CHAPTER 1:

INTRODUCTION

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 CHAPTER 1: INTRODUCTION

1.1 SETTING THE CONTEXT ................................................................................. 1

1.2 RESEARCH PROBLEM .................................................................................... 6
HYPOTHESIS:......................................................................................................... 7
1.3 LITERATURE REVIEW ..................................................................................... 8
1.3 (A) COSTS FRAMEWORK ................................................................................... 8
1.3 (B) RESEARCH APPROACH.............................................................................. 13
1.3 (C) ENFORCEMENT MODEL ............................................................................. 17
1.3 (D) ENFORCEMENT INSTITUTION ..................................................................... 23
1.3 (E) ENFORCEMENT PROCESS ......................................................................... 32
1.3 (F) ENFORCEMENT OUTCOME ......................................................................... 40
1.4 SCOPE AND LIMITATIONS ............................................................................ 46
1.5 AIM & SIGNIFICANCE .................................................................................... 47
1.6 RESEARCH QUESTIONS ............................................................................... 48
1.7 RESEARCH METHODOLOGY ....................................................................... 48
1.8 RESEARCH TOOLS: CODING ....................................................................... 49
1.9 CHAPTERS ..................................................................................................... 52
1.10 MODE OF CITATION .................................................................................... 54

1.1 Setting the Context

According to Jefferson’s Philosophy, “governments are instituted to secure to
the individual his inherent and inalienable rights”1–i.e. the right to life, liberty
and the pursuit of happiness. In doing so, the government takes up a
regulatory role by imposing regulations on the conduct of addressees.
Regulations are understood as a “sustained and focused control exercised by
a public agency over activities that are valued by a community.”2 The state
enacts a law that restricts the activities of citizens in the more considerable
interest of society. In enforcing these laws, the state creates several

1 William J. Bryan, “Jeffersonian Principles”, 168(511) THE NORTH AMERICAN REVIEW 676, 670
(1899).

2 ANTHONY OGUS, REGULATION: LEGAL FORM AND ECONOMIC THEORY (HART Publishing, 2004).

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organisations mandated by implementing these laws. However, attaining
optimum regulation is a challenging task, as one must achieve an appropriate
balance between an individual’s freedom and society’s interests.3 In India, the
government’s regulatory role stems from the Constitution of India, which
empowers the Union and State legislature to make laws on various subjects.

Post economic liberalisation and establishment of the WTO framework, it was

felt necessary to regulate practices that can impede free competition in the
market. Thus, a High-Level Committee on Competition Policy and Law
(hereinafter ‘Raghavan Committee Report’) recommended the need for
competition law.4 During the committee deliberations, one of the significant
issues discussed was the necessity of a ‘competitive market’ as a pre-requisite
for implementing competition policy and law. It was thought to be premature
to contemplate having a competition law. A minority of Raghavan Committee
members felt that competition law aims at ‘curbing excessive rivalry and strife’
and hence not relevant in India where firms lacked a “combative spirit”.5
However, most committee members believed that the function of competition
policy was not merely to regulate anti-competitive activities. Instead, it is also
a useful tool for promoting competition and fulfilment of political and social
objectives. This position and function of competition law have been discussed
in various scholarly writings as well.6 The objectives of competition policy are
founded in an active competitive environment, which encourages the creation

3 SECOND ADMINISTRATIVE REFORM COMMISSION, 13TH REPORT: ORGANISATIONAL STRUCTURE OF

GOVERNMENT OF INDIA 144 (April 2009) available at <http://arc.gov.in/13threport.pdf>
accessed on July 20, 2014.

4 REPORT OF HIGH LEVEL COMMITTEE OF ON COMPETITION POLICY AND LAW, (1999) available at
<https://theindiancompetitionlaw.files.wordpress.com/2013/02/report_of_high_level_com
mittee_on_competition_policy_law_svs_raghavan_committee.pdf> accessed on October
23, 2017. (Raghavan Committee Report)

5 T.T. Ram Mohan, “Competition Policy Dilemmas”, 35(28) ECONOMIC AND POLITICAL WEEKLY
2499 (2000).

6 See generally, Eleanor M. Fox, “Competition, Development and Regional Integration: In

search of a Competition Law fit for Developing Countries”, LAW AND ECONOMICS RESEARCH
PAPER SERIES (2012) available at <http://ssrn.com/abstract=1761619> accessed on
January 10, 2015; Kenneth G. Elzinga, “The Goals of Antitrust: Other than Competition
and Efficiency, What Else Counts?”, 125 UNIVERSITY OF PENNSYLVANIA LAW REVIEW (1977).

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of globally competitive firms with higher investment and innovative
technologies.7 In pursuance of this, India’s competition policy goals are
understood as maximising economic efficiency and promoting total welfare.8
Few jurisdictions also stress that competition law should consider normative
standards of citizen’s preferences based on constitutional goals, besides
efficiency and total welfare.9

It was also considered delaying the enactment of competition law until January
2005, keeping India’s bargaining power at WTO negotiation. Meanwhile,
suitable amendments could have been made in the Monopolies and
Restrictive Trade Practices Act, 1969 (hereinafter “MRTP Act”).10 However,
being a newly opened economy, India was prone to anti-competitive practices
by the huge transnational corporations. Further, there was a need for
developing the competitive spirit among domestic corporations, leading to
healthy competitive markets. The government moved beyond MRTP Act and
established a full-fledged regulatory system through Competition Act, 2002
(hereinafter “CA”). The difference between the two regimes is reflected in their
differing constitutional foundation–the transformation from curbing monopolies
to promoting trade-related competition.11 MRTP was based on the principles
enshrined under Article 39 (b) and (c) of the Constitution of India with a policy
aim of fair distribution of material resources and avoiding the concentration of
wealth.

7 Joseph Brodley, “The Economic Goals of Antitrust: Efficiency, Consumer Welfare and
Technological Progress”, 62 N.Y.U.L REVIEW 1020 (1987).

8 Supra note 4 (Raghavan Committee Report) at ¶2.1.1 - “In this context the appropriate
definition of welfare is the sum of consumers' surplus and producers' surplus and also
includes any taxes collected by the Government.”

9 Wolfgang Kerber, “Should Competition Law Promote Efficiency? Some Reflections of an

Economist on Normative Foundations of Competition Law” in ECONOMIC THEORY AND
COMPETITION LAW (Josef Drexl et al. (eds.), Edward Elgar, 2008) available at
<http://ssrn.com/abstract=1075265> accessed on January 10, 2015.

10 Vijay Kumar Singh, “Competition Law and Policy in India: The journey in a Decade”, 4 NUJS
L.Rev. 523, 536 (Oct. – Dec, 2011).

11 Manas Kumar Chaudhuri, “MRTP Act to Competition Act: The Way Forward” 41(2) VIKALPA
170, 175 (2016).

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The CA has its genesis in freedom of trade and Item 21 of the Concurrent List
in the Seventh Schedule of the Constitution dealing with commercial and
industrial monopolies, combines and trusts. It is not just the anti-market
conduct differentiated from the MRTP Act. Rather, the CA’s enforcement
structure was also modern to face the new challenges. Through the CA,
executive power was delegated to a regulator, the “Competition Commission
of India” (hereinafter “CCI”). As a mandate, CCI is responsible for “preventing
practices having an adverse effect on competition, promoting and sustaining
competition, protecting the interests of the consumer and ensure freedom of
trade carried on by other participants, in markets in India.”12 For this purpose,
the CA created an ex-post enforcement mechanism for anti-competitive
agreement (Section 3 of the CA) and abuse of dominant position (Section 4 of
the CA);13 and an ex-ante enforcement mechanism for regulating
combinations (Section 5 and 6 of the CA).14 To facilitate enforcement
mechanisms, CCI has the power to notify regulations.15 CCI is entrusted to
carry out “competition advocacy” for aiding the government in formulating
competition policy, creating awareness and imparting training on competition
issues.16 Thus, CCI is entrusted with all matters relating to competition in the
Indian market17 and enforces the competition law.18

It is essential to note that law enforcement structure demonstrates the

underlying policy outcomes intended to achieve through it. Thus, enforcement

12 See, Long Title and §18 of the Competition Act, 2002 (Duties of Commission).

13 See also, §19 read with §26 of the Competition Act, 2002 (Ex-post Enforcement).

14 See also, §20 read with §29 of the Competition Act, 2002 (Ex-ante Enforcement).

15 §64 of the Competition Act, 2002: (Power to make Regulations)

16 §49 of the Competition Act, 2002: (Competition Advocacy)

17 See, §32 of the Competition Act, 2002: (Extra Territorial Jurisdiction of CCI)

18 See, Rahul Singh, “The Teeter-Totter of Regulation and Competition: Balancing the Indian
Competition Commission with Sectoral Regulators”, 8 WASH. U. GLOBAL STUD. L. REV. 71
(2009).

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structure should be optimal enough19 to minimise the errors of “false positive”
and “false negative”, which are more harmful to markets than the contravention
of the law. While the false positive20 cases will injure enterprises and the
consumers since pro-competitive behaviour is prohibited, the problem is that
the law is over-inclusive. The false negatives21 will injure consumers as the
law is under-inclusive.22 Theoretical reasons for these errors can be found
within the theories of regulations themselves. Two broad theories of regulation
are (i) Public Interest Theory; and (ii) Private Interest Theory.23 Public Interest
Theory suggests that a disinterested and expert regulator pursues public
interest rather than private interest. However, this theory has certain
shortcomings as well. Firstly, there is difficulty in agreeing on a commonly
shared conception of public interest. Secondly, the origin of distrust among the
addressees concerning disinterestedness and public-spiritedness of the
regulators, who pursue their benefit and career development, lacks interest in
serving the regulatory goals after the initial life cycle.24 These shortcomings
lead to tendencies of pursuing their institutional ends by protecting and
expanding their jurisdictional turf. Thirdly, regulators subject themselves to the
influence of dominant regulated parties because of economic power and
prevalence of capture in regulation. Regulators become subject to the

19 Steven Shavell, “The optimal structure of law enforcement”, in A READER ON REGULATION

(Robert Baldwin ed. Oxford University Press, 1998) – (Optimality of the legal structure will
be depended on (i) Social Welfare Criteria; (ii) Timing of intervention; (iii) Form of
Intervention; (iv) Private Vs. Public Enforcement)

20 ‘False positive’ are those cases where competition authorities incorrectly concluded pro-
competitive conduct as abusive or anti-competitive.

21 ‘False Negatives’ are those cases where competition authorities incorrectly concluded that
an anti-competitive activity is legal.

22 Daniel A. Crane, “The Economics of Antitrust Enforcement” in ANTITRUST LAW AND

ECONOMICS Vol. 4 (Keith Hylton (Ed.) 2nd Ed. Edward Elgar Publishing, 2010 UK)

23 See, ROBERT BALDWIN, MARTIN CAVE, AND MARTIN LODGE, UNDERSTANDING REGULATION:
THEORY, STRATEGY AND PRACTICE (2nd ed. OUP, 2012).

24 George J. Stigler, “The Theory of Economic Regulation”, 2(1) BELL JOURNAL OF ECONOMICS
AND MANAGEMENT SCIENCE 3 (1971).

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influence of consumer sectors, and regulation serves the interests of these
parties or sectors rather than those of the wider public.

Private Interest Theory (Capture Theory) suggests the extent to which

regulatory developments are driven not by the pursuit of public interest but by
the particularistic concerns of interest groups. As pointed out by George
Stigler, “regulation is acquired by the industry and is designed and operated
primarily for its benefit.”25 However, like public theory, this theory also entails
certain shortcomings. Firstly, this theory assumes that regulated parties are
rational maximisers of their welfare. Secondly, it poses difficulty in identifying
the preferences of parties, often resulting in competing interests. Thirdly,
informational limitations may cause self-interestedness behaviour. Fourthly,
the possibility of altruism and public-spiritedness, which goes against the
private interest.

The study does not evaluate whether the CCI is public interested or private
interested or whether the regulator’s decisions lead to scenarios of a false
positive or false negative. Instead, the focus is on assessing the enforcement
mechanism of competition law to identify certain defects prone to aggravate
error costs arising from regulatory intervention. Such defects are as fault lines
in the enforcement and may further aggravate the cost of false positives and
false negatives.

1.2 Research Problem

CCI has completed a decade of enforcement, and a study into its experiences,
assessment and evaluation is needed to understand if there are any fault lines
in the enforcement structure resulting in adverse transaction costs of
enforcement. The working of the enforcement structure can demonstrate the
goals which the law intends to achieve, and the same can be assessed based
on its institutional design and enforcement practices. Primarily, a young
regulator like CCI must overcome three challenges–(i) spreading the reach of
law and bringing geographical inclusivity in terms of its enforcement exercise;

25 Ibid.

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(ii) the delivery of decision making must be quick to keep the market forces
alive; and (iii) lastly, there must be clarity on the tools employed for correcting
the market failure arising because of anti-competitive conduct. The above
factors can reduce the transaction costs involved in law enforcement by
supplying credible information with proportionate geographical distribution,
ensuring no region is under-regulated or over-regulated. The timely
intervention of regulators in the markets affected by anti-competitive conduct
ensures markets are restored through regulatory tools. Speedy disposal is also
essential to recover the consequent monetary penalties imposed, disgorge
unlawful profits, and restrict the benefits that may arise due to the time value
of money. Last, certainty and predictability of the law shape the behaviour of
the market participants by creating deterrence; however, clarity on the tools
employed for market correction is relevant to communicate regulatory signals.
Further, clarity on tools also brings in transparency and compliance with
procedural justice.

