Competition Commission : The journey so far : From the Horse’s mouth

CCI Mandated to Make Markets Function for the Consumer and to Ensure Fair and Healthy Competition in the Indian Economy- Dhanendra Kumar

Successful implementation of any Competition regime has two distinct limbs enforcement of competition laws; and advocacy of benefits of competition among various stakeholders. In the process of transition from planned economy to a more open economy, the application of competition law can usefully support other policy initiatives. Trade policy, industrial policy, privatization, deregulation, regional policy and social policy all need to be conducted in a manner attuned to the market mechanism for an economy to function as efficiently as possible. In order to study the issues of competition in the markets, the Commission has also commissioned 18 market studies of which 17 have been completed and the same are on our website. The issues relating to competition raised in these studies and recommendations made therein are being acted upon. This was disclosed by the chairperson of the Competition Commission of India shri Dhanendra Kumar who completes his tenure by this weekend while addressing the media here today about the challenges faced in building the capacity, gaining confidence of various stakeholders, getting all the provisions of the Competition Act notified, framing necessary regulations, enforcement of competition laws and competition advocacy. He expressed satisfaction over the journey so far and shared his vision about the organization and the potential of the Competition Act in the overall interest of the economy and especially for the consumers who will finally be benefitted from the fair competition in the economy.

Shri Dhanendra Kumar said the Competition Commission of India (CCI), under its mandate to make markets function for the consumer and to ensure fair and healthy competition in the Indian Economy, is initiating series of market studies to analyse and monitor the competitive dynamics in the various industries of the Indian Economy. As part of this series, the sectors of Agriculture, steel and paper has been taken up by the commission in its initial phase.

Giving a detailed version of the initiatives taken by the Commission Shri Dhanendra Kumar said when the Commission was constituted, the enforcement provisions of the Act were not notified. The provisions of anti-competitive agreements and abuse of dominance, Section 3 and 4 were notified only on May 20 2009. Thereafter, MRTP Act was brought to an end bringing clarity among the stakeholders about the prevailing enforcement jurisdiction in the country. Finally, combination provisions are in place with effect from 1.6.2011.

Another major task before the Commission was to frame the regulations as required under Section 64 of the Competition Act to facilitate the working of the Commission. Following regulations have been framed and notified so far:

¢ The Competition Commission of India (Procedure for Engagement of Experts and Professionals) Regulations, 2009 (No. 1 of 2009).

¢ The Competition Commission of India (General) Regulations, 2009 (No.2 of 2009)

¢ The Competition Commission of India (Meeting for Transaction of Business) Regulations, 2009 (No.3 of 2009)

¢ The Competition Commission of India (Lesser Penalty) Regulations, 2009 (No.4 of 2009)

¢ The Competition Commission of India (Determination of Cost of Production) Regulations, 2009 (No.6 of 2009).

¢ The Competition Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2011

¢ The Competition Commission of India (Procedure in regard to the transaction of business relating to combination) Regulation 2011.

All these regulations were finalized through a consultative process, first placing the drafts on the website in order to get the views of various stakeholders and after holding intensive discussions in the meetings with the stakeholders. Very recently, regulations on combinations was notified after widening the scope of the consultative process further by organizing conferences at four major cities to elicit more and more suggestions. Hon™ble Minister of Corporate Affairs was also kind to spare time to give audience at two of these conferences. The necessary regulations are now in place after incorporating all the implementable suggestions made by the stakeholders. Ministry of Corporate Affairs has also played a key role in the process. This vigorous consultative process has been appreciated by all the stakeholders even from other jurisdictions.

Shri Kumar gave account of the progress of the enforcement of the competition law by the Commission. Since May 20,2009, the Commission have taken up 171 cases under the provisions of the Competition Act. This includes 113 Information filed under Section 19 of the Act by various individuals, associations and business entities alleging the infringement of the provisions related with anti-competitive agreements and abuse of dominant position, 50 cases received from erstwhile MRTP, one case referred by a Statutory Authority, two cases referred and five cases taken up on its own motion. After forming prima facie opinion, the Commission ordered 100 cases for investigation through Director General as provided under section 26(1) of the Act. The Commission has also passed orders in 58 cases under section 26(2) where in the opinion of the Commission, no prima facie infringement of the Act was found. In addition, interim relief has also been granted in 16 cases under section 33 of the Act. Now the Commission has also imposed penalties in one case finding that there was contravention of the provisions of Section 3 of the Act.

He said, in initial days, the Commission had to face a lot of legal challenges. Out of 42 cases which went to the Court, 41 were decided in the favour of the Commission. This showed that the procedure being followed in the Commission has met the test of legal scrutiny so far.

Shri Kumar said to bring in a culture of competition in the country, the Commission has undertaken vigorous steps towards advocacy. In the process, the Commission has interacted with trade and professional associations, industry groups, held workshops and seminars for the benefit of the Govt. Ministries and Departments. The Commission has established a website on which details of its competition promotion and education activities can be found.

In pursuance of creating competition awareness among various stakeholders, the Commission organizes interactive meetings, workshops and seminars, etc with different regulatory bodies, policy makers, trade organizations, consumer associations and the public at large to create awareness of competition issues. During last two years, the Commission held a series of lectures, workshops, seminars and conferences dedicated to the various issues related to competition in the economy. The Commission has organized a range of national level conferences on various themes; such as, State of Competition in the economy; Competition, Public Policy and Common Man; Competition Regime: Benefiting the Consumer; and Public Procurement Achieving Value through Competition. Moreover, during this period the Commission held a series of lectures and seminars dedicated to the various issues related to competition in the economy, Shri Kumar added. He also gave an account of a series of advocacy booklets published by the Commission and said outlining the Commission™s activities and explaining key concepts in the Competition Act. Furthermore, to create awareness about the provisions of the Competition Act among masses, the Commission in collaboration with the Ministry of Consumer Affairs has initiated an advertisement campaign in the print and electronic media.

He said the commission recently has organized a National Level Essay Competition to create awareness among students about the benefits of competition and competition related issues on the two themes; ˜Fair Competition: The Engine of Economic Development™ and ˜Attaining Competitiveness through Competition™. The Commission received an overwhelming response from the students and received more than 300 entries. Students of various backgrounds such as law, economics, commerce, engineering and management etc. representing various universities and institutes including IIT™s and IIM™s and geographically covering almost all the states have participated in this competition. The Commission envisages holding such event in future also.

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