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Day 38 – Q.1 Discuss the role and powers of the Competition Commission of India (CCI) in regulating competition in the Indian market. How effective has the CCI been in promoting healthy competition and protecting consumers from anti-competitive practices? Examine.

  • IASbaba
  • January 4, 2023
  • 0
GS 2, Indian Polity, TLP-UPSC Mains Answer Writing
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Discuss the role and powers of the Competition Commission of India (CCI) in regulating competition in the Indian market. How effective has the CCI been in promoting healthy competition and protecting consumers from anti-competitive practices? Examine.

भारतीय बाजार में प्रतिस्पर्धा को विनियमित करने में भारतीय प्रतिस्पर्धा आयोग (सीसीआई) की भूमिका और शक्तियों पर चर्चा करें। सीसीआई स्वस्थ प्रतिस्पर्धा को बढ़ावा देने और प्रतिस्पर्धा-विरोधी प्रथाओं से उपभोक्ताओं की रक्षा करने में कितना प्रभावी रहा है? परीक्षण कीजिए।


Approach

Start with basic intro on the CCI, and simply write different role and powers and then examine how much CCI has been effective in its work with giving different example.

Introduction

Competition Commission of India aims to establish a robust competitive environment. Through proactive engagement with all stakeholders, including consumers, industry, government and international jurisdictions.

Body

Role and powers:

  • To eliminate practices having adverse effects on competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
  • To give opinion on competition issues on a reference received from a statutory authority
  • To undertake competition advocacy, create public awareness and impart training on competition issues.
  • Consumer Welfare, to make the markets work for the benefit and welfare of consumers.
  • Ensure fair and healthy competition in economic activities in the country for faster and inclusive growth and development of the economy.
  • Implement competition policies with an aim to effectuate the most efficient utilization of economic resources.

Work and judgements of CCI for promoting healthy competition:

  • Google: CCI imposed a fine of ₹10 million upon Google in 2014 for failure to comply with the directions given by the Director General (DG) seeking information and documents.
  • The commission ordered an antitrust probe against Google for abusing its dominant position with Android to block market rivals. This probe was ordered on the basis of the analysis of a similar case in the EU where Google was found guilty and fined.
  • Cement companies: CCI imposed a fine of ₹63.07 billion (US$910 million) on 11 cement companies for cartelisation in June 2012.
  • It claimed that cement companies met regularly to fix prices, control market share and hold back supply which earned them illegal profits.
  • BCCI: CCI imposed a penalty of ₹522 million (US$7.6 million) on the BCCI in 2013 for misusing its dominant position.
  • The CCI found that IPL team ownership agreements were unfair and discriminatory and that the terms of the IPL franchise agreements were loaded in favor of BCCI and franchises had no say in the terms of the contract.
  • Telecos: CCI ordered a probe into the functioning of Cellular Operators Association of India (COAI) following a complaint filed by Reliance Jio against the cartelization by its rivals Bharti Airtel, Vodafone India and Idea cellular.
  • Airlines: CCI imposed a fine of ₹258 crores upon Three Airlines in 2015. Competition Commission of India (CCI) had penalized the three airlines for cartelisation in determining the fuel surcharge on air cargo.
  • The Commission has adjudicated more than 1,200 antitrust cases i.e., case disposal rate is 89 % in antitrust cases.
  • It has also reviewed more than 900 mergers and acquisitions till date, cleared most of them, within a record average time of 30 days.
  • The Commission has also come up with several innovations like the ‘Green Channel’ provision for automated approval on combinations/transactions and cleared more than 50 of such transactions.

Challenges:

  • With the advent of Web 3.0, AI, IoT, Blockchain and other technological developments, and emergence of issues like data protection and privacy, search bias, platform neutrality, deep discounting, hostile takeovers, confidentiality, etc, the need for a robust competition law.
  • In spheres such as telecom, internet and big-technology, CCI’s functions also overlap with other regulatory bodies such as the Telecom Regulatory Authority of India (TRAI).
  • CCI has been called a ‘Toothless regulator’ by critics. Most of the orders of the CCI are under appeal before the National Company Law Appellate Tribunal (NCLAT) or under challenge in the high courts or the Supreme Court.

Conclusion

Currently India’s Commission needs to update its definition of market now. There is a need to look into different new spaces like digital space and ensure that there are no monopolistic/duopolistic tendencies leading to price rises and supply side manipulations.

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