Competition Law in India

Evolution of Competition Law in India

India after independence chose a centrally
planned economic structure also referred to
as the Nehruvian Socialism Model. The
Nehruvian Model was a mixed economy
model – a model that was neither a market
economy like the United States of America nor
a socialist economy one like the USSR. Under
the mixed model, both the private and public
sector co-existed.
 Evolution of Competition Law in India
As discussed, the Nehruvian model was a mixed
economy model, but it was tilting more towards
socialistic pattern of economic growth with the
objective being ‘economic growth with social
justice’. Despite more than a decade of
independence, it was apparent to every one
including Mr. Nehru that that the professed model
was not yielding desired results. Economy was
growing at the rate of less than 3% per annum and
income growth was around 1.75%.
 Evolution of Competition Law in India
A concerned Government, appointed a Committee in October,
1960 to look into the reasons of inequality in the distribution
of income and levels of living (Mahalanobis Committee). The
Committee noted that big business houses were emerging
because of the “planned economy” model practiced by the
Government and recommended looking at industrial structure.
Subsequently on account of such recommendations made by
the Mahalanobis Committee, the Government constituted the
Monopolies Inquiry Commission (MIC) in 1964 to enquire into
the extent of and effect of concentration of power in the
private sector and the prevalence of monopolistic practices in
India.
 Evolution of Competition Law in India
The MIC found a high level of concentration of
economic power in over 85 percent of industrial items
in India. The MIC also found that the then licensing
policy in the country had enabled big business houses
to secure a disproportionately bigger share of licenses
resulting in pre-emption and foreclosure of capacity.
The MRTP Act was passed to enable the Government to
control concentration of economic power in Indian
industry. The MRTP Act was notified in the year 1970
and in August 1970, the MRTP Commission was set up.
The MRTP Act: Predecessor of the Competition
Act, 2002

The MRTP Act aimed at preventing (a)

economic power concentration in a few hands
and curbing monopolistic behavior and (b)
prohibition of monopolistic, unfair or
restrictive traded practices. The intention
behind this was both to protect consumers as
well as to avoid concentration of wealth
 The MRTP Act: Predecessor of the
Competition Act, 2002
The MRTP Act was a precursor to the Competition
Act and sought to legislate over issues relating to
restrictive and monopolistic trade practices. There
are areas of similarities between the MRTP Act and
the Competition Act. The primary distinction
between the enactments stems from the legislative
objective. While the thrust of the Competition Act is
to promote competition, the objective of the MRTP
Act was to prevent economic concentration and
restrictive trade practices.
Evolution of Competition Law in India
The Finance Minister of India in its budget speech in
February, 1999 made the following statement in the
context of to the then existing MRTP Act.
“The MRTP Act has become obsolete in certain areas in
the light of international economic developments
relating to competition laws. We need to shift our focus
from curbing monopolies to promoting competition. The
Government has decided to appoint a committee to
examine this range of issues and propose a modern
competition law suitable for our conditions.”
 Indian Competition Law Framework

Articles 38 and 39 of the Constitution of India provides that

the State shall strive to promote the welfare of the people by
securing and protecting as effectively, as it may, a social order in
which justice – social, economic and political – shall inform all
the institutions of the national life, and the State shall, in
particular, direct its policy towards securing (a) that the
ownership and control of material resources of the community
are so distributed as best to subserve the common good; and
(b) that the operation of the economic system does not result
in the concentration of wealth and means of production to the
common detriment.
 Indian Competition Law Framework

The Competition Act is drafted, as are most of

the competition laws in the world, in fairly
general terms and is not limited to regulation of
commercial acts of private parties. The
Competition Act prohibits or regulates
(A) Anticompetitive agreements (u/s 3 of the
Act) (B) Abuse of dominant position (u/s 4 of the
Act) (C) Combinations (u/s 5 & 6 of the Act).
 Anti-Competitive Agreements
Section 3 of the Competition Act states that any
agreement which causes or is likely to cause an
appreciable adverse effect (AAE) on competition in
India is deemed anti-competitive. Section 3 (1) of
the Competition Act prohibits any agreement with
respect to “production, supply, distribution, storage,
and acquisition or control of goods or services
which causes or is likely to cause an appreciable
adverse effect on competition within India”.
 Anti-Competitive Agreements

