The Setting up of the Competition Commission of India regime in India has so far proved to be a much more difficult task in hand than what was initially envisaged. Starting from the last decade the Competition Law in India has seen a lot of twists and turns in its application. Initially, there were two basic laws regarding the implementation of Competition Law in India. There was a shade of opinion in the Committee that by enacting the laws in this stage would result in loss of bargaining power at WTO negotiations and therefore it was deemed that there was no hurry in the passing of the bill and that the MRTP could suitably be amended to meet the requirements of the present.
The Competition Law authority under the new competition law was set up for the purpose of administration and enforcement of competition laws in India, Though the CCI being a new body altogether could not depart from its predecessor the MRTP but it had its own unique additions: one brings that the MRTP was a unilateral body and on the other hand the CCI would be a body corporate and would be a “quasi-judicial” body.
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Objectives of Competition Commission of India Laws, 2002
In general, the rules of the competition laws are based on the principle that competition is essential and desirable in a free market. These laws are created such that to regulate the manner in which the businesses are being conducted in India, they are created so as to make and formulate a balanced playing field with productive competition in the market. The aim of these laws is not to make any business, in particular, to be dominant on the other and allow all the organizations to sustain with one another. The Competition Act aims at “fair competition for the greater good” . The main objectives of the Act include:-
1. To ensure that there is freedom of trade.
2. To protect the best interest of consumers.
3. To promote and sustain the necessary competition in the market.
4. To prevent the practices which further have an adverse effect on competition.
The Competition Act was passed in 2002 and has been further amended by the Competition (Amendment) Act, 2007. It further follows the philosophy of modern competition laws.
Competition Commission of India
The goal of Competition laws are sought to be achieved by the Competition Commission of India (CCI). The CCI is a statutory body of the Government of India which has been established with effect from 14th October 2003. It is the duty of the commission to take effective measures against the policies that have an adverse effect on the competition, to promote and sustain the competition in the market, to safeguard the consumer’s interest and guarantee freedom of trade in the markets of India. The commission is also required to give it’s the recommendation on competition issues on any reference if received from any statutory body which is established under any law.
The Competition Act further aims at establishing a sturdy competitive environment by the following:-
1. By aiming at a proactive engagement between all the various stakeholders which further includes the consumers, industry and the government.
2. By being a focused knowledge-intensive body with a high competence level.
3. Through professionalism and transparency.
Structure Of Competition Commission Of India
The Competition Commission of India, as per the Competition Act, constitutes a total of 6 members and one person who is appointed on the directions of the Central Government. Further, the commission is a quasi-judicial body which gives opinions to the other statutory body and also deals with the other cases related to it. The members and the chairperson here must be full-time members only.
The chairperson and the other members of the CCI must be of such ability and integrity and had either been or are qualified to be a judge of High Court and have special knowledge and professional experience of not less than fifteen years in the field of international trade, commerce, economics, business or in any matters as suitable to central government and which is, in turn, use to the commission too.
Another important thing is that the members or the chairperson hold the position in the office for a term of 5 years from the day of joining the office and can be further re-appointed to their respective position.
Duties of the CCI
The main duties and the need for CCI has been discussed as below:-
1. Promoting Domestic Enterprises:– In today’s time, the businesses have been moving and expanding and it is quite necessary to promote the domestic enterprises while moving in continuity with the foreign investment in various businesses in our country.
2. Promoting Free Enterprise:- The CCI must promote free enterprise in the market system, competition is important for providing free economic systems also.
3. Having Control over Economic Activities:- Another essential duty is the control over the economic activities of the various business structures in a bid to protect those businesses which may suffer a loss due to the falling market or by various anti-competitive methods being employed by the bigger corporations.
Purpose of CCI
The various important functions of the CCI are discussed as under:-
1. It acts as a regulatory authority and watchdog to protect the smaller industries which are unable to defend themselves from the larger corporations.
2. Any foreign company entering the Indian soil through acquisition or merger has to follow our country’s competition laws.
3. The Competition Act guarantees that no organisation abuses their dominant position in the Indian market through the control of the supply or adapting such practices which may further deny the market access to other firms in the free market.
4. To make the market work for the welfare of the customers is yet another important role of the CCI.
Another important thing is that the Competition Act is extra-territorial and further it assumes its jurisdiction outside the boundary of India where the Act outside of India may affect the market in India . Further, in the discharge of its functions, the CCI must work with the principles of natural justice and regulate its own procedures.
Administration by CCI
The CCI is endowed with the responsibility for enforcement of Competition laws. Where CCI is of the opinion that a corporation is engaging in anti-competitive agreements or is misusing their dominant position, it has the power to pass any of the following orders:-
- Cease and desist of the property thus involved.
- Imposing a penalty of up to 10% of the total turnover of the enterprise for the preceding 3 financial years.
- In case of a carte i.e an association that by themselves makes an attempt to control the market, the CCI can impose a penalty of up to 3 times of the profit earned or 10% of the total turnover whichever is higher.
- Order any modification as it may deem fit to the agreement.
- May issue any more directive as it may deem fit which can further bring an end to the contravention.
The Act here also prescribes a jail term of upto 3 years in the event of a person not complying with the directions issued by the CCI or where a person fails to pay the fine imposed by the CCI in the given stipulated time.
The Competition laws in India have quite a significance in the economic reforms in our country and its role as a major driving force cannot be neglected. The growing needs and the advancement in the field of growing enterprises along with the need to have a uniform system which may promote the growth of new industries and regulate them gave rise to the enactment of Competition Laws, 2002 which are further governed by the Competition Commission of India (CCI) which is an important organ for the enforcement of Competition laws in our country . Although, with the increase in malpractices and the growing industries, the need to diversify the CCI has emerged and its presence should be increased so as to quickly administer justice and to regulate the various laws related to the Competition Acts in our country between the industries.
 Dr H.K. Saharay, Textbook on Competition Law (Universal Law Publishers, 2nd edn, 2016).
 Prof. V.K. Agarwal, Competition Act 2002 Principles and Practices, (Bharat Law House Pvt. Ltd, 2nd edn, 2019).
 The Competition Act 2002.
 Viswanath Pingali, “Competition Law in India: Perspectives”, Colloquium, 168-169 (2016).
BY- ASHISH NAGPAL| FAIRFIELD INSTITUTE OF MANAGEMENT AND TECHNOLOGY, NEW DELHI