The promotion of competition is vital to the Indian economy
Live Mint, March 23, 2020
Speaking at an event staged by a media house and held at the beginning of March, Prime Minister Narendra Modi inter alia spoke about working on fair competition as one of the four pillars to achieve India’s target of a $5 trillion economy.
National Competition Policy: Compete, not also-run
Economic Times, September 19, 2019
As India faces one of its worst economic slowdowns, it’s worth revisiting past efforts to deal with difficult economic situations through the lens of structural competition reforms.
Economic Regulations, Competition, and Consumer Protection in Ancient India
The Antitrust Bulletin, June 20, 2018
Indian civilization, which is viewed as more than four thousand years old, is one of the oldest civilizations of the world. Like other great ancient civilizations, it began in a large river valley—the Indus river valley.
The role of competition policy for developmentevelopment
Live Mint, April 08, 2018
A competition policy will help in improving the competitiveness of enterprises and act as a bridge between industrial and trade policies.
- Why is Apple differentiating between India, China?
The Asian Age, September 20, 2017
The latest flavour in the mobile industry is iPhone X. Its manufacturer, Apple, is leaving no stones unturned in ensuring the global success of its flashy new smart phone.
- Call for a multilateral competition regime
Live Mint, October 12, 2016
Control over the global food value chain is getting consolidated in fewer private hands, posing serious security concerns. Four current multibillion-dollar deals in the agriculture sector are ringing alarm bells around the world the takeovers of Syngenta by ChemChina and of Monsanto by Bayer; and the mergers between Dow Chemical and DuPont, and between Potash and Agrium.
- Government policies hamper competitive neutrality?
The Asian Age, November 22, 2015
A large number of cases before the Competition Commission of India show how policy distortions lead to them. If only, our draft National Competition Policy (NCP) is implemented the case load will mainly be of firm level malpractices and distortions addressed separately…case of our four public sector general insurance companies who were recently hauled up for collusion. Were they at fault for doing it? Not really, since they were following the government diktat to coordinate their marketing including to not to poach on each others’ clients.
- Tackling trade associations’ anti-competitive practices
The Financial Express, July 23, 2015
Trade associations play the important role of mobilising voices of different players across sectors, which makes it easy for advocacy purposes as well as for negotiating issues of common interest to the members. However, in the process, associations often go beyond their legal mandate and end up being avenues for anti-competitive behaviour.
- A new competition law enforcement paradigm
Financial Express, August 17, 2015
One of the biggest movie grosser of recent times, Baahubali, was produced in Telugu and dubbed in Tamil, Malayalam and Hindi, and will perhaps be also done in French, Mandarin and Japanese. Fortunately, exhibition of dubbed Indian language versions was not prevented by powerful film and TV bodies, else Bahubali may not have broken records. In a first of its type, the film and TV trade bodies in Karnataka who were blocking dubbing of popular films and serials were hauled up by the Competition Commission of India in a complaint by a consumer group: Kannada Grahakara Koota.
- Where’s the reforms momentum?
The Hindu Business Line, July 24, 2015
…Adoption of an overarching competition policy and reforms has resulted in significant benefits across jurisdictions…India should also move fast towards adoption of NCP. It is a non-legislative instrument and the government should not face any bottlenecks in its adoption. Only when NCP is adopted will the government be able to showcase the synergies which could be created.
- Tackling trade associations’ anti-competitive practices
The Financial Express, July 23, 2015
Trade associations play the important role of mobilising voices of different players across sectors, which makes it easy for advocacy purposes as well as for negotiating issues of common interest to the members. However, in the process, associations often go beyond their legal mandate and end up being avenues for anti-competitive behaviour.
- Tailoring competition laws for state units
The Asian Age, November 22, 2014
When our public sector is much in news whether it involves privatisation or disinvestment, it is worth recalling whether they are good corporate citizens, especially when they are monopolies. Many are not. This was evident when the Competition Commission of India fined a whopping Rs 1,773 crore on Coal India for abuse of dominance in December 2013. The matter is still pending final adjudication but the issue is that Coal India has been truant. This was the first case of fining by CCI on a state owned enterprise (SOE), while it has come down with a heavy hand on several private sector firms… This might call for a relook on the manner in which the competition law is applied to SOEs. Whilst the competition law should indeed apply to SOEs, there might be need for the law to apply with some narrow derogation when it comes to SOEs
- Curb inflation through competition reforms
Livemint, July 22, 2014
Reforms are required across the board to create a culture of competition in India. At present, it is largely missing. Competition reforms and existence of an effective competition regime can help growth and curb inflation. More and effective competition can generate new innovations which is a major driver of economic growth. There is enough empirical evidence that higher product market competition can reduce inflation over time. Competition can increase supply—more choice for consumers at affordable and fair prices
- Resolving patent wars through competition law
Financial Express, March 31, 2014
The recent orders of the Competition Commission of India (CCI) asking its Director General to investigate Ericsson’s alleged anticompetitive conduct raises issues lying at the crossroads of Intellectual Property Rights (IPR) and competition. The order also raises the issue of third-party access on fair and reasonable terms, which our judiciary is yet to comprehend.