There is no independent empirical study conducted based on which an

assessment of defects in the enforcement of the CA can be made. CCI’s
annual reports provide much data on enforcement numbers. However, the
same is not appropriately structured to assess the performance and identify
the fault lines. Hence, there is a need to study the enforcement structure to
discover the practices resulting in the enhancement of adverse social cost of
enforcement.

Hypothesis:

H1: CCI’s present institutional structure defined by geographical location,

decision-making process, resource allocation in terms of advocacy and human
resource, and enforcement design enhances transaction costs and produces
sub-optimal outcomes.

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1.3 Literature Review

1.3.1 Costs Framework

Enforcement of the law is a procedural law domain that supplements and

supports the law’s substantive part. Enforcement is not an isolated activity.
Rather, it is a targeted process to achieve the law’s goal through an
appropriate structure to be defined under the law. Wils (2008), in respect of
competition law, proposes three tasks of enforcement- (i) clarifying the content
of law; (ii) preventing violation; and (iii) dealing with consequences.26
Enforcement involves interpreting the law for its applications on the facts,
which clarifies the law’s content over the period. Enforcement also signals
unlawful conduct through regulations and decision’s imposing penalties,
resulting in the prevention of violation and punishing wrongdoers. If this is
considered the optimal function of enforcement, its optimality depends on the
level and extent of enforcement cost incurred. Joskow (2002) states that
antitrust is a deterrence system. For its effective enforcement, antitrust policy
needs to evolve so that firms receive clear signals from these enforcement
institutions to determine where to draw the line between behaviour and market
structures that are likely to be legal and those that are likely to be illegal.27

Schwartz (1980) identifies three types of cost and suggests these must be
minimised for optimal enforcement: (i) cost resulting from harmful conduct
subject to regulation; (ii) process costs associated with apprehending and
determining the guilt of offenders; and (iii) punishment cost associated with
sanctioning upon the offender.28 The legal system incurs the latter two costs.
Schwartz proposes to the approach for minimising the costs of legal systems
is the setting of the right ‘price’ for violations. However, the price must be

26 See, WOUTER P.J. WILS, EFFICIENCY AND JUSTICE IN EUROPEAN ANTITRUST ENFORCEMENT 50-
54 (HART Publishing, USA, 2008).

27 Paul L. Joskow, “Transaction Cost Economics, Antitrust Rules, and Remedies” 18(1)
JOURNAL OF LAW, ECONOMICS, & ORGANIZATION 95 (Apr., 2002)

28 W. Schwartz, “An overview of the economics of antitrust enforcement” 69 GEORGETOWN

LAW JOURNAL 1075 (1980)

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optimal, as with lower penalties, undesirable conduct will escape, and with too
high penalties cost of law enforcement will be too high.

Not merely the associated cost, for optimal enforcement, it is also desirable to
have a decision-making structure to prevent the errors of ‘false positive’ and
‘false negative’, which are more harmful to markets as against the
contravention of the law. ‘False positive’ cases are where competition
authorities incorrectly conclude a pro-competitive behaviour as abusive or
anti-competitive, and ‘false negatives are those cases where competition
authorities incorrectly decide an anti-competitive activity is not illegal (Wish
and Baily, 2012).29 Crane (2010) highlights that the former injures enterprises
and consumers since pro-competitive behaviour is prohibited; the problem
here is that the law is over-inclusive. The latter will harm consumers primarily,
as the law is under-inclusive.30

Easterbrook (1984) provided a framework for optimal antitrust rules by

explaining the relationship between the errors and antitrust liability and laying
down two fundamental assumptions in the enforcement process. Firstly,
‘errors’ are inevitable in competition cases because of the hardship of
distinguishing pro-competitive and anti-competitive conduct. Secondly, the
social cost associated with false-positive errors will be greater than the false-
negative errors because market forces offer at least some corrective measures
as the market could correct the false negative but not false positive. 31 It is an
admitted position that eliminating error costs is near to impossible and is
costly.32 However, such error cost can be minimised by adopting certain filters

29 RICHARD WISH & DAVID BAILEY, COMPETITION LAW (7th ed., Oxford University Press, 2012).

30 Daniel A. Crane, “The Economics of Antitrust Enforcement” in ANTITRUST LAW AND

ECONOMICS Vol. 4 (Keith Hylton (Ed.) 2nd Ed. Edward Elgar Publishing, 2010 UK).

31 Frank H. Easterbrook, “The Limits of Antitrust”, 63 TEX. L. REV. 1 (1984).

32 I Ehrlich and R.A. Posner, “An Economic Analysis of Legal Rulemaking,” 3(1) JOURNAL OF
LEGAL STUDIES 257 (1974); P.L. Joskow, “Transaction Cost Economics, Antitrust Rules,
and Remedies”, 18(1) JOURNAL OF LAW, ECONOMICS AND ORGANIZATION 95 (2002); K.
Heyer, “A World of Uncertainty: Economics and the Globalisation of Antitrust” 72(2)
ANTITRUST LAW JOURNAL 375 (2005); A. Christiansen and W. Kerber, “Competition Policy
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in the enforcement process like–putting the burden on the plaintiff to
substantiate the basic facts of market power, the gravity of consumer harm,
methods of production and distribution in the industry, consistency of
economic evidence and whether the complaining firm is a rival in the market.
Manne and Wright (2010) also proposed to put certain filters in the competition
law cases related markets for innovations like–per se legality for a new
product; requiring direct proof of actual anti-competitive effect; no treble
damages for private suits; inadmissibility of intent evidence; per se legality of
refusal to share intellectual property.33 The efficiency of these filters is quite
debatable, as drawing an appropriate balance on these measures may not
bring desired results and may counter the objective. As Lambart (2020)
argues, in minimising false-positive error, if the policymakers make it harder
for the plaintiff to establish the liability or easier for the defendant to make out
a defence, there is an increased risk of false negative. Alternatively, if there is
a reduction in the plaintiff’s burden or defences available to the defendant,
there is an enhanced risk of social loss from false positives.34 These studies
focus on the substantive part of establishing liabilities but miss out on the
aggravating effects on the cost resulting from procedural defects in an
inevitable false-positive or false-negative decision making.

Posner (1973) highlighted that purpose of procedural legal rules is to minimise

the two types of costs–(i) error costs; and (ii) direct costs. Error cost relates to
those negative social costs generated because of the failure of the judicial
system to carry out the functions as assigned to it. At the same time, direct
cost relates to the operating cost of the dispute-resolution bodies.35 Cooter

with Optimally Differentiated Rules Instead of “Per Se Rules Vs. Rule of Reason””, 2(2)
JOURNAL OF COMPETITION LAW AND ECONOMICS 215 (2006).

33 Geoffrey Manne and Joshua D. Wright, “Innovation and the Limits of Antitrust” 6(1) JOURNAL
OF COMPETITION LAW AND ECONOMICS 153-202 (2010).

34 Thomas Andrew Lambert, “The Limits of Antitrust in the 21st Century” (February 6, 2020).
University of Missouri School of Law Legal Studies Research Paper No. 2020-06, available
at <https://ssrn.com/abstract=3533549> accessed March 20, 2021.
35 Richard A. Posner, “An Economic Approach to Legal Procedure and Judicial
Administration”, 2(2) THE JOURNAL OF LEGAL STUDIES 399 (June 1973).

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and Ulen (2016) state that the goals of the legal procedures are to minimise
the social costs. They offer a simple measure of social costs, as the sum of
administrative costs and error costs. Administrative costs related to filing a
legal claim, exchanging information with the other party, bargaining in an
attempt to settle, litigating, and appealing. Errors distort incentives and impose
a variety of costs on society.36 In order to reduce the social costs and bring
legal procedure efficiently, one method is to avoid the error, which, as
highlighted above, related to substantive changes in the decision-making
process. Another contributing feature is to minimise the transaction
cost/administrative cost, which can also minimise the social costs. 37 For
example, class actions avoid the high social costs of re-litigating common
issues in many individual actions and give plaintiffs economies of scale in
pursuing their claims when collective action would otherwise be impractical.
Class actions also confer deterrence benefits by making private enforcement
feasible when individual damages are small relative to litigation costs.38

Transaction cost is not just restricted to the cost of litigation. Beckner and
Salop (1999) consider the cost associated with gathering the information, and
the institutions are also part of such transaction costs.39 Error cost also
considers the uncertainty in the legal rules causing a chill to the beneficial
conduct and weak (or no) deterrence of the harmful conduct.40 Joskow (2002)
states that in distinguishing “competitive” and “anti-competitive” conducts,
antitrust enforcement institutions are faced with a variety of transaction costs.
These costs include the direct costs of identifying firms and markets where

36 ROBERT COOTER AND THOMAS ULEN, LAW AND ECONOMICS (Pearson, 6th, Ed. 2016).

37 Richard A. Posner, “An Economic Approach to Legal Procedure and Judicial

Administration”, 2(2) THE JOURNAL OF LEGAL STUDIES 399 (Jun., 1973).

38 ROBERT G. BONE, CIVIL PROCEDURE: THE ECONOMICS OF CIVIL PROCEDURE

259–91 (2003)

39 C. Frederick Beckner III & Steven C. Salop, “Decision Theory and Antitrust Rules”, 67
ANTITRUST L.J. 41, 43-52 (1999)

40 Jonathan B. Baker, Exclusion as a Core Competition Concern, 78 ANTITRUST L.J. 527 (2013)

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behaviour or market structures are deemed to violate the antitrust laws and
enforcing the associated legal determinations in particular cases. However,
these direct transaction costs are likely to be relatively small since relatively
few firms are subject directly to antitrust sanctions. The primary transaction
costs are associated with the responses made by the target firms and, more
importantly, by responses and adaptations that firms and markets, in general,
make to antitrust rules defined in particular cases and how these responses
affect prices costs and innovation throughout the economy. 41 Baker (2015)
finds that the “error cost” approach in antitrust enforcement is based on
whether the rules minimise the total social costs. His error cost perspective
considers the cost of “false positives”, the cost of “false Negatives”, and
transaction costs associated with the legal process.42 Katsoulacos & Ulph
(2014) find that enforcement procedures involving legal uncertainty may be
welfare superior to those without legal uncertainty because of their better
deterrence effects.43 However, they miss out on the aspect of procedural
fairness would require certainty in the procedures, as uncertainty will lead to
inconsistent decisions, which are likely more likely to be challenged.

In any law enforcement system, the “error” of adverse decision-making is

bound to happen, and the cost of such an error is difficult to evaluate because
of various unknown factors. These errors cause an adverse social cost arising
from the enforcement of laws. Errors in decision making cannot be eliminated
because of the complexities involved in distinguishing pro-competitive and
anti-competitive. One component of the social cost is the transaction cost
involved in the decision making. As with those assumptions of errors, if the
enforcement process has some inbuilt defects like the disproportionate spread

41 Paul L. Joskow, Transaction Cost Economics, Antitrust Rules, and Remedies 18(1) Journal
of Law, Economics, & Organization 95 (Apr., 2002)
42 Jonathan B. Baker, “Taking the Error Out of 'Error Cost' Analysis: What's Wrong with
Antitrust's Right” 80(1) ANTITRUST LAW JOURNAL (2015) available at
<https://digitalcommons.wcl.american.edu/facsch_lawrev/1356/> accessed on March 10,
2021.

43 Yannis Katsoulacos & David Ulph, 2014. "Legal Uncertainty, Competition Law Enforcement
Procedures and Optimal Penalties," Discussion Paper Series, School of Economics and
Finance 201410, School of Economics and Finance, University of St Andrews.

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of law, delay in the process, lack of procedural fairness, inconsistent remedies
and mechanical decision-making in imposing penalties that may enhance
social costs of enforcing the law. An assessment of competition authorities’
performance on the procedural aspect can shed light on these defects and
prevent the additional adverse cost.

Further, even if there is an error-free decision, the inherent procedural defects

in the decision making may adversely affect the effectiveness of an
appropriate decision. Optimal rules can reduce the transaction cost and
minimise the “error costs” and resultant social costs. However, this would
require identifying those errors in the enforcement structure, which are
controllable by the human agency, and can minimise the costs. It must be
noted that, not just in an erroneous decision, error’s increasing transaction
costs may also render an appropriate decision ineffective, affecting the
competition law’s goals.

