Competition Commission of India – Objectives

The CCI acts as the competition regulator in India. The Commission was established in 2003,
although it became fully functional only by 2009. It aims at establishing a competitive
environment in the Indian economy through proactive engagement with all the stakeholders,
the government, and international jurisdiction. The objectives of the Commission are:
To prevent practices that harm the competition.
To promote and sustain competition in markets.
To protect the interests of consumers.
To ensure freedom of trade.
How was the Competition Commission of India formed?
The CCI was established by the Vajpayee government, under the provisions of the Competition
Act 2002.
The Competition (Amendment) Act, 2007 was enacted to amend the Competition Act, 2002.
This led to the establishment of the CCI and the Competition Appellate Tribunal.
The Competition Appellate Tribunal has been established by the Central Government to hear
and dispose of appeals against any direction issued or decision made or order passed by the
CCI.
The government replaced the Competition Appellate Tribunal (COMPAT) with the National
Company Law Appellate Tribunal (NCLAT) in 2017.
What is the Competition Act, 2002?
The Competition Act, 2002 was enacted by the Parliament of India and governs the Indian
competition law. The Act received the presidential assent in 2003.
The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and
replaced by the Competition Act, 2002.
This was done based on the recommendations of the Raghavan Committee.
The Act:
Prohibits anti-competitive agreements
Prohibits abuse of dominant position by enterprises and
Regulates combinations (acquisition, acquiring of control, and M&A), which can cause or is
likely to cause an appreciable adverse effect on the competition within India.
The Act follows the philosophy of modern competition laws.
Why do we need Competition Laws?
Competition laws perform three main functions in society.
To uphold free-enterprise: the competition laws have been called the Magna Carta of free
enterprise.
Security against market distortions: there is a constant risk of various people resorting to
market distortions and abusing their dominant positions to resort to anti-competitive activities,
thus competition laws are required to ensure that the market is safe from the various
distortions.
They also aid in the promotion of domestic industries: Competition laws are required to ensure
that the domestic industries do not get suppressed with an increase in globalization. They play
a quintessential role in determining the viability of the domestic industries. However, to keep
the Indian competition laws updated with the businesses of the digital world which include not
many assets, the Indian government has established a Competition Law Review Committee.
Competition Commission of India – Members Composition
The members of the CCI are appointed by the Central Government. The Competition
Commission of India is currently functional with a Chairperson and two members.
The Commission used to consist of one chairperson and a minimum of two members and a
maximum of six members.
This has further been reduced to three members and one chairperson by the Cabinet. This
move was taken to produce a faster turnaround in hearings and speedier approval, thereby
stimulating the business processes of corporates and resulting in greater employment
opportunities in the country.
The chairperson and the members are usually full-time members.
The eligibility for the Commission: The Chairperson and every other Member shall be a person
of ability, integrity, and who, has been, or is qualified to be a judge of a High Court, or, has
special knowledge of, and professional experience of not less than fifteen years in international
trade, economics, business, commerce, law, finance, accountancy, management, industry,
public affairs, administration or in any other matter which, in the opinion of the Central
Government, may be useful to the Commission.
Competition Commission of India – Functions
The preamble of the Competition Act focuses on the development of the economy and the
country by avoiding unfair competition practices and promoting constructive competition. The
functions of the CCI are:
Ensuring that the benefit and welfare of the customers are maintained in the Indian Market.
An accelerated and inclusive economic growth through ensuring fair and healthy competition in
the economic activities of the nation.
Ensuring the efficient utilization of the nation’s resources through the execution of competition
policies.
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 through a
merger or acquisition to ensure that it abides by India’s competition laws – the Competition
Act, 2002.
CCI also ensures interaction and cooperation with the other regulating authorities in the
economy. This will ensure that the sectoral regulatory laws are agreeable with the competition
laws.
It also acts as a business facilitator, by ensuring that a few firms do not establish dominance in
the market and that there is a peaceful co-existence between the small and the large
enterprises.
Competition Commission of India – Challenges
The CCI faces multiple challenges while implementing the Competition Laws. The challenges can
be both internal and external.
The constant and continuous change in the way businesses are undertaken and the evolving
antitrust issue is proving to be a significant challenge for the CCI.
The emerging business models are based on a digital economy and e-commerce. This proves to
be a problem for the CCI as the current competition laws talk only of assets and turnovers.
The number of benches of the CCI has to be increased to pronounce judgments more speedily
on the competition cases.
The inclusion of parameters in the competition and antitrust laws such as data accessibility,
network effects, etc. is important to ensure that the Competition laws are relevant in a digital
economy.