- Tailoring competition laws for state-owned enterprises
Financial Express, February 17, 2014
The Competition Commission of India (CCI) levied a fine of Rs 1,773 crore on Coal India Ltd, a state-owned enterprise (SoE), for abuse of dominance in the fuel-supply services market, and also recommended that it should be broken up. Although CCI has slapped heavy fines on other firms since it started operating, this was its first major penalty on an SoE…Whilst the competition law should indeed apply to SoEs, there might be need for the law to apply with some narrow derogation when it comes to SoEs. It is, therefore, not surprising that the central theme for the International Competition Network’s annual conference in April 2014 would be to debate on the application of competition laws to SoEs.
- Expediting National Competition Policy
Financial Express, January 27, 2014
Investment and competition are the two sides of a coin. The government is promoting investment seriously and is also addressing bottlenecks through the Cabinet Committee on Investment and a Project Monitoring Group. Many of the investment bottlenecks are due to entry barriers and thus promoting competition reforms can enable investment flows and immersion better and easier. Fortunately, the government is also considering competition reforms seriously and to oversee it by establishing a Cabinet Committee on Competition to be headed by the Prime Minister.
- Build a compliance culture
Financial Express, November 22, 2013
Every country needs a healthy competition culture through regulation of anticompetitive practices, removal of competition impediments and awareness generation. In many competition regimes, penalties for violating firms are reduced if the said firms have compliance programmes in place; such provisions incentivise businesses to be competition-friendly. Hitherto, the role of CCI has been restricted to limited awareness generation without any proactive advocacy. So, the unilateral awareness-generation approach of CCI seems to be short-sighted and misses the ultimate goal of building a culture of competition and self-compliance. Building a culture of compliance is a step ahead of plain awareness generation.
- Singed by the potash cartel
The Hindu Business Line, September 18, 2013
A large number of cartels, particularly in the natural resources sector, operate in the world, the most egregious one being crude oil. Since drilling for oil is considered a sovereign activity, the OPEC cartel does not violate any competition law in the world. With the recent break-up of the Russian-Belarusian potash cartel — Russia’s Uralkali quit the Belarusian Potash Co. (BPC) partnership and broke up a marketing venture that controlled about 43 per cent of global exports — the potash cartel is in the news again.
- Proscribe pay-for-delay
Financial Express, September 16, 2013
In the pharma company Actavis case, the Federal Trade Commission observed that reverse payment settlements should be declared unlawful as a general rule because they are anti-competitive and harmful to consumers by directly restricting output and raising prices. Although no concrete action has been taken against such deals as yet in India, nothing prevents Competition Commission of India to carry out investigations to uncover such shady deals and take action. Banning such deals, in India as well as globally, will not only save consumers extra money, it will also help prevent patients from discontinuing their necessary medication because of high cost of brand-name drugs. It is yet to be seen how quick the world’s largest market for generic drugs realises the need to do the same.
- Flying in the face of the free market
Business Standard, July 30, 2013
The proposal by the Ministry of Civil Aviation to create a cell to keep a watch on airfares and report unusual patterns to the Competition Commission of India (CCI) is anathematical to free market principles. Airlines follow a dynamic pricing strategy of charging passenger fares depending on when a flight is booked or on the simple principle of supply and demand on a particular route at a point of time. Nowhere in the world do governments regulate airfares, but they do expect their competition agencies to take deterrent action against the colluders. The government’s role is to promote competition in the marketplace so that players do not exploit the market.
- Why is business afraid of a more efficient competition law?
Financial Express, July 05, 2013
Traditionally, business opposes any competition law around the world, because they fear that its application will bite into their bottom lines, which is an extremely misplaced fear. Perhaps, they are ignorant of the fact that a competition law actually builds up their balance sheets, as many studies have shown, by making them more efficient and regulating the anti-competitive practices of their competitors, input suppliers and distributors…Any law anywhere in the world is not static and changes are made depending upon the experience that is gained, so what’s wrong with the proposed amendment bill?.