1.3.2 Research Approach

Theoretically, as per Baldwin (2012), assessment of the agencies

performance can be evaluated on the scale of (1) Inputs (human resources
devoted to enforcement, number of information filed and other resources
devoted to the awareness of law); (2) Processes (adherence to the
requirement of procedural fairness and other laws, policies, or guidelines); (3)
Output (measure the extent of compliance and non-compliance in terms of the
number of matters disposed of by agency); and (4) Outcomes (impact of the
regulatory system towards the fulfilment of goals for which the law constitutes
such an agency).44 However, assessing outcomes poses a practical challenge
because of multiple unknown factors that may affect the objectives, which may
arise from lack of coordination in agency, political and social factors, and
varying methods of data collection and processing. Assessment will provide
the status of performance, modification in enforcement, and regulatory
approach towards law compliance. Modifications investigate the adjustments

44 ROBERT BALDWIN ET AL, UNDERSTANDING REGULATIONS (2nd Ed., OUP, 2012).

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required in institutional structure, detection methods, response, and
assessment criteria. Broadly, it encompasses the change required to enforce
the law to ensure compliance and achieve the law’s stated goals.45 He further
suggested the sensitivity of regulatory bodies toward their performance and
developed a process for evaluating their present enforcement system and
calculating the undesirable activity escaping from the present structure.46

Kovacic (2009) presented a simple input and outcome model for the
competition authority but highlighted the difficulty in measuring the outcome.
The most common evaluation method is to measure various activities like the
total number of cases filed, investigations undertaken, inquiries conducted,
advocacy initiatives, and research studies. However, none of these assesses
the outcome or impact of the activity. In measuring institutional performance,
it is appropriate to keep cognisance of these difficulties.47 Later, Kovacic
(2012) stated that the proper measure of enforcement of competition law is not
in its output of cases, but whether competition authority has shown the ability
to solve competition problems and achieve enforcement goals, i.e., consumer
welfare and choice. This ability goes to the very heart of the conceptions about
competition authorities’ role and how its effectiveness be measured.48 Sokol
(2010), drawing an analogy from the restaurant-style consumer survey,
focuses on assessing the quality of enforcement and not looking at numbers
generated by the competition agency’s performance. He proposes a consumer
survey to understand the regulator’s subjective assessment and provides a
set of questions for determining the rank on various issues. The evaluation
should be based on a few objective metrics like budget-to-staff ratio, agency

45 Ibid

46 Ibid

47 William E. Kovacic, “Rating the Competition Agencies: What constitutes Good

Performance?” 16(4) GEO. MASON LAW REVIEW (2009).

48 William Kovacic, “The Institution of Antitrust Law: How Structures Shapes the Substance”,
110 MICHIGAN LAW REVIEW 1019 (2012).

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age, and agency activity in numbers.49 Giligan et al. (2016) observe growing
tendencies to utilise the enforcement reports in numbers to provide an
organisational overview of enforcement activity through orders’ output.
Though the same is considered an appropriate step for increasing
transparency and accountability, the above aim is defeated because of a lack
of explanatory information and ambiguity in the data elements.50 It is important
to note that CCI also follows a similar approach of reporting the performance
in numbers, to which CLRC (2019) has recommended preparing the structured
reports with performance targets which could serve as a metric to measure
and review CCI’s performance and effectiveness.51 However, the CLRC
provided no method in this regard, and the whole suggestion looks vague in
the absence of defined parameters for such performance assessment.

Iacobucci and Tribelcock (2019), being sceptical about the strength of

quantitative measures of agency performance, suggests that given the
substantial divergence in agency mandates, institutional structures; the
decision-making process; and accountability regimes, it is quite difficult to
generate the comparative rating or ranking across the jurisdiction. An optimal
competition law enforcement regime will have to be studied in its setting, and
efforts to compare may induce convergence on a uniform set of institutional
norms, which would be undesirable.52 In assessing the competition law
framework, Laffont (1999) warned of replicating the western system of
competition law analysis because of hazards associated with transition

49 D. Daniel Sokol, “Designing Antitrust Agencies for More Effective Outcomes: What Antitrust
Can Learn from Restaurant Guides” 4 LOYALA UNIVERSITY CHICAGO LAW JOURNAL 573
(2010)

50 George Gilligan, Jasper Hedges, Paul Ali, Helen Louise Bird, Andrew Godwin and Ian
Ramsay, “Regulating by Numbers: The Trend Towards Increasing Empiricism in
Enforcement Reporting by Financial Regulators” 9(4) LAW AND FINANCIAL MARKETS REVIEW
260 (2016).

51 Ministry of Corporate Affairs (Government of India), Competition Law Reform Committee

Report (2020).

52 Edward M. Iacobucci and Micheal J. Trebilcock, “Evaluating the Performance of Competition

Agencies” in DESIGNING EFFECTIVE ENFORCEMENT SYSTEM (Damein Gerard and Ioannis
Lianos, eds., 2019).

~ 15 ~
economies. He recommended countries to give greater importance to the
institutions involved in enforcing the competition law. As in the absence of
institutional resources for auditing, monitoring and enforcement, competition
may be an effective substitute for rent-seeking behaviour.53 Similar results
were found by Nicholson (2004) by quantifying the competition law features
available in the statute books and drawing an Antitrust Law Index. It was found
that countries with high index values do not represent the strongest antitrust
laws. Adopting antitrust laws appeared to be related to supranational bodies’
guidelines, like European Union.54

Schinkel and Tuinstra (2006),55 based on their collusion model, highlight that
in imperfect enforcement, the incidence of anti-competitive behaviour
increases and instead of deterring harmful conduct, enforcement stifles
genuine competition. They argued that when the investigation is inexpensive
and efficient, the agency should endeavour to install a perfectly competitive
market structure. However, when the same is expensive and inefficient,
competition authority should avoid enforcement and accept some costs. They
even went to the extent that where competition law enforcement is prone to
greater errors, it is socially desirable to have a very lenient legal regime or no
antitrust authority. Their study also made a case for the competition authority
with a limited budget to prioritise the enforcement area and target those
traditional industries dominated by stable anti-competitive conduct. On the
other hand, those in high pace industries with rapid innovation can be treated
leniently.

Kronthaler (2007), using panel estimation techniques, examines the factors

contributing to the effective implementation of competition with a sample of
few recent national competition laws enacted immediately before 2007. The

53 Jean-Jacques Laffont, “Competition, Information and Development” in THE INTERNATIONAL

BANK FOR RECONSTRUCTION AND DEVELOPMENT, THE WORLD BANK, 237 (1999).

54 Micheal W Nicholson, “Quantifying Antitrust Regimes”, Bureau of Economics, FTC (2007).

Available at <https://www.ftc.gov/reports/quantifying-antitrust-regimes> accessed on
March 20, 2021.

55 Maarten Pieter Schinkel and Jan Tuinstra, “Imperfect Competition Law Enforcement”, 24
INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANISATION 1267 (2006).

~ 16 ~
study highlighted that macro-economic factors like economic development are
more relevant for competition law enforcement’s performance in the short run.
However, implementing competition law takes a longer time. Further, the
perceived effectiveness of competition is inversely proportional to the size of
the economy, ceteris paribus, hence, whereby larger countries should focus
on competition law advocacy. The study also cautioned the countries with high
corruption, as the interest group can capture the competition law for their
purpose.56

Keeping these limitations in view, the method of assessing CCI’s performance

over the last decade, the study inquires and assesses certain specific features
in the enforcement of CA and its impact on the performance of CCI. These
features and relevant literature benchmarking or qualifying the variables and
method are discussed hereunder.

1.3.3 Enforcement Model

The process of enforcement of competition law primarily depends on the public

enforcement model. Roach and Trebilcock (1996) state that public law
enforcement is a function of the state, and prescribing an appropriate
enforcement mechanism falls within its legislative power. It is reasonable to
have a public monopoly over law enforcement, as in a welfare state,
individuals should divert their resources from self-protection and self-help to
other productive activities.57 Public enforcement has become a leading law
implementation and enforcement strategy with the introduction of regulatory
bodies.58 As with the growing complexities of the varied transaction, a
specialised and expert regulator for a particular sector is better positioned to

56 Franz Kronthaler, “Effectiveness of Competition Law: A Panel Data Analysis” IWH-

Discussion Paper No. 7/2007 (2007) available at
<https://ideas.repec.org/p/zbw/iwhdps/iwh-7-07.html> accessed on March 21, 2020.

57 Kent Roach and Mitchell J. Trebilcock, “Private Enforcement of Competition Laws”, 34(3)
OSGOODE HALL LAW JOURNAL 461 (1996).

58 For Example: Security and Exchange Board of India, Central Electricity Commission/State
Electricity Commission, Insurance Regulator and Development Authority etc.

~ 17 ~
enforce the law than courts that may lack the expertise required for such
specialised laws.59

However, public enforcement is not the sole model of enforcing laws. Polinsky
(1980) highlighted that private enforcement, as a blended and complementary
mechanism to public enforcement, is well established in law and economics
studies.60 A blended model offers the channels of enforcement either through
state functionaries or through a private individual. This blended model is the
reaction of the government’s failure in enforcing the laws efficiently due to the
risks posed by malfeasance, dereliction of duties, and inaction on public
agencies. Gerber (2007) states that public enforcement may bring an anti-
competitive activity to an end but cannot afford to restitute the victims’ loss.
Consequently, some jurisdiction blends private enforcement mechanism
within or in addition to their public enforcement model of competition law.61

Public authorities cannot be projected to do all or even most of the required

enforcement activities for various reasons, including budgetary constraints
(Stewart and Sunstein, 1982),62 lack of awareness of industry environments
(Lande and Davis, 2008),63 and government decisions are at times politically
driven (CEPS, 2007).64 In their critique of public enforcement, Becker and

59 Supra note 57 (Roach & Trebilcock).

60 A.M. Polinsky, “Private versus Public Enforcement of Fines” 9 JOURNAL OF LEGAL

STUDIES105 (1980).
61 David J. Gerber, “Private Enforcement of Competition Law: A Comparative Perspective”
(Essay) in THE ENFORCEMENT OF COMPETITION LAW IN EUROPE (Thomas M. J. Mollers and
Andreas Heinemann, Cambridge University Press, 2007).

62 Richard B. Stewart & Cass R. Sunstein, “Public Programs and Private Rights” 95 HARVARD
LAW REVIEW 1193, 1214 (1982).

63 Robert H. Lande and Joshua P. Davis, “Benefits from Private Antitrust Enforcement: An
Analysis of Forty Cases”, 42 UNIVERSITY OF SAN FRANCISCO LAW REVIEW 879 (2008).

64 Centre for European Policy Studies (CEPS), “Making Antitrust Damages actions more
Effective in EU: Welfare Impact and Potential Scenarios” 56 (2007) available at
<http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_stud
y.pdf> accessed on 15 January 2015; See also, Kenneth W. Dam, “Class Actions:
Efficiency, Compensation, Deterrence, and Conflict of Interest”, 4 J. LEGAL STUD 47 (1975)
- “Influence of political process in determination of budget impact the rate of enforcement
to be economically optimal”.

~ 18 ~
Stigler (1974) have stated that, as the expected gains of a public enforcer
(fixed salaries) from the enforcement are lower than violators expected loss,
they may be more vulnerable to corruption diluting the enforcement process.65
Landes and Posner (1975) have also highlighted the problem of discretionary
non-enforcement even in the absence of corruption, which is usually facilitated
by the law’s open-textured language.66 Wils (2009), in furtherance to this,
states that, even though the private individual may report violations,
competition authority is not obliged to conduct an inquiry on every such
information. Rather, because of discretion vested in them, a choice may be
made by the regulator.67 There are chances of corruption even in this exercise
of choice as well.

Lande and Davis (2008) believe that the individuals’ private enforcement helps
avoid the resource-constraint the public authorities face in enforcing the law
as the cost burden shifts to the individual to prosecute and prove.68 However,
earlier to them, Martii and Revesti (2004) found that private enforcement’s
effectiveness is not only because it discharges government budget constraints
but also because individuals are more immediate to the harm and possess
violator’s identity.69 The remedies pursued in private enforcement are in the
form of restitution. The action here essentially is for claiming
damages/compensation, which has two-fold purposes (Wils, 2009);70 firstly,
being restitutory puts the person in the equivalent situation as if the anti-

65 Gary S. Becker and George J. Stigler, “Law Enforcement, Malfeasance, and Compensation
of Enforcers”, 3 J. LEGAL STUD. 1 (1974).

66 William M. Landes and Richard A. Posner, “The Private Enforcement of Law”, 4 J. LEGAL
STUD. 1, 39 (1975) (discussing importance of “discretionary non-enforcement”).

67 Wouter P.J. Wils, “The Relationship between Public Antitrust Enforcement and Private
Action for Damages”, 32(1) WORLD COMPETITION 3, 28 (2009).

68 Robert H. Lande and Joshua P. Davis, “Benefits from Private Antitrust Enforcement: An
Analysis of Forty Cases”, 42 UNIVERSITY OF SAN FRANCISCO LAW REVIEW 879, 906 (2008).

69 Gianmaria Martini and Cinzia Rovesti, “Antitrust Policy and Price Collusion: Public Agencies
vs Delegation” 70 RECHERCHES ECONOMIQUES DE LOUVAIN 127 (2004).

70 Pfizer, Inc. v Government of India, 434 U.S. 308: The US Supreme Court has said the both
compensation and deterrence are legitimate goals of private treble damages actions.

