Competition Commission of India (CCI)

Context:

The Competition (Amendment) Bill, 2022 has been introduced that aims to improve regulatory set-up by increasing the Competition Commission of India (CCI) accountability, giving it flexibility and enforcement efficiency.

About Competition Commission of India (CCI)

• Competition Commission of India (CCI) is an a statutory and quasi-judicial body and works under the Ministry of Corporate Affairs.
• The Competition Commission of India (CCI) was established in March 2009 (established in 2003 but became fully functional in 2009) by the Government of India under the Competition Act, 2002 for the administration, implementation, and enforcement of the Act.
• Competition Act, 2002: it repealed and replaced the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act).
  • Under the Act, the Competition Commission of India and the Competition Appellate Tribunal (COMAT) have been established.
  • The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises, and regulates combinations (acquisition, acquiring of control, and Merger and acquisition), which causes or are likely to cause an appreciable adverse effect on competition within India.
  • In 2017, functions of the COMAT were subsumed under National Company Law Appellate Tribunal (NCLAT).
• Composition: it has a chairperson and 6 Members appointed by the Central Government.
• These members are appointed for 5 years or 65 years of age (whichever comes first). However, these members are eligible for reappointment.

Objectives and functions of CCI:

• To Eliminate practices having an adverse effect on competition
• To promote and sustain competition
• To protect the interests of consumers
• To ensure freedom of trade in the markets of India
• To Establish a robust competitive environment through:
• Proactive engagement with all stakeholders, including consumers, industry, government, and international jurisdictions.
• Being a knowledge-intensive organization with high competence level.
• Professionalism, transparency, resolve, and wisdom in enforcement.

Functions of CCI:

It takes the following measures to achieve its objectives-

• Ensuring that 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: aimed at ensuring the most efficient utilization of economic resources.
• Ensure effective relations and interactions with sectoral regulators: to ensure smooth alignment of sectoral regulatory laws in tandem with the competition law.
• Awareness generation: among all stakeholders to establish and nurture competition culture in the Indian economy.

Why do we need Competition Laws?

Competition laws perform three main functions in society.

• To uphold free-enterprise: the competition laws have been called the Magna Carta of free enterprise.
• Security against market distortions: there is a constant risk of various people resorting to market distortions and abusing their dominant positions to resort to anti-competitive activities, thus competition laws are required to ensure that the market is safe from the various distortions.
• They also aid in the promotion of domestic industries: Competition laws are required to ensure that the domestic industries do not get suppressed with an increase in globalization. They play a quintessential role in determining the viability of the domestic industries. However, to keep the Indian competition laws updated with the businesses of the digital world which include not many assets, the Indian government has established a Competition Law Review Committee.

Members & Composition

The members of the CCI are appointed by the Central Government. The Competition Commission of India is currently functional with a Chairperson and two members.

1. The Commission used to consist of one chairperson and a minimum of two members and a maximum of six members.
2. This has further been reduced to three members and one chairperson by the Cabinet. This move was taken to produce a faster turnaround in hearings and speedier approval, thereby stimulating the business processes of corporates and resulting in greater employment opportunities in the country.
3. The chairperson and the members are usually full-time members.
4. The eligibility for the Commission: The Chairperson and every other Member shall be a person of ability, integrity, and who, has been, or is qualified to be a judge of a High Court, or, has special knowledge of, and professional experience of not less than fifteen 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.

Judgments by CCI: 

• The CCI had imposed a fine of Rs. 63.07 billion on 11 cement companies for cartelisation in June 2012. These companies were accused of meeting regularly to fix prices, control market share and hold back supply, leading to them gaining illegal profits.
• The CCI imposed a penalty on the Board of Control for the Cricket in India (BCCI) in 2013 for misusing its dominant position. It was found that the IPL team ownership agreements were unfair and discriminatory. The terms of the IPL franchise agreements were highly in favour of the BCCI and franchises had no say in terms of the contract.
• A fine of Rs.10 million was imposed upon Google in 2014 due to its failure to comply with the directions given by the Director General (DG) seeking information and documents.
• The CCI imposed fine of Rs.258 crores on 3 Airlines in 2015. These 3 Airlines were penalized for cartelisation in determining the fuel surcharge on air cargo.
• CCI had also ordered probe into the functioning of the Cellular Operators Association of India (COAI) in response to the complaint filed by Reliance Jio against the cartelization by its rivals: Bharati Airtel, Vodafone India and Idea cellular.
• The Commission had also ordered an antitrust probe against Google for abusing its dominant position with Android to block its market rivals. This probe is based on the analysis of a similar case in the European Union where Google was found guilty and was fined. The Commission had sent letters to the handset makers in 2019, seeking details of the terms and conditions of their agreements Google. This is to see whether or not Google had imposed any restriction on these companies for the company’s apps in the past 8 years since 2011.

Challenges

The CCI faces multiple challenges while implementing the Competition Laws. The challenges can be both internal and external.

1. The constant and continuous change in the way businesses are undertaken and the evolving antitrust issue is proving to be a significant challenge for the CCI. 
2. The emerging business models are based on a digital economy and e-commerce. This proves to be a problem for the CCI as the current competition laws talk only of assets and turnovers.
3. The number of benches of the CCI has to be increased to pronounce judgments more speedily on the competition cases.
4. The inclusion of parameters in the competition and antitrust laws such as data accessibility, network effects, etc. is important to ensure that the Competition laws are relevant in a digital economy.

Way forward

CCI is an important institution to ensure fair competition in the Indian economic system. This will boost the confidence of various stakeholders in the Indian market. In this context, the government should further strengthen the institutional and functional capacity of the CCI by ensuring adequate financial and human resources.

Source: Indian Express

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