- Need for a realistic penalty regime
Financial Express, March 29, 2013
Most competition agencies have developed transparent guidelines for fining/penalties. Indeed, many of them did so after being questioned by courts, such as US, EU, France and so on. Most such guidelines follow a three step approach for defining the penalty amounts. It is thus recommended that for less serious contravention, the minimum amount should be 3% of the overall turnover; 5% for serious contravention, and 7% for very serious contravention. Recidivists (repeat offenders) would come under the third category even though their violation did not come under the same, if it was done the first time. Indeed, the gravity of the violation can differ due to subjectivity, but will need to be defended by the CCI.
- The Competition Commission is not as bad as is portrayed
Financial Express, February 11, 2013
“What is very important is the quality of the regulator, the whole principle; architecture ultimately depends on the calibre, quality and the professional capability of those who are going to actually carry on the process of regulation.” Thus spoke Ashok Chawla, chairman, Competition Commission of India (CCI) while launching the CUTS/CIRC third biennial report on the State of Competition & Regulation, 2011 in Delhi on December 27. The report inter alia bares the quality of regulation and the independence of regulators, including the competition agency, in India. Perhaps, Chawla was expressing his angst on how they are doing. A lot can be said about the CCI’s abilities to come out with some excellent reasoning in its judgments. With time, we hope that this is a pervasive feature of all of its orders.
- India’s uneven playing fields
Business Standard, December 14, 2012
Competitive neutrality is a minimum condition for effective mixed markets, for which the government needs to adopt and implement the National Competition Policy quickly. Despite being an essential ingredient for a successful competition regime, India is seeing several instances of distortion of this principle across its various sectors. In the recent past, there have been many such cases. The application of competitive neutrality and any deviation from these principles, therefore, should always be subject to the condition that the benefits outweigh the associated costs. For this to happen soon, the government needs to adopt the National Competition Policy and implement it.
- PSUs cartelising in insurance?
Financial Express, November 06, 2012
Government is expected to encourage competition as it creates efficiency in the economy. Following the 1990s reforms, the insurance sector was deregulated and private sector firms were allowed to operate in India. Until the 1972 law on nationalisation of the insurance business, many private players did operate in India. Then the government nationalised the insurance sector. Now that there is a healthy competition in the sector, thanks to the arrival of many private players, the finance ministry wishes to turn the clock back. In a recent directive, the ministry asked the heads of four government insurance companies not to compete against each other, but to coordinate their activities. This is a retrogressive measure and needs to be reversed.
- Should banking M&As come under the CCI?
Business Standard, October 10, 2012
One must compliment Palaniappan Chidambaram to be able to rise above narrow considerations and support the jurisdiction of the Competition Commission of India (CCI) as the sole body to review mergers in not only banking, but all sectors. Thus, he has promoted the integrity of the economic governance system, which is imperative for the success of economic reforms. All countries empower the competition regulator to oversee competition issues in all regulated sectors, including banks, purely because of their skills. The only exception vis-à-vis banking mergers is Turkey, but there, too, the central bank has to use the competition law to review mergers. A variation of this exists in the US, where the Federal Reserve and a few big state banking regulators oversee banking mergers, but the Antitrust Division of the Department of Justice can also intervene to check the competition angle.
- CCI needs to pull up its socks
The Financial Express, October 08, 2012
Recently, CUTS published a round-up on the performance of the Competition Commission of India called “CCI through the lens of media”. The media scan captures CCI’s reported activities from 2009 in an attempt to assess how it has performed since it became active in enforcement. We think that though still evolving, CCI has been very active in its role as the competition watchdog. Notwithstanding this, some deficiencies, such as a lack of sound economic reasoning in its case analyses and a desired level of consistency in its orders which is partly attributed to this, continue to mar its functioning. To do this better, CCI needs to pull up its socks.
- CCI will remove policy hurdles that distort markets and hurt economic growth
Economic Times, September 20, 2012
Every new policy proposal is greeted by apprehension coupled with ignorance and turf issues. The proposed National Competition Policy (NCP) formulated by the Ministry of Corporate Affairs too may become a victim of this phenomenon. The Department of Industrial Policy and Promotion (DIPP) has reportedly picked holes in the draft policy when it should, in fact, be the strongest supporter. Looking at our dismal economic scenario, one of the contemporary and important policy prescriptions by the government is to adopt competition reforms through an NCP. The NCP, when implemented, will usher in the second big wave of economic reforms after 1991. In the medium term, it will also curb inflation that is currently a big issue in India.