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competitive conduct had not taken place. Secondly, when such victims of anti-
competitive injury possess knowledge of violators identity, allowing such
compensation actions will encourage victims to initiate legal proceedings and
thus harness the information they have for law enforcement.71 Such a
mechanism encourages people to reveal anti-competitive conduct because of
the economic incentives involved. Encouraging victims to report anti-
competitive conduct increases the deterrence amongst infringers due to a
higher probability of being reported for anti-competitive conduct.72 This dual
control helps in generating a favourable competition culture, which is valuable
for the consumer.73 It is here that the restitutory and preventive functions of
the competition law are complementary to each other. Huschelrath and Peyer
(2013) investigated the relationship between private and public enforcement
using the cost-benefit analysis of detection and prosecution in different
conduct types in European competition law. Their analysis suggests that
conduct relating to the horizontal agreement and abuse of dominant power,
public enforcement plays a leading role, and private parties usually bring
follow-on action cases. The reason is the difficulty in detecting horizontal
agreement, and in case of abuse of dominant power, the victim does not
directly deal with the violator. In vertical agreement cases, private informants

71 S. Shavell & A. M. Polinsky, “The Theory of Public Enforcement of Law” in HANDBOOK OF

LAW AND ECONOMICS, VOL. 1 (A. Mitchell Polinsky and Steven Shavell eds., 2007) Available
at <http://www.law.harvard.edu/faculty/shavell/pdf/07-Polinsky-Shavell-
Public%20Enforcement%20of%20Law-Hdbk%20LE.pdf> accessed on 15 January 2015

72Ballarpur Industries v. Sinaraman, [1996] 87 CompCas 159: MRTP Commission observed

that, Section 12B (compensation provision) of the MRTP Act, 1969 has been provided by
the legislature by way of remedy and with a view to providing deterrence to prohibited trade
practices, even where they arise out of contractual transaction.

73 Steven Shavell, “The Fundamental Divergence Between the Private and the Social Motive
to Use the Legal System”, 26 J. LEGAL STUD. 575 (1997); See also, Matthew C.
Stephenson, “Public Regulation of Private Enforcement: The case of expanding the Role
of Administrative Agencies” 91(1) VIRGINIA LAW REVIEW 93, 98 (2005) - “Many Federal
Statutes expressly authorize private remedies for statutory violations. While the motivation
for creating many of these rights of actions has been compensatory, private suits by the
victims of statutory violations often serve an important public function as well, in that the
threat of private enforcement can deter potential violators.”

~ 20 ~
are directly involved through the contractual relationships with violators and
have a vital role in disclosing the anti-competitive conduct.74

On the contrary, Lande and Posner (1975) proposed that if the level of fines
or damages is higher than the illegal activity’s social costs, this will attract
higher than optimal numbers of individuals seeking to collect such fines or
damages by being private enforcers of the law. In such a scenario, these
individuals will devote their resources to detection and prosecution, resulting
in the probability of beyond the low-level detection and could cause over-
enforcement and deterrence.75 Bierschbach and Stein (2005) argue on similar
lines against private enforcement and public enforcement, resulting in over-
enforcement of law.76 A higher penalty (compensation) will encourage
monetarily motivated private enforcers to dedicate more resources in
enforcement than what is required for detecting and punishing violators at a
socially optimal level.

Comparative analysis of enforcement mechanisms across various jurisdictions

suggests that public and private enforcement are used parallel and as a
distinct mode of competition law enforcement complementing each other.
Jones (2016) finds that the USA’s Antitrust Laws enforcement is dominated by
private enforcement actions, with the antitrust suits making up approximately
96% of the antitrust litigation being initiated by a private person, and the
remaining 6% is only through public enforcement.77 “Action for Treble damage”
(a popular name for private enforcement) in the USA has facilitated the

74 Kai Hüschelrath and Sebastian Peyer, “Public and Private Enforcement of Competition Law
- A Differentiated Approach” ZEW - Centre for European Economic Research Discussion
Paper No. 29 (2013). Available at <https://ssrn.com/abstract=2278839> accessed on
March 21, 2021.

75 W.M. Lande and R.A. Posner, “The Private Enforcement of Law”, 4 JOURNAL OF LEGAL
STUDIES 1 (1975).

76 For an argument outlining the ways in which procedural and evidentiary structures may
prevent overenforcement: See, Richard A. Bierschbach and Alex Stein,
“Overenforcement”, 93 GEO. L.J. 1743 (2005) as cited in Margret H. Lemos and Max
Mizner, “For Profit Public Enforcement”, 127(3) HARVARD LAW REVIEW 854, 860 (2014).

77 Alison Jones, “Private Enforcement of EU Competition Law: A Comparison with, and

Lessons from, the US” in HARMONISING EU COMPETITION LITIGATION: THE NEW DIRECTIVE
AND BEYOND (M Bergstrom, M Lacovides, M Strand eds., Hart Publishing, 2016).

~ 21 ~
enforcement of the antitrust laws,78 brought about effective deterrence of
future violation and provided relief to those injured by anti-competitive conduct
(Lande and Joshua, 2011).79 Recently, the EU has appreciated the relevance
of private action in the enforcement mechanism and recognised the
individual’s right to claim compensation for the conduct that limits or distorts
the competition.80 Private enforcement is gaining momentum in EU national
competition laws, with the recent Antitrust Damages Directive81 provides an
organised approach for realising the completion law’s full effectiveness. EU
Courts have established that Articles 101 and 102 of TFEU directly apply and
can be relied upon by or against private individuals in national courts’ actions
(Jones and Sufrin, 2011).82 Wells (2016) finds a similar relevance of private
enforcement in Australia and presented optimistic signs where 26% of cases
being contributed by the private plaintiff during 2000-2014.83 As seen, most
countries have adopted a mixed Public and Private Enforcement, which
complements each other.

78 See, §4 of the Clayton Act 1914 (USA); Treble Damage is three times multiple of actual loss
or injury cased. See also, John M. Connor & Robert H. Lande, “Not Treble Damages; Cartel
Recoveries Are Mostly Less than Single Damages”, 100 IOWA L. REV. 1997 (2015) –based
on quantitative analysis of 71 cartel cases arguing that in actual the recoveries are not
three times to the loss or injury, and in private litigation rarely one achieves even double
the loss, mostly the compensation is below the initial loss.

79 See, Robert H. Lande and Joshua P. Davis, “Comparative Deterrence from Private
Enforcement and Criminal Enforcement of the U. S. Antitrust Law”, BIRMINGHAM YOUNG
UNIVERSITY LAW REVIEW 315 (2011).

80 See, Courage v. Crehan, Case C-453/99 [ECJ]; See also, Manfredi et al. v. Lloyd Adriatico
Assicurazioni Spa e Assitalia Spa, C- 295/04 [ECJ].

81 See, “Directive 2014/104/EU of the European Parliament and of the Council of 26 November
2014 on certain rules governing actions for damages under national law for infringements
of the competition law provisions of the Member States and of the European Union Text
with EEA relevance” (Adopted on November 26, 2014).

82ALISON JONES & BRENDA SUFRIN, EU COMPETITION LAW 105 (4th Ed., Oxford University Press,
New York, 2011).

83 Caron Beaton Wells, “Private Enforcement of Competition in Australia – Inching Forwards?”

39 MELBOURNE UNIVERSITY LAW REVIEW 681 (2016).

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1.3.4 Enforcement Institution

Ogus (2004) stresses that the regulatory system requires an appropriate

institution to achieve goals in which regulations are brought into force.84 The
institutional structure demonstrates the policy outcomes, and thus if the
institution implementing the law is defective, there are higher chances of
diminishing outcomes. Thus, the structure of enforcement institutions and
processes must ensure compliance with the law and realise the intended
goals. One of the prerequisites for evaluating the enforcement is to identify the
goals of the law. As Robert Bork (1978) stated, “antitrust policy cannot be
made rationale until we are able to give a firm answer to one question: what is
the point of the law – what are its goal? Everything else follows from the
answer we give…”.85 The generally accepted goal of competition law is
understood as “consumer welfare”.86 However, the scholars of Chicago school
has advanced economic efficiency as a single goal of competition law. 87 This
debate does not stop here, and further development is made in the European
Union to consider ‘public interest’ instead of consumer welfare as a goal of

84 ANOTHONY OGUS, REGULATIONS: LEGAL FORM AND ECONOMIC THEORY 99 (Hart Publishing,
2004): Creation of institution and allocation of powers takes place at horizontal level i.e.
the extent to which authority should be conferred and vertical i.e. degree of control
exercised over such institution.

85 ROBERT BORK ,THE ANTITRUST PARADO: A POLICY AT WAR WITH ITSELF, Basic Books (1978).

86 Herbert J.Hovenkamp, “Distributive Justice and Consumer Welfare in Antitrust”, FACULTY

SCHOLARSHIP AT PENN LAW (2013). Available at
<https://scholarship.law.upenn.edu/faculty_scholarship/1868> accessed on March 25,
2021; J.B. Kirkwood, and R.H. Lande, “The Fundamental Goal of Antitrust: Protecting
Consumers, Not Increasing Efficiency”, 84(1) NOTRE DAME LAW REVIEW (2008); GEORGIO
MONTI, EC COMPETITION LAW 46 – 48 (Cambridge University Press, 2007); Ibid (BORK) –
“suggested that the texts of the antitrust statutes, the legislative intent, or the requirements
of proper judicial behaviour, refers to only a single goal of consumer welfare in the
interpretation of the antitrust laws); See also, Herbert J. Hovenkemp, “Is Antitrust’s
Consumer Welfare Principle Imperiled?” 45(1) THE JOURNAL OF CORPORATION LAW 101
(2019) - defended the consumer welfare principle and acknowledges that antitrust could
do better than it has protecting consumer interests.

87 Oliver E. Williamson, “Economies as an Antitrust Defense: The Welfare Trade-Offs”, 58

AM.ECON. REV. 18 (1968); Joseph Brodley, “The Economic Goals of Antitrust: Efficiency,
Consumer Welfare and Technological Progress”, 62 N.Y.U.L REVIEW 1020 (1987).

~ 23 ~
competition law (Townley, 2011).88 Every jurisdiction has its specific set of
goals to be achieved by implementing competition law as per its democratic
setting. For instance, South African Competition Law identifies the problem of
apartheid in economic activity, and thus, equal participation and fair
distribution of the resource is one of the goals.89 For Chinese Competition Law,
the development of the “Socialist Market Economy” is one of the stated
purposes.90 Similarly, for European Competition Law, apart from the
competition goals (efficiency and consumer welfare), there is an ‘integration
goal’ for a single European market (Kirchner, 2007).91 The goals of competition
policy in India is understood as maximising economic efficiency and promoting
total welfare.92

However, with these divergent views, this study undertakes a functional

comparison approach for understanding goals. Bork (1978) studied the goals
with the help of legislative intent and surrounding circumstances, which can
tell us about the purpose of enacting a law. However, the same does not
capture the functional goals, which the regulatory enforcement is achieving.
Blair and Sokol (2012) studied the goals considering the highest courts’
general guidance, and the application of the same is left to the lower court.
They found divergence in courts’ approach in analysing and solving
competition law problems, and the usual trade-off between efficiency and

88 Christopher Townley, “Which goals count in Article 101 TFEU? Public Policy and Its
Discontents”, 9 EUROPEAN COMPETITION LAW REVIEW (2011) available at
<http://ssrn.com/abstract=1894837> accessed on January 20, 2017.

89 Preamble, Competition Act, 1998 (South Africa).

90 Article 1, Anti-Monopoly Act, 2008 (China)

91 Christian Kirchner, “Goals of Antitrust and Competition Law Revisited” in THE MORE
ECONOMIC APPROACH TO EUROPEAN COMPETITION LAW 7 (Dieter Schmidtchen, Max Albert,
and Stefan Voigt ed., Conferences on New Political Economy, 2007); See also Consten
and Grundig [1966] ECR 299 – decision shows market integration taking priority over
economic efficiency.

92 REPORT OF HIGH-LEVEL COMMITTEE OF ON COMPETITION POLICY AND LAW, (1999) available

at
<https://theindiancompetitionlaw.files.wordpress.com/2013/02/report_of_high_level_com
mittee_on_competition_policy_law_svs_raghavan_committee.pdf> accessed on October
23, 2017.

~ 24 ~
consumer welfare makes the application differentiated. This suggests that
actual goals in decisional practice may differ from the law’s objective statement
of its goals. This study compares objective goals as discovered from the
legislative intent and compares the same with the CCI orders, i.e., functional
goals, to evaluate the status of goals intended to be achieved by enforcement
exercise.

Conferment of jurisdiction on any institution is done with a specific purpose to

exercise authority on the conducts intended to be regulated by law. Designing
an institution for regulating competition depends upon what is expected from
the authority to achieve from the competition. Crane (2011) supports this idea
and states that the authority structure determines the law’s substance.93
Trebilcock and Iacobucci (2010) study the structure of competition authorities
across jurisdictions, which is modelled in a judicial or an administrative
model.94 Under the Judicial model, regulators have powers to investigate and
take administrative actions, but they must approach courts for substantive
punishment.95 Trebilcock and Iacobucci (2010)96 provided three fundamental
institutional designs for the exercise of competition law authority - (i) Bifurcated
Judicial Model; (ii) Bifurcated Agency Model; and (iii) Integrated Agency
Model.

93 DANIEL CRANE, THE INSTITUTIONAL STRUCTURE OF ANTITRUST ENFORCEMENT (OUP, 2011).

94 Michael Trebilcock and Edward M. Iacobucci, “Designing Competition Law Institutions:

Values, Structure and Mandate”, 41(3) LOYALA UNIVERSITY CHICAGO LAW JOURNAL 455
(2010).

95 HOVENKAMP, HERBERT, FEDERAL ANTITRUST POLICY: THE LAW OF COMPETITION AND ITS
PRACTICE (2nd Ed. West Publishing Co., USA, 1999).