Although the Competition Act does not define

AAEC and nor is there any thumb rule to
determine when an agreement causes or is
likely to cause AAEC, Section 19 (3) of the Act
specifies certain factors for determining AAEC
 Anti-Competitive Agreements
 creation of barriers to new entrants in the market;
 driving existing competitors out of the market;
 foreclosure of competition by hindering entry into the
market;
 accrual of benefits to consumers;
 improvements in production or distribution of goods or
provision of services;
 promotion of technical, scientific and economic
development by means of production or distribution of
goods or provision of services.
 Anti-Competitive Agreements
Section 3(3) of the Competition Act provides that
agreements or a ‘practice carried’ on by enterprises or
persons (including cartels) engaged in trade of identical or
similar products are presumed to have AAEC in India if they:-
• Directly or indirectly fix purchase or sale prices;
• Limit or control production, supply, markets, technical
development, investments or provision of services;
• Result in sharing markets or sources of production or
provision of services;
• Indulge in bid-rigging or collusive bidding.
 Anti-Competitive Agreements
Section 3(4) of the Competition Act provides that any agreement
among enterprises or persons at different stages or levels of the
production chain in different markets, in respect of production,
supply, distribution, storage, sale or price of, or trade in goods or
provision of services, including
(a) tie-in arrangement;
(b) exclusive supply agreement;
(c) exclusive distribution agreement;
(d) refusal to deal;
(e) resale price maintenance, shall be an agreement in contravention
of Section 3(1) if such agreement causes or is likely to cause an
appreciable adverse effect on competition in India.
 Abuse of Dominance
Section 4 of the Competition Act is the
operative provision of the Act dealing with the
abuse of dominant position. This provision is
broadly fashioned on the European Union
prohibition on abuse of dominance contained
in Article 102 of the Treaty on the Functioning
of the European Union (TEFU).
 Abuse of Dominance

The term ‘dominant position’ has been defined in the Act

as “a position of strength, enjoyed by an enterprise, in the
relevant market, in India, which enables it to operate
independently of competitive forces prevailing in the
relevant market; or affect its competitors or consumers or
the relevant market in its favour”. The definition of the
dominant position provided in the Competition Act is
similar to the one provided by the European Commission
in United Brand v Commission of the European
Communities case.
 Regulation of combinations

• 5. The acquisition of one or more enterprises by

one or more persons or merger or amalgamation
of enterprises shall be a combination of such
enterprises and persons or enterprises, if—
• (a) any acquisition where— (i) the parties to the
acquisition, being the acquirer and the
enterprise, whose control, shares, voting rights
or assets have been acquired or are being
acquired jointly have,—
 Regulation of combinations
Combination
• (A) either, in India, the assets of the value of more
than rupees one thousand crores or turnover more
than rupees three thousand crores; or
• (B) [in India or outside India, in aggregate, the
assets of the value of more than five hundred
million US dollars, including at least rupees five
hundred crores in India, or turnover more than
fifteen hundred million US dollars, including at
least rupees fifteen hundred crores in India; or]
 Regulation of combinations

• (ii) the group, to which the enterprise whose control, shares,

assets or voting rights have been acquired or are being acquired,
would belong after the acquisition, jointly have or would jointly
have,—
• (A) either in India, the assets of the value of more than rupees
four thou sand crores or turnover more than rupees twelve
thousand crores; or
• (B) [in India or outside India, in aggregate, the assets of the
value of more than two billion US dollars, including at least
rupees five hundred crores in India, or turnover more than six
billion US dollars, including at least rupees fifteen hundred
crores in India; or]
 Regulation of combinations

(b) acquiring of control by a person over an

enterprise when such person has already direct or
indirect control over another enterprise engaged in
production, distribution or trading of a similar or
identical or substitutable goods or provision of a
similar or identical or substitutable service, if—
(i) the enterprise over which control has been
acquired along with the enterprise over which the
acquirer already has direct or indirect control jointly
have
 Regulation of combinations

