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Overview of the Competition Commission of India

8 min read

By Sakshi Chhabra

Introduction

The Competition Commission of India is regarded as the competition regulator of the country. This Commission is a statutory body of the Indian Government which is responsible for enforcing The Competition Act, 2002.

It promotes competition throughout the country as well as prevents activities that cause an adverse effect on competition in India.

The idea of establishing a legal system to regulate the competition in India was in discussion from a very long time but this concept came to existence in 2002 when the parliament of India announced the Competition Act, 2002.

The Competition Act, 2002 was replaced after The Monopolies and Restrictive Trade Practices Act,1969 was repealed.

This article, hence, deals with the working of the Competition Commission of India.

What is the Competition Commission of India?

The Competition Commission of India (hereinafter as CCI) was established on 14th October 2003, but it became fully functional only after May 2009. Mr. Dhanendra Kumar was appointed as the first chairman of the Commission. Previously the Commission consisted of a chairperson and not less than 2 and more than 6 members.

These members are appointed by the Central Government. But now the number of members has been reduced to three along with the chairperson. This was done so that the decision-making process is speedier, and hearings take place faster and effectively.

The chairperson and all the members of the Commission must be a person having the ability and integrity to be qualified as a Judge of the High Court, or who is or has been a Judge of the High Court.

The members must have special knowledge and professional experience, not less than 15 years in the international business, trade, economics, commerce, law, accounts, public affairs, etc.

The current chairperson of CCI is Ashok Kumar Gupta and the other existing members of the Commission are Dr. Sangeeta Verma and Bhagwat Singh Bishnoi.

The Competition Commission of India was introduced under the guidance of the Vajpayee Committee on the recommendations of the Raghavan Committee.

What were the recommendations of Raghavan Committee?

The Government of India had previously come up with different reforms regarding the economic policies of the country but none of them were ever implemented. In 1999, after the guidelines of the World Trade Organization were released, the Indian Government initiated the formation of the Raghavan Committee, which was a high-level committee whose major focus was the competition policies as well as the competition laws for the country.

This committee was given the power to advice on the modern competition law of the country as well as make suggestions on the legislative framework of the competition laws.

However, the role of the Commission was not only limited to enforce the competition laws, but it was also expected to take part in the activities that leads to the formation of the economic policies within the country.

Thus, it was found that the Monopolies and Restrictive Trade Practices Act,1969 was not sufficient to deal with the economic policies and competition laws of the country.

Which is why , the Competition Commission of India (CCI) was established to build a relationship between the various regulatory bodies for formulation and development regarding the competition in the market.

This will in return improve the communication and will also search for alternative which will be less harmful in nature not only for the competition but also for the welfare of the consumers.

Why is there a need of Competition Commission of India?

  • To encourage free enterprise

The competition laws are described as the Magna Carta of the free enterprises. this is because competition is highly important for preserving the economic freedom as well as building up a free enterprise system in the country.

  • To Prevent market from distortions

The market can suffer from distortions and failures at any given time and due to this, various players of the market sought anti-competitive activities such as abuse of dominance, pricing, etc. all this will lead to adverse effects on the economic efficiency and consumer welfare.

Thus, all these leads to the need of Competition Commission of India to monitor the activities of the market as well as to establish effective control over the economic activities taking place by being a competition regulator.

  • To promote domestic industries.

In today’s time the economies are moving towards development and thus and effective Competition Commission is needed to ensure that the domestic industries are carefully balanced along with gaining the benefits of the foreign investment increased competition.

What are the functions of Competition Commission of India?

  • It ensures that the customers receive all the benefits and welfare which the Indian market ensures.
  • It accelerates the economic growth of the market by ensuring fair competition in the economic activities carried out in the nation.
  • It is the duty of the Commission to undertake competition Advocacy.
  • It is regarded as the antitrust ombudsman for the small organisations in the country.
  • It ensures that the resources of the nation are utilised effectively by executing the competition policies.
  • Competition Commission of India also has the duty to scrutinise any foreign company that enters the Indian market for business through a merger or acquisition and ensure that the company abides the competition laws of India set up by the Competition Act, 2002.
  • It is the duty of the Commission to promote cooperation with the other regulatory authorities of India.
  • The Competition Commission of India is the competition regulator, but it also acts as a business facilitator.
  • The Commission must make sure that the new firms entering the market do not establish their dominance as well as to maintain the peaceful coexistence between the large enterprises as well as the small enterprises.
  • The Commission must carry out rivalry strategies with the view to effectuate the most proficient use of the monetary assets in the market.
  • To make the business sectors good enough to work for the advantage as well as government assistance of the shoppers.
  • The Competition Commission of India must create successful associations and relations with the sectoral controllers, so that there is a smooth arrangement of sectoral administrative laws along with the competition laws.

