The competition law aims to preserve and conserve fair and healthy trade practices among market enterprises. It intended to safeguard consumers’ rights and guarantee the freedom of trade practised by other market participants by controlling the behaviour of these enterprises and prohibiting them from engaging in anti-competitive behaviour.
Hence, to fulfil the said aim d to play the regulatory role, the Competition Commission of India came into being. Established under the Competition Act 2002, the Competition Commission of India, constituted in March 2009, administers, implements, and enforces the provisions of the said Act.
When it comes to competition regulatory systems, the two most influential systems globally are the European Union’s competition law and the United States antitrust laws.
Competition Commission Of India
The Competition Commission of India (CCI) is a statutory body of India charged with enforcing the Competition Act, 2002, established in March 2009. On the recommendations of the Raghavan Committee, the Monopolies and Restrictive Trade Practices Act of 1969 (MRTP Act) got repealed and replaced by the Competition Act of 2002. The Competition Commission of India seeks to create a healthy competitive environment.
By proactively engaging all stakeholders, including consumers, industry, government, and international jurisdictions, it acts as a knowledge-intensive organisation with a high level of competence, professionalism, transparency, tenacity, and wisdom in enforcement.
Goals of Competition Commission of India
The goals of the Competition Commission of India are as follows:
- Preventing Practises that have a negative impact on competition
- Championing and preserving market competition
- Consumers’ interests get safeguarded
- Ensured trade freedom
Need for Competition Commission of India
Encourage free enterprise
Competition laws get referred to as the “Magna Carta of free enterprise.” Competition is critical to the survival of economic liberty and our free enterprise system.
Protect against market distortions
The need for competition law arises as markets may suffer from failures and distortions. Various players can engage in anti-competitive activities such as cartels, abuse of dominance, and so on, which harm economic efficiency and consumer welfare.
As a result, competition law must provide a regulatory force that establishes effective control over economic activities.
Promotes domestic industries
In an era when economies are transitioning from closed to open economies, effective competition commission is critical to ensuring the continued viability of domestic industries while carefully balancing the benefits of increased foreign investment.
Composition of Competition Commission of India (CCI)
The Competition Commission of India (CCI) is a quasi-judicial body established under the Competition Act (Section 7) to regulate market competition and carry out the Act.
It comprises a Chairperson and no fewer than two and no more than six other members appointed by the Central Government. The Competition Commission of India investigates alleged violations of the Act’s provisions either on its own or in response to information provided by any person or a referral made to it by the Central Government, State Government, or statutory authority.
According to Section 8(1) of the Act, the Competition Commission of India would consist of a chairperson and no fewer than two and not more than six other members appointed by the Central Government. The members will be in charge of the administration and coordination division and the investigation, economic, combination, antitrust, and legal divisions.
Section 8(2) of the Act requires that the Chairperson and all members be individuals of integrity, ability, and standing who have been or are qualified to be a High Court Judge or have special knowledge and professional experience of not less than 15 years in international trade, economics, law, business, finance, accounting, industry, public affairs, or any other matter that the Central Government believes may be useful to the Commission.
The Central Government chooses the Chairperson and all other members of the Competition Commission of India from a list of names proposed by the Selection Committee.
The Chairperson of the Selection Committee is:
- the Chief Justice of India or his nominee;
- the Secretary in the Ministry of Corporate Affairs for the Member;
- the Secretary in the Ministry of Law and Justice for the Member; and two experts of repute
The chairperson should have special knowledge and professional experience in international trade, economics, business, commerce, law, finance, accounting, management, industry, public affairs, or competition matters, including Competition Law and Policy For The Member Of The Committee.
Functions and Role of Competition Commission of India
The functions of the commission of India are to:
- To eliminate anti-competitive practices, promote and sustain competition, protect consumer interests, and ensure free trade in India’s markets.
- To provide an opinion on competition issues in response to a referral from a statutory authority established under any law and to engage in competition advocacy, raise public awareness, and provide training on competition issues.
- To achieve its goals, the Competition Commission of India takes the following steps:
- Make markets work for consumers’ benefit and welfare.
- Ensure healthy and fair competition in economic activities in the country for faster and more inclusive economic growth and development.
- Implement competition policies to achieve the most efficient use of economic resources.
- Develop and maintain effective relationships and interactions with sectoral regulators to ensure that sectoral regulatory laws get aligned with the competition.
- Inquiring into certain agreements and the firm’s dominant position: The Commission May Inquire Into Certain Agreements And The Firm’s Dominant Position Either Suo Moto Or Upon Receipt Of Any Information Of An Alleged Violation Of Section 3 (Prohibits Anti-Competitive Agreements).
- Inquiring Into Combinations: Section 20 of the Act gives the Commission the authority to inquire into any information about the acquisition and determine whether such combination or acquisition may have a significant adverse effect on competition (AAEC).
- Reference by Commission: Section 21A of the Act states that if any individual raises an issue during the proceeding that any decision made by the Commission violates the provisions of the Competition Act, whose authority gets entrusted to statutory authority, the Commission may refer the issue to the statutory authority.