96 Supra note 94 (Trebilcock and Iacobucci)

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Countries like Australia (till 2010)97, the US, Canada (till 1986)98 adopted a
‘bifurcated judicial model’, wherein the function of adjudication is vested in the
judiciary, and competition authorities are responsible for investigation and
prosecution. In contrast, the ‘bifurcated agency model’ provides a constitution
of a tribunal/commission to exercise competition law authority with a separate
wing of investigation authority. The European Commission and various
national competition authorities in the EU are designed on this model.
However, even in this model, certain powers are vested in national courts to
exercise jurisdiction over matters related to compensation for damages
caused due to competition law violation. One aspect is clear here since private
enforcement involves adjudication on liability and quantum of compensation,
it is essentially like settling a dispute between two parties. For this reason, the
function of adjudication is entrusted to the judicial authority. In an integrated
agency model, the investigative and adjudicatory power is vested in a single
agency. Competition authorities of India and South Africa are based on this
model.

All models afford some advantages and disadvantages but adopting

appropriate models depends on the country-specific goals to be achieved by
enforcing competition law. Following features can be adduced for each model
as given in Table 1.99

97 Earlier under the Restrictive Trade Practices, Act 1971(Australia) there were different
agencies, however with the Enactment of Competition and Consumer Act 2010 (Australia)
the Australian Competition and Consumer Commission was established.

98 Since 1986 Competition Bureau Canada is enforcing competition law: See,

<https://fightspam.gc.ca/eic/site/cb-bc.nsf/eng/04427.html> accessed on January 10,
2019.

99 Researchers Analysis of the Trebilcock and Iacobucci’s paper. Supra note 94.

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 Table 1: Features of three models of Institutional Structure

Bifurcated Judicial Bifurcated Agency Integrated Agency

Feature Criteria
Model Model Model

Independence High accountability High independence

High independence;
v. due to judicial with balanced
High Accountability
Accountability appeal accountability

Expertise High Level of

Low expertise and Balanced expertise
v. Expertise and
detachment and detachment
Detachment attachment
High transparency;
Transparency Balanced
but can maintain
v. transparency and High Confidentiality
balance with
Confidentiality confidentiality
confidentiality
High Administrative
Administrative Balance
Efficiency; Due
Efficiency Administrative
High Due Process process
v. efficiency and due
occasionally side-
Due Process process
lined
High predictability:
Predictability Balanced
Low Flexibility; low but decisional
v. predictability and
predictability practice creates a
Flexibility Flexibility
hurdle

Further, Kovacic and Hyman (2012) observed 100that while designing an

appropriate competition authority factors like - leadership structure, multi-
member board or unitary executive, stand-alone agency or subsidiary, single-
purpose or multipurpose are also considered. The country’s legal system plays
a prominent role in this design depending upon the extent of separation of
power, the delegation of executive power permitted, and the judiciary’s
independence. Further, which enforcement mechanism must be adopted, and
which type of institutional model depends on the legislature’s intention based
on objectives to be achieved from a particular law.

100 William E. Kovacic and David A. Hyman, “Competition Agency Design: What's on the
Menu?” GWU LEGAL STUDIES RESEARCH PAPER NO. 2012-135 (2012). Available at
<https://ssrn.com/abstract=2179279> accessed on March 20, 2015: Discussed two more
features - “Autonomy v. Accountability”; and “One or Many Enforcement
Agencies/Agents?” which was covered in Trebilcock and Iacobucci (2010).

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The institutional structure also considers the agency’s geographical spread–
i.e., whether the agency is centralised at one place or decentralised? The
reach of law with the agency’s location also varies. A decentralised structure
of enforcing agency has proximity to the market, which the agency is trying to
regulate.101 Lockwood (2002) furthers decentralised enforcement in a political
economy, which helps law enforcement in each region according to regional
citizens’ preferences, neglecting inter-jurisdictional externalities.102 OECD
(2009) recognises the benefits of geographical deregulation with targeted
regulation addressing the unevenness of competitive circumstances between
various geographic regions.103 Such tailored geographical deregulation may
impose additional regulation concerning specific regional preferences.
However, the OECD also cautions about the cost associated with such
deregulation due to a range of problems, such as unclear sub-national
segmentation, uncertain effect on competition and investment, increased
burden on regulators and operators, and impact on universal services.
Nicolaides (2012) identifies the cost of decentralisation and centralisation and
highlights that decentralisation lowers the cost of enforcement as the
authorities have better knowledge of their markets. However, he also
recognises a cost of establishing new authorities, and if such an establishment
is costlier than knowledge, such decentralisation may be inappropriate. There
is also a cost of coordination, as when different authorities have decision-
making power, there will be negative externalities.104 This suggests that

101 E. Berry Hawk and L. Larain Laudati, “Antitrust Federalism in the United States and
Decentralization of Competition Law Enforcement in European Union: A Comparison”,
20(1) FORDHAM INTERNATIONAL LAW JOURNAL 18(1996); Micheal J. Frese, “Decentralised
Enforcement of EU Competition Law and the Institutional Autonomy of the Member states:
A Case Commentary”, 48 COMMON LAW MARKET REVIEW (2011) available at
<https://ssrn.com/abstract=1780825> accessed on March 30, 2017.

102 Ben Lockwood, “Distributive Politics and the Costs of Centralization”, 69(2) THE REVIEW OF
ECONOMIC STUDIES 313 (2002).

103 OECD, “Geographically Segmented Regulation for Telecommunications”, OECD Digital

Economy Papers, No. 173, OECD Publishing, Paris (2010) available at <https://www.oecd-
ilibrary.org/science-and-technology/geographically-segmented-regulation-for-
telecommunications_5km4k7mggw7f-en> accessed on April 1, 2021.

104 Phedon Nicolaides, “Development of a System for Decentralised Enforcement of EC

Competition Policy” INTERNOMICS 41 – 51 (Jan./Feb. 2012).

~ 28 ~
neither complete centralisation nor complete decentralisation should be an
appropriate strategy for enforcement. Rather balanced policy and identification
of geographical areas with coordination and decision making will bring a better
decentralisation effect. CLRC (2019) observes that a centralised location of
the regulator may be prudent in nascent years to maintain consistency and
coherency, but a limited local presence may also hinder accessibility, reach
and awareness. Committee recommended the geographical decentralisation
of CCI’s offices for a continued proactive role in promoting and developing
competition, recognising increased accessibility and reduced cost for the
parties involved in proceedings.105 The present recommendation is based on
a qualitative assessment of the CCI’s role. However, it does not capture any
quantitative data on the reach of competition law regarding the geographical
location of the parties, anti-competitive conduct, and advocacy carried out by
CCI.

Though there is a mixed approach on geographical decentralisation of the

regulatory authority, in India, we can see regulators like the Securities and
Exchange Board of India, Reserve Bank of India and Insurance Regulatory
and Development Authority has decentralised their offices for the better reach
to the subjects of regulations and facilitating access for grievances. The study
is required to understand whether there are any grounds for decentralising CCI
for its better reach or the existing system can capture all anti-competitive
activity and advocacy throughout the territory of India. There is no prior
empirical study of CCI and CLRC (2019), as stated above, was based on
qualitative assessment. Robinson (2013) studied the Supreme Court of India’s
workload by quantifying the data on distance from where cases are instituted
from the docket of 1993–2011. His findings suggested that Supreme Court’s
workload is disproportionately distributed, skewed towards places near Delhi
and creating a hurdle in access to justice. The study advanced the case of
splitting the Supreme Court into benches across the country and making
geographical inclusivity with greater access. This study evaluates the

105 Ministry of Corporate Affairs (Government of India), Competition Law Reform Committee
Report (2020).

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geographical source of “incoming cases” and “outgoing advocacy
programmes” to understand and appreciate the need for the decentralisation
of CCI.

Besides the geographical segmentation, there is also a need for human

resource strength to respond to anti-competitive conduct. Lipsky and Tritell
(2015) identify the best practices for the antitrust procedure in the International
Task Force report. After examining the best practices on various aspects of
enforcement, the report concluded with three important best practices
affecting overall enforcement–

“(i) The Officials involved in all steps of an antitrust proceeding should

possess sufficient expertise in competition law, economics and/or other
relevant disciplines to enable them to conduct their duties in a disinterested,
efficient and accurate fashion. (ii) All rules and practices governing
proceedings—procedure, evidence, review, etc.— should be clearly
disclosed and made publicly accessible in advance of proceedings. Any
exceptions should be proportional and based on specifically identified
objective and legitimate reasons. (iii). Officials should provide for an effective
system to prevent unnecessary delay at any stage in proceedings.” 106

Studies have pointed out the relation between input and output of enforcement
to establish the judicial process’s efficiency. Chapparro and Jimenez (1996)
studied the measurement of technical efficiency of administrative authority by
using staff as the input and number of cases disposed of as the output and
find that proper proportion of these inputs and output could reduce the delays
in the decision making and thereby increase efficiency in decision making.107

Similarly, Deyneli (2012) studied efficiency in two stages. At the first stage, the
number of judges and staff as input and the cases disposed as the out. In the
second stage, the salaries of judges and staff, their training and the number of

106 Abbott B. Lipsky and Randolph Tritell, “Best Practices for Antitrust Procedures: The Section
of Antitrust Law Offers its Model” THE ANTITRUST SOURCE (2015) available at
<https://www.americanbar.org/content/dam/aba/publishing/antitrust_source/dec15_lipsky
_tritell_12_11f.authcheckdam.pdf> accessed on March 10, 2021.

107 Francisco Pedraja-Chaparro and Javier Salinas-Jimenez, “An assessment of the efficiency
of Spanish Courts using DEA, 28(11) APPLIED ECONOMICS 1391 (1996).

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courts were used as regressors to determine judicial efficiency. Their study
highlighted in the increase in judge’s salary significantly impact judicial
efficiency, but the same is not the sole solution for creating efficiencies. 108
Falavigna et al. (2015) observe that most studies on judicial efficiencies are
based on performance in terms of the output of cases while keeping the inputs
equal. However, it also essential to measure the bad output, as any efficiency
assessment cannot disregard the appropriate balance between good and bad
outputs.109

The nature of competition law analysis requires that response should be driven
by relevant economic analysis to address the effect-based harm. As the
decision making in competition law infringement is based on a wide range of
analytical criteria of effect on competition, the statutes are open-ended.110
Katsoulacos et al. (2016) state that economic analysis plays a vital role by
providing analytical tools and models to understand anti-competitive conduct’s
implication by evaluating its welfare implications.111 Broulik (2018) identifies
the two-level interconnected application of economics in competition law. One
is to analyse the deterrent effect of competition law on business conduct, and
the other is to analyse the competitive effect of business conduct on the
competition.112 Froeb et al. (2008) support specialised human resources in
economics to enforce competition law. Their comparative analysis across
various competition law authorities finds that effective functional agency

108 Fatih Deyneli, “Analysis of relationship between efficiency of justice services and salaries
of judges with two-stage DEA method,” 34(3) EUROPEAN JOURNAL OF LAW AND ECONOMICS
477 (2012).

109 G. Falavigna, Roberto Ippoliti, Alessandro Manello and Giovanni B.Ramello, “Judicial
productivity, delay and efficiency: A Directional Distance Function (DDF) approach” 240
(2) European Journal of Operational Research 592 (2015).

110 William E. Kovacic, “The Influence of Economics on Antitrust Law” 30 ECONOMIC INQUIRY
294 (April 1992)

111 Yannis Katsoulacos, Svetlana Avdasheva and Svetlana Golovanova, “Legal Standard and
the role of Economics in Competition Law Enforcement”, 12(2) EUROPEAN COMPETITION
JOURNAL 277 (2016).

112 Jan Broulík, “Two Contexts for Economics in Competition Law: Deterrence Effects and
Competitive Effects” in NEW DEVELOPMENTS IN COMPETITION LAW AND ECONOMICS (Klaus
Mathis & Avishalom Tor, eds., Springer, 2019).

~ 31 ~
should blend horizontal links between legal and economic units.113 Ginsburg
and Fraser (2010) also believe that highly skilled economists must play a vital
and integrated role in enforcing competition law. Economic analysis is required
not only to determine the cases but also to arrange the evidence presented.
Further, such economic analysis aid in the advocacy of competition by the
authorities. Their analysis extends economists’ use to the appellate tribunal
because the authority reviewing the agency’s orders should also keep relevant
economic context for the coherency of judicial reasoning.114

Specialised human resource is an important variable to understand the output

of cases and their quality. Such skilled personnel can effectively investigate
and inquire about the cases while maintaining the quality of the output. This
study assesses CCI’s human resource and their availability to understand the
impact on quality of output measured in terms of time taken and disposal rate.

1.3.5 Enforcement Process

A necessary first step in enforcing any law is to identify apparent violations, for
which law should incorporate appropriate tools for the detection of violations.
Spartling (2000) proposes to create channels of information supply and
incentives to the informant for disclosing information on alleged anti-
competitive conduct.115 Competition authorities can also rely on their initiative
based on market research or studies disclosing the probability of anti-
competitive conduct.116 Usually, the person injured by any conduct will have

113 Luke M. Froeb, Paul A. Pautler and Lars-Hendrik Röller, “The Economics of Organizing
Economists” VANDERBILT LAW AND ECONOMICS RESEARCH PAPER No. 08-18 (July 3, 2008).
available at <https://ssrn.com/abstract=1155237> accessed on December 10, 2019; See
also, Johan Christensen, “The Organization of Professional Expertise in the European
Commission”, 3(1) POLITICS AND GOVERNANCE 13 (2015).

