Ques: According you, what are the key challenges that the Competition Commission of India faces?

Ans: The Competition Act, 2002 is a modern law and its features are very distinct from the earlier enacted Monopolies and Restrictive Trade Practices Act. Even the WTO Trade Policy Review of India in its 2007 report termed the Competition Act as a modern law based on economic principles. The key challenges in enacting this law is to firstly create awareness among the stakeholders and emphasizing that the new law is business friendly and is aimed at promoting competition. Consumers benefit the maximum from this. The CCI has to ensure that this is achieved through a well formulated advocacy programme. The second challenge facing our commission is to train professionals to assist the commission in its enforcement work. This includes training these professionals in competition analysis because experience in this field is limited in the country.

Ques: On 22nd May, notifications regarding S.3 and S.4 of the Competition Act, 2002 came into effect which deal with anti-competitive agreements and abuse of dominance respectively. What about the provisions regarding mergers and when would the come into effect?

Ans: Sections 5 and 6 of the Competition Act, deal with combinations which involves mergers, acquisitions and amalgamations. The regulation of ‘combination’ is likely to be made effective shortly as it is reportedly on the 100 day Agenda programme of the present Government.

Ques: Don’t you feel that the country’s draft merger regulations are still too ambiguous as on what basis would the Competition Commission of India form its prima facie opinion, the waiting periods, who would be consulted and how and whether can modifications be prescribed?

Ans: The draft merger regulations have not yet been finalised. These were posted even before the Commission was set up as these regulations were prepared in 2008 whereas the Competition Commission of India became fully constituted on 1st March 2009. We are yet to take a decision regarding the same though we shall look at updating and amending these regulations.

Ques: How do you plan to enforced compliance in an effective manner?

Ans: As the Competition Act is still relatively new, there is need for creating awareness about the benefits of voluntary compliance of the Act by enterprises. The Act explicitly mandates true advocacy. Enforcement action and the certainty of being caught and punished if one violates the law would assist in ensuring compliance. The law empowers the CCI with sufficient powers of investigation. For example, in the case of cartels, the CCI can impose on each member of the cartel, a monetary penalty of up to three times the profit during the period of cartelization or 10% of the turnover during that period of cartelization. On the other hand, the law also enables the CCI to be lenient towards those cartel members who come out with a view to assist the Commission with evidence regarding the cartel.

Ques: In terns of priority, what are the competition issues that you plan to tackle first?

Ans: The Competition Act mandates the CCI to address issues related to anti-competitive agreements, abuse of dominance and combinations which involves mergers, amalgamations, mergers and acquisitions. Since the provisions related to anti-competitive agreements and abuse of dominance (i.e. sections 3 and 4 respectively) have come into effect, we shall deal with these provisions and also address issues related to combinations in the due course of time. However, our priority shall be to set up infrastructure, in terms of both physical infrastructure and recruitment of professionals. Regarding enforcement, one of the Commission’s main priorities shall be to tackle cartels, which are a menace to the society. Moreover, the global meltdown has facilitated the abuse of dominant positions by enterprises which shall also be a key issue of focus for the Commission.