(A) either in India, the assets of the value of more

than rupees one thousand crores or turnover
more than rupees three thousand crores; or
(B) [in India or outside India, in aggregate, the
assets of the value of more than five hundred
million US dollars, including at least rupees five
hundred crores in India, or turnover more than
fifteen hundred million US dollars, including at
least rupees fifteen hundred crores in India; or]
 Regulation of combinations

• (ii) the group, to which enterprise whose control has

been acquired, or is being acquired, would belong after
the acquisition, jointly have or would jointly have,— (A)
either in India, the assets of the value of more than
rupees four thou sand crores or turnover more than
rupees twelve thousand crores or (B) [in India or outside
India, in aggregate, the assets of the value of more than
two billion US dollars, including at least rupees five
hundred crores in India, or turnover more than six billion
US dollars, including at least rupees fifteen hundred
crores in India; or]
 Regulation of combinations

(c) any merger or amalgamation in which—

(i) the enterprise remaining after merger or the enterprise created
as a result of the amalgamation, as the case may be, have,—
(A) either in India, the assets of the value of more than rupees
one thou sand crores or turnover more than rupees three
thousand crores; or
(B) [in India or outside India, in aggregate, the assets of the
value of more than five hundred million US dollars, including at
least rupees five hundred crores in India, or turnover more than
fifteen hundred million US dollars, including at least rupees
fifteen hundred crores in India; or]
 Regulation of combinations

