Competition Commission of India

The Competition Commission of India (CCI) is a statutory body of the Government of India which has been made responsible to enforce the Competition Act, 2002 in India. It also aims to prevent all unfair trade activities that have an adverse effect on competition in India.

Why was the CCI formed?

• After the economic liberalization of 1991, there was a need to promote competition and private enterprise.
• However, these private companies could only thrive in a condition where there were a fair market and no company, by virtue of its position or finance, abused the market.
• Thus, the idea of Competition Commission of India was conceived by the policymakers and was introduced in the form of The Competition Act, 2002.
• The CCI comprises of a Chairperson and has 6 members, who are all appointed by the Central Government.?

What does Act demand?

• The Competition Act, 2002, which has been once amended by the Competition (Amendment) Act, 2007, aims for the prohibition of the anti-competitive agreements, the abuse of dominant market & fiscal position by enterprises.
• It also regulates any entity combinations (acquisition, acquiring of control and Merger and acquisition), which may have the potential to cause an appreciable effect on fair market competition within India.

Why is it in the news?

• Following a detailed inquiry conducted by the Competition Commission of India, the private firm “Jaiprakash Associates Limited” (JAL) has been found guilty of carrying out restrictive trade practices which violate the fair competition law.?
• JAL is an infrastructure firm and has been accused of imposing unfair/discriminatory conditions on the allottees in one of its projects.
• The private firm was found to have violated several sections of the law and a substantial financial penalty was imposed on them.

Competition Commission of India

The Competition Commission of India (CCI) was set up to replace the anachronistic Monopolies and Restrictive Trade Practices Commission (MRTPC). It was established to eliminate practices that adversely affect competition in different industries/areas and protect interests of consumers and ensure freedom of trade. The Competition Act of 2002 called for the creation of CCI. However, it was established in 2003 and became fully functional only by 2009. The CCI is a quasi-judicial body which gives opinions to statutory authorities and also deals with other cases. It has one chairman and six members. It is the youngest and the only cross-sector regulator in India.

Functions and roles of CCI

The functions performed by the CCI include:

1. Playing the role of a market regulator for all sectors with focus on anti-competitive behaviour of companies that may distort competition.
2. To prohibit abuse of dominant position by enterprise or group.
3. To regulate the combinations (acquisition, acquiring of control and Merger and acquisition) that may cause or likely to cause adverse effect on competition within India.
4. To create awareness and impart training on competition issues through advocacy.

Review of functioning of CCI

In seven years of its functioning, the CCI has ordered penalties totalling Rs. 13,900 crore, though only Rs.82 crore has been actually paid and remaining being under litigation. In the last 7 years, the CCI has made its presence felt in various industries as diverse as cement, automobiles, pharmaceuticals, real estate, and information technology-enabled services. Some of the major orders issued by CCI include:

1. In 2011, the National Stock Exchanged Ltd was fined for abusing its dominant position in currency derivative market.
2. DLF was fined in 2011 for abusing dominant market position. The order against DLF has set a new template between real estate companies and consumers.
3. 11 cement companies were fined in 2012 for alleged cartelisation in price fixing.
4. In 2014, the BCCI was fined for anti-competitive practices in IPL.
5. In 2014, Coal India was fined for abusing dominant position in fuel supplies.
6. In 2015, Jet Airways, IndiGo and SpaceJet were fined for cartelisation in fixing fuel surcharge for cargo.

Government of India must also be given credit for not interfering in functioning of the CCI given the high stakes involved in mergers and acquisitions. However, in several cases the legal integrity of CCI orders has been questioned. It has led to a serious debate about the exact nature and objective of the quasi-judicial regulator. The Competition Appellate Tribunal (COMPAT) has struck down several CCI orders mainly for violation of the principle of natural justice that provides everyone a fair hearing before law. Currently, few orders issued by CCI are still pending before SC for final test. There are also concerns regarding validity of CCI as it may infringe upon the functional domain of other sector specific regulators like the RBI and SEBI.

Future challenges before CCI

The CCI has to streamline it processes to reduce the time taken to clear merger filings. Initially, it took less than 30 days, but because of the raising number of applications, the time period rose up to 60 days. While giving speedy decisions, quality also must be maintained. The CCI has to align its regulatory procedures more closely with the legal architecture of the Indian judicial system. The CCI as a regulator has to move away from applying “19th- and 20th century tools” and should change with need of the hour. The CCI is being seen as a hurdle in doing business in India. The CCI has to prove that its role is to promote fair competition in the market. The CCI may take another five-six years to become fully mature.

COMPAT (Competition Appellate Tribunal)

COMPAT has been set up the Centre in 2009 under Competition Act of 2002. It hears an appeal from a decision of the CCI. COMPAT can have one Chairperson and a maximum of two other members, all of whom serve for 5 years. They are all eligible for re-appointment unless they reach the age of 68 in case of Chairperson and 65 in case of members. Only a former SC Judge or CJ of HC can be appointed as Chairperson of COMPAT.

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Competition Commission of India

The CCI (Competition Commission of India) whose predecessor was the MRTPC (Monopolies and Restrictive Trade Practices Commission) was established to eliminate practices that adversely affect competition in different industries/areas and protect interests of consumers and ensure freedom of trade. The Competition Act of 2002 called for the creation of CCI. However, it was established in 2003 and became fully functional only by 2009. The CCI is a quasi judicial body which gives opinions to statutory authorities and also deals with other cases.