- When even bread-makers are cartelizing
Financial Express, August 15, 2012
The News, Pakistan, August 12, 2012
Global movement to raise awareness about cartels
Financial Express, Bangladesh, August 04, 2012
Cartels are considered the most egregious of anticompetitive practices. As always, it is the poor who suffer the most. In many countries cartelisation or collusion is treated as a criminal activity under the law. While companies have paid heavy fines, senior executives have even undergone jail sentences. Further, consumers do not have access to and cannot freely select the quality and variety of goods and services they desire at reasonable prices, and especially if they do not have a choice. The only option is to not to buy, but when it comes to essential items like food or fuel, boycott is not an option.
- Unhealthy abuse of dominance
Financial Express, July 09, 2012
The Competition Commission of India (CCI), since its establishment, has already taken action against many firms for abusing their dominant positions such as the famous DLF case. However, the health sector is more critical, given the extent to which the poor are vulnerable to abusive behaviour by the firms. In addition to particular cases, it is also critical for CCI to inter alia invest heavily in getting acquainted with the whole rubric of the interface between competition and IPR, which would prove useful in dealing with abuse of dominance in the health and similar sectors.
- Inland water transport sector susceptible to anti-competitive practices
The Financial Express, Bangladesh, June 21, 2012
India’s inland water transport system is vulnerable to anticompetitive practices. The sector is however yet to be scanned through competition lens, despite its importance in economic activity. Given the incidents of anticompetitive conduct that have been reported in other countries over the years, it is difficult to expect India to be an exception. Cartelisation in the sector would have bad consequences on the economy as well as on the public using the transport services, which would have an impact on poverty. Although the Competition Commission of India (CCI) has over the years attempted to understand the nature of competition in several potentially vulnerable markets, the nature of competition prevailing in the sector is yet to be explored. This calls for a more detailed focus from CCI.
- Untangling Regulatory Overlaps
The Financial Express, June 19, 2012
Nowhere in the world are banking mergers outside the remit of competition laws. The only exception is Turkey, where the central bank oversees banking mergers, but it is empowered to do so under their competition law and not banking laws. But exemptions do not prove the rule. Because competition enforcement and sector regulation are complementary instruments, and aim at ensuring that markets functions well. But ambiguities and overlapping jurisdiction often create confusion, as is happening in India currently. There are two proposals before the government to boost the competition culture in the country. First, to amend the Competition Act to ensure coherence and efficiency. Second, to address a huge number of policy-induced competition distortions through a National Competition Policy.
- Parallel imports: trademarked vs copyrighted
The Financial Express, June 12, 2012
If we look at India, Hindustan Lever Ltd was able to get a stay order from the Bombay High Court a few years ago on import of Lux soaps by Indian traders from Indonesia. It was cheaper there because of the huge depreciation of their Rupiah. In jargon, this type of trade is termed parallel imports, which is basically a competition policy instrument and does not violate intellectual property laws. Alas, there has been much confusion about parallel imports, which has now been settled by the government. But the catch is that while trademarked or patented goods can pass through the filter, copyrighted goods (books, DVDs etc.) may not, due to bad politics and policy incoherence.
- Unlevel playing field is wasteful
The Financial Express, May 21, 2012
India is fraught with examples of distortion of competitive neutrality and wasteful subsidies and bailout packages. It is time we looked into the regulation of such grants as well, and wherever possible to provide cash support to the poor. The way forward is through the proposed National Competition Policy, which has addressed all these issues in depth. It is hoped that it will be adopted by the government sometime in not too distant a future.
- Will RBI be a better judge for banking mergers?
Business Standard, May 09, 2012
Ever since the Competition Commission of India (CCI) started taking baby steps to regulate the jungle of competition abuses in the country, and some very successful cases, many started howling for an exemption from its bite. The latest one is from banking circles asking for an exemption from CCI’s remit to review mergers under the Competition Act, 2002, in that sector. Other strong contenders include the Department of Telecommunications seeking an exemption for the telecom sector. These moves are tragic and will affect the integrity of our economic governance system, and should be discouraged as strongly as the demand being made for exemptions.
- Cartels & Information Exchange
The Financial Express, May 02, 2012
In India, it also appears as if the Competition Act, 2002, has not provided for justifiable reasons for exemption, as Section 3 generally describes all such agreements as void. Since there are some information exchange platforms that can yield pro-competitive outcomes, there might also be a need for Competition Commission of India (CCI) to take a lead in calling for necessary amendments to ensure that, as is the case in other jurisdictions, only those information exchange arrangements that have an appreciable adverse effect on competition are prohibited.
- Coercion’s instrumental in sustaining cartels
The Financial Express, March 26, 2012
Cartels are the most egregious form of anticompetitive practice, wreaking great harm on the economy. It is therefore that in many countries cartel activity is treated as a criminal offence ending in jail terms and fines for the executives of the colluding firms also. While most big cartels are formed through a covert and a civil dialogue, some of the colluding activity is done through coercive means, because all parties may not agree. Both require a different approach by the competition agency when it comes to busting them.