114 Douglas H. Ginsburg and Eric M. Fraser, “The Role of Economic Analysis in Competition
Law” in GETTING THE BALANCE RIGHT: INTELLECTUAL PROPERTY, COMPETITION LAW AND
ECONOMICS IN ASIA (Ian McEwin, ed., Hart Publishing, 2011).

115 Gary R. Spartling, “Detecting and Deterrence: Rewarding Informant for Reporting
Violations”, 69 GEOGRE WASHINGTON LAW REVIEW 798 (2000).

116 Frances Dethmers and Jonathan Blondeel, “EU Enforcement Policy on Abuse of
Dominance: Some Statistics and Facts”, 38(4) EUROPEAN COMPETITION LAW REVIEW 147
(2017).

~ 32 ~
the incentive to report and disclose the violator’s identity as the same will
provide the appropriate remedy to a victim from infringer.117 Thus private
information of violation is always a helpful means for the initiation of the public
enforcement model. Wham (1952) states that the success of private
information lies in the remedies attached to it. For instance, the US allows for
threefold damages to the plaintiff, as the probability of suing is greater if the
expected benefit from the suit is high.118 However, Breit and Elzinga (1974)
delink the remedy and information and call for abolishing private action for
damages. 119Their analysis suggests that such a compensation process
generates perverse incentives and misinformation effect, which leads to
adverse reparation costs on the defendant. When the informant is aware of
the alleged violation and compensation remedy, the consumer/informant
modifies his behaviour to increase the damage and claim higher
compensation.

Further, a private party often supplies information, which is either false or not
grounded in substantial facts, leading to the adverse effect of dedicating
resources to filtering the information. On the contrary, Snyder and Kauper
(1991) find that abolishing private enforcement for compensation would put an
additional burden on antitrust agencies’ detection and resources. Reducing
the incentive of injured parties to provide infringement information will
discourage the informant and resultant deterrent effect.120

Becker (1966) finds that it will be not socially helpful in terms of enforcement
cost if all the enforcement agencies depend on the disclosures made by the

117 Matthew C. Stephenson, “Public Regulation of Private Enforcement: The case of

expanding the Role of Administrative Agencies”, 91(1) VIRGINIA LAW REVIEW 93 (2005) –
“Many Federal Statutes expressly authorize private remedies for statutory violations. While
the motivation for creating many of these rights of actions has been compensatory, private
suits by the victims of statutory violations often serve an important public function as well,
in that the threat of private enforcement can deter potential violators.”

118 Benjamin Wham, “Antitrust Treble-Damage Suits: The Government’s chief Aid in
Enforcement”, 40(12) AMERICAN BAR ASSOCIATION JOURNAL 1061 (1954).

119 William Breit & Kenneth G. Elzinga, “Antitrust Enforcement and Economic Efficiency: The
Uneasy Case for Treble Damages” 17 JOURNAL OF LAW & ECONOMICS 329 (1974).
120 Edward A. Snyder and Thomas E. Kauper, “Misuse of the Antitrust Laws: The Competitor
Plaintiff”, 90(3) MICHIGAN LAW REVIEW 551 (1991).
~ 33 ~
victims of violations. Instead, the appropriate strategy is to increase the
probability of being disclosed by creating a deterrence of reporting and
appropriate sanctions signalling.121 Kaplow and Shavell (1994) further the
encouragement of self-reporting from parties under the scheme of the law.
Such self-reporting directly affects reducing enforcement costs, which can be
realised by inducing the individuals to admit the confession of prohibited
conduct. To accomplish this, the reduction in sanction for admitting one’s act
should be greater than the lower probability of apprehending the person
through investigation.122 The competition law framework adopts leniency
provisions to attract vital information through self-disclosure. Motta and Polo
(2003) evaluate such policies’ structure and conclude that they would be
effective only if open to informants, even after initiating investigations. 123 Firms
decide to take part in a cartel if the net of the expected benefit and cost
(probability of being detected times the penalty) is sufficiently positive. Unless
this payoff is affected negatively during collusion, they have no reason to come
forward and report themselves. This alteration of payoff can be induced once
investigations have been initiated, as the probability of detection increases,
reducing the net payoff.124 Kovacic (2003) proposes the private monitoring
system, where private parties provide information about the alleged cartel
activity. The government will share a percentage from the amount ultimately
recovered as fines from the infringer if the informant cooperates in identifying
and successfully prosecuting a collision.125 Auberta, Rey and Kovacic,

121 Gary Becker, “Crime and Punishment: An Economic Approach”, 76 JOURNAL OF POLITICAL
ECONOMY 169 (1968).

122 Louis Kaplow and Steven Shavell, “Optimal Law Enforcement with Self Reporting
Behaviour”, 102(3) JOURNAL OF POLITICAL ECONOMY 583 (1994).

123 Massimo Motta, and Michele Polo, "Leniency programs and cartel prosecution," 21(3)
INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION 347 (2003).

124 Klein, Gordon Jochem, "Cartel Destabilization and Leniency Programs - Empirical
Evidence" 39(3) ECONOMICS BULLETIN, 1918 (2019).
125 William Kovacic, “Private Participation in the Public Enforcement of Public Laws” at Third
Annual Conference on International and Comparative Competition Law: The Transatlantic
Antitrust Dialogue (2003) available at <https://www.ftc.gov/public-
~ 34 ~
(2006)126 call for moving beyond just leniency and offering bounties for
deviating colluding firms. They argue that individual bounties and leniency are
complementary. The former forces the colluding firm to pay the informed
insider to prevent whistleblowing, but that payment renders the cartel unstable
as the reduced fines now appear more attractive for the firm to deviate. Korea
has adopted this innovative policy of providing individual rewards or bounties
as a tool for creating an adequate incentive to report misbehaviour.127

However, having various channels of information and quality of information are

two different aspects. In their analysis, Beckner and Salop (1999) apply the
“decision theory”128I n antitrust enforcement and establish that better
information reduces the likelihood of factual and judicial error.129 In their
analysis, a multistage process is guided by the court’s information, which leads
to presumption at the initial characterisation and disposition based on the
information. At this initial stage, the court may look for additional low-cost
information to characterise the information to gather complete information to
achieve a full merit determination. If the information is imperfect, there is a high
likelihood of error in decision making. Kwak (2014) also finds similar results
through their model by analysing the deterrence effect of judicial standards
while minimising the related information cost. The judicial standard should
depend upon the conduct’s initial characterisation, i.e., whether the conduct is
anti-competitive or pro-competitive. If the initial characterisation is anti-
competitive, courts should be strict in their approach, while in pro-competitive

statements/2003/05/private-participation-enforcement-public-competition-laws> accessed
on February 20, 2021.

126 Cécile Auberta, Patrick Rey and William E. Kovacic, “The impact of leniency and whistle-
blowing programs on cartels” 24(6) INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION
1241 (2006).

127 Andreas Stephen, “Is Korean Innovation of Individual Informant Rewards is a viable Cartels
detection tool?” CCP CORKING PAPERS SERIES 14-03 (2014) available at
<http://ssrn.com/abstract=2405933> accessed on April 11, 2015.

128 Decision theory sets out a process for making factual determinations and decisions when
information is costly and therefore imperfect.

129 C. Frederick Beckner III and Steven C. Salop, “Decision Theory and Antitrust Rules” 67 (1)
ANTITRUST LAW JOURNAL 41 (1999)

~ 35 ~
conduct, the approach should be liberal. Where the effect of the conduct is
certain, courts can decide the matter based on per se legal or illegal standards.
However, when the effect is uncertain, the authorities require additional
information to be collected, and the standard should be based on the rule of
reason.130

The above studies have pointed out that having multiple sources of information
is optimal for detecting violations. However, there is always a threat associated
with frivolous information and increasing the burden of enforcement agencies.
This study analyses the multiple channels of information supply available in
CA and evaluates the performance of such information in terms of conversion
ratios to assess the quality of information and evaluate the channel.

Once information is received, the next process is to determine the response.

Law confers legal and regulatory tools that are fit for investigation and inquiry.
Law creates adequate instrumentalities for filing charges, presenting evidence
before an adjudicatory tribunal, and pursuing remedies. However, all response
rules should be procedurally fair and follow the principles of due process.131
Forrester (2009) cautions and finds that since the institutional structure largely
followed in most countries is administrative and the fusion of investigative,
adjudicatory and legislative power vested in one integrated agency, there is a
threat to the notion of procedural fairness.132 Wils (2004) identified be three
types of bias “(i) confirmation bias; (ii) hindsight bias and desire to justify past
efforts; and (iii) desire to show a high level of enforcement activity,”133 which

130 Juwon Kwak, “Optimal antitrust Enforcement: Information Cost and Deterrent Effect, 41(2)
EUROPEAN JOURNAL OF LAW AND ECONOMICS 1 (2014).

131 Daniel Zimmer, “Competition Law Enforcement: Administrative versus Judicial systems”,
9th ASCOLA Conference on Procedural Fairness in Competition Proceedings (Warsaw
2014) available at <https://www.ascola-conference-
2014.wz.uw.edu.pl/conference_papers/Zimmer_Competititon_law_enforcement.pdf>
accessed on April 20, 2015.

132 Ian Forrester, “Due Process in EC Competition Cases: A Distinguished Institution with
Flawed Procedures”, 34 EUROPEAN LAW REVIEW 817 (2009).

133 Wouter P.J. Wils, “The Combination of the Investigative and Prosecutorial Function and
the Adjudicative Function in EC Antitrust Enforcement: A Legal and Economic Analysis”,
27(2) WORLD COMPETITION 201 (2004).

~ 36 ~
may creep into the response of regulator when an integrated agency enforces
the law, resulting in a reduction in procedural fairness standard. It is also
unnecessary that every reported behaviour be investigated and inquired about
by the enforcement agency. The agency can use the settlement/commitment
provisions to dispose of the case. Settlement refers to the disposal of a
suspected antitrust infringement through a specific procedure or policy
application. Some benefit is granted to the party charged with a violation in lieu
of confession or pleading no-contest to the infringement. Wils (2008) suggests
that the settlement procedure can be a useful enforcement tool to gain speedy
disposal and lower the enforcement process’s cost. Settlement processes
facilitate the early disposal and restoration of a competitive market. The further
shorter time frame between the infringement and punishment increases the
punishment’s deterrence effects. There will be no or fewer appeals with a
streamlined process, saving administrative resources, and within a limited
budget, more detection of infringements can be made and dealt with.134 Choné
et al. (2012) find that introduction of a settlement procedure positively affects
consumer surplus.135 Because of early disposal, markets getting restored
quickly, and the competition authority will get the party’s behavioural
commitments.

However, Gautier and Petit (2018) compare the infringement process and
settlement process and find that the settlement procedure does not replicate
the infringement procedure, and sometimes, it may lead to under-
enforcement.136 Their proposition is premised on the case analysis, which
suggests harmful anti-competitive conduct was not eliminated. In other
critiques of settlement procedure, Reiter (2020) states that such a process are
rarely appealed. It reduces the likelihood of creating clarity on the law as no

134 Wouter P. J. Wils, “The Use of Settlements in Public Antitrust Enforcement: Objectives and
Principles” 31 (3) WORLD COMPETITION: LAW AND ECONOMICS REVIEW 335 (2008).

135 Philippe Choné, Saïd Souam and Arnold Vialfont, “Commitments in Antitrust” No 2012-9,
EconomiX Working Papers, University of Paris Nanterre, EconomiX (2012) available at
<https://EconPapers.repec.org/RePEc:drm:wpaper:2012-9> accessed on April 2, 2021.

136 Axel Gautier and Nicolas Petit, “Optimal enforcement of competition policy: The
commitments procedure under uncertainty” 45 Eur J Law Econ 195 (2018).

~ 37 ~
judicial precedents are passed. OECD (2016), though accepting the benefits
of the settlement process, also cautioned about implementing the same in the
legal Framework. It suggested being mindful of using commitment decisions
extensively, as the absence of fines may weaken enforcement’s deterrent
effect. In the absence of an appeal, the commitment decision’s value as a
precedent will be weaker, and the absence of infringement will have a negative
effect on follow-on damages action. Thus, merely putting a higher focus on
procedural economies may not be appropriate as there may be a risk of non-
compliance with due process.137 Sokol and Guzman (2018) highlighting the
importance and relevance of procedural fairness and justice in competition
enforcement and its relationship with informational symmetries. They argue
that a better due process improves informational symmetries between the
competition authority and the parties, gathering better information via
evidence. Also, parties are better informed about the level of risk regarding
antitrust liability. Substantial and vital information avoids various procedural
costs by predicting the case's timing and management. The overall impact of
ensuring better procedural justice is that decisions are less likely to be
challenged on procedural issues, and the scope of appeals are restricted to
substantive issues.138

One of the essential requirements of procedural fairness and due process is

that decision-making should not involve inordinate delays. Ginsburg and
Owings (2015), in their doctrinal analysis, suggests that competition regulators
should follow five aspects of due process–right to produce evidence and
arguments against the company, a hearing before actual decision-maker,
impartial and neutral authority, a decision rendered without inordinate delay,
and a review process by an independent tribunal.139 Inordinate delays are

137OECD, “Commitment Decisions in Antitrust Cases” (2016) available at

<https://www.oecd.org/daf/competition/commitment-decisions-in-antitrust-cases.htm>
accessed on March 1, 2021.

138 D. Sokol and Andrew T. Guzman, “The Case for Global Best Practices in Antitrust
Procedural Fairness” in ANTITRUST PROCEDURAL FAIRNESS (Oxford University Press, 2019).

