The Competition Commission of India (CCI) turned a decade old recently.
In this backdrop, here is an overview of CCI's performance and an assessment of the challenges ahead.
What is CCI?
The Competition Commission of India (CCI) is India’s competition regulator.
The Competition Act, 2002 was passed by the Parliament in the year 2002, and was given President's assent in 2003.
It was subsequently amended by the Competition (Amendment) Act, 2007.
In accordance with the provisions of the Amendment Act, the CCI and the Competition Appellate Tribunal have been established.
The provisions of the Act relating to anti-competitive agreements and abuse of dominant position were notified on May 20, 2009.
The Act -
prohibits anti-competitive agreements and abuse of dominant position by enterprises
regulates combinations which causes or are likely to cause an appreciable adverse effect on competition within India
[Combinations include acquisition, acquiring of control and M&A (Mergers and acquisitions)]
It is the duty of the Commission to -
eliminate practices having adverse effect on competition
promote and sustain competition
protect the interests of consumers
ensure freedom of trade in the markets of India
CCI now consists of a Chairperson and 6 Members appointed by the Central Government.
How has CCI's role been?
The CCI has made course corrections across sectors, including entertainment, pharmaceuticals, public procurement, transport, and construction.
It has also held individuals i.e., both current and former employees, to be liable for their conduct.
As part of its successful advocacy rollout, the CCI has passed 9 leniency orders.
The leniency regime is where a cartel member points out or owns up to irregularities and gets away with a smaller penalty.
[A cartel is an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.]
The leniency regime, as a whistleblower’s tool, has given a boost to the CCI’s cartel enforcement.
This is particularly after the amendments in 2017, which removed the cap on the number of leniency applicants.
The CCI, in the 8 years of the Indian merger control regime, allayed industry concerns of M&A timelines being impacted.
It has done this by expeditiously clearing over 650 merger notifications with an average disposal time of 23 days in 2018.
What are the challenges ahead?
Dealing with antitrust issues involving new age economy and evolving ways in which business is done globally is a key challenge ahead for the CCI.
[Antitrust laws/competition laws are statutes to protect consumers from predatory business practices.]
Antitrust regulators around the world are grappling with tools of analysis to examine issues involving the digital economy.
These include the algorithm pricing, big data, or mergers where data and not turnover are of real relevance.
It calls for hiring data scientists to work with competition regulators.
Also, moving away from traditional measures of market share only to parameters which include access to data, network effects, and multi-sided markets is essential.
In this regard, the US appears to be moving towards an EU type competition model.
In this, new age economy companies will be scrutinised for market power and abuse of dominance.
E.g., recently, the US House Judiciary Committee initiated an investigation to assess the effectiveness of current antitrust laws in regulating technology companies
The Government of India has also set up the Competition Law Review Committee.
This includes a working group on ‘new age markets and big data’ to examine the issues relating to the digital economy.
What is the way forward?
The CCI has the ability to levy the highest economic penalties in India.
It is statutorily mandated to prevent practices that have adverse effect on competition.
However, the wide mandate exercised by the CCI emphasises the need for the formulation of penalty guidelines by the regulator.
This is crucial now to serve as a barometer to guide industry.
The CCI has nationwide relevance and in particular, a majority of the CCI’s matters originate in Mumbai.
Given this, the Central Government should consider setting up benches of the CCI to expeditiously decide on competition cases.
This is also imperative in the interest of facilitating wider access to justice and ease of doing business in India.