- Global problems & solutions
The Financial Express, January 13, 2012
Interactions between trade and competition could not be more intimate than they are today, when countries the world over are getting severely affected by the volatility of trade in primary commodities. The major commodity spike of 2007-08 sent alarm bells ringing when the prices of many primary goods doubled from what they had been not so long ago. Much of this fluctuation may be explained through the simple economics of demand and supply, while managing supply side failures is critical to restore some sense in the market. One such management issue is that of the inability of trading nations to deal with rampant anticompetitive practices, especially when the importing countries pay heavily for anticompetitive practices exempted by exporting countries’ competition laws. A case in point here is the global potash fertiliser export cartel.
- Cartelisation in water transport sector
Financial Express, December 29, 2011
India’s inland water transport system is also vulnerable to anticompetitive practices. The sector is, however, yet to be scanned through a competition lens, despite its importance in economic activity. Given the incidences of anticompetitive conduct that have been reported in other countries over the years, it is difficult to expect India to be an exception. Cartelisation in the sector would have bad consequences on the economy as well as on the public using the transport services, which would have an impact on poverty. Although Competition Commission of India (CCI) has over the years attempted to understand the nature of competition in several potentially vulnerable markets, the nature of competition prevailing in this sector is yet to be explored. This calls for a more detailed focus from CCI.
- Consumers united
The Kathmandu Post, Nepal, December 06, 2011
Consumers unite and say ‘no more’ to being exploited by cartels
Financial Express, Bangladesh, December 05, 2011
Saying “no more” to cartels
The News, Pakistan, December 04, 2011
Consumers unite against exploitation by cartels
l’ express Weekly [Friday 2 December 2011 • Insert N° 4 L’EXPRESS YOURSELF]
The World Competition Day being observed on December 5 in response to a global call by the Consumer Unity and Trust Society (CUTS) for this second year allows a scope for greater discussions and dissemination of the beneficial effects of competition on the average consumers – either directly or indirectly. In effect, it is expected to result in greater public understanding and support on the issue. This year’s events should allow stakeholders to say out loud ‘No More’ to the perpetrators of cartel activities. This article urges countries and competition agencies to stand up and protect their consumers, against the harmful effects of cartels
- Should dominant companies be split?
Financial Express, November 15, 2011
In my last column (Against abuse of pharma FDI, FE, October 31) on the hot issue of pharma takeovers, I had written that the Competition Commission of India also has the power under Section 28 of the Competition Act, 2002 (CA02), to ask a company to split up, if it is found to be abusing its dominance.
Let us look at the history of our competition regime since the days of the MRTP Act. It also had a provision to split companies if they were found to be abusing their dominance, though they never used it. Other than this section, all other merger related sections were thrown out when the law was amended in 1991 as part of our reforms processes. The reforms also enabled the smoother entry of foreign companies, which was further facilitated by removing restrictions under FERA. Consequently, there were no competition checks on mergers and acquisitions triggered by a large number of MNCs.
- Against abuse of pharma FDI
Financial Express, October 31, 2011
The debate on pharma takeovers has been hitting headlines, with the Prime Minister too getting involved in it. The worry is whether the takeovers will lead to an increase in prices and affect the affordability of medicines for the aam aadmi. The high level committee headed by Arun Maira has rightly prescribed that CCI is the body to keep a watch on brownfield investments in the pharma sector, in order to avoid any dominance and other anticompetitive behaviour, but that the FDI policy should maintain status quo
- Enough room for CCI in regulated sectors
Financial Express, October 29, 2011
An interim stay by the Delhi High Court, to the effect that the Competition Commission of India (CCI) does not have jurisdiction in cases relating to petroleum and gas, because of the existence of the Petroleum and Natural Gas Regulatory Board (PNGRB), not only stirred a hornet’s nest but also ignited a debate on the interface of CCI and sector regulators in India. The stay is out of sync as it totally ignored the inadequacy of the provisions of the PNGRB Act, 2006, in dealing with the alleged cartel conduct against public sector oil companies in the supply of aviation turbine fuel. The complaint was brought forward by Air India, another PSU
- Trade associations as cartels
Financial Express, October 13, 2011
CCI can demand access to the minutes of meetings that the associations have been holding, with a view to assessing whether price issues were also discussed by their members. One would not be surprised to see prices being among the issues discussed and minuted by these associations, especially in those cases where the meetings are often followed by increased prices or market allocation. Some associations would be discussing pricing issues due to ignorance, as found in the Pakistan Jute Mills Association case referred to earlier. However, ignorance of the law is no defence, and the sooner the practice is nipped the better
- How competition reform can check inflation
