The competition commission’s work has become significantly more relevant in light of the exploding expansion of the technology and e-commerce sectors and the increase in mergers and acquisitions (M&As) across industries. This Article discusses the role and functions of competition commission of India.
The Competition Commission of India (CCI) is a statutory body established under the Competition Act,2002 (the “Act”) with the vision “to promote and sustain an enabling competition culture through engagement and enforcement that would inspire businesses to be fair, competitive and innovative, enhance consumer welfare and support economic growth”. The CCI was founded in 2003, but it wasn’t until 2009 that it reached full functionality.
The CCI’s work has become significantly more relevant in light of the exploding expansion of the technology and e-commerce sectors and the increase in mergers and acquisitions (M&As) across industries.
Organisational Structure
The Act states that the CCI shall consist of a chairperson with minimum of two and maximum of six other members to be appointed by the central government, from a panel of names recommended by a selection committee. To be eligible for the role of CCI member, a person should have special knowledge and professional experience of at least 15 years in, international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs or competition matters, including competition law and policy. The chairperson and every other member shall be appointed for a term of five years and shall be eligible for reappointment.
Duties of the CCI:
The Act specifies that it is the duty of the CCI to a) eradicate all those practices that has a negative impact on competition, b)promote&sustain healthy competition, c)protect consumer interests, and d)ensure other parties’ freedom of trade in Indian markets.
It is the duty of CCI to ensure that by establishing a healthy competitive environment maximum economic efficiency is achieved.
Powers of the CCI
1) CCI has the power to initiate investigation of any violation of anti-competitive agreement and abuse of dominant position regulations either suo-moto or on reference. The reference can be made by any party, state government, central government or any statutory body. (Section 19)
2. The CCI has power to inquire any acquisition or combination thathas caused or is likely to cause an appreciable adverse effect on competition in India (Section 20).
3. The CCI has the power to issue directions to parties involved in anti-competitive agreements, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be. [Section 27(a)]
4. The CCI has powers to impose fines and penalties, upon each of such person or enterprises in violations of the Act. [Section 27(b)]
5. The CCI in case of abuse of dominance may order for division to ensure that such enterprise does not abuse its dominant position. (Section 28)
6.The CCI has extra territorial jurisdiction meaning it can investigate any contract that despite being entered into outside India if such agreements have adverse effect on India. (Section 32)
7.When an act of violation with regard to the anti-competitive agreements, abuse of dominance or combinations has been committed or continues to be committed or even in apprehension of such violation, the CCI has the power to issue interim orders to temporarily restrain such acts. (Section 33)8.
8. The CCI while undertaking its duties is guided by the principles of natural justice and has the power to regulate its own procedure.[Section 36(1)]
9. The CCI in discharge of its functions has powers similar to a civil court under the Code of Civil Procedure, 1908 while (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavit; (d) issuing commissions for the examination of witnesses or documents; (e) requisitioningany public record or document or copy of such record or document from any office.[Section 36(2)]
10. To assist in any inquiry, the CCI has the power to call experts from the fields of economics,commerce,accountancy, international trade or from any other discipline as it deems necessary.[Section 36(3)]
11. The CCI has the power to direct any person to a) produce books, accounts or other documents or b) furnish information about any trade that is in his custody. [Section 36(4)]
12. The CCI has power to amend any order passed by it to rectify any mistake therein, provided such rectification shall not amend substantive partof its order passed under the provisions of this Act. (Section 38)
The CCI is divided into seven branches viz Legal Framework, Antitrust, Combination, Competition Economics, International co-operation and Capacity Building.
CCI as Anti-Trust Watchdog
The main ethos of the CCI is to act as a watchdog against anti-competitive agreements, abuse of dominance and adverse combinations. The antitrust branch of the CCI acts as a watchdog by checking entities from entering into agreements having appreciable adverse effects or from taking undue advantage of its position as an industry player.
CCI as Business Facilitator
The CCI, under its Competition Economics wing,frequently undertakes market studies to develop a better understanding of competitive conditions within one or more sectors. Armoured with its robust and diverse market studies, the CCI helps in facilitating competition advocacy by forming recommendations for governments, sector regulators, businesses and various business associations. This wing also organises annual conferences and workshops where best experts in economics and competition converge.
CCI as a Regulatory Body
The Combination wing of the CCI works as a regulator of M&As.It ensures that no combination is in violation of conditions and limitations set forth by the Act.
With the ever-evolving business and competition market, the CCI is also breasting with the changes and challenges. CCI, with its number of innovations, such as the “Green Channel” provision for automatically approving combinations and transactions, sponsorship schemes to facilitate officers to undergo specific training or study courses in the areas of competition law, economics, or finance,National Conferences on Economics of Competition Laws, the CCI is becoming more of a facilitator of healthy competition than a quasi-judicial body that the Act intended.