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12734965691Manoj Pandey Competition and Consumer Protection Practice in India

12734965691Manoj Pandey Competition and Consumer Protection Practice in India

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Published by: Udit Kathpalia on Jun 27, 2011
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A presentation by Manoj Pandey, Additional Director General, Competition Commission of India 26th April,2010 , Istanbul

To understand the issue of relationship between competition and consumer protection at present in India. Issues of consumer protection and competition in the market place find mention as early as 3rd century BC in Kautilya¶s Arthashastra in India. . it is necessary to first discuss the legislative framework that governs competition and consumer protection in India.y y y Relationship between competition and consumer protection has always been subject matter of intense discussion among the experts and practitioners of competition and consumer laws.

prohibition of monopolistic. It now consists of one Chairperson and Six members. Keeping pace with the changes in economic policies ushered in 1991.y Monopolies and Restrictive Trade Practices Act. The broad objectives sought to be achieved through MRTP Act were prevention of concentration of economic power. It was later on amended by the Competition (Amendment) Act. 2002 was enacted in January 2003. a forward looking Competition Act. the Competition Commission of India (CCI) could only be duly constituted in March 2009. Although the Indian Competition Act had come into existence in the year 2002. 1969 was the first anticompetitive legislation enacted in India. control of monopolies. restrictive and unfair trade practices. 2007. because of cases filed in the Court challenging the enactment of new Act. y y .

2002 relating to anti-competitive agreements and abuse of dominance (Section 3 and Section 4) were notified and brought into force in May 2009. enforcement of competition laws and second. 2002 has two broad elements. The enforcement provisions of the Competition Act. one. It consists of one Chairperson who is retired Judge of the Apex Court of India and two other members who are experts in competition matters. Competition Appellate Tribunal (CAT) has been established. The Competition Act. competition advocacy. ` ` .` In order to hear and dispose of appeals against any direction or order of the Commission.

Seminars. all these cases not only focus on need for enhanced competition in the market. In order to educate and inform consumers at all levels. ` ` . the Commission is also engaged in work of competition advocacy.` The Commission has so far has received and initiated inquiries in about three dozen cases. However. The information in these cases relate to the alleged anti-competitive agreements and abuse of dominant position. along with enforcement of competition laws. conferences and workshops are being organised to sensitize all stakeholders. but also protection of the interest of consumers eventually at the end.

Consumer Protection Act. from adulterated. namely. India was one among the 185 odd countries who agreed to adopt the UN Guidelines for consumer protection. safety. choice. substandard goods and deficient services. and consumer education. 1986 was enacted which had come into force in May 1987. representation. COPRA was enacted following adoption of the Guidelines for Consumer Protection in 1985 by the United Nations recognizing the rights of consumers. information. redressal.` In order to protect and save the consumers from exploitation. ` ` .

the Central Consumer Protection Councils (CCPC) and State Consumer Protection Councils.` The Consumer Protection Act. 1986 seeks to provide for the protection of consumers¶ interests. namely. the Act also recommended setting up of district consumer protection councils. It makes provisions for the establishment of consumer councils and other authorities to settle consumers¶ disputes and connected matters. In the amendment in 2003. The Act has envisaged the setting up of consumer protection councils at the central and state levels. ` ` .

hazardous y y Under the COPRA. 1986. an elaborate 3-tier redressal mechanism has been established. the basic premise of which is to ensure that goods and services are available to consumers at reasonable prices and acceptable standards of quality.y The COPRA 1986 aims to . i) protect consumers against marketing of goods and services to life and property ii) provide access to goods and services at competitive prices iii) award compensation to dissatisfied consumers.10 Million.10 Million and National Commission look into cases involving amount more than Rs. The final appeal lies with the Supreme Court. is at New Delhi. the National Commission. . [The district level courts look into cases involving amount upto Rs. The consumer Commissions have been entrusted with jurisdiction over cases of fixed monetary value. while State Commissions are at State Capitals and District Forum is at the district level.[ A National Consumer Policy has also been adopted.2 Million. State Commissions look into cases upto Rs. The apex body.

y y y Competition Act. it is the duty of the Competition Commission not only to eliminate practices having adverse effect on competition. but also to protect the interest of consumers. As per preamble and duties of the Commission prescribed in the Competition Act. promote and sustain competition. 1986 are two different sets of acts in India. it is not that the objective of Competition Act. 2002 and Consumer Protection Act. 1986. However. 2002. ensure freedom of trade carried on by other participants in markets in India. 2002 is to promote only competition leaving the interest of consumers to be looked after by the Consumer Protection Act. the Consumer Protection Act looking primarily at the instances of unfair trade practices. while the Competition Act has wider mandate investigating all actions that may lessen competition and reduce consumer welfare at the market place. .

