INTRODUCTION:
Competition Commission of India (CCI) is one of the
affiliated offices under the ministry of corporate affairs. This commission was
established under Vajpayee government on 14th October 2003. The commission is mainly constituted to fulfill the objectives of the Competition Act, 2002, as amended
by the Competition (Amendment) Act, 2007
and the latest amendment was in 2009.[1] It was
duly constituted in March 2009 it was formed after the recommendations given by
the Raghavan committee in lieu of liberalization in 1999 to reform the
Competition laws in India and to improve the economic policies in business
performance, it suggested replacing the Monopoly And Restrictive Trade Practices
Act, 1969 with Competition Act.
OBJECT:
The salient feature of CCI is to ensure healthy and fair
competition between organizations and to have a potential impact on market
prices (demand and supply), To restrain practices which will have harmful
effects on the economy, to protect the interest of consumers in all
enterprises, and to have freedom of trade and practices.[2]
ESTABLISHMENT AND COMPOSITION OF
CCI:
According to Sec. 7(1) of the Act, the Commission is
established by the Central Government by notification, appointment, established
for the purpose of this Act.
According to Sec. 8, the Commission shall consist of a chairperson including not less than two & more than ten other members to be appointed by the central government.
Sec. 10 states "Term of office of Chairperson and other members". The secretary in the ministry of corporate affairs and the secretary in the Ministry of Law and Justice and two experts who have knowledge in economics, trade, finance, commerce, law, public affairs, the term of office is 5 years from the date of joining & shall be eligible for reappointment. Sec. 10(4) in case of a vacancy that occurs due to any sickness, death or resignation a new chairperson will be appointed until then senior most member will discharge the function.[3]
FUNCTIONS OF COMMISSION:
Anything in contravention to the below mentioned sections can be enquired either by Suo-moto or by filling an application, by the commission.
- Sec. (3) "Anti-competitive agreements", any agreement can be declared void if it causes or likely to cause adverse effect on competition market to determine the prices and holds control over production in enterprise who are in same stage of production and different stage as well and if it’s used in any other wrongful manner.
- Sec (20) "Enquiry into Combinations", Commission has power to inquire into any information relating to acquisition may have an appreciable adverse effect on competition (AAEC).
- According to Sec. 21, any conflict arises in a decision by commission which is in contravention to the ACT, then the reference can be made to statutory authority by commission.[4]
- According to Sec. 21A, In the course of proceeding an issue raised by a party that a decision taken by commission makes reference in respect of the issue to statutory authority.
- According to Sec. 33, the commission is entitled to issue interim orders on violation of sections 3 and 4. Sec. 4 talks about "Abuse of Dominance", dominant position is allowing a company to perform independently to hold a positive effect on consumers and market. So, using this as a tool no enterprise should restrict any trade practice and should not fix the predatory price value over goods, and impose any unfair condition over production and distribution of sale.[5]
MERGERS AND ACQUISITION: According to Sec.5,
combination means amalgamation of two companies or production which is relevant
or rival or at different stages of production, to cause appreciable impact upon
the business market. But no company shall enter into combinations if the object
is not achieved and any such combination should be approved by the board of
directors
COMPETITION ADVOCACY: According to Sec.49, the aim of
this is to create a more competitive environment by creating awareness through
campaigns, to have conferences or seminars, and presentations regarding this.
CASE LAWS:
- COMPETITION COMMISSION OF INDIA v. STEEL AUTHORITY OF INDIA (SAIL):
Jindal steel ltd has filed an information to CCI against
SAIL for entering into exclusive supply agreement with Indian railways. It is
violative of section 3 which is anticompetitive agreements which will cause
adverse effect. CCI formed prima facie opinion under section 26(1) which
directs the director general to investigate. The company then appealed in
COMPAT and contended that no Audi alteram partem is given and CCI wanted to
become a part in place of Jindal steel against SAIL, but CCI contended that
SAIL has no right to appeal in COMPAT. Supreme court held that the SAIL has no
right to appeal before COMPAT under section 26(1) of CCI and SAIL is not
entitled to get notice or hearing as a matter of right and THE CCI could be a
party against SAIL in COMPAT in place of JINDAL ltd.[6]
- BRAHM DUTT v. UNION OF INDIA:
He filed a writ petition in supreme court regarding the
composition of CCI and that it performs judicial function so its chairman
should be “judge “. The UOI contended that CCI is a regulatory body and requires
Expertise which the judiciary could not provide power of judicial review
against the decision of CCI still there and India is not the first country
having non judicial members in a regulatory body like CCI. The union government
amended the ACT during the pendency of the case, it was that the chairmen and
other members of CCI will be selected by the committee presided by the chief
justice of India, established competition appellate tribunal (COMPAT). The
Supreme Court declares the amendment valid because the regulatory body is
deemed to have judicial touch.[7]
- BUILDERS ASSOCIATION OF INDIA v. CEMENT MANUFACTURE:
The builders Association through an informant filed
information under sec 19(1)(a) to CCI against 11 leading cement manufacturing
companies viz., ACC, Ambuja, Ultratech, jk, binani, jp etc. They contended that
it’s violative of section 3which is Horizontal Agreement (cartel) and it is
anti-competitive and section 4 which is abuse of dominant position with respect
to price control a quantity control and market dominance. They also included
those companies involved in monopoly restrictive trade practice (MRTP)
activities. CCI prima facie found that there is such violation and under 26(1)
directed the director general to investigate and they reported it to be a
cartel. CCI observed that cement manufactures used to meet and collect both
retail and wholesale prices and details of capacity utilization and there was
price parallelism among the cement manufacturers and created high entry and
exit barriers in the cement industry due to the high cost of setting up a
cement production plant. So CCI passed a cease and desist order and imposed a
penalty as 0.5 times of their annual profit which is 6307.32 crores in total.[8]
CONCLUSION:
The Competition Commission is established to have fair trade practice and healthy competition among members in the market, and it functions to ensure the maximum protection given to both buyers and sellers. The committee will have the power to make investigations and pass orders in case of any violation of provisions of the Competition Act, 2002.
[1] Competition Commission of India-
https://www.cci.gov.in/about-cci
[2] Ministry
of corporate
affairs-https://www.mca.gov.in/content/mca/global/en/about-us/affiliated-offices/cci.html
[3]
Competition act,2002
-https://www.advocatekhoj.com/library/bareacts/competitionact/index.php?Title=Competition%20Act,%202002
[4]
https://www.advocatekhoj.com/library/bareacts/competitionact/index.php?Title=Competition%20Act,%202002
[5] Introduction to competition law -https://www.cci.gov.in/sites/default/files/advocacy_booklet_document/CCI%20Basic%20Introduction_0.pdf
[6] ANR
(2010) 10 SCC 744- https://indiankanoon.org/doc/346379/
[7] AIR 2005
SC 730 -
http://courtverdict.com/supreme-court-of-india/brahm-dutt-vs-union-of-india
[8]
https://corporate.cyrilamarchandblogs.com/2016/11/curious-case-cement-cartel/
About the Author: This note is prepared by Ms. D Pradeepa, a law student at JSS Law College- affiliated to Karnataka State Law University (KSLU), and is an intern at MyLawman. She can be reached pradeepa865@gmail.com
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