Competition Advocacy: An Analysis of Provisions under Competition Law of India

  • Sandeep Saini and Chinky Nanda
  • Show Author Details
  • Sandeep Saini

    Assistant Professor at Geeta Institute of Law, Panipat, India

  • Chinky Nanda

    Assistant Professor at Geeta Institute of Law, Panipat, India

Abstract

Competition support is one in all the most pillars of contemporary competition law that aims at making, increasing and strengthening awareness of competition within the market. Section forty nine of the Competition Act, 2002 mandates the CCI to undertake support for promoting competition. “Competition advocacy” suggests that those activities that are conducted to market a competitive setting for economic activities. The most beneficiaries of competition policy and law are the customers, whose welfare is its declared objective of competition Act. Support is that the act of influencing or supporting a selected plan or policy. Effective implementation of any policy and law mostly depends upon the disposition of the folks to simply accept the law. In this sense support forever plays an important role in securing the disposition and acceptableness of any policy and law. Raising the amount of awareness among the general public is a vital step towards making a contest culture inside the country. it's typical knowledge that a contest agency should do quite merely enforce its country’s competition law. Competition could also be lessened considerably by varied public policies and institutional arrangements in addition. Indeed, personal restrictive business practices are typically expedited by varied government interventions within the marketplace. Thus, the mandate of the competition workplace extends on the far side simply implementing the competition law. It should additionally participate a lot of generally within the formulation of its country’s economic policies, which can adversely have an effect on competitive market structure, business conduct, and economic performance. It should assume the role of competition advocate, acting proactively to evoke government policies that lower barriers to entry, promote deregulating and trade liberalization, and otherwise minimize inessential government intervention within the marketplace. It’s same that it's particularly necessary for competition agencies in developing countries to interact in competition support. The economic policies in these countries are undergoing basic changes; markets have become a lot of open; new government and restrictive establishments are being formed; trade is presumptuous bigger influence; and state closely-held enterprises are being privatized. Competition policy ought to have a basic role during this transition method; however it's troublesome for a replacement competition agency to amass the influence and therefore the skills that it wants for this purpose. A Foundation for Competition support here are sure conditions for effective support by a contest agency. a minimum of three is known the agency ought to have a big degree of independence from political influence from each within and out of doors the govt. its long been recognized that independence is vital for the enforcement perform of a contest agency, however it's a necessary element of effective support in addition. There are two aspects to independence, structural and operational. Bureau that's created as a separate entity, not a part of a ministry and accountable on to the parliament or general assembly for its budget, is structurally freelance. All else being equal, it'll relish relative freedom in ending its social control and support functions.

Type

Research Paper

Information

International Journal of Law Managment and Humanities,
Volume 4, Issue 2, Page 2049 - 2055

DOI: http://doi.one/10.1732/IJLMH.26456

Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.

Copyright

Copyright © IJLMH 2021

I. Introduction

A commonly accepted definition of competition advocacy is that it includes all activities of a competition agency that are intended to promote competition apart from those that involve enforcement of the competition law. It is important that competition agencies in all countries engage in competition advocacy, but the discussions above suggest that it is especially critical for those in developing countries to do so. There are certain events that occur in the formative stages of a market economy, including privatization and regulatory reform, which will significantly impact how the new economy develops. It is better to accomplish these changes properly at the outset than to try to amend them later, and the participation of the competition agency as an advocate for competition has obvious value to that end. Further, most developing countries lack suitable competition cultures, and it is important for the agency to begin the process of building one. These circumstances suggest that competition agencies in developing countries should be relatively more active in competition advocacy than their counterparts in developed countries. At the same time, however, they may lack the foundation for doing so – they may not yet have acquired the independence, the resources and the credibility necessary for effective advocacy. There is no obvious solution to this dilemma. The agency must simply exercise good judgment in selecting and pursuing its advocacy projects. It must seek out matters that are economically important, politically visible, that will not occupy too many resources and in which the agency has a reasonable chance of success. It must give ongoing attention to building a competition culture through aggressive public relations and dissemination of information. And importantly, it must not neglect its law enforcement responsibilities. It must exercise the same care and expend at least the same amount of energy in finding and prosecuting violations of the law as it does in its advocacy efforts.

