Date: 06/02/2023

Relevance: GS-2: Separation of powers between various organs dispute redressal mechanisms and institutions.

Key Phrases: Competition Commission of India, Ministry of Corporate Affairs, Tribunals and Regulatory Bodies, Mahindra Case, Registrar General(s) of High Courts.

Context:

• Amidst a growing tussle between the Centre and Judiciary over power to appoint judges and members of Tribunals and Regulatory Bodies, the Centre has fired a fresh salvo against the Judiciary by keeping the judges away from the zone of consideration itself for the posts of members in Competition Commission of India (CCI).

Key Highlights:

• In a notice issued by the Ministry of Corporate Affairs (MCA) for filling up three posts of members in CCI, the Centre has invited applications from “eligible officers in the Central Government/State governments/UTs, who are interested and can be spared in the event of selection,” effectively ruling out the candidature of judges for the posts.
• The notice has been circulated to only ministries and departments of the government of India” and “chief secretaries of all State governments/UTs”, keeping the Registrar General(s) of High Courts conspicuously out of the circulation loop.

Competition Commission Of India:

• The Competition Commission of India (CCI) is the chief national competition regulator in India.
• It is a statutory body within the Ministry of Corporate Affairs and is responsible for enforcing the Competition Act, of 2002 to promote competition and prevent activities that have an appreciable adverse effect on competition in India.
• The commission was established on 14 October 2003. It became fully functional in May 2009.
• Composition: CCI consists of a Chairperson and 6 Members appointed by the Central Government.

Significance:

• Ensuring that the benefit and welfare of the customers are maintained in the Indian Market.
• Accelerated and inclusive economic growth through ensuring fair and healthy competition.
• The CCI looks into cases and investigates them if the same has a negative impact on competition.
• CCI also approves combinations under the act so that two merging entities do not overtake the market.
• Ensuring the efficient utilization of the nation’s resources.
• The Commission also undertakes competition advocacy.
• It is also the antitrust ombudsman for small organizations.
• The CCI will also scrutinize any foreign company that enters the Indian market that abides by India’s competition laws – the Competition Act, 2002.
• CCI also ensures interaction and cooperation with the other regulating authorities in the economy.
• It also acts as a business facilitator.

Challenges before the Competition Commission of India:

1. Impact of the Pandemic:
   • Since the primary legislation dates back to 2002, the transformation of the market with the explosive growth of the digital economy in all sectors, particularly during the pandemic, has posed new challenges for the market regulator.
2. Toothless Regulator:
   • The CCI has collectively fined companies about INR 13,000 crore between 2011-12 and 2018-19. But it has collected less than 1% of it so far.
3. Overlap with other Regulatory Bodies:
   • In spheres such as telecom, internet and big-technology, CCI’s functions also overlap with other regulatory bodies such as the Telecom Regulatory Authority of India (TRAI).
4. New Market Definition:
   • There is a need for new market definition for digital technologies. Since, there are no boundaries in the digital space, defining relevant market has been a tough task for regulators around the world.
5. Dysfunctional Days:
   • The CCI is having only two members — short of even a quorum requirement of three for transacting business.
   • As a result of the lack of quorum, CCI has been dysfunctional for about four months, putting various M&A deals on hold.

Way Forward:

• In UK concurrent (share) jurisdiction approach has been adopted in which both the competition authority and the sectoral regulators work concurrently in a particular case. India should adopt the same practice.
• The sole purpose behind enacting Competition Law in India was to prevent any abuse of dominant position so that CCI should have the final say in cases of competition matters.

Conclusion:

• The Competition Commission is essential in maintaining market stability since it aids in preventing all sorts of unfair trade practices that are frequently used by large corporations, such as cartelization, abuse of dominant position, and monopolization of their product.
• However current development will be detrimental to its functioning and keeping the competition commission of India impartial.

Source: The Hindu BL

Mains Question:

Q. What do you know about the Competition Commission of India? Discuss various challenges before it. (250 words).