139 Douglas H Ginsberg and Taylor M Owings, “Due Process in Competition Proceedings,
11(1) COMPETITION LAW INTERNATIONAL 39 – 50 (2015).

~ 38 ~
oppressive as individuals subject to enforcement face disruptions in their
personal and professional lives. The delay at the first level of decision making
affects one’s right to approach higher authorities against an erroneous
decision, and the same may further result in cascading effects.

Turnaround time in the disposal of cases is essential for markets to ensure

competitive forces alive. Chemin (2009) has identified the relationship
between delays in the judicial process. He suggested a negative impact of
delays, as it makes the regulatory intervention ill-timed and infructuous.140
OECD (2014) highlights the processing time of a case as a key performance
indicator of a regulatory body, as delays in the regulatory process directly
affect the business and the community by imposing additional costs arising
from such delays and continuing uncertainties of law applicability.141 Falavigna
et al. (2015) found that judicial delay produces social costs concerning the
uncertainty of justice, which endogenously affects the demand for justice, as
the party’s overall reliability on the judiciary is diminished.142

The inordinate delay means the difference between the actual time taken and
the time one would expect in disposing of the case, considering the case’s
complexity and certain objective standards of time expectations. Goldman
(1968) states that there is no absolute benchmark to understand what amounts
to delay in decision making. One method of measurement which can be
adopted to evaluate the delay is to compare the turnaround time experienced
in cases of the same kind, which could be a prima facie sign of delay. Other
factors like the existence of an unnecessary administrative activity or dilatory

140 M. Chemin, “Do Judiciaries matter for Development? Evidence from India”, 37 JOURNAL OF
COMPARATIVE ECONOMICS 230 (2009); and Roberto Ippoliti et. al., “Judicial Efficiency and
Entrepreneurs’ Expectations on the Reliability of European Legal Systems”, 40 EUROPEAN
JOURNAL OF LAW AND ECONOMICS 75 (2015). See also, ROBERT BALDWIN ET AL,
UNDERSTANDING REGULATIONS (2nd Ed., OUP, 2012).

141 OECD, “Performance Evaluation, in the Governance of Regulators”, OECD Publishing,

Paris (2014)

142 G. Falavigna, Roberto Ippoliti, Alessandro Manello and Giovanni B.Ramello, “Judicial
productivity, delay and efficiency: A Directional Distance Function (DDF) approach” 240
(2) European Journal of Operational Research 592 (2015).

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behaviour of parties may be considered in measuring the delay. 143 Nagel
(1972) studied the administrative delays by dividing the time taken in each
stage of the administrative process and factoring the same with case
complexities depended upon the length of the pleadings, evidence and
exhibits produced, and the number of parties.144 The analysis was useful for
administrative agencies in two ways. Firstly, comparing past performance and
re-examination of procedures and personnel helps identify the factors for
delays. This assessment helps in adopting targeted reforms. Secondly, finding
time taken at each stage helps provide the specific measure to reduce delay
in that stage, thereby improving the overall performance.

As pointed above, quality information may positively affect the proceedings

and outcome of a case, and this study assesses the same in the existing legal
Framework to identify whether such characterisation of information increases
efficiency. Further, there is a need to dispose of cases within an appropriate
time frame as the delay may defeat the aim for which a regulator is constituted.
The study divides the time taken by CCI into different stages and by a different
source of information, as followed by Nagel (1972), makes a comparative
analysis based on the time taken in different cases, sources of information and
stages. Factoring some features, like complexities and the number of parties,
will be an essential feature in this analysis.145

1.3.6 Enforcement Outcome

The OECD (2014) cautions the regulator that a high number of inspections do
not bring a greater level of compliance, and alternatively, a small number does
not mean that there is high self-compliance.146 Though it is difficult to assess
the effectiveness of enforcement properly, as various unknown factors impact

143 Steven Goldman, “Administrative Delay and Judicial Relief”, 66 (7) MICHIGAN LAW REVIEW
1423 (1968).

144 Stuart S. Nagel, “Measuring Unnecessary Delay in Administrative Proceedings: The Actual
versus the Predicted” 3(1) POLICY SCIENCES 81 (1972).
145 Supra note 144 (Nagel)

146 Ibid

~ 40 ~
such effectiveness, and monitoring outcomes of law is necessary to assess
the positive contribution. A person’s or firm’s willingness to obey a legal
command may depend partly on its perception of how effectively the legal
system punishes a violation. Thus, enforcement depends on one of the
pertinent questions ‘when to intervene?’ Thus, action can be taken to prevent
an anti-competitive activity or situation that may provide an opportunity for
such behaviour, or action can be prompted after the realisation of harm. 147 In
this context, a statute creates ex-ante or ex-post enforcements and confers
various powers on the agency to intervene at the appropriate stage with an
appropriate regulatory instrument. As per Elzinga and William Breit (1977),
these instruments’ efficacy depends on the number of resources devoted to
implementing the law, detection, and conviction of those guilty of anti-
competitive behaviour.148 Stigler (1974) proposed that, simultaneously, while
devoting the resource, it also must be considered that the enforcement cost is
internalised or minimised to avoid costs borne by the state in enforcing the
laws. Excess costs in enforcing the laws will prevent the state and society from
forestalling, detecting, and punishing all offenders,149 and if the cost incurred
in the process of enforcement is minimised and internalised, enforcement can
be widened. Thus, a balanced approach between the remedies and penalties
should be adopted to cure the market at a minimal cost for an optimal
enforcement outcome.

Under any competition law system, the objectives of the remedies framework
are to achieve competitive markets or restore the competition in the market. 150

147 ROBERT BALDWIN ET AL, UNDERSTANDING REGULATIONS (2nd Ed., OUP, 2012).

148 Kenneth G. Elzinga and William Breit, THE ANTITRUST PENALTIES: A STUDY IN LAW AND
ECONOMICS (Yale University Press, London,1977).

149 George Stigler, “The Optimum Enforcement of Laws” in ESSAYS IN ECONOMICS OF CRIME
AND PUNISHMENT 56 (William H Lande & Gary S. Becker (Ed. UMI,1974) available at
<http://www.nber.org/chapters/c3626.pdf> accessed on May 22, 2017.

150 Per Hellstrom et al, “Remedies in European Antitrust Law”, 76(1) ANTITRUST LAW JOURNAL
43 (2009) – “On the contrary purpose of fine is to deter future violations, as well punishing
violators”; See also, Charles A. James, “The Real Microsoft Case and Settlement”, 16
ANTITRUST 58 (2001); and, Carl Shapiro, “Microsoft: A Remedial Failure”, 75 ANTITRUST L.J.
739 (2009).

~ 41 ~
Thus, the remedies to be incorporated in statute and enforced by competition
authorities should solve the market failures in the short run and the long run.151
Lowe and Maier-Riguad (2008) provided four parameters in defining remedies
under the law152 – “(i) details of the obligations to be imposed, i.e. whether they
should be defined (cease and desist) or include detailed prescriptions; (ii) the
ability and incentive of third parties (competitors, customers) to support
monitoring; (iii) the contribution that other bodies, such as national courts,
sector regulators or arbitrators, could provide to the effective enforcement of
the remedies; and (iv) the necessity and role of external assistance supporting
the commission’s monitoring.” Keeping this in view, the remedies under the
law can be structural and as well as behavioural. ‘Structural remedies’ intend
to restore the competitive structure of the market by restructuring the entity. In
contrast, ‘behavioural remedies’ are continuing obligation remedies to align
firms’ behaviour according to the existing standard of competition law. There
can be a combination of both forms of remedies.

Structural remedies can be horizontal or vertical to create and restore

competition in the market. Former involves the sale of assets of enterprises
that compete in the same line of product and geography, and vertical
separation means divesting the assets in different supply chain layers
(opposite of vertical integration).153 Rigaud (2016) highlights that since this
remedy reduces the market power by cutting off some limbs, it may create
certain inefficiencies and are also complex to execute. However, once
executed, the competitive structure can be left to market forces without
ongoing supervision. Behavioural remedies are appropriate when the
competition is affected by specific conduct. These remedies are in nature of
regulating the conduct of an enterprise operating freely in the market. Thus,
behavioural remedies require continuous monitoring of the behaviour, and

151 F. Maier-Rigaud, "Behavioural versus Structural Remedies in EU Competition Law", in

EFFECTIVE AND LEGITIMATE ENFORCEMENT OF COMPETITION LAW (P. Lowe, M. Marquis and
G. Monti, eds., Oxford, 2016).

152 Philip Lowe and Frank Maier-Rigaud, “Quo Vadis Antitrust Remedies” (2007) FORDHAM
COMPETITION LAW INSTITUTE 597, 598 (B.Hawk ed., 2008).

153 GUNNAR NEILS ET AL, ECONOMICS FOR COMPETITION LAWYERS (OUP, 2012).

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they are not self-executory.154 Rigaud and Loertscher (2020), in their review
of 14 years of EC Competition Commission’s practice, found that commission
mainly relies on behavioural remedies to address the competition concerns
arising out of competition law enforcement while it shows a stronger
preference for structural remedies in merger cases. They believe that this
differential approach in solving competition concerns is inconsistent and
difficult to reconcile.155 Page (2014) classified the remedies into two
categories: (i) penalties (having deterrent functions); and (ii) Injunction (having
prospective remediation function). Penalties include private damages, public
fines and imprisonment and the challenge for practical competition law
enforcement is to adopt appropriate combinations to bring optimal deterrence.
He believes that injunctions (structural or behavioural) should be used as an
additional secondary remedy when the monetary penalties are not likely to
bring the desired deterrent effect.156

Becker (1968) states that financial liability aims to disgorge the wrongful gain
and restitute wrongful loss caused to the individual and society. The
restitution’s principal approach in recovering the social cost of the anti-
competitive conduct, causing wrongful loss to the consumers at large. A social
cost may involve the cost of the violation, the cost involved in detecting and
establishing the violation and imposing sanctions.157 His Framework suggests
a concept of optimal deterrence to be achieved when the expected costs of
sanctions to the offender equal the external costs of the offence to society.
Landes (1983) lays down one of the most widely accepted measures of
optimal fine for competition law violations: “the fine should equal the net harm

154 Ibid

155 Frank Maier-Rigaud & Benjamin Loertscher, “Structural vs. Behavioral Remedies”, CPI
Antitrust Chronicle (April 2020) available at
<https://www.nera.com/content/dam/nera/publications/2020/PUB_CPI_Remedies.pdf>
accessed on April 4, 2021.
156 William Page, “Optimal Antitrust Remedies: A Synthesis” in 1 THE OXFORD HANDBOOK OF
INTERNATIONAL ANTITRUST ECONOMICS (Roger D. Blair and D. Daniel Sokol eds., OUP,
2014).

157 Gary Becker, “Crime and Punishment: An Economic Approach”, 76 J.POL.ECON. 169
(1968).

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to persons other than offender divided by the probability of apprehension and
conviction. The “net harm” is the sum of the external harms inflicted by
violation because of overcharge and deadweight loss.

Elhauge (2009) rejects the prevalent form of remedies and fines in the US and
advances a modest disgorgement as an antitrust remedy. It avoids
government and judicial interference in ongoing business operations, which is
more regulatory and on lines of command and control. Disgorgement
monetises the obligation and replaces the regulation via a price mechanism.
Since the government cannot obtain damages, the closest is the claim of
disgorgement. Though the disgorgement as a remedy does not cover the total
harm created either by deadweight loss or effect on other competitors, the law
does not allow such optimal fining to cover all harm, and alternative
disgorgement is optimal to recover illicit profits.158

Werden and Simon (1987) consider Becker’s optimal monetary penalty for
deterrence and studies firms’ ability to pay such a fine based on estimations.
They find that for paying Beckerian optimal fine, a firm must have assets of
about six times its annual sales to pay a fine. Thus, only large and diversified
firms with very high assets-to-sale ratios will be able to pay such an optimal
fine.159 However, Craycraft et al. (1997), with their empirical analysis of 386
firms convicted from 1955 to 1993, contradict the firm’s poor ability to pay fines
theory. It was found that the firms have the ability to pay the actual fine out of
the cash on hand and short-term investment, and such fines do not cause any
undue hardship to firms.160

Forrester (2011) states that where the level of penalty is high, there should be
a review by a judicial authority on the proportionality of fines. In its assessment,
courts should examine the severity of breach; kind and distinctiveness of

158 Einer R. Elhauge, “Disgorgement as an Antitrust Remedy”, 76 ANTITRUST L.J. 79 (2009).

159 Gregory J. Werden and Marilyn J. Simon, “Why price Fixers should go to prison?”, The
Antitrust Bulletin 917 (April 1987).

160 Catherine Craycraft et al., “Antitrust Sanctions and Firms Ability to Pay, 12 REVIEW OF
INDUSTRIAL ORGANISATION 171 -183 (1997).