Duties of Competition Commission India
The primary goal of competition law is to promote economic efficiency by utilising competition as one of the means of assisting in creating markets responsive to consumer preferences.
The Competition Act intends to address the ills afflicting the country’s economic landscape, in which the interests of society and consumers at large are directly involved.
One of the Act’s stated goals is to promote consumer welfare by preventing market distortions caused by enterprise actions and agreements detrimental to competition and consumer interests.
By definition, competition law envisages situations in which the Competition Commission of India has a role and is required to control the behaviour of enterprises in the marketplace to achieve consumer welfare.
Section 18 of the Act, which is consistent with the Act’s preamble, requires the Competition Commission of India to “eradicate” anti-competitive practices and promote competition, consumer interests, and free trade. Other provisions of the Act apply to the exercise of power under Section 18.
The Commission’s goal is to establish a system of undistorted competition proportionate to promoting consumer interests. The Competition Act’s preamble and Section 18 mandate the Commission to “protect the interests of consumers,” and it is critical to ensure that consumers’ surplus does not get jeopardised.
Judgements of Competition Commission of India
- In June 2012, CCI imposed a fine of 63.07 billion (US$910 million) on 11 cement companies for cartelisation. It claimed that cement companies met regularly to fix prices, control market share, and restrict supply, resulting in illegal profits.
- In 2013, the CCI fined the Board of Control for Cricket in India (BCCI) $522 million (US$7.6 million) for abusing its dominant position.
- The CCI determined that IPL team ownership agreements were unfair and discriminatory and that the terms of IPL franchise agreements were stacked in favour of BCCI, with franchises having no say in the contract’s terms.
- In 2014, the CCI fined Google $10 million for failing to comply with the Director General’s (DG) request for information and documents.
- Three Airlines was fined 258 crores by CCI in 2015.
- The Competition Commission of India (CCI) fined the three airlines for forming a cartel in determining the fuel surcharge on air cargo.
- Following a complaint filed by Reliance Jio against the cartelisation by its rivals Bharti Airtel, Vodafone India, and Idea Cellular, the CCI ordered an investigation into the functioning of the Cellular Operators Association of India (COAI).
- The commission launched an antitrust investigation into Google for abusing its dominant position with Android to obstruct market competitors. This investigation was ordered following an examination of a similar case in the EU in which Google was found guilty and fined.
- In 2019, CCI sent letters to handset manufacturers requesting information about the terms and conditions of their agreement with Google.
- It determines whether Google imposed any restrictions on them for using its apps in the previous eight years.
Samir Agarwal v. Competition Commission of India
In this case, the Supreme Court of India addressed the following issues:
- Whether a member of the general public can file a complaint with the CCI alleging a violation of the Act
- Whether an aggrieved party can appeal the CCI’s decision to the NCLT and the Supreme Court
The National Company Law Appellate Tribunal (NCLAT) dismissed the petitioner’s appeal because he is not a consumer of Ola or Uber. In contrast, after reviewing the Act, the Supreme Court concluded that the definition of person in Section 2(l) of the Act is inclusive and extremely broad. The 2007 Competition (Amendment) Act
Section 19(1) of the Act was amended to change the phrase “receipt of complaint” to “receipt of information.” This distinction is significant because an aggrieved party can only file a complaint, whereas information can be received from anyone.
The Court also held that Section 45 of the Act, which provides a penalty of up to Rs. 1 crore for false claims, acts as a deterrent to frivolous and vexatious litigation.
Concerning appeals, the Court held that Section 53B of the Act provides that any person dissatisfied with any order, direction, or decision of the Commission may file an appeal with NCLAT. Any person dissatisfied with the Appellate Tribunal’s order, decision, or direction may file an appeal with the Supreme Court under Section 53T of the Act.
Solid market competition is essential for the economy’s advancement and development. Although the Indian economy has advanced from its defensive position against homegrown businesses, harmful exchange rehearsals such as cartel formation and restraining infrastructures conflict with the public arrangement.
It harms both small manufacturers and the general public because they must now agree to the ridiculous terms and conditions imposed by the massive parts on the lookout. The rich become more extravagant to the detriment of the poor, which contradicts the goal of the economy’s value. A body like India’s Competition Commission of India is critical for policing such practices.
FAQs on Competition Commission of India
What essentially is Market Competition?
In common parlance, market competition refers to sellers competing independently for buyers’ patronage to maximise profit (or other business objectives).
What does unfair competition mean?
The unfair competition entails collusive price-fixing, deliberate reduction in output to raise prices, creating barriers to entry, market allocation, tie-in sales, predatory pricing, discriminatory pricing, etc.
When was the Competition Commission of India started?
14 October 2003
Is CCI a legal entity?
CCI is the statutory authority in charge of reviewing combinations and determining whether they have or are likely to have a significant adverse effect on competition in the relevant market(s) in India.
Who is the chairman of CCI?
Ashok Kumar Gupta