QUES . Discuss the role of the Competition Commission of India in containing the abuse of dominant position by the Multinational Corporations in India. Refer to the recent decisions. UPSC GS Mains 2023 Paper 2
HINTS:
Competition Commission of India is a statutory body responsible for enforcing The Competition Act, 2002 and to prevent activities that have an appreciable adverse effect on competition in India.
It was established on 14 October 2003. It became fully functional in May 2009.
Competition Act, 2002
The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws. 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 likely to cause an appreciable adverse effect on competition within India.
What is abuse of dominance under the Competition Act of 2002?
Section 4 (2) of the Act specifies the following practices by a dominant enterprises or group of enterprises as abuses:
directly or indirectly imposing unfair or discriminatory conditions in the purchase or sale of goods or services;
directly or indirectly imposing unfair or discriminatory prices in the purchase or sale (including predatory prices) of goods or service;
limiting or restricting production of goods or provision of services or market;
limiting or restricting technical or scientific development relating to goods or services to the prejudice of consumers;
What is the Composition of the Competition Commission of India?
Section 8(1) of the Competition Act, 2002 (the Act) provides that the Commission shall consist of a Chairperson and not less than two and not more than six Members.
The Commission has been functioning as a collegium right from its inception. In several major jurisdictions such as in Japan, USA and U.K., Competition Authorities are of a similar size.
What are the objectives of the Competition Commission of India?
1 . Make the markets work for the benefit and welfare of consumers.
2 . Ensure fair and healthy competition in economic activities in the country for faster and inclusive growth and development of economy.
3 . Implement competition policies with an aim to effectuate the most efficient utilisation of economic resources.
4 . Develop and nurture effective relations and interactions with sectoral regulators to ensure smooth alignment of sectoral regulatory laws in tandem with the competition law.
5 . Effectively carry out competition advocacy and spread the information on benefits of competition among all stakeholders to establish and nurture competition culture in Indian economy.
What is the role of the Competition Commission of India?
֍ In section 19 of the Act, the Commission may inquire into any alleged contravention of Section 4 (1) of the Act that proscribes abuse of dominance.
֍ Under Section 27 of the Competition Act, the Commission has powers to –
1 . direct the parties to discontinue and not to re-enter such agreement;
2 . direct the enterprise concerned to modify the agreement;
3 . direct the enterprises concerned to abide by such other orders as the Commission may pass and comply with the directions, including payment of costs, if any;
4 . pass such other orders or issue such directions as it may deem fit;
5 . can impose such penalty as it may deem fit. The penalty can be up to 10% of the average turnover for the last three preceding financial years;
֍ Section 28 empowers the Commission to direct the division of an enterprise enjoying a dominant position.
֍ Under section 33 of the Act, during the pendency of an inquiry into abuse of dominant position, the Commission may temporarily restrain any party from continuance with the alleged offending act.
֍ The Competition Appellate Tribunal (COMPAT) is established under section 53A of the Act, to hear and dispose of appeals against any direction issued. Claims of compensation too are decided by the COMPAT.
֍ CCI also works for public awareness and market research to promote fair competition in markets.
Recent decisions of the Competition Commission of India with respect to containing the abuse of dominant position by the Multi-National Corporations in India
֍ The CCI imposed a penalty of Rs 1,337.76 crore on Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem.
֍ In 2022, CCI imposed penalties on Tyre manufacturers and their Associations for indulging in cartelisation.
֍ CCI initiated an investigation into WhatsApp’s privacy policy, citing a prima facie case of abuse of dominance, ensuring data privacy and fair competition in the digital space.
֍ CCI’s approval of the Reliance-Future Group deal in 2020 while taking the case due to prior commitments of a party with Amazon, helped ensure fair competition in the retail sector.
֍ CCI imposed a Rs 40 lakh fine on Axis Bank for not notifying its acquisition of CSC e-Governance, violating competition regulations.
֍ CCI imposed a Rs 1,773-crore fine on Coal India for abusing its dominant position, addressing anti-competitive behavior in key industries.
Competition Commission of India is a vital guardian of fair competition in the Indian market by its vigilant enforcement of antitrust laws to bring in a competitive business landscape. The 2023 amendment to the Competition Act has further expanded the scope of CCI to check anti-competitive practices by MNCs. However there are various challenges ahead for CCI like adapting to the evolving digital landscape and aligning with new digital legislations, resolving pending orders, staying current with global antitrust practices and technological advancements, etc.
