IS THERE A NEED FOR CHANGE IN COMPETITION LAW IN INDIA?

 

 

Introduction

The competition law in India has gone through drastic changes over a few decades. The earlier form of the market economy and to curb the competition, the enactment of Monopolies and Restrictive Trade Practices Act, 1969 was paramount. Over the decades, this stringent act became quite ineffective and led to the formulation of Competition Act, 2002 but the enforcement of this legislation was not up until 2009. However, even after a decade of implementation of competition law in India, there can be seen the persistent lacunas in the law which hinder in the trade and leads to the abuse of these legislative principles. Therefore, there exists the need for some improvements in the present and existing competition law in India so as to make sure that the sustainability of competition remains prevalent without defaults.

Background Facts

The advent of the Competition law in India can be traced back to the bill for the competition law by the name of Monopolies and Restrictive Trade Practices and the formulation of it into the Act. Due to globalisation and the advent of various market forces, it became necessary to bring about changes in the legislation. The Raghavan Committee prepared a report looking at the limitations existing in the law and saw that the unclear and faulty laws lead to the barrier in the competition in India. Therefore, it leads to the Competition Act, 2002 on the basis of the committee where the laws were a bit liberal and the major impact of the act was for the safeguarding of the rights of consumers and to promote the competition in India.

Analysis of issues

The issues with the competition law relates to its practicality and the various problems in the several sections of the Competition Act itself. These issues need to be analysed and looked upon in deep for there to be a solution for the existing problems. The recommendations for the improved competition legislation will provide more safeguards and measures to ensure no faultily of the laws.

  • CCI and DG

The role of Competition Commission of India and the Director-General is particularly defined in the Act. The issue arises with the transparency of the work of the CCI in deciding the questions of law. It has been seen through various cases and decisions taken by the CCI that the orders are at times at fault with no real justice being seen. The cases have come forward before the court of law of the discrimination being held towards the other party where one of the party was not given adequate means of putting forward their case leading to the not following the major principle of the natural justice. The recent instance where the abuse of dominant position by Reliance by introducing predatory pricing in the form of Jio sim cards lead to great havoc and thus, the commission’s power comes in question.

The quorum for the commission and its working also poses the issue in the market economy where the adjudicatory powers are given to the commission and the quorum that takes or listens to the issue or the investigation conducted by the CCI or the Director-General is not the same as to the one passing the order. Another issue exists with the delayed justice as no specified limit for the finishing or passing of the order after the investigation is completely given. This leads to uncertain results and the consumers suffer as a consequence. Under the BCCI case where they were not given the opportunity of being hurt and thus, there was not following of the principle of natural justice.

  • CCI’s powers
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The extent of the powers of the commission as it is given the regulatory power to conduct the investigation and to make laws for the benefit of the statute and competition in India. The problem arises where the essential power of making the laws is not given and only the delegation of the non-essential powers exists. This way the commission is not able to deal with the prevailing circumstance of legislative faults existent and correct them. Another issue exists with the backlog of cases and the delay in the conducting of the investigation by the director-general and the commission not being able to decide the cases in the timely fashion. The problem that relates to whether commission work as the regulatory body or the adjudicatory body still exists hampering in the work of the commission and the justice. In the famous cement cartel case where the quorum deciding and the quorum giving the decision under the commission was different lead to gross injustice.

  • Registration of agreements

Under the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, the provisions and guidelines were specifically provided for the registration of agreements and the format through which the legal effectiveness of the agreements entered into by the parties are ensure through it. MRTP Act was quite persistent and up to the point of that factor. But under the Competition Act, 2002, it is not mandatory nor is the guidelines provided for the registration of the agreements. This leads to many implied or oral contracts and agreements which cannot be proven by law. The prohibited practices of cartels are created through this way and it leads to the problem of finding evidence and proving the existence of anti-competitive agreements.

  • The conflict between general and specific law

The violation of any provision of the competition law and the turf between the violations of specific law generally occurs. The problem increases when these issues come in direct or indirect conflict with the competition law. In the instance where the case arose pertaining to the TRAI regulations and the infringement and involvement of the key features of the Competition Act, 2002, then according to the directed principles, the general law will give way to the specific which means that competition law which is the general law will not have the power. The jurisdiction will be of the particular legislation having the specialisation and the infringement the competition provision will not be taken into account.

  • Cross Border Competition

The cross border competition creates a problem with the uncertainty and the extra-territorial jurisdiction of the act and the fact of how to deal with the international cartels and their investigation. Therefore, it becomes necessary to know about the fact of the problem and the director-general and the commission to look at the whole point of the issue. The competition from international borders create the effect on the domestic workfare with less regulations and minimum laws for them and thus, creating a problem.