(ii) the group, to which the enterprise remaining after the

merger or the enterprise created as a result of the
amalgamation, would belong after the merger or the
amalgamation, as the case may be, have or would have,—
(A)either in India, the assets of the value of more than rupees
four-thou sand crores or turnover more than rupees twelve
thousand crores; or
(B) [in India or outside India, in aggregate, the assets of the value
of more than two billion US dollars, including at least rupees
five hundred crores in India, or turnover more than six billion
US dollars, including at least rupees Fifteen Hundred Crores in
India
 Regulation of combinations
• 6. (1) No person or enterprise shall enter into a combination which causes or
is likely to cause an appreciable adverse effect on competition within the
relevant market in India and such a combination shall be void.
(2) Subject to the provisions contained in sub-section (1), any person or
enterprise, who or which proposes to enter into a combination, [shall] give
notice to the Commission, in the form as may be specified, and the fee
which may be determined, by regulations, disclosing the details of the
proposed combination, within [thirty days] of—
(a) approval of the proposal relating to merger or amalgamation, referred to in
clause (c) of section 5, by the board of directors of the enterprises
concerned with such merger or amalgamation, as the case may be;
(b) execution of any agreement or other document for acquisition referred to
in clause (a) of section 5 or acquiring of control referred to in clause (b) of
that section.
 Regulation of combinations
• 15[(2A)No combination shall come into effect until two hundred and ten days have
passed from the day on which the notice has been given to the Commission under
sub-section(2) or the Commission has passed orders under section 31, whichever is
earlier.]
• (3) The Commission shall, after receipt of notice under sub-section (2), deal with such
notice in accordance with the provisions contained in sections 29, 30 and 31.
• (4) The provisions of this section shall not apply to share subscription or financing
facility or any acquisition, by a public financial institution, foreign institutional investor,
bank or venture capital fund, pursuant to any covenant of a loan agreement or
investment agreement.
• (5) The public financial institution, foreign institutional investor, bank or venture
capital fund, referred to in sub-section (4), shall, within seven days from the date of
the acquisition, file, in the form as may be specified by regulations, with the
Commission the details of the acquisition including the details of control, the
circumstances for exercise of such control and the consequences of default arising out
of such loan agreement or investment agreement, as the case may be
 COMPETITION COMMISSION OF INDIA
Establishment of Commission
• 7. (1) With effect from such date as the Central
Government may, by notification, appoint, there shall be
established, for the purposes of this Act, a Commission
to be called the “Competition Commission of India”.
• (2) The Commission shall be a body corporate by the
name aforesaid having perpetual succession and a
common seal with power, subject to the provisions of
this Act, to acquire, hold and dispose of property, both
movable and immovable, and to contract and shall, by
the said name, sue or be sued.
 Composition of Commission
[8.(1) The Commission shall consist of a Chairperson and not less
than two and not more than six other Members to be appointed
by the Central Government.
• (2) The Chairperson and every other Member shall be a person of
ability, integrity and standing and who has special knowledge of,
and such professional experience of not less than fifteen years in,
international trade, economics, business, commerce, law, finance,
accountancy, management, industry, public affairs or competition
matters, including competition law and policy, which in the opinion
of the Central Government, may be useful to the Commission.
• (3) The Chairperson and other Members shall be whole-time
Members
 Composition of Commission
• Term of office of Chairperson and other Members. (1) The
Chairperson and every other Member shall hold office as
such for a term of five years from the date on which he
enters upon his office and shall be eligible for re-
appointment: [Provided that the Chairperson or other
Members shall not hold office as such after he has
attained the age of sixty-five years] (2) A vacancy caused
by the resignation or removal of the Chairperson or any
other Member under section 11 or by death or otherwise
shall be filled by fresh appointment in accordance with
the provisions of sections 9.
 Appointment of Director General, etc.
• Section 16. [(1) The Central Government may, by notification,
appoint a Director General for the purposes of assisting the
Commission in conducting inquiry into contravention of any
of the provisions of this Act and for performing such other
functions as are, or may be, provided by or under this Act.
(1A) The number of other Additional, Joint, Deputy or
Assistant Directors General or such officers or other
employees in the office of Director General and the manner
of appointment of such Additional, Joint, Deputy or Assistant
Directors General or such officers or other employees shall
be such as may be prescribed.”]
 DUTIES, POWERS AND FUNCTIONS OF
COMMISSION
• Section 18. Subject to the provisions of this Act, it shall
be the duty of the Commission to eliminate practices
having adverse effect on competition, promote and
sustain competition, protect the interests of consumers
and ensure freedom of trade carried on by other
participants, in markets in India: Provided that the
