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Competition Commission of India (CCI) Role

GS2/GS3 Paper 

 Syllabus: Role of statutory and non-statutory bodies

 

Source: IE

 Context: The Competition Commission of India (CCI) plays a crucial role in ensuring fair competition amidst India’s rapid technological and economic changes.

 

What is CCI?

The Competition Commission of India (CCI) is a statutory and quasi-judicial body working under the Ministry of Corporate Affairs. It was established under the Competition Act, 2002 for the administration, implementation and enforcement of the Act, and was duly constituted in March 2009.

 

Objectives:

  1. Ensure markets benefit consumers.
  2. Implement competition policies for efficient resource utilization.
  3. Foster fair and healthy competition for inclusive economic growth.
  4. Ensure alignment of sectoral regulatory laws with competition law.

 

Functions:

  1. Investigate negative effects on competition.
  2. Regulate mergers to prevent market capture.
  3. Eliminate anti-competitive practices and regulate combinations.
  4. Undertake competition advocacy, create public awareness, and provide training.
  5. Provide opinions on competition issues referred by statutory authorities.

  

The role of the competition commission to regulate and achieve the policy goals of competition

  • It guarantees that no enterprise abuses their ‘dominant position’ through the control of supply, manipulating purchase prices, or adopting practices that deny market access to other competing firms
    • For example – It imposed penalties on the BCCI for the abuse of dominant position. – CCI imposed a penalty of 522 million (US$7.6 million) on the BCCI in 2013 for misusing its dominant position.
  • Secure the interest of consumers and ensure that their welfare is not compromised.
    • For example –It played active role in preventing cartelization in the telecom sector. – 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.
  • Ensures that foreign companies abide by the country’s competition laws.
    • For example – It ordered for an anti-trust probe against Google- for abusing its dominant position with Android to block market rivals.
  • Prevent cartelization
    • For example – It has prevented the cartelization of cement companies. CCI imposed a fine of 63.07 billion (US$910 million) on 11 cement companies for cartelisation in June 2012.
  • Undertake competition advocacy, create public awareness and impart training on competition issues.
  • Ensure smooth alignment of sectoral regulatory laws and competition laws.
  • It has ensured that there is proactive engagement with all stakeholders, including consumers, industry, government and international jurisdictions.

  • The recent The Competition (Amendment) Bill, 2022 and its increased efficiency – It has been introduced to improve regulatory set-up by increasing the CCI’s accountability, giving it flexibility and enforcement efficiency.
    • Key changes made in the bill
      • Increasing transparency and strengthening the accountability:
        • A board with part-time membersto supervise CCI activities.
        • CCI to mandatorily issue penalty guidelinesand give reasons in case of any divergence.
        • Enforcement efficiency
          • CCI could engage in structured negotiations with parties and arrive at mutually-workable solutions without having to go through lengthy formal proceedings.
        • Limitations:
          • The bill does little to address competition concerns in digital markets.
            • g., mergers concern in digital markets between entities that do not have significant assets or turnover, but are still very significant (such as Facebook-WhatsApp).
          • No effective clause for regulating anti-competitiveconduct by digital platform.

 For more on the bill: Click Here

 

Initiatives Taken by CCI to Address New-age Challenges:

InitiativesDescription
Streamlining ProcessesCCI has enhanced the efficiency of investigation and decision-making processes, resulting in reduced times for investigations and decisions, ultimately improving overall market efficiency.
Addressing Digital Economy ChallengesCCI is concentrating on scrutinizing practices such as predatory pricing and data monopolisation employed by tech giants in the digital economy to ensure fair competition and prevent market distortions.
Regulatory Framework EvolutionCCI is continuously updating its regulatory framework to remain robust and flexible, aligning with emerging market dynamics and preparing for potential future challenges.
International CooperationCCI actively collaborates with global entities, engaging in knowledge-sharing initiatives and working towards harmonizing regulations to ensure effective enforcement in the international context.

 

Conclusion

Competition commission of India should enhance its efforts and reach to the technological nuances of the new digital era and ensure whether these markets are being fairly, effectively, and transparently used for the benefit of consumers.

 

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