- Competition Law for India was triggered by Articles 38 and 39 of the Constitution of India.
- These Articles are a part of the Directive Principles of State Policy.
- Among other things, Article 38 calls for the elimination of inequalities in opportunities for people engaged in different vocations (professions).
- Article 39 calls for ensuring that the operation of the economic system does not result in the concentration of wealth. Based on the Directive Principles, The Monopolies and Restrictive Trade Practices Act (MRTP Act) was passed in 1969.
- It was India’s first Competition Law.
- MRTP Act was repealed and replaced by The Competition Act. The Competition Act was passed in 2002, on the recommendations of the Raghavan Committee.
- In October 2003, the Competition Commission of India (CCI), was established under the provisions of the Competition Act, 2002. It became fully functional when the provisions of the Competition Act relating to anti-competitive agreements and abuse of dominant position were notified in May 2009.
- Competition Appellate Tribunal (COMPAT) was also established based on the Competition (Amendment) Act, 2007. However, the Government replaced the Competition Appellate Tribunal with the National Company Law Appellate Tribunal (NCLAT) in 2017.
Composition of CCI
According to the Competition Act:
- The CCI has a Chairperson and not more than 6 members.
- The Union Government appoints the Chairperson and the members.
- The Commission is a quasi-judicial body.
- It also provides advice to the statutory bodies.
Eligibility of members:
According to the Competition Act, 2002, the Chairperson and every other member shall be:
- Who has been, or is qualified to be, a judge of a High Court, or
- Who has special knowledge of, and professional experience of not less than 15 years in international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs, administration, or in any other matter which
- In the opinion of the Central Government, may be useful to the Commission.
CCI’s jurisdiction does not include matters protected by Intellectual Property Rights.
Functions of CCI:
It is the statutory duty of the Commission to
- Eliminate practices having adverse effects on competition;
- Promote and sustain competition;
- Protect the interests of consumers;
- Ensure freedom of trade carried on by other participants, in markets in India.
- Make the markets work for the benefit and welfare of consumers.
- Ensure fair and healthy competition in economic activities in the country for faster and inclusive growth and development of the economy.
- Implement competition policies to effectuate the most efficient utilization of economic resources.
- Develop and nurture effective relations and interactions with sectoral regulators to ensure smooth alignment of sectorial regulatory laws with the Competition Law.
- Effectively carry out competition advocacy and spread the information on the benefits of competition among all stakeholders to establish and nurture competition culture in the Indian economy.
- It may act on a complaint filed by an informant about an anti-trust activity or may take action suo motu.
- The Commission is also mandated to give its opinion on competition issues to the government or statutory authority and to undertake competition advocacy for creating awareness of competition
Benefits of CCI:
- It acts as a competition regulator and an anti-trust watchdog for smaller organizations that are unable to defend themselves against large corporations. Thus, its actions have effectively ensured competition, ultimately benefiting the consumer and the economy.
- CCI has played both administrative and quasi-judicial roles to eliminate practices having adverse effects on competition. It also promotes and sustains competition, protects the interests of end consumers, and ensures freedom of trade in Indian markets.
- The Commission has also come up with several innovations like the ‘green channel’ provision for automated approval on combinations that do not have appreciable adverse effects on competition and cleared more than 50 of such transactions. Thus, the Commission while ensuring fairness, does support mergers that make economic sense.
- CCI has conducted several market studies to help the dynamics of the market.
Challenges before CCI:
- CCI has been called a ‘Toothless regulator’ by critics. Most of the orders of the CCI are under appeal before the National Company Law Appellate Tribunal (NCLAT) or under challenge in the high courts or the Supreme Court. The CCI has collectively fined companies about INR 13,000 crore between 2011-12 and 2018-19. But it has collected less than 1% of it so far.
- Even though the Competition Act, 2022 represents an improvement from its extremely restrictive predecessor (the MRTP ACT) it remains riddled with loopholes and ambiguities. This creates unnecessary legal uncertainty, which favors lawyers and law firms. For instance, the law allows the CCI to leave some leeway for ‘relative advantage, by way of contribution to the economic development’. This may allow large firms to justify their anti-competitive practices in the name of development.
- In spheres such as telecom, internet, and big technology, CCI’s functions also overlap with other regulatory bodies such as the Telecom Regulatory Authority of India (TRAI). Moreover, to assess and ensure competition in these spheres, CCI will require staff with specialized knowledge in technology as well as an understanding of modern industrial economics.
- There is a need for a new market definition for digital technologies. Since, there are no boundaries in the digital space, defining a relevant market has been a tough task for regulators around the world. With the advent of Web 3.0, AI, IoT, Blockchain, and other technological developments, and the emergence of issues like data protection and privacy, search bias, platform neutrality, deep discounting, hostile takeovers, confidentiality, etc, the need for a robust competition law, geared to meet the needs of present-day techno-legal world becomes vital.