Commission may, for the purpose of discharging its
duties or performing its functions under this Act, enter
into any memorandum or arrangement with the prior
approval of the Central Government, with any agency of
any foreign country
 DUTIES, POWERS AND FUNCTIONS OF
COMMISSION
• Inquiry into certain agreements and dominant position of
enterprise. (1) The Commission may inquire into any
alleged contravention of the provisions contained in
subsection (1) of section 3 or sub-section (1) of section 4
either on its own motion or on— (a) [receipt of any
information, in such manner and] accompanied by such
fee as may be determined by regulations, from any
person, consumer or their association or trade
association; or (b) a reference made to it by the Central
Government or a State Government or a statutory
authority.
 DUTIES, POWERS AND FUNCTIONS OF
COMMISSION
• Inquiry into combination by Commission
• Section 20. (1) The Commission may, upon its own
knowledge or information relating to acquisition referred
to in clause (a) of section 5 or acquiring of control referred
to in clause (b) of section 5 or merger or amalgamation
referred to in clause (c) of that section, inquire into
whether such a combination has caused or is likely to
cause an appreciable adverse effect on competition in
India: Provided that the Commission shall not initiate any
inquiry under this subsection after the expiry of one year
from the date on which such combination has taken effect.
 Meetings of Commission
• [22. (1) The Commission shall meet at such times and places,
and shall observe such rules and procedure in regard to the
transaction of business at its meetings as may be provided by
regulations. (2) The Chairperson, if for any reason, is unable to
attend a meeting of the Commission, the senior-most Member
present at the meeting, shall preside at the meeting. (3) All
questions which come up before any meeting of the
Commission shall be decided by a majority of the Members
present and voting, and in the event of an equality of votes,
the Chairperson or in his absence, the Member presiding, shall
have a second or/casting vote: Provided that the quorum for
such meeting shall be three Members.]
 Orders by Commission
• After inquiry into agreements or abuse of
dominant position. Where after inquiry the
Commission finds that any agreement referred
to in section 3 or action of an enterprise in a
dominant position, is in contravention of
section 3 or section 4, as the case may be, it
may pass all or any of the following orders,
namely:—
 Orders by Commission
• (a) direct any enterprise or association of enterprises or person or
association of persons, as the case may be, involved in such agreement, or
abuse of dominant position, to discontinue and not to re-enter such
agreement or discontinue such abuse of dominant position, as the case may
be;
• (b) impose such penalty, as it may deem fit which shall be not more than ten
percent of the average of the turnover for the last three preceding financial
years, upon each of such person or enterprises which are parties to such
agreements or abuse: [Provided that in case any agreement referred to in
section 3 has been entered into by a cartel, the Commission may impose
upon each producer, seller, distributor, trader or service provider included in
that cartel, a penalty of up to three times of its profit for each year of the
continuance of such agreement or ten percent. of its turnover for each year
of the continuance of such agreement, whichever is higher.]
 Orders by Commission
• (c) [Omitted by Competition (Amendment) Act,
2007] (d) direct that the agreements shall stand
modified to the extent and in the manner as may be
specified in the order by the Commission; (e) direct
the enterprises concerned to abide by such other
orders as the Commission may pass and comply with
the directions, including payment of costs, if any; (f)
[Omitted by Competition (Amendment) Act, 2007]
(g) pass such other [order or issue such directions]
as it may deem fit
 Orders by Commission
• Division of enterprise enjoying dominant
position 28 (1) The 47[Commission] may,
notwithstanding anything contained in any
other law for the time being in force, by order
in writing, direct division of an enterprise
enjoying dominant position to ensure that
such enterprise does not abuse its dominant
position.
 Power of Commission to regulate its own
procedure
• Section 36. (1) In the discharge of its
functions, the Commission shall be guided by
the principles of natural justice and, subject to
the other pro visions of this Act and of any
rules made by the Central Government, the
Commission shall have the powers to regulate
its own procedure.
 Power of Commission to regulate its own
procedure
• (2) The Commission shall have, for the purposes of discharging its
functions under this Act, the same powers as are vested in a Civil Court
under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in
respect of the following matters, namely:- (a) summoning and enforcing
the attendance of any person and examining him on oath; (b) requiring
the discovery and production of documents; (c) receiving evidence on
affidavit; (d) issuing commissions for the examination of witnesses or
documents; (e) requisitioning, subject to the provisions of sections 123
and 124 of the Indian Evidence Act, 1872 (1 of 1872), any public record or
document or copy of such record or document from any office. (3) The
Commission may call upon such experts, from the fields of economics,
commerce, accountancy, international trade or from any other discipline
as it deems necessary to assist the Commission in the conduct of any
inquiry by it.
Director General to investigate contravention