This is a major difference as far interpretation of the term ± consumer is concerned. It covers not only the end ±consumers who purchases goods for personal purpose. 2002 is wider one. ` ` . but also the intermediate consumers who purchase goods for resale or for any commercial purpose.` The scope of definition of term µConsumer¶ under the Competition Act.

The Competition in the market leads to innovations. the interest of consumers is bound to get harmed. namely. However. protection of the interest of consumers. it is still to be tested how the interactions take place eventually in future between the bodies established under the two Acts. If the market remains non-competitive.` ` ` ` Since the competition commission is a relatively young agency.e. Competition Act. better choice and lower price for consumers and mandate of the Competition Commission is to ensure that consumers ultimately are benefited out of competition in the market. . 1986. 2002 and Consumer Protection Act. existence of the two agencies may not be seen as mutually exclusive since both are ultimately having similar goals i.

with goals of wider participation in the market place. ` . CCI aim at the promotion of the development of market conditions which provide consumers with appropriate choices at low prices and better quality. COPRA also has similar objectives.` The objectives of the consumer policy and competition are mutually complementary aimed at ensuring responsive policies in accordance with the needs of common man and end consumers.

At the root of both Consumer Protection and Competition is the recognition of the fact that consumers need protection from the abusive position of producers at the market place. The objectives of competition are met by ensuring that there are sufficient numbers of players in the market so that no one player can attain a position of dominance. collective and coordinated actions to reduce supply and division of markets with adverse and detrimental impact on consumers.` ` ` ` Promotion of Consumer welfare is the common goal of consumer protection and competition law. which can be abused. Competition seeks to check market failure leading to collective pricing. .

An effective competition regime by lowering entry and exit barriers and by ensuring level playing field for all in the market. the consumer experiences wider choice and greater availability of goods at affordable prices. greater innovation and enhancement of consumer welfare. y y y y y y y y . Competition Law aims at regulating the process of competition between enterprises in order to establish effective competition in market. The result of competition in the market place is higher economic efficiency.y There are elements of commonality between the goals of Competition law and Consumer law. Consequently. makes environment conducive to conduct business and promote a culture of competition.

Competition Act and Consumer Protection Act both aim at protection of the consumers in a complex market place in the era of liberalization.y y y y Consumer Protection Policy and law are primarily concerned with the protection of interest of consumers by improving market conditions for effective consumer choice. In order that the competition regime in any developing country gains wider acceptance and support among consumers.e. it is required that those cases are taken up which would bring immediate and measurable benefits to the consumers. Competition Commission of India is also aiming at that while deciding its priorities. The two disciplines of competition and consumer protection. but are having similar aims i. competitive markets that promote consumer welfare. maintaining well functioning. . may focus on different remedies. wherein there may be demand for lesser intervention from state.

consumer and common man will be the ultimate beneficiary. Cases under investigation with Competition Commission of India indeed suggest that lack of competition reduces choice and leads to higher prices for the consumers. The cases decided by the CCI would usher a regime wherein with more and intense competition. better management practices and technology which would ensure wider choice and ultimately lower prices at the market place.` ` ` ` The Competition Commission of India seeks to promote competition and accelerate economy through better efficiency. . benefiting the common man and woman. Consumer Protection Policy creates a regime whereby consumers receive satisfaction from the delivery of goods and services needed by them. where there has been a fall in real prices and remarkable improvement in quality of goods/services. Positive effects of competition are well illustrated by the recent experiences of in India in several sectors such as telecommunication and consumer electronics.

` CCI aims to provide effective deterrence against all sorts of anticompetitive practices A sort of visible hand for corrections at the market place. ` ` ` ` . CCI aware of these expectations is committed to take actions against all practices which lessen competition and reduce consumer welfare. Consumers need protection and are looking at the CCI with great expectations. Recent order of the Court upholding the decisions of CCI to conduct inquiries against anti-competitive practices of some corporate bodies harming the interests of consumers is quite encouraging.

` Consumers are looking at both CCI and Consumer Courts in order to get their grievances redressed. This would gradually bring clarity in the minds of two bodies as well as that of the consumers. Cases are being filed at both the forums by the consumers ±CCI is getting cases against certain unfair trade practices filed by individual consumers and the Consumer Courts are receiving cases which primarily contain competition concerns. Since unlike many other jurisdictions. some sort of coordination would be required while dealing with cases. consumer form in India at present is different from that of competition. ` ` ` .

should be the king at the Market place.` Consumer remains and if not. Thanks .

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