Business Standard, September 22, 2011
Once again the Reserve Bank of India (RBI) has raised the interest rates, with several questioning the wisdom of the decision. Inflation has become the bugbear of our growth story, and in the recent past some of our econocrats have also suggested for lowering the growth rate to curb it. Competition reforms and the existence of an effective competition regime can help growth and curb inflation. More and effective competition can generate new innovations, which is a major driver of economic growth
- Highway robbery by state transport companies
Financial Express, September 12, 2011
While there is a general acceptance that anticompetitive practices should not be tolerated, a look at the situation across many countries would reveal that there is a general tolerance of anticompetitive practices in the bus transport sector, particularly the long-distance market. These anticompetitive practices exist mostly in the form of cartelisation and abuse of dominance. This is also worsened by the fact that some of these anticompetitive practices flourish due to legal protection offered by regulations governing the road transport sector, which thwarts the process of competition
- Housing comes under heat
Financial Express, August 24, 2011
Even while the case where the Competition Commission of India (CCI) imposed a penalty on NSE for abuse of dominance was still under public debate, CCI has followed up with yet another crackdown on abuse of dominance, this time by India’s largest real estate company, DLF. DLF Limited was slapped with a record Rs 630 crore fine for abuse of dominance of an exploitative nature. DLF Limited was found guilty by CCI of imposing arbitrary, unfair and unreasonable conditions on apartment allottees of one of its numerous housing complexes, the Belaire situated in Gurgaon
- Competitive neutrality in public policy
Business Standard, August 22, 2011
The Government of India has launched discussions on a draft national competition policy. Such a policy is needed to promote healthy competition in the Indian economy, so that growth is assured, inflation is controlled and more jobs are created. As it is, a number of competition distortions or impediments arise owing to our policy framework in different areas of economic governance. As part of work on a competition policy, the government has undertaken an exercise to unravel the huge range of competition distortions, which may be over 3,000 if we consider the number of policies, laws, regulations and praxis at the level of the Central, state and local governments
- An abuse of dominance
Financial Express, August 08, 2011
The order by the Competition Commission of India in the case of set top boxes has not endeared it to consumers, leading to the questioning of its capacity to deal with the rampant anti-competitive practices in the country. The issue is quite simple. DTH operators get set top boxes made to their own specifications, which are not usable on a competitor’s service. This means that interoperability is lacking, thus tying down a consumer to one provider. This, in turn, creates disincentives to shift to another provider. This also affects innovation adversely as such dominant practices dampen the desire to innovate by offering better quality, lower prices and so on, and thus be ahead of rivals. In competition jargon it is defined as an abuse of dominance as the supplier ties you down to their own products.
- Deconstructing The Merger Review Regime
Diplomatist, Volume III, Issue No 6, July 2011
The launch of the new regulations, which have been discussed extensively with all stakeholders, provides the procedures to implement the recently notified provisions of the Competition Act 2002 relating to mergers or combinations, principally Sections 5 and 6. In this article, some of the ideas motivating the introduction of this new regime have been explained and their likely impact on the Indian economy have been briefly discussed.
- Making the case for NSE
The Financial Express, July 14, 2011
CCI grabbed headlines and spurred numerous editorials in the financial press when it levied a penalty of R55mn on NSE for abuse of dominance. NSE was charged with leveraging its dominance in one market to gain or protect its position of strength in the other by way of fee waivers and exclusionary denial of integrated market watch facility. Many have welcomed the order as a good lesson for the largest bourse in the country to deter it from engaging in anti-competitive practices, while many have also argued that NSE did not enjoy a position of dominance in the currency derivatives market and the zero pricing model adopted by it was not indicative of predatory pricing.
- Boycott has Two Faces
The Financial Express, June 18, 2011
When it is difficult to find a remedy through the competition law, buyers often gang up to call for a collective boycott to pressure the suppliers. And most of the times it is against a cartelised industry, which may work. This has been seen in the cases of tyres, cement, fertilisers etc., where the market is infested with cartelised behaviour. This deals with both types of cases, where boycott has been used by a section of the trade as an aggrieved group of buyers and as a bunch of traders asking for higher margins
- The Foreign M&A Domino Effect
Business Standard, June 03, 2011
As the Competition Commission of India (CCI) gears up to implement merger regulations from June 01, 2011 it should also take a close look at international mergers that can have a potential impact on the Indian market. These mergers may not be happening in India but as a consequence their subsidiaries in India would need to merge because their parents have already married. India is a huge growing economy and thus many international mergers are bound to have an impact on the country.