  • Advent of e-commerce
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The advent of e-commerce and the uncertainty that is prevalent towards has brought various avenues for competition in India. This dynamic market environment has led to innovation in technology and has increased the competition. With the increase in the competition, the terminology used in competition to describe the geographical framework, enterprises, turnover and many more have become quite redundant and ineffective. Therefore, it becomes necessary to bring about the changes and amends in the philosophy and the trends of the competition laws in India.

 

Improvements/Solutions

The examination of the issues at hand has led to the problems to be examined under the microscope and to look for the solutions. These improved and refurnishing of the competition law will help the competitors to survive in the market which is ever-changing and to make sure that the advocacy and the promotion of competition takes place without any default.

  • Amendment in law as to technological change

The innovation in the technology with the ever increase in the business prospects has lead to the discovery of various formats and new economic and trade prospects. The regulations of these prospects are necessary to make sure that no illegal work is done. It is also necessary to make sure that the stricter penalties can be imposed for the violation and infringement of the competition regulation. For that purpose the changes and amends in the legislation related to competition with the change and diversification in the powers and functions along with the expansion of the definitions in the competition law is necessary. The experts in the technological field are to be appointed

  • Procedural guidelines for the work of DG

The specified guidelines for the work of director-general should be issued where these regulations should guide how the work by the DG should be done. This framework would ensure that more fairness and transparency is reached which will make it possible for the rule of law to follow. Where there is discrimination and there is uncertainty as to the work of DG under the competition act, 2002 and the powers and functions of it, this will be corrected through synchronised steps and process of law making it possible.

  • Flexibility for conducting investigations

The possibility and the power of the investigation with the commission and the DG might pose a problem when they have to obtain from the court of law appropriate order to justify the means. This leads to the justice being delayed and the procedure gets lagged on and the consumers are the ones who suffer because of that. The leniency in the framework of the investigation and others powers will make it possible for the authority under the Competition Act, 2002 to conduct the investigation with ease and without any prior approval or order from the concerned authorities making it possible for the cases to be decided more quickly and the culprit being caught more easily with adequate evidences.

  • Principal jurisdiction for competition law

The principal jurisdiction for the competition law is to be specifically defined by the higher court as in the case of any dispute, or any kind of confusion as to the general or specific law, the conclusion can easily be reached as to which one is to be applied when the question of law arises. This is necessary so as to save the time of the court, commission and parties and to segregate between the different parts of authorities and cases.

  • Powers and functions of Commission
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The diversification and the expansion of the functions of the Competition Commission of India is necessary to make it possible that they perform their functions with more flexibility and easily. The examination, the power of suo moto and all other functions which relates to the legislative functions and quasi-judicial function of commission needs to be adequately addressed.

  • Quick disposal of cases and appeals

The special regulation and guidelines need to be issued so that the precious time of both the court and the parties is not wasted and the decision takes place more quickly. The decision which takes years to achieve is the one where no real justice is there with the less penalty being given for the offence having a far reaching effect. Thus, it becomes mandatory that because of frivolous reasons the cases do not remain adjourned or pending before the court. This is required by specifying the time limit for the finishing up of the case once it is brought in front of commission or any court.

  • Cases having priority

The priority to the cases which shows the prima facie evidence that the situation is there of the fault of the party or that the case is established should be given due preference. There might be instances where the cases are brought so as to delay the time of the court and to wrongfully accuse the other party so as to tarnish the reputation of the other party. Thus, it becomes important to recognise the cases and to give priority to the genuine case over the other one.

  • Speaking orders

The decisions and orders of the commissions should be solely based on the given reasons for the action taken and the penalty imposed. Even when the commission rejects the case on the prima facie the decision should be included with the specified reasoning so that it gives the party opportunity to examine the substance of the issue and way the commission reached the decision which it did.

  • Trained individuals

The individuals and experts employed for all the positions should be the one who are specifically trained and have the knowledge for it. They can understand the practicality and the applicability of the market position and correct the same and take the measures to improve the same.

 

Conclusion

It can thus be concluded that though the present competition legislation has been going on with greater force. But, since the dynamic power of the market forces, it is hard to ignore that the changes in these regulations and guidelines are necessary requirement before the competition act becomes redundant and have the effect like the previous legislation. The fruitful changes need to be brought forward so that the effective working of the competition can take place and continue to grow in India.

Author: Arushi Anand,
Vivekananda Institute of Professional Studies, 4th Year

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