Daily Current Affairs – 22th February, 2016

Daily Current Affairs – 22th February, 2016

For a Robust Competition Law- Competition Commission of India (CCI)

Let us talk about insights on measures to make the competition law more effective—

  1. Upgrading of the institutional capacity-
  • The foremost challenge for the fair-trade regulator is the upgradation of its institutional capacity, as it takes five to six years for the regulator to mature
  • Since 2009, the commission has handled 688 anti-trust cases, and around 370 combination matters; while cracking down on cases of cartelisation (in the case of cement and airlines companies) as well as abuse of market power (those involving NSE, DLF, Coal India)—the commission has imposed fines worth around of Rs 14,000 crore over the past seven years, the actual recovery has barely been around one per cent
  • Manpower Crunch:
    • In 2014, according to the Ministry of Corporate Affairs, the nodal ministry for CCI, the regulator and Director General (DG)’s office had the strength of 84 and 19, as against the sanctioned posts of 156 and 41, respectively
    • This shortage is more acutely felt at DG’s office – the investigating arm of the commission, with each officer handling 10-15 cases encompassing different sectors, all at once. As a result, there is a huge backlog of cases with it.
    • Absence of institutional memory: Few permanent staff with most officers investigating a case being on deputation for three years

Need for the Ministry to comprehensively review the recruitment rules—

  • Recruit or engage domain experts/professionals on a contractual basis with a view to professionalising the working of the commission and its offices
  • Employ stricter screening process

2. Need for a strong, effective leniency programme

  • Cartels are most damaging to consumers and poor evidence collected leads to poor enforcement of directives most of the time. Therefore, in order to ensure an effective anti-cartel regime, it is essential to have a strong and robust leniency programme.
  • There is a case of not only unpredictability and non-incentivisation of the whistle-blowers but also the identity of the whistle-blower not being kept protected.
  • EU- All cartel decisions have emanated from leniency applications; its advantage being provision of accurate evidence and ensuring a finding of breach. Therefore the CCI must revisit its leniency programme and follow international best practices.
  • Huge number of cases has been set aside by the Competition Appellate Tribunal (COMPAT) for a failure by the CCI to adhere to basic natural justice norms and therefore, the CCI must not resort to short cuts disregarding the rights of the defence and should exercise their rights lawfully.
  • Need to—
    • The CCI must entertain only those cases where there is a clear competition law violation
    • Introduction of additional exemption to help weed out harmless transactions

3. Strike a balance between regulator and judicial forum

  • Set up in 2003, the commission could not commence enforcement till several years later due to a combination of—
    • Constitutional challenges in the higher courts,
    • Prolonged process of amendments to the Competition Act, and
    • Delay in the notification of its powers by the government
  • The commission too has to step back and review its journey— Some slippages:
    • Not following the correct procedure for cross-examination,
    • Not giving proper opportunity to a guilty party to defend and
    • Lapses in the hearing of arguments
  • A two-way path that needs to be addressed—

Commission- Introspect on remedial measures it needs in its procedures

Judiciary- Reflect on whether all the minute processes and rules of evidence that apply to courts must equally apply to the commission, which is a regulator, and not a judicial forum

A balance needs to be struck between the interests of the parties, and the broader interests of India’s markets and consumers

Share this post