The main purpose behind enacting the Competition Commission of India was to ease trade practices within India as well as overseas, as one of the major ways to grow an economy is by enhancing the trade and commerce of that country. The companies should be allowed to enter the market freely and promote their goods and services without any unnecessary hurdles given by the government. But at the same time, it is also essential to protect the market from unfair trade practices or else it can lead to the collapse of the entire market.
The Competition Commission of India ensures that there are no unfair practices moving along the market and even imposes penalties, if found any. The Commission was formed with the backing of the Competition Act 2002 at the time when Vajpayee government was in rule. As India had adopted economic liberalisation and globalization, it was equally important to ensure healthy competition in the market without any prejudices and biases, through legislation.
The Competition Commission of India is a statutory body which was established as per the provisions of the Competition Act 2002 and the primary goal of this Commission is to apply and administer the provisions of the Competition Act 2002. The Commission is also responsible for avoiding any sort of anti-competitive agreements being realised. The Commission focuses on application of the modern competition laws and its respective philosophies with regard to the Act of 2002. With the Commission, it is easier to track any unfair trade practices which might affect the market adversely as well as the consumers. The Commission even prevents monopolistic competition, as it is not in favour of producers as well as consumers.
The Competition Act 2002 was enacted by repealing and replacing the Monopolies and Restrictive Trade Practices 1969 based on the recommendations and suggestions made by the Raghavan Committee. The main aim of the Act was to set a healthy competitive environment for all the firms and companies by engaging everyone including the stakeholders, consumers, government etc. The Commission is driven by the ideals of professionalism, wisdom and transparency by being a knowledge intensive organization professing higher competence level in the Indian markets. The Commission was established on 14th October 2003 and came into operation from May 2009.
Objectives of CCI –
There are certain objectives of Competition Commission of India which need to be kept in mind while administering the trade practises. They are-
- To avoid enactment of any practices or policies which may affect the constructive competition in the Indian market in any negative manner
- To safeguard and protect the freedom of trade within the markets of India
- To secure the interests of the consumers by meeting their wants and ends
- To maintain and sustain productive competition in the Indian markets
- To promote and create awareness on just, fair and healthy competitive practices within the Indian markets.
These are some of the common yet essential objectives of the Commission, which need to be worked upon by the Commission.
Composition of CCI –
The composition of Competition Commission of India consists of one Chairperson and six other members as mentioned in the Competition Act 2002 and all of them shall be appointed by the Central Government. As the commission is quasi-judicial body and has been rendered the status of statutory authority, as it gives opinions to the other Authorities and also deals with the cases with respect to unfair trade practices, the chairperson and the other members are full-time members of the Commission.
The eligibility criteria of the members as well as the Chairperson shall be; the person should be person of ability, integrity and standing who has been qualified to be Judge of High Court or the person has specific knowledge of or professional experience which shall be not less than 15 years in International trade, economics, commerce, law, business, finance, industry-related or management and public affairs or any other matter which is beneficial for the Commission as per the views of the Central government.
Powers and Obligations of CCI –
As we know the Competition Commission of India was established based on the Chapter III and Section 7 provisions of the Competition Act 2002. The Act not only, mentions the establishment of the Commission but also specifies the powers and duties of the Commission, which it is supposed to adhere to. The Commission shall confer upon its powers so as to ensure that their duties are being met as well. The powers of the Commission are-
- The Commission has the power to make inquiries regarding certain agreement as well as about the dominant position of the enterprises. This can be understood that the Commission has the power to, by its own authority or with help of any information which is alleged to contravene the provision of anti-competitive regulations to launch the inquiry for determining the same.
- The commission also has the power to inquire about any acquisition or any combination if it is alleged that such an acquisition or combination can adversely affect the constructive competition in the Indian market.
- The commission further has the power to regulate their own procedures, in their own manner following the basic principles of justice, equity and good conscience.
- The Commission can also impose monetary penalties on the faulty companies and parties in case of any contravention to the provisions of the Competition Act 2002.
- The commission also has the power to pass an interim order for any Act that is explicitly considered to be anti-competitive in their agreement form or there is abuse of position of the dominant parties which effect the working of the smaller producers as well as the competition within the market.
These were some of the important powers of the Commission. But there are certain duties as well which need to be performed by the Commission, in order to sustain healthy competition in the market and help in the economic growth of the country. Some of the major obligations or duties of the Commission are-
- The Commission should ensure that the interest of the consumers is protected in the market and they are not being subjected to unfair trade practices
- They have to adhere to the provisions and policies as enumerated in the Competition Act 2002.