• 41. (1) The Director General shall, when so directed by the

Commission, assist the Commission in investigating into any
contravention of the provisions of this Act or any rules or
regulations made there under. (2) The Director General shall
have all the powers as are conferred upon the Commission
under subsection (2) of section 36. (3) Without prejudice to
the provisions of sub-section (2), sections 240 and 240A of
the Companies Act, 1956 (1 of 1956), so far as may be, shall
apply to an investigation made by the Director General or
any other person investigating under his authority, as they
apply to an inspector appointed under that Act.
Contravention of orders of Commission
• 42.(1) The Commission may cause an inquiry to be made into compliance of its
orders or directions made in exercise of its powers under the Act.
• (2) If any person, without reasonable clause, fails to comply with the orders or
directions of the Commission issued under sections 27, 28, 31, 32, 33, 42A and 43A
of the Act, he shall be punishable with fine which may extend to rupees one lakh
for each day during which such non-compliance occurs, subject to a maximum of
rupees ten crore, as the Commission may determine.
• (3) If any person does not comply with the orders or directions issued, or fails to
pay the fine imposed under sub-section (2), he shall, without prejudice to any
proceeding under section 39, be punishable with imprisonment for a term which
may extend to three years, or with fine which may extend to rupees twenty-five
crore, or with both, as the Chief Metropolitan Magistrate, Delhi may deem fit:
Provided that the Chief Metropolitan Magistrate, Delhi shall not take cognizance of
any offence under this section save on a complaint filed by the Commission or any
of its officers authorized by it.
 Contravention by companies
• Section 48. (1) Where a person committing contravention of any of
the provisions of this Act or of any rule, regulation, order made or
direction issued there under is a company, every person who, at
the time the contravention was committed, was in charge of, and
was responsible to the company for the conduct of the business of
the company, as well as the company, shall be deemed to be guilty
of the contravention and shall be liable to be proceeded against
and punished accordingly: Provided that nothing contained in this
sub-section shall render any such person liable to any punishment
if he proves that the contravention was committed without his
knowledge or that he had exercised all due diligence to prevent
the commission of such contravention.
 Competition Advocacy
• Section 49. [(1) The Central Government may, in formulating
a policy on competition (including review of laws related to
competition) or any other matter, and a State Government
may, in formulating a policy on competition or on any other
matter, as the case may be, make a reference to the
Commission for its opinion on possible effect of such policy
on competition and on the receipt of such a reference, the
Commission shall, within sixty days of making such
reference, give its opinion to the Central Government, or the
State Government, as the case may be, which may thereafter
take further action as it deems fit
 Evaluation
• The Indian competition law regime is a
nascent regime. It is barely four years since
our new competition law- the Competition Act
has become operational. Prior to the
operationalization of the Competition Act in
May 2009, MRTP Act was the operational law
that regulated certain aspects of competition.
 Steady increase in the number of
complaints
• During the first FY of the CCI working i.e FY 2009-10, the CCI received
32 complaints under Section 19 of the Competition Act. The CCI also
received 50 cases that were pending under the MRTP Act. The MRTP
cases were transferred to the CCI in accordance with the provisions of
Section 66 of the Competition Act. The number of complaints received
in the FY 2010-11 shot to 77 and in the subsequent FY 2011-2012 the
number of information received further increased to 93.
Comprehensive data for the current FY 2012-13 is not publicly available
however till the month of February, 2013 the CCI has already issued
final orders in 79 cases. The steady increase in the number of
complaints to the CCI clearly shows that the level of awareness about
the Competition Act is increasing.
 Diverse nature of informants

the Part V of this report the CCI can begin inquiry of the alleged anti-competitive
practice either on the basis of information received from private parties or on
reference received from the Central or the State Government or by taking suo
moto cognizance. During the first two FYs the CCI did not take suo moto
cognizance of any anticompetitive matter, however in FY 2011-12, the CCI started
5 investigations by taking suo moto cognizance. The CCI received information by
reference for one matter in FY 2010-11, references increased to 4 in subsequent
FY 2011-12. As far as other informants are concerned, it shows a healthy mix of
private individuals, trade associations, chambers of commerce, direct competitors
in the market, enterprises engaged in distributing activity for a dominant
manufacturer, non-government organization etc.6 The mix of informants shows
that the aims and objectives of the Competition Act have permeated through
different strata of society and citizens and enterprises are coming forward to
provide information about anti-competitive practices.
 Industries in which Opposite Parties are
engaged
The opposite parties in the investigations handled by the CCI belong
to diverse industries. Major complaints have been received in the
enterprises engaged in real estate, pharmaceutical and chemical and
drugs, travel and tourism, film distribution and media, aviation and
telecommunication sectors7. This however is not an indication that
these sectors indulge in rampant anti-competitive activity. The
primary reason behind receiving more complaints in these sectors
may be attributed to the fact that in each of these sectors the CCI has
in one or more cases issued heavy penalties or has passed cease and
desist orders. The wide reporting of the orders issued by the CCI has
resulted in other informants coming forward to report on the specific
industry sector in which the CCI has passed the order imposing
penalty or ceases and desist orders.
 Complaints received against state owned
enterprise

• As discussed below the Competition Act also extends to State

Owned Enterprise (SOE) as well as State departments engaged
in commercial activity as opposed to discharging its sovereign
obligation. Our data shows that the CCI has received a healthy
number of complaints against the SOEs such as Railways, Coal
India, Public Sector Undertaking Banks, State owned mining
companies, Central Government Ministries (Health and
Agriculture Ministry), Oil PSUs, State Governments (the State
of Andhra Pradesh and Goa), State industrial corporation,
Metro rail corporations, Steel PSU etc..
 Complaints received against state owned
enterprise