- Watch out for collective abuse
The Financial Express, May 31, 2011
The basic parameters for healthy competition in the market require large number of players and large number of buyers to promote the necessary rivalry. Alas, rivals also know how to defeat the purpose by colluding through an implicit or an explicit cartel or by abusing their dominance singly or jointly. Tackling the abuse of dominance needs clear guidelines, so as to capture the conduct of the whole sector that may be prevailing in the market place.
- Intimations of Insecurity
Financial Express, May 10, 2011
In the latest soap opera of cartel busting, both Procter & Gamble and Unilever were fined US$457.3mn by the European Commission in April 2011. The case was settled after another conspirator, Henkel, spilled the beans and claimed leniency. In such cases, it is the leniency provision that enables the competition authority to nail the perpetrators with little effort. Alas, despite having such a provision in our competition law, the Competition Commission of India, in force since 2009, has not yet been able to bust a single cartel.
- Merger Norms – Way to Economic Democracy
Business Standard, April 29, 2011
Merger regulations under the Competition Act, 2002 have always been controversial. Now that the government in its wisdom has announced June 01, 2011 as the date for operationalising them, Indian business has again voiced concerns over whether these norms would be a boon or a bane. Some concerns are valid while many are not. One of the principal aims of a competition law is to promote economic democracy by regulating anti-competitive practices and concentration, to ensure consumer and business welfare.
- A regulator for the fertiliser sector?
The Economic Times, April 13, 2011
Nowhere in the world does one have a ‘fertiliser regulator’ . Many, including civil servants, think that this is a ploy of manipulative civil servants to create post-retirement jobs for themselves. There is no doubt about such motives, but the idea is as ludicrous as the earlier proposals to set up regulators for steel, coal and so on. If there was an integrated regulator for the energy sector, one could understand that coal should also be handled by the energy regulator.
- Should the CCI be Abolished?
Business Standard, April 6, 2011
The competition law needs to be amended to enable the Commission to work in an autonomous manner, without explicit and implicit government control. Yes and no. The current avatar of the Competition Commission should be overhauled keeping in mind some critical aspects and the Competition Act should be buttressed to ensure that it is effective and its utility is not questioned.
- Not Exempt from Trouble
The Financial Express, India, April 01, 2011
In spite of strong business opposition, the government has notified the merger regulations under the Competition Act, 2002, to be effective from June 01, 2011. In its wake, many have started clamouring for exemptions from this cover. Should exemptions be granted to any sectors? Once an exemption is given to one sector, there is nothing that can stop every industry from seeking the same exemption, which defeats the whole purpose behind the enactment of the Competition Act. This article lays out the pros and cons.
- Hit Fertiliser Cartels with Alliances
The Economic Times, March 28, 2011
Fertilisers contribute a large part of the cost of agriculture and the exchequer’s subsidy burden, yet, there is little thought being given to why the prices of imported fertilisers are scrambling up. It is well known that the artificially high prices of fertilisers are maintained by handful of companies operating as a cartel, which is not illegal under their home country laws. Especially as India is a very large consumer, the government could bargain for lower prices rather than asking the taxpayer to be a party to more subsidies that end up unjustly enriching foreign companies.
- CCI needs to think out of the box
The Financial Express, India, March 21, 2011
Finally, the Competition Commission of India (CCI) will become a full competition regulator after the notification of the merger regulations. But it is not the only news about CCI that has been bothering many. The CCI’s first full judgement on the issue of charges towards the prepayment of home loans to be borne by the consumer borrower, is creating ripples. While the judgement itself was divided, the majority felt that such charges are valid and not anti-competitive. But was the judgement fair and properly reasoned?
- Learning from the Onion Crisis
The Financial Express, India, February 17, 2011
Food price inflation in India is not an isolated conundrum. The same can be witnessed in many other countries as part of a global phenomenon. Without going deeper into this phenomenon, let us review the simple case of the recent onion price rise crisis. It is a sensitive issue as the onion is a staple food item for Indians. In the past, the issue has led to downfall of governments.
- Stop road transport cartels, go competition
The Financial Express, India, January 10, 2011
Curbing cartels in the transport sector is also an opportunity that can work to the advantage of the competition authority. This is one of the best ways for the authority to endear itself to the general public as the decisions concerned will yield immediate results and these will be easy for all to see.
- An Imperative for Promoting Inclusive Growth
The India Economy Review 2011, January 01, 2011
Despite the existence of a competition law, competitive environment might not be established due to the inconsistency between the orientation of competition law and restrictions imposed by other regulations – here arises the necessity of a National Competition Policy (NCP). The NCP is an important step forward in establishing a consistent national economic framework to promote and maintain competition in all sectors of the economy.
