Review of orders of Commission in competition acts 2002
From Advocatespedia, The Law Encyclopedia
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. It became fully functional in May 2009 with Dhanendra Kumar as its first Chairman.
The Competition Act, 2002
The idea of Competition Commission was conceived and introduced in the form of The Competition Act, 2002 by the Vajpayee government. A need was felt to promote competition and private enterprise especially in the light of 1991 Indian economic liberalisation. 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 Merger and acquisition), which causes or likely to cause an appreciable adverse effect on competition within India. 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 14 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.
"The main objective of competition law is to promote economic efficiency using competition as one of the means of assisting the creation of market responsive to consumer preferences. The advantages of perfect competition are three-fold: allocative efficiency, which ensures the effective allocation of resources, productive efficiency, which ensures that costs of production are kept at a minimum and dynamic efficiency, which promotes innovative practices."
Supreme Court of India Judgment in Civil Appeal No. 7999 of 2010 pronounced on 9 September 2010
Preamble to the Competition Act
An Act to provide, keeping in view of the economic development of the country, for the establishment of a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto. To achieve its objectives, the Competition Commission of India endeavours to do the following:
• Make the markets work for the benefit and welfare of consumers.
• Ensure fair and healthy competition in economic activities in the country for faster and inclusive growth and development of economy.
• Implement competition policies with an aim to effectuate the most efficient utilisation of economic resources.
• Develop and nurture effective relations and interactions with sectoral regulators to ensure smooth alignment of sectoral regulatory laws in tandem with the competition law.
• Effectively carry out competition advocacy and spread the information on benefits of competition among all stakeholders to establish and nurture competition culture in Indian economy.
Review of orders of Commission
Any person aggrieved by an order of the Commission from which an appeal is allowed by this Act but no appeal has been preferred, may, within thirty days from the date of the order, apply to the Commission for review of its order and the Commission may make such order thereon as it thinks fit: Provided that the Commission may entertain a review application after the expiry of the said period of thirty days, if it is satisfied that the applicant was prevented by sufficient cause from preferring the application in time: Provided further that no order shall be modified or set aside without giving an opportunity of being heard to the person in whose favour the order is given and the Director General where he was a party to the proceedings.
• In December 2010, CCI instituted a probe to examine if there was any cartelisation among traders when onion prices touched 80 rupees but did not find sufficient evidence of market manipulation.
• In June 2012, CCI imposed a fine of ₹63.07 billion (US$940 million) 11 cement companies for cartelisation. CCI claimed that cement companies met regularly to fix prices, control market share and hold back supply which earned them illegal profits.
• In January 2013, CCI modified clauses in agreements between real estate company DLF Limited and apartment buyers. Business and finance Portal Moneycontrol.com welcomed the order saying that, "This is a landmark ruling and will benefit property owners across the country". Some of the important modifications were:
o The Builder cannot undertake any additional construction beyond the approved building plan given to the buyers.
o The builder will not have complete ownership of open spaces within the residential project area not sold.
o Not just the buyer but the builder will be liable for any defaults.
o All payments made by the buyers must be based on construction milestones and not "on demand".
o The builder will not have the sole power to form the owner’s association.
• On 8 February 2013, CCI imposed a penalty of ₹522 million (US$7.8 million) on the Board of Control for Cricket in India (BCCI) for misusing its dominant position. The CCI found that IPL team ownership agreements were unfair and discriminatory, and that the terms of the IPL franchise agreements were loaded in favour of BCCI and franchises had no say in the terms of the contract. The CCI ordered BCCI to "cease and desist" from any practice in future denying market access to potential competitors and not use its regulatory powers in deciding matters relating to its commercial activities.
• In 2014, CCI imposed a fine of ₹10 million upon Google for failure to comply with the directions given by the Director General(DG) seeking information and documents.
• On 17 November 2015, CCI imposed a fine of ₹258 crores upon Three Airlines. Competition Commission of India (CCI) had penalised the three airlines for cartelisation in determining the fuel surcharge on air cargo. A penalty of Rs 151.69 crores was imposed on Jet Airways, while that on InterGlobe Aviation Limited (Indigo) and SpiceJet are Rs 63.74 crores and Rs 42.48 crores respectively.
• In May 2017, CCI ordered a probe into the functioning of COAI (Cellular Operators Association of India) following a complaint filed by Reliance Jio against the cartelisation by its rivals Bharati Airtel, Vodafone India and Idea cellular.
• On 8 February 2018, it had fined Google's parent company, Alphabet Inc. for 135.86 cr rupees for 'search bias'