep competition fair and intact in the Indian economy.

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[1] Press Information Bureau, CCI celebrates 10th Annual Day, Government of India, (Apr. 24, 2020, 2:14 PM), https://pib.gov.in/newsite/PrintRelease.aspx?relid=190062

[2] Ibid at 1.

[3] Welcome Address, Chairperson, Competition Commission of India, (Apr. 24, 2020, 3:17 PM), https://www.cci.gov.in/sites/default/files/speeches/SpeechChairperson.pdf?download=1

[4] IE Staff, CCI: Need, Composition, Function, Challenges, IAS Express, (Apr. 24, 2020, 2:20 PM),https://www.iasexpress.net/competition-commission-of-india/