- Condemning air cargo cartels on World Competition Day
The Financial Express, Bangladesh, December 06, 2010
Cartels in the air cargo industry should be of concern to all stakeholders as they have a serious negative impact on efforts towards economic development and poverty reduction in developing countries. It is therefore very alarming to see that almost all the major players in the air cargo market were part of a cartel, and one shudders at the impact in terms of overcharges that consumers across the globe suffered due to the cartel.
- How to Bust those Cartels
The Financial Express, India, November 19, 2010
A recent action against the Indian company Apollo Tyres’ local subsidiary in South Africa for collusive activity set in motion the whole thought process of understanding what businesses do in order to maximise profits by whatever means. The same businesses would also indulge in thwarting import competition by collectively applying for anti-dumping action. While collusive action or cartelising can be actioned against under the competition law, use of non-tariff barriers such as anti-dumping cannot be easily countered because the rules in India do not allow the application of a public interest test.
- Stop that Price Gouging
The Financial Express, India, October 12, 2010
While the benefits of competition enforcement to consumers and the economy can be easily understood from a theoretical standpoint, such benefits are difficult to see since they are not easily isolated from other government policy interventions. One type of anti-competitive practice whose eradication brings immediate benefits to consumers is excessive pricing.
- When doctors go downhill
The Financial Express, India, September 16, 2010
The delivery of health services is marked by decisions taken by the physician treating a consumer, and not the consumer himself. While a consumer can chose the brand of soap he wants, he cannot do so for the medicine that the doctor has prescribed. This unique phenomenon can encourage deception by doctors, pharmacists and hospitals to profit at the expense of the consumer. We hope that Competition Commission of India would be effective in dealing with perpetrators of collusive practices in the Indian healthcare sector and ensure that the Indian consumer is not ripped off.
- Bust a Cartel, Gain a Friend
The Financial Express, India, August 31, 2010
Following prioritisation, competition authorities have gained confidence and support through busting cartels on critical services, which constitute a big proportion of the poor’s budget, such as for food and medicines. Successfully prosecuting a cartel would also go a long way in convincing sceptics, particularly those doubting the expertise of the competition authority to the extent of lobbying against notification of the merger provisions of the Competition Act, 2002.
- Competition policy: Costly neglect
The Economic Times, August 23, 2010
Cartelisation or other types of anti-competitive practices can be tackled under the Competition Act, 2002. But in such cases, if the same has emerged due to a government policy or praxis, action can hardly be taken, or if taken, chances of success are remote. A policy measure with vast implications for competition is the imposition of an antidumping duty. When imposed correctly, such duty helps prevent predatory or below-cost pricing by a powerful foreign competitor to eliminate competition from domestic or other suppliers and gain monopoly control of the market.
- Cartel on the wings
The Hindu Business Line, June 23, 2010
While the Competition Commission of India is yet to progress on one alleged case of airline cartelisation — code sharing deal — by Kingfisher and Jet Airlines, our national carrier, Air India, barely escaped being prosecuted by the Korean Fair Trade Commission in a recent case of cartelisation in cargo freight. In May, 2010 the KFTC levied a record fine of more than $98 million on 19 airlines in the biggest cartel case that it has handled.
- Overseeing pharma mergers through competition lens?
The Financial Express, India, June 20, 2010
There is an urgent need for the Competition Commission of India (CCI) to be empowered to assess and regulate all mergers. This is only to ensure that if they potentially harm competition, then steps are taken to ensure that the harmful effect is diluted. The argument is not, and has never been, that multinational corporations (MNCs) should be stopped from coming to India or Indian MNCs from going out.
- Regulating Mergers is an Urgent Matter
The Financial Express, India, May 02, 2010
The indigenous pharma industry has been sounding alarm bells against foreign companies acquiring domestic players. Now the department of pharmaceuticals wants a review of the FDI rules that allow foreigners to enter into India. In the recent past, six such takeovers have happened, beginning with Daichi from Japan taking over Ranbaxy in India in June, 2008. One way to regulate such takeovers is through the Competition Act, 2002, under its merger regulations. Alas, the same are not yet in place due to the misguided lobbying by some businesses.
- CCI has a Role to Play in Bank Mergers
The Financial Express, India, January 10, 2010
Competition regulation of mergers and acquisitions (M&As) in the banking sector is a different matter. This is aimed at ensuring that banks compete among themselves in fighting for customers by offering the best terms, lower interest rates on loans and higher interest rates on deposits and securities. Merger regulation by the Competition Commission of India (CCI) would be therefore intended to ensure that such activities are not motivated by the desire to collude and make excessive profits at the expense of customers or to squeeze other players out of the market through abusive practices.