• The CCI had found prima facie ground to initiate an inquiry in many of the
complaints received against State departments and SOEs, however the CCI
has yet not found any violation implicating SOEs. The initiation of various
inquiries against the SOEs is evident that the CCI is determined to enforce
the law to the extent that these SOEs are engaged in commercial
economic activities. This is also a heartening sign that unlike challenges
faced in various countries the SOEs in India will stand at same footing if it
comes to the violation of Competition Act and the status of SOE may not
be a mitigating factor.10 Another interesting point that comes across is
that SOEs are not only complained against, i.e. joined as opposite parties
before the CCI but they have also been informants / complainants in
various cases. The railways and various other PSUs have been informants
in multiple cases.
 Inquiry by the CCI

• On the basis of data collected by us we have found that in more than 60% of
the cases CCI has looked into, the CCI has not found a prima facie case to refer
the matter to the DG. A perusal of a sample of such rejected cases indicates
that such cases are either in the nature of consumer or unfair trade practice
cases and the consumer courts would have been the correct forum to present
these cases or that the informants were indulging in forum shopping against
the opposite party. From the publicly available data and media reports we have
also found that informants have gone into appeal against the CCI’s orders
pertaining to finding no prima facie case to refer the matter for investigation.
However we have not come across any case where the CCI has been directed
by COMPAT to initiate investigations. This trend is alarming, since the capacity
of CCI in terms of employee and the bench strength is limited. Such a high
number of frivolous cases consumes precious time of the CCI and its staff.
 Cartel v/s Abuse of Dominance

• In the period of review beginning FY 2009-10 to February 2013, we have

found that there is almost an equal number of anti-competitive
agreements and abuse of dominance cases. Our consolidated data
presented as Annexure A to this Report shows that in the orders passed
by the CCI, 63 cases were section 4 cases relating to the abuse of
dominance, whereas 58 cases were section 3 cases relating to cartels and
other anti-competitive agreements. In 40 other cases informants have
raised issues under both Sections 3 and 4 of the Competition Act. The
competition enforcement agencies across the world generally adjust their
enforcement actions to prioritize between the cartelization cases or the
abuse of dominant cases, however it is not discernible yet from the
collected data as to what is the priority of the CCI in terms of
enforcement actions.
 Dissenting opinion in CCI Orders

• Recently there have been media reports that the CCI is debating whether or not
the CCI should continue to make dissenting orders public.The argument of experts
advocating against making these reports public is that the CCI being an expert
body created under the Act is not required to publish dissenting opinions. Other
sectoral regulators such as SEBI and Telecom Regulatory Authority of India also do
not make their dissenting opinion public. As can be gathered from the data
provided in Annexure A that in almost 20% of the cases, members of the CCI have
written either a separate opinion or dissenting opinion. The existence of separate
and dissenting opinions indicate that there is ample scope for interpretation and a
clearer understanding of this new piece of legislation. Competition law
jurisprudence in India is at a nascent stage therefore in the benefit of every stake
holder, it is absolutely imperative that the order of CCI should include a dissenting
opinion which will help in the growth and strengthening of competition law
jurisprudence in this country.
 Imposition of penalty

• On the basis of data collected by us we have not been able to find any trend in
the imposition of penalty by the CCI. In some cases like Builders Association of
India v. Cement Manufacturers Association & Ors the CCI imposed a penalty
equivalent to 0.5% of the profit of cartelizing cement companies. In other
cases varying degree of penalties have been imposed which fails to indicate to
any trend. To illustrate, in the NSE case 5% of the average turnover, in the DLF
case 7% of turnover and in BCCI case penalty at the rate of 6% of average
turnover was imposed. In the Vadodra Drug Association case penalty at the
maximum rate of 10% of average turnover totaling to Rs. 53,387 was imposed
but the members of the association who benefitted from the drug association’s
anti-competitive practice were allowed to go scot free. In some cases despite
the presence of clear evidence the CCI has merely imposed a token penalty. In
the Film Distribution case the CCI imposed a token penalty of Rs. 1,00,000 only.