Competition Commission of India
The Competition Act
The Competition Act, 2002, as amended by the Competition (Amendment) Act,
2007, follows the philosophy of modern competition laws. The Act prohibits anti-
competitive agreements, abuse of dominant position by enterprises and regulates
combinations (acquisition, acquiring of control and M&A), which causes or likely
to cause an appreciable adverse effect on competition within India.
Competition Commission of India
Competition Commission of India is a statutory body of the Government of
India responsible for enforcing The Competition Act, 2002 throughout India and
to prevent activities that have an appreciable adverse effect on competition in
India. It was established on 14 October 2003. The objectives of the Act are sought
to be achieved through the Competition Commission of India (CCI), which has
been established by the Central Government with effect from 14th October 2003.
CCI consists of a Chairperson and 6 Members appointed by the Central
Government.
It is 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 in the markets of India.
The Commission is also required to give opinion on competition issues on a
reference received from a statutory authority established under any law and to
undertake competition advocacy, create public awareness and impart training on
competition issues.
Accordingly the Competition Act, 2002, provides for the establishment of the
Competition Commission of India. Section 7 of the Act deals with establishment of
“Competition Commission of India”.
Composition of the Commission
The Competition Commission shall consist of a Chairperson and not less than two
and not more than ten other members to be appointed by the Central
Government. The Chairperson and the members are appointed by the Central
Government from the panel of names recommended by the selection committee
consisting of;
The Chief Justice of India or his nominee (chairperson of the committee);
Secretaries in the Ministries of Corporate Affairs and Law and Justice;
Two experts of repute having special knowledge of and professional experience
in international trade, economics, business, commerce, law , finance,
accountancy, management, industry , public affair or competition matters
including competition law and policy in international trade , economics, business,
commerce, law , finance, industry;
RBI Governor
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 reappointment. The Act provides that the salaries of the staff and other
expenses shall be met by the Competition Fund. The Central Government is
empowered to remove the chairperson and any member of the commission on
certain specific grounds and the procedure as specified in the Act. The ‘Persons’
appointed shall be whole time Members. The Act prohibits Chairperson and the
members to accept employment in or connect with the management or
administration of any enterprise which has been party to the proceedings before
the Commission, within two years of demitting the office. The Chairperson and
the members of See Section 10 of the Act Section 11 and section 53K deals with
the removal of Chairman or any member of the Commission.
He can be removed if he
a) Is ,or at any time has been, adjudged insolvent; or
b) Has engaged at any time, during his term of office, in any paid employment; or
c) Has been convicted of an offence which, in the opinion of the Central
Government, involves moral turpitude; or
d) Has acquired such financial or other interest as is likely to affect prejudicially
his functions as a member ;or
e) Has so abused his position as to render his continuance in office prejudicial to
the public interest; or
f) Has become physically or mentally incapable of acting as member.
The commission has been given protection of the service in as much as their
salary, allowance and other terms and conditions of the service will be varied to
their disadvantage after their appointment. The Chairperson and the other staff
of the Commission are deemed to be public servants within the meaning of
section 21 of the Indian Penal Code. No suit or proceedings shall lie against
Central government, Commission or the officers/ staff of the commission for
anything done in good faith or intended to be done under this Act or the rules or
regulations framed there under. The Chairperson has general power of
superintendence, direction and control over the administrative matters of the
Commission. The Competition Commission will also have suo moto powers for
initiating action against any perceived infringement. The Commission shall be
assisted by a Director General (DG) appointed by the central government.
Duties & Powers of CCI
It shall be the duty of CCI to sustain competition in markets, protect
freedom of trade and interests of consumers in markets.
To sustain competition in markets, CCI has power to make inquiries in case
of any certain agreement, abuse of dominant position or any combination by any
person or body corporate on its own or on receipt of complaint by consumer or
by reference of govt or any authority.
The CCI has powers to inquire into any of acts outside India that causes
adverse impacts on competition within India.
The Chairperson shall constitute benches to exercise powers of CCI and a
bench shall consist of at least 2 members include at least 1 judicial member
(qualified to be a judge of High Court. The Bench where Chairperson presides is
known as Principal bench and others are known as additional benches.
The CCI has power to make inquiry (either Suo Motto or on request of any
person, consumer or trade association) and pass order for any certain agreement,
abuse of dominant position or any combination that cause adverse effect on
competition within India.
The CCI can impose penalties on enterprises or on persons which shall not
be > 10% of turnover of enterprise or person in case of any offence as provided
under this act. Also CCI can order to any enterprise or person to pay
compensation to person or enterprise who suffered from acts of that person or
enterprise.
The CCI can advise central govt for division of a dominant enterpriseto
ensure that it does not abuse its position. Consequently, govt can take action
either same as advised by CCI or in other form as case may be.
The CCI has power equivalent to a civil court while discharging its functions
in matters such as summoning, producing evidences etc. Also has power to
regulate its own procedure such as place of sittings, timings etc.
Any person or enterprise can appeal to Supreme Court against order of
CCI within 60 days from date of order. But no appeal shall be allowed if order
passed by CCI involves consent of both parties.
No Civil court can exercise jurisdiction on any matter under this act or any
matter on which CCI is empowered to exercise jurisdiction.
Penalties
If any enterprise or person not complies with any order of CCI shall liable
for punishment of imprisonment up to 1 year or/and fine which shall not be > 10
lakh.
If any person fails to comply with any direction given by CCI or Director
General such as ignore summons etc. shall be liable for penalty of Rs 1 lakh per
day during such failure continues.
If any person or enterprise (party to a combination) provides any false
information or hide any considerable information shall liable for penalty of not
less than 50 lakhs and may be extended up to 1 crore.
Also every person of an enterprise (contravenes any provisions of act) who
was responsible to company for conduct of particular business shall be tried and
punished as may be determined by CCI.
Control of Central Govt over CCI
The Central Govt has power to exempt any number of enterprises from
provisions of act as it may deems fit for security or interests of country or public.
The Central can issue directions to CCI and CCI is bound to follow that
directions.
The Central Govt can suspend & take charge over the CCI for period not
exceeding 6 months in circumstances such as default made by CCI or situation
beyond control of CCI or in public interest etc. The Govt shall reconstitute CCI
after that period by fresh appointments may be differed from previous one.