What are the challenges faced by the Competition Commission of India?

While implementing the competition laws the CCI faces various challenges, these challenges are both internal as well as external.

  • One significant challenge arises when there is constant and continuous change in the way of business which are undertaken and thus the evolving antitrust issue is a big challenge for the Competition Commission of India.
  • In CCI the number of benches hearing the cases are very less, thus the Commission is facing a challenge to pronounce judgments more speedily.
  • In today’s world most of the business models are on the digital platform and ecommerce. this proves to be a huge problem for the Competition Commission as the present competition laws are simply based only on assets and turnovers of the business.
  • Including the parameters of the competition and antitrust laws like data accessibility, network effects, etc is necessary to know that the competition laws are relevant in the digital economy as well. But this creates another great challenge for the Competition Commission of India.

What are the powers of the Competition Commission of India?

The Competition Act 2002 was created due to highly technical and competitive reality of the Indian markets. Thus, to regularly monitor and keep a control over the market the Competition Commission of India was created. The powers of the Commission were simplified by the Competition Act, 2002.

The Competition Commission of India has the power to identify the issues regarding the anti-competitive agreements as well as abuse of the dominant force in the Indian markets. Section 19 along with Section 26 to 28 specifically deals with the arrangement of these issues in the Competition Act.

The Competition Commission of India can suggest ideas to the government regarding the competitions carried out in the Indian markets.

It also assists the public authority regarding the understanding the results of the different strategies used on the opposition, however these ideas are not restricting on any kind of execution of approaches.

The Commission also has the power to investigate the matter which is external to the area of the country but has its impact on India. In case there is a dispute regarding the decision of any statutory authority which is negating the Competition Act, a reference to the Competition Commission of India can be made.

What is the Competition Commission of India (CCI) approval?

The Competition Commission of India regulates all the mergers, amalgamation, acquisitions, etc in India. the Commission is the statutory authority which is responsible for reviewing and assessing whether they are pausing any adverse effect on the competition in the relevant markets of India.

Thus, a CCI approval is very essential and required for the parties in business whose assets and turnover exit the set out mentioned in Section 5 of the Competition Act.

Recent news updates concerning Competition Commission of India

  • In November 2020, the Competition Commission of India had organized a virtual workshop of BRICS for discussing the competition issues in the automotive sector. Prior to this BRICS competition agencies had signed a memorandum of understanding on cooperation in the field of competition law and policy. This was done to enhance cooperation and interaction[1].
  • Recently a group of 15 start-up founders had a virtual meeting with the Competition Commission of India to discuss about the regulator of Google’s anti-competitive policies in India. the discussion was about Google’s recent imposition off its play store billing system on the Indian developers along with 30% Commission that the company charges for selling digital goods and services through its system[2].
  • The Competition Commission of India had initiated a probe against Amazon and Flipkart in January 2020 after a complaint was fine. The complaint alleged Amazon and Flipkart promoted select sellers regarding the e commerce platforms and that deep discount stifled competition. However, the arguments what dismiss based on lack of evidence by the Competition Commission of India[3].

Conclusion

Rivalry in the market is normal and fundamental for development of the economy. A statutory body like the Competition Commission of India is very crucial for checking malpractice is taking place in the competition sector.

However, the CCI Graph has evolved substantially and in the coming years it is expected that its place will continue to progress, specifically in the digital market as well as the e-commerce sector.

It is also expected that the Competition Commission of India will take some drastic steps to implement an effective framework for adequate transparency in the competition of India and define basic guidelines for the ecommerce industry and the digital platforms.

In 2021 amid the covert crisis most of the businesses are rated digitally and thus the competition Commission of India needs to take measures to regulate the digital platforms and e-commerce.

  1. Competition Commission of India (CCI): An overview of Function available at: byjus.com (Last visited on 20th June 2021)
  2. Roger Montii, Google accused of Anti – Competitive practices in Government Report, available at: searchenginejournal.com (Last visited on 20th June 2021)
  3. Competition Commission of India to expedite Amazon, Flipkart Anti Trust Probe, available at: ndtv.com (Last visited on 19th June 2021)