According to the Raghavan Committee[3]

The role of CCI is not merely enforcing the Competition Law. It has to participate in the formulation of the country’s economic policies, which may adversely affect competitive market structure, business conduct and economic performance. Therefore Commission has to act the role of a competition advocate also to bring about Government policies that lower down the barriers to entry, promote de-regulation and trade liberalization and promote competition in the market place. Therefore there is a direct relationship between competition advocacy and enforcement of competition law. The aim of competition is to lead more competitive market structure without the direct intervention of the CCI. To make successful competition advocacy programme, CCI has to develop relationship with the Ministries and Departments of the Government, regulatory agencies and other bodies to formulate and administer policies affecting demand and supply positions in various markets. Such relationships will facilitate communication and search for alternatives that are less harmful to competition and consumer welfare.CCI has to encourage debate on competition and promote a better and more informed economic decision making. Competition advocacy must be open and transparent to ensure safeguard the integrity and capability of the CCI. By establishing good media relations and explaining the role and importance of Competition Policy/Law as an integral part of the Government’s economic framework CCI can enhance the competition advocacy.

II. Advocacy in the Competition Act, 2002[4]

In recognition of the importance of the various stakeholders, the Act lays emphasis on competition advocacy initiatives to be taken by CCI at three levels –

  • The policy makers (Central and State Governments),
  • The sectoral regulators and
  • The public at large.

Law provides that the Central Government as well as State Governments have to make reference to CCI for its opinion. However, CCI can give its opinion on competition policy[5] on its own to government, no reference is required. Advocacy is therefore, an important tool in most jurisdictions for fostering competition in regulated sectors. It is mandatory for the regulators to inform the CCI of any proposed Regulations so as to enable it to provide its opinion on the Competition dimensions. The Act specifically provides for competition advocacy for creating awareness and imparting training about competition issues amongst various stake-holders[6]. Besides consumers and consumer organizations, such initiatives could target the business, professionals, media, the law makers, bureaucrats and the judiciary. The role of other stakeholders like consumer organizations, industry bodies, trade associations, professional bodies, research institutions and other civil society organizations is equally important to create a culture of competition in the country. They are encouraged to supplement the efforts of the CCI.

III. Techniques of Advocacy or Role of CCI

Various competition advocacy tools are effectively utilized by competition authorities. Seminars and workshops are effective tools for targeted audience. Published brochures, guidelines, articles and posting them on website are able to carry the message far and wide. Many competition authorities may give opinion on proposed legislation and public policy on their own, so that the law makers and policy makers consider the competition dimensions and give reasons for deviating from them for the benefit of the public. The CCI should carry out market studies to understand the state of competition in various sectors in order to advise the concerned authorities to make necessary changes so as to usher greater competition to usher competition where there is weak competition or no competition, as the case may be. Advocacy allows competition agencies to expand its reach and play an important role in areas where its role is usually ignored[7]. It is imperative to CCI to formulate, publish and post in the public domain guidelines covering various dimensions related to competition law for enhancing public awareness. Such guidelines help enterprises by bringing greater clarity about the provisions of the competition law and the manner of its enforcement. The concept and the role of competition are relatively new to the Indian business community. There is an urgent need to increase the level of awareness about the benefits of competition and the contribution of the competition law amongst the public, more particularly amongst the business community. The CCI has been given the mandate to generate public awareness. The opportunities for competition advocacy are numerous, and take several different forms. Below is a brief discussion of four principal forums in which a competition agency may practice advocacy[8]:

 (a) privatization.

(b) legislation, government policy and regulatory reform.

 (c) competition policy in regulation.

 (d) building a competition culture.

These classifications don’t seem to be reciprocally exclusive, of course. Privatization problems, for instance, could arise within the course of restrictive reform during a given sector. Again, the stress in these discussions is on support in developing countries. Privatization .The economies of the many developing countries area unit characterized by a major degree of participation by the state through state in hand enterprises. Market reforms in these countries inevitably feature the privatization of those SOEs. The competition agency ought to have a job within the privatization method. it’s necessary, it’s usually aforesaid, that in public in hand monopolies not be reborn into personal ones through the privatization method. The state has Associate in nursing interest in maximizing its revenues in privatization sales, however, Associate in Nursing so it’s Associate in nursing incentive to make and sell an enterprise that has market power. Such Associate in nursing entity has additional price than one that’s introduced into a competitive market. The competition agency is well placed to supply resistance to the current tendency. it’s within the agency’s interest to participate within the privatization method if solely as a result of “getting it right” at the privatization stage – making competitive markets from the first – can reduce its social control burdens anon. The agency will in all probability be handiest during this regard if the competition law applies on to privatization transactions. That is, the agency will review and block, or need modifications to, a projected privatization even as it might with relevance the other merger or restrictive agreement. this can be not the case in several countries, however, which implies that the agency has on the market solely its powers of support. Ideally the applicable law can allow the competition agency to participate formally in privatizations – to receive timely notice of projected transactions, to request the submission of knowledge and to submit formal statements or opinions concerning the competitive effects of the proposal. The competition agency ought to limit its review of a projected group action to its competitive effects. Privatization may be Associate in nursing intensely political method. There is also powerful interests clothed in support of Associate in Nursing anticompetitive group action. The competition agency’s review, therefore, ought to be skilled and impartial. If a group action is deemed to be anticompetitive[9], the agency ought to pay explicit attention to the remedy that it proposes. block the group action, or a wholesale breakup of the entity to be oversubscribed, is also politically distasteful. an appropriate various is also to encourage measures to lower barriers to entry within the affected market or markets, as well as trade barriers. The agency ought to additionally resist tries by the privatization agency to grant concessions or privileges to the buying entity during a privatization that may interfere with the economical operation of the market. The privatization method points up most acutely the quandary facing the competition agency during a developing country. The agency’s participation as advocate for competition is perhaps obscurity additional necessary than in privatization, however that method sometimes comes early during a country’s market reforms, at a time once the new competition agency could have comparatively very little influence. It additionally presents a chance, however. A booming intervention by the agency during a status privatization will considerably enhance its name and standing within the country. Competition Law and CCI will facilitate government and government bodies by:

  • Creating awareness among varied levels of state Officers to harmful effects of anti-competitive measures[10] adopted by suppliers, makers etc.
  • Helping distinctive areas wherever bid-rigging, cartelization or abuse of dominance is also happening additional usually[11].
  • Helping in protection of tiny enterprises, freelance and micro-retailers against abuse of dominance by larger enterprises.
  • Creating positive result on wages[12], operating conditions and workers’ welfare as a results of increase in allocative efficiencies arising in labour market.
  • Familiarizing with the legal remedies on the market in competition law.
  • Helping them develop competition compliance programs.
  • Providing competition recommendation in framing policies that area unit competition compliant.
  • Creating a healthy image of country’s economic and industrial policies to the planet

IV. Conclusions

Peep of Competition support Initiatives Taken By CCI The CCI has preoccupied competition support efforts at the same time with the Central Government and State governments[13], besides enterprise support with the opposite stakeholders like the business chambers, shopper activists / associations, tutorial establishments and statutory bodies of execs like lawyers, chartered accountants, value accountants and company secretaries. CCI has taken varied initiatives for promotion and making awareness of competition law awareness and capability building in competition matters as follows- National and State level Workshops and Seminars Special lectures organized for CCI officers Papers and studies printed for competition support and for making awareness of competition problems. Capability building of stakeholders or for CCI officers to participate in competition restrictive method Competition connected restrictive impact assessment; market studies and analysis comes meted out by the commission[14]. Consultation papers published/ placed on web site of the Commission. Press conferences and press releases.

*****

FOOTNOTES

[3] S. V. S. Raghavan is an Indian industrialist and the former head of Bharat Business . SVS Raghavan Committee (2015). “Committee Report – Full Text” (PDF). Centre for Competition and Regulation. Retrieved 20 July 2015.

[4] The Act of Parliament received the assent of the President on the 13th January, 2003

[5] Subs. by Competition (Amendment) Act, 2007 for:“(1) In formulating a policy on competition (including review of laws related to competition), the Central Government may make a reference to the Commission for its opinion on possible effect of such policy on competition and on receipt of such a reference, the Commission shall, within sixty days of making such reference, give its opinion to the Central Government, which may thereafter formulate the policy as it deems fit.”

[6] Section -178, Indian Company Act ,2013

[7] Economic Survey (2005-06), Ministry of Finance, Government of India.

[8] Pradeep S. Mehta and Nitya Nanda, (2003) “Competition Issues With International Dimensions” in CUTS (ed), Competition Policy & Pro-poor Development, CUTS, India.

[9] Ahluwalia, Isher Judge, (1993) “Industrial Policy Reform of Public Sector Enterprises and Privatisation in India,” paper presented at the conference on ‘India – The Future of Reforms’, Merton College, Oxford.

[10] Planning Commission (2006), “Towards Faster and more Inclusive Growth – An Approach to the Eleventh Five Year Plan, “Government of India.

[11] Reference by State Governments is proposed in the Competition (Amendment) Bill, 2006

[12] Report of the High Level Committee on Competition Policy and Law, 2000 Para 6.4.8

[13] Forty-Fourth Report, Standing Committee on Finance (2006-07), Lok Sabha Secretariat.

[14] Report of the High Level Committee on Competition Law and Policy, 2000.


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