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Functions of Competition Commission of India

Introduction

The conception of the Competition Commission came during 2002 in the form of the Competition Act. During the backdrop of the economic liberalisation, the need to develop a healthy competitive environment became necessary.

The Competition Commision of India is a statutory body that has been established under the Competition Act,2002. The primary objective of the law is to enforce the provisions of the act and to prevent any anti-competitive agreements from being realised. It was established on 14th October, 2003 and became fully functional with Dhanendra Kumar as its first chairman on May, 2009.

Objectives of the Commission

  • To prevent policies and practices that may have an adverse effect on positive competition in the market.
  • To prevent and regulate to help in protecting the freedom of trade in the Indian Market.
  • To help protect the interests of the end consumers
  • To help regulate and protect positive competition in the market
  • To help in spreading awareness of fair and healthy competitive practices

Powers of the Commission

Under the Chapter III of the Competition Act, 2002 establishes the Competition of India. The statute also provides the powers the commission holds to ensure its duties are met. The same statute also gives this body a wide range or powers which have been summarised in the following points:

  1. The statute gives the Competition Commission of India the power to ask for an inquiry into certain agreements including the dominant positions of an enterprise in an industry. The body, thus has the power to, under its own authority or on the basis of an information of an alleged contravention going against the anti-competitive regulations to launch an enquiry to determine the same.
  2. The statute gives the Competition Commission of India the power to place an inquiry on any acquisition or combination if the body is convinced that such acquisition or combination may adversely affect the circumstances around the competition on the Indian Market.
  3. The statute gives the Competition Commission of India the power to regulate its own workings and procedure.
  4. The statute gives the body the jurisdiction to impose monetary penalties upon companies and organisations who violate the terms of the Competition Act, 2002.
  5. The statutory body has the powers to pass an interim order for an act wherein in organisations have collue to make anti-competitive agreements or have abused their dominant market position adversely affecting the circumstances of competition in the market.

Duties of the Commission

The statute was enacted to help ensure the development of the Indian economy by regulating fair and constructive practices. The Competition Commission of India has been entrusted to do the following :

  1. Ensure that the consumer Interests are protected in the market
  2. Enforce and Implement the policies that are enumerated in the Competition Act,2002
  3. Help in advocating and educating fellow government bodies about the Competition Act, 2002.
  4. To promote fair and positive and constructive competition in the market
  5. To help regulate and protect against anti- competitive agreements
  6. To help build cooperative mechanisms with other regulatory bodies and provide for a more efficient continuity for a free and fair market.

Main Provisions of the Act

  • To prohibit anti-competitive agreements (S.3)
  • To prohibit abuse of dominant position (S.4)
  • To regulate combinations (S.5 & S.6)
  • Competition Advocacy (S.49)

Challenges Faced by the Commission

The statutory body(CCI) during the course of building towards stability, has faced many challenges including but not limited to the implementation of the competition law in the first place, then was the transition to the antitrust issues of the current era, the changing ways of doing business and to examine the issues pertaining to the digital economy and e-commerce.

It is imperative that the Competition Commission of India moves away from the older strategies of examining a conventional business and start to include parameters of data accessibility, network effects and multi-sided markets for getting a better understanding on the new age areas like that of the digital economies and the e-commerce industries.

 

Initiatives taken by the Commission to help promote fair and positive competition in the market

The commission has engaged itself in undertaking advocacy with ministries, regulators, state governments and other authorities. Some bills and laws where the commission input was taken are mentioned below:

  1. Petroleum and Natural Gas Regulatory Bill, 2005
  2. Warehousing (Development and Regulation) Bill, 2006
  3. Indian Post Office (amendament) bill, 2007
  4. Shipping Trade Practices Bill, 2007

The commission was an important asset and played a significant role while drafting regulatory policies and practices in the banking and telecommunication industry and has also played an important role in intellectual property rights.

Has given presentations on competition law and policy to Ministries.

Some Judicial Precedent under the Jurisdiction of Delhi High Court

On the question whether the CCI is tribunal the Exercising Judicial Functions

The Delhi High Court observed that while discharging their investigative functions, the Director General and the Commission (CCI) are not concerned with a dispute between two parties and their legal relationship, status or private property and are only concerned whether the competitive Act has been breached.

On the the question on whether the composition of the CCI is unconstitutional and violates the principle of separation of powers

To answer this, the High Court relied on the SC judgement in the case of Utility Users’ Welfare Association case the court said the following :

We are, thus of the unequivocal view that for all adjudicatory functions, the bench must necessarily have at least one member, who is or has been holding a judicial office or is a person possessing professional qualification with substantial experience in the practice of law and who has the requisite qualifications to have been appointed as a Judge of the High Court or a District Judge.

Thus, the Delhi High Court held that when the CCI issues adjudicatory orders, the judicial memeber’s presence and participation is necessary.

On the Question whether the “revolving door” practice as the CCI vitiates any provisions of the Act

The manners for the decision making provided under Section 22(3) of the Act is Unconstitutional

This issue is about the objection to S.22(3) which enables the members to participate in one or some proceedings or cease from participating at their will. This may not guarantee a fair hearing and may also violate the basic principle of ‘one who hears must decide’. The allegations against the revolution door allegation was based on the premise that certain persons who had heard the final arguments in the original case before the commission and had not chosen to sign the final order. The Delhi High Court thus held the possibility of a ‘revolving door’ did render section 22(3) invalid.

On the Question on whether an expansion in scope of Inquiry by the CCI illegal

The Delhi High Court, in the case of Excel Crop Care Ltd. v. CCI[6] specifically dealt with the question of the case so concerned that the Supreme Court clarifies that the Director General can expand on the subject of Investigations, which is not limited to the parties against whom the allegations have been levied. The same can be extended to other associated ones. The court thus, was not convinced by the petitioners plea that the CCI had acted in an illegal Manner.

Conclusion

In conclusion; the development of the CCI’s enforcement has evolved significantly in multiple sectors and, in the coming years, it is expected that it’s stance will continue to grow.

Especially in the emerging areas like that of the digital markets and e-commerce sector. It is thus expected that the CCI would take some measures to implement a framework of adequate transparency and help define the basic conditions for the e-commerce industry and the digital market platforms.

In the future it is also anticipated that future streamlining of several substantive and procedural aspects of competitive law is based on the Competition Law Review Committee recommendations.


[1]  S.  7 of the Act.

[2] S.18 of the Act.

[3]Competition Act, 2002

[4] Section 49(1) of the Act.

[5]State of Gujarat v. Utility User’s Welfare Association, 2018 SCC OnLine SC 368

[6] Excel Crop Care Ltd. v. CCI (2017) 8 SCC 47