- The Commission is also responsible for advocating, promoting and educating the other government bodies about the Competition Act 2002 such as the state governments and Ministries, to maintain the equilibrium of the market
- The Commission should strongly profess fair and productive competition practices in the markets to keep it just for all
- The Commission should prevent the realization of any anti-competitive agreements
- In order to cooperate with the other regulatory government bodies and make them work efficiently, there should be continuity of free and fair market
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Role of CCI –
The Competition Commission of India plays a vital role in sustaining healthy competition in the Indian Markets. They have certain role to play which are similar to the duties of the Commission. They are-
- The Commission has the role to eliminate the practices which are having negative impact on the competition and ensure freedom of trade within the markets
- They can also give their views on competition issues while receiving the reference from statutory authority established under the law.
- The Commission also focuses on fulfilling their objectives such as keeping the markets fair for the consumers in such a way that it is beneficial for both producers and consumer. This also helps in the overall economic development of the country.
- The competition policies should be enforced and executed properly for optimum utilization of resources
- The Commission also works on effective and smooth alignment of the sectoral regulatory laws working in acquiescence with the competition law
- The Competition Commission acts as the watchdog of the smaller organizations who are working hard to sustain in the market among with the bigger stakeholders and companies
- The Commission also has the authority to notify and warn the organizations who are selling in the Indian markets, if they feel it is negatively affecting the competition of the Indian markets.
- As per the Competition Act, it has been guaranteed that no enterprise or firm shall be permitted to abuse their dominant position in the market by manipulating their purchase prices and controlling their supply which might directly affect the market.
- In case there is foreign company which is interested in participating in Indian markets via acquisition or mergers, shall have to abide by the country’s competition laws and even the assets and turnover of a particular company or enterprise when cross a particular monetary value, they are brought under the purview of the Commission.
Recent Penalties Imposed By CCI –
In case of violation of the provisions of the Competition Act 2002, the Commission is authorized to impose penalties in form of compensation to the faulty firms or companies. Some of the recent penalties imposed by the Commission on major enterprises are-
The Competition Commission of India had imposed fine of Rs 63.07 billion on 11 cement companies for cartelisation of prices in June 2012 and the claim made by the Commission was that these alleged companies met on a regular basis to fix the prices of the cement and keep the prices of cement under control in market and even held their supplies which earned them illegal profits. Then there was penalty imposed on Board of Control of Cricket in India (BCCI) in 2013 of Rs 522 million for misusing their dominant position with regard to the IPL team agreements which were unfair and biased and even the terms and conditions mentioned under the IPL agreements were found to be in favour of BCCI and there was minimum say of franchises in the agreement.
Further, the CCI has also imposed monetary fine of Rs 10 million on Google in 2014 as it failed to adhere to the direction of Director General for seeking the information and documents. There were also cases of imposition of fine on three Airlines in 2015 of Rs 258 crores again for the reason of cartelisation (colluding to control the prices) of the fuel surcharge on Air cargo. There has been recent complaint filed by the Reliance Jio for the matter of cartelisation by its rivals Bharti Airtel, Vodafone India and Idea Cellular. So, the Commission has asked the Cellular Operators Association of India (COAI) to take a look into the matter. Thus, there have been many such cases where such fines are imposed by the Commission in order to protect the efficiency of the market.
Need of CCI –
It is often questioned as to what is the need of the Commission to look after the market, but there are some solid reasons which make it vital for the establishment of this Commission in accordance to the provisions of the Competition Act. First of all, competition laws are described as the Magna Carta or Bible for free enterprise and it is very important to have healthy competition ways or else it can affect the entire economic freedom as well as the free enterprise.
The competition laws were originally implemented because the market was functioning in negative manner and there were unfair practices made by the bigger firms and enterprises making it a monopolistic competition and obstructing the working of smaller enterprises. Various players of the market were resorting to anti-competitive activities such as cartelisation, misuse of their dominant position in market which not only affected smaller enterprises but also the consumer welfare. Thus, there was pressing need for enacting some regulative force on these manipulative players of market to establish effective control and welfare of all within the market.
In the recent times, especially when the functioning of economies is also changing and the economies are getting open and reaching out to all different places, there has to be regulatory body governing and controlling the competition to ensure the viability of domestic and small-scale industries and maintain balance between the big players and foreign investment along with adequate promotion of domestic firms.
The Competition Commission of India works as one of the primary statutory bodies working on the primary objective to protect and sustain healthy competition within the Indian markets and ensure consumer’s welfare as well. It is quasi-judicial body as they have been conferred with right to conduct proceedings as well as impose the faulty companies with stated fines to be given to the aggrieved parties. As stated above, Competition Commission plays a vital role in controlling the working of the markets, as it helps in preventing all sorts of unfair trade practices often carried out by the big players such as cartelisation, misuse of dominant position, monopolization of their product etc.
The Commission also educates and promotes healthy competitive agreements among the parties and aids in resolving the market related issues. This commission not only saves the market but it also gives a boost to the Indian economy in every way by sustaining an equilibrium between the foreign investment and domestic companies, while adhering to the needs and wants of the consumers. Thus, Competition Commission of India is one of the most efficient and essential bodies of the Indian government.
-This Article is authored by Rhea Banerjee, Pursuing B.A.LL.B from Indore Institute of Law.