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participation, whether fine imposed is proportionate to severity; penalty
comparable to other economic crime; method of setting fine.161 OECD
(2014)162 advances the idea of a responsive regulation approach for effective
regulatory enforcement. Among the other factors include the range of potential
penalties, which are sufficiently broad and differentiated to be applied
proportionately to distinct behaviour. Penalties designed to impose higher
costs than violations result in deterrence and prevent a repeated or similar
violative behaviour by different players. CLRC (2019) observed that, due to
the absence of clear guidance on the computation of penalties, the penalties
are often challenged in appellate authorities as being disproportionate, and as
a result, this significant amount of penalties is not realised by CCI.163 However,
merely having guidelines will not bring consistencies in the computation of
penalties. EU has well-defined sentencing and fine policy, and there is still
criticism of the EU Commission’s practice of setting fines because of
inconsistencies in the determination of penalties (Gilliams (2014);164 Geradin
(2011).165 Nonetheless, the clear guidelines establishing the principles of
proportionality and setting up fines can reduce discretion, increase certainty,
and speed up the attainment of finality of the order. However, compliance with
guidelines should be under judicial scrutiny.

In the context of the CA, this study of the outcomes examines available tools
with CCI to cure the market and assess and evaluate how often and in what
manner they are used. It is pertinent to note that remedies and penalties are

161 Ian Forrester, “A challenge for Europe’s Judges: The Review of Finess in Competition
Cases” 36 EUROPEAN LAW REVIEW 185 (2011).

162 OECD, “Best Practice Principles for Regulatory Policy: Regulatory Enforcement and
Inspections” (2014) available at <http://www.oecd.org/gov/regulatory-policy/enforcement-
inspections.html> accessed on April 4, 2021.

163 Ministry of Corporate Affairs (Government of India), Competition Law Reform Committee
Report (2020).

164 Hand Gilliams, “Proportionality of EU Competition Fines: Proposal for Principled

Discussion” 37(4) WORLD COMPETITION 435 – 458 (2014).

165 Damien Geradin, “The EU Competition Law Fining System: A Reassessment TILEC
Discussion Paper No. 2011-052 (October 3, 2011). Available
at <https://ssrn.com/abstract=1937582> accessed on February 27, 2021.

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based on the proportionality principle, and hence the outcome analysis in the
context will also have to inquire the method of setting those penalties and
remedies. Studies have identified the trends of CCI’s imposition of penalties
(AZB, 2019;166 Seetharman, 2019167); however, the same does not disclose
the factors for the variations in the penalties and the basis of the exercise of
discretion of CCI in determining penalties. This study undertakes a deeper
understanding in assessing the use of mitigating and aggravating factors to
determine penalties and evaluate their proportionality.

1.4 Scope and Limitations

The study focuses on evaluating the enforcement of competition law on the
Framework as laid down above. This evaluation will involve the discourse with
the procedural aspect of the enforcement at the CCI. In analysing the same,
the study considers the cases originating as a violation of the CA; thus, matters
transferred from MRTP Commission in the initial years are not part of the
study. For this purpose, the data is constructed from all orders passed by CCI
in its ex-post enforcement regime, i.e., Section 3 and 4 violations/allegations
matters from May 2009–Dec. 2019.

The primary data for this study is limited to Indian competition law
enforcement. For any reference and comparison with a foreign jurisdiction, the
researcher has relied on secondary sources. The study has considered
reforms recently recommended by CLRC. However, CLRC’s suggestions
were not based on empirical analysis, and this study may support or refute the
recommendation made by CLRC.

166 AZB, “A look back at 10 years of CCI’s Penalties” (2019) available at

<https://www.azbpartners.com/bank/a-look-back-at-10-years-of-ccis-penalties/>
accessed on April 10, 2021.

167 G Seetharaman, “Can CCI be more Agile like its EU and US counterparts in disposing
cases?” ET Bureau (2019) available at
<https://economictimes.indiatimes.com/news/economy/policy/can-cci-be-more-agile-like-
its-eu-and-us-counterparts-in-disposing-of-cases/articleshow/72201833.cms?from=mdr>
accessed on April 10, 2021.

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The focus is on the procedural aspect of enforcement related to inquiry in Anti-
Competitive Activity (Section 3) and the Abuse of Dominant power (Section 4).
The procedural aspect or substantive aspect of regulating combination
(Section 5 and 6) are not part of this study. Since CCI’s enforcement process
is the subject of this study, similar data analysis for the role of the appellate
tribunal is not part of the study, and wherever required, the study draws the
findings based on annual reports of CCI individual relevant order and
secondary studies.

The study is primarily based on the data collected from various orders of the
CCI and generating the pattern of enforcement. In this endeavour, the study
makes a few comparisons with foreign jurisdictions using secondary sources
to draw a comparative analysis, subject to their adaptability in India.

1.5 Aim & Significance

• The study aims to evaluate the performance of CCI in enforcing
competition law over the last decade using empirical data based on the
decisions delivered by CCI. (Quantitative Assessment)

• Based on the evaluation, the study also aims to develop theoretical

statements explaining CCI’s enforcement status based on the empirical
data. (Explaining phenomenon qualitatively)

• The study aims to identify the fault lines in the enforcement structure,
which can be modified to minimise the social costs associated with false
positives and false negatives, assuming the inevitable existence of
these errors.

• This study contributes by filling the gap in the literature on the

evaluation of the young regulator and can be used as an external insight
by CCI to better the enforcement structure. Further, this may also assist
future research in the field, either in method or content.

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1.6 Research Questions
For achieving the above objectives, the study is conducted through the
jurisprudential development and the orders of CCI from May 2009–December
2019 by drawing findings upon them to answer the following questions:

1. What are the goals of Indian competition law, which are promoted and
protected by the Competition Commission of India while enforcing the
law?

2. Whether the enforcement mechanism and institutional structure

adopted under the Indian competition law is appropriate to promote the
goals as understood above?

3. Under the existing enforcement structure, what is the status of

enforcement of rules associated with detection, investigation, inquiry,
and sanctions and remedies of the competition law violations over the
last decade?

4. Are there any fault lines (defects) in the institutional design and
enforcement structure that impact the efficiency of the enforcement
mechanism of the Competition Act, 2002?

5. Based on the above assessment and evaluation, is there any need to

modify any part of the enforcement structure or institutional design?

1.7 Research Methodology

The research study employs diverse methods to answer and achieve the
objective. Necessarily, the study will be “Analytical Research” in nature,
starting with the qualitative analysis as the preliminary research; however, to
confirm qualitative review with empirical facts, a quantitative study was
employed. This quantitative analysis often raised new questions that were
answered using logical, analytical-qualitative analysis. In this manner, the

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study was conducted in the stages, beginning with a preliminary qualitative
review followed by quantitative analysis, which then answers the questions
raised in the qualitatively explored process. This staged research method is
the ‘quant sandwich’168 (Qualitative – Quantitative – Qualitative).

For the qualitative stage, the study will be relying on the existing literature and
primary data collected from the decision of the CCI’s order. Here the main
thrust is to descriptively analyse the existing theories and bring them in
consonance with the Indian settings, specifically considering goals of
competition law. The second stage of quantitative analysis will employ coding
techniques to convert the qualitative data into quantitative. The variables must
be tested through bivariate analysis and descriptive statistics validating and
substantiating the analysis generated from the qualitative stage. Often
quantitative analysis leads to new findings, which might be new, but supporting
or varying with the existing theories. For such a situation, research reverted to
qualitative analysis to theorise new findings.

1.8 Research Tools: Coding

Keeping in view the nature of data, primarily the orders of CCI from May 2009
– December 2019 and the contents of the data requiring quantitative and
qualitative, the coding technique was employed to categorise the data into
variables for the analysis. Coding the data in categories assisted in discovering
the patterns as codes are repeated in orders of CCI, and these patterns derive
the conclusion. Codes were designed to discover the patterns related to
similarity, differences, frequency, sequence, correspondence, and causation.
Thus, requiring specific filters in the code for generating a theory from the
analysed data, thereby labelling the data and linking the data for analysis. This
style helps convert the data to idea and from the idea to all data related to that

168 Margarete Sandelowski, “Tables or tableaux? the challenges of writing and reading mixed
methods studies” in HANDBOOK OF MIXED METHODS IN SOCIAL & BEHAVIORAL RESEARCH
(Abbas Tashakkori, Charles Teddlie eds., SAGE Publication, 2003)

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idea.169 Specific data types are coded through a sequence of coding cycles,
which helps advance theory.170

Data to be collected to use coding techniques is primarily the orders of CCI

passed under three broad categories Section 26(2) – Prima Facie Closure;
Section 26(6) Closure after investigation and inquiry; and Section 27 –
Contravention orders with penalties. Data coverage for the above three
categories will be for ten years from 2009 – 2018. As the data is dynamic,
hence December 2019 was taken as the last point. Some data can be Sourced
from Annual Reports of the CCI, which will be for ten years 2009 – 2019.

The first cycle of the coding intended to arrange the data in the logical
segregation, for which the researcher has relied on the QDA Miner Software.
All the orders of CCI were arranged using open coding of data in the following
heads for forming the descriptive content:
i. S. no.
ii. Case No.
iii. Title of the case
iv. Source of information – (Information/Reference/Suo moto/ Transfer)
v. Type of Informant – (Individual /Corporate/Association/Government)
vi. Informant Place
vii. Respondent Place
viii. Subject matter Place
ix. Industry type
x. Nature of infringement
xi. Date of Prima Facie Order
xii. Interim injunction application
xiii. Time taken in the investigation
xiv. Time taken in inquiry
xv. Final Decision

169 Johnny Saldana, THE CODING MANUAL FOR QUALITATIVE RESEARCHERS 8 (Sage Publications
Ltd, 2009)

170 Ibid at 42

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xvi. Use of Foreign Jurisprudence
xvii. Use of Economic Evidence
xviii. Goals of Competition Law Highlighted
xix. Structural Remedy
xx. Behavioural Remedy
xxi. Monetary Penalties0.
xxii. Mitigating Factors
xxiii. Aggravating Factors
xxiv. Appeal to Appellate Tribunal
xxv. Appeal to Supreme Court
xxvi. Writ Petition

Once this data is compiled, data were converted into axial coding in the
following categories and axis to develop an initial analytic strategy in its
second coding cycle.

1. Anti-Competition Agreement
a. Case Number
b. Industry type
c. Contravention found
d. No Contravention
e. Places from
f. Time taken
g. Remedy
h. Penalty
i. Goals understood

2. Abuse of Dominant Power

a. Case Number
b. Industry type
c. Contravention found
d. No Contravention
e. Places from

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 f. Time taken
g. Remedy
h. Penalty
i. Goals understood

Though it was quite challenging to work on lengthy excel sheets with multiple
variables, and many times this becomes a difficulty, QDA Miner kept the
research in control and ownership of the voluminous data.

1.9 Chapters
As highlighted above, the issue of enforcement does not have merely one
perspective. Instead, it is collection issues that collectively assess the
enforcement process. Keeping in view the above objectives, the study will
broadly be divided into five parts dealing with the specific theme under the
research and answering each research question in a separate chapter with
backward linkages.

Chapter II - Goals of Competition Law: In this chapter, the study will explore
the competition law's legislative intent and economic content to understand
the goals. This chapter considers the functional goals pursued by CCI to
ascertain the symmetry in goals as stated under the legislative intent,
literature, and enforcement exercise. This addresses the first research
question and introduces the recent debates and approaches that CCI should
consider in enforcement. The objective is to assess whether the goals followed
by CCI give the prospects of minimising the legal process's social costs or
enhances the transaction costs.

Chapter III - Enforcement Structure under Competition Act, 2002: This

chapter will highlight the prevalent models of enforcing competition law, i.e.,
public and private enforcement. Since the enforcement model is linked to the
institutional structure, both topics will be dealt with to set up the framework for
the chapter. This chapter will also discuss the constitutional status of the CCI
as per the various judicial pronouncements and the reforms proposed by
CLRC (2019) in the institutional structure and its implications. This chapter will

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introduce the concept of the Public and Private enforcement model of
enforcement and delineate the contours of both models. To further elaborate
on public enforcement, this chapter will analytically present the four stages of
public enforcement–(1) formation of prima facie opinion; (2) investigation by
Director-General; (3) inquiry by CCI; and (4) remedies and sanctions. This
chapter aims to discuss what type of institution and enforcement mechanism
is optimal in theory to minimise the administrative cost and bring efficiency to
the enforcement.

Chapter IV-A Decade of Enforcement in Numbers: This part will deal with
the various stages of enforcement under the present competition law
framework, i.e., detection, investigation, inquiry, and adjudication. The aim is
to present a descriptive status of the turnaround time for cases, sources of
supply of cases, the role of leniency in detecting violations, use of market
correction tools and penalties. This part will empirically study the competition
law enforcement from 2009 to 2019. The objective is to identify the actual
issues the CCI faces in its enforcement structure which are not apparent from
the data presented in the official annual reports.

Chapter V - Assessing the Fault lines in Enforcement: This chapter will

critically examine the defects in the enforcement structure and their effects on
the social costs. This chapter will correlate the fault lines arising from
geographical location, source of detection, enforcement structure, and
decision-making of CCI with the effects on the enforcement costs. The
objective is to explain how the defects in the process may lead to adverse
costs and enhance the transaction cost. Minimising these costs can bring
greater efficiency to the enforcement mechanism and reduce social costs.

Chapter VI - Suggestions and Conclusion: This chapter will be the final and
summation of the study. The study will attempt to respond to the research
problem and suggest few measures for improving enforcement.

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1.10 Mode of Citation
Uniform method of citation is followed throughout this thesis per The Bluebook:
A Uniform System of Citation, 19th Edition.

A reader must read this study and the footnotes, as most relevant orders
connected with the findings are introduced in the footnotes with the appropriate
connector and explanation.

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