Establishment of CCI

The establishment of CCI is closely related to the evolution of competition law in India. As we know about how the Competition Act, 2002, replaces the previously existing Monopiles and Restrictive Trade Practices (MRTP) Act of 1969. It is with the advent of the Competition Act, 2002, that the Competition Commission of India (CCI) came into place, as the sole enforcer agency of the Act. This does not mean that under the MRTP Act, 1969, there was no enforcing agency. However, the Commission established under the same was primarily involved in the curbing of monopolies, and did not consider the improvement of competition in the market as one of its objectives per se. It was empowered only to investigate restrictive or unfair trade practices, however, unlike the CCI, it could not look into situations creating AAEC. Additionally, the jurisdictions of the MRTP Commission and the Consumer Courts also overlapped to a great extent, creating further confusion and complexity in the adjudication process.

. Thus, an ardent need was felt to replace the outdated MRTP Act, 1969, and the MRTP Commission along with it. During the 1990s, it was found that there were only two clear options in terms of competition legislation in India. Either the government could amend the MRTP Act, 1969, thoroughly, or it could replace the same with a new Act, to match pace with the changing social and economic  conditions of India. To recommend the ideal course for the same, a high powered committee headed by S. V. S. Raghavan was set up in 1999.

The Raghavan Committee found that the powers of the MRTP Commission were feeble and it was not equipped to face the challenges that the changing regime of business and competition was bringing. It emphasized that the issues relevant to competition in the market were unique, and in many cases, the judiciary may not be adequately equipped to deal with the same due to a lack of experience regarding free market problems. The issues related to competition like abuse of dominance, anti competitive agreements, etc., required a special level of knowledge and analysis regarding economic and free trade, and the judges in the usual Courts may not be well versed in such areas. Thus, a specialized agency would certainly be required to ensure that competition in the market is nurtured and enhanced. Further, it should also take upon efforts related to competition advocacy, so that knowledge about the same can be disembarked among the public. The Committee also recommended the enactment of a new competition law, which will maintain and improve competition in India in terms of domestic and international trade

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The CCI was provided for in various sections of the Competition Act, 2002, and in its preamble as well. Section 7 of the Competition Act, 2002, provides for the establishment of the Competition Commission of India. It also underlines the nature of the body, by mentioning in section 7(2) that “The Commission shall be a body corporate by the name aforesaid having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued”

Under this section, the CCI was established on 14th October, 2003. Composition The CCI consists of a chairperson, and between two to ten other members who are appointed by the central government. The central government chooses the chairperson and other members of the commission from a panel of names, which consists of:

• For the position of the chairperson, the Chief Justice by India or a candidate nominated by him;
• Secretaries in the Ministries of Corporate Affairs and Law and Justice;
• Experts of repute with special knowledge and experience in international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affair or competition matters including competition law and policy in international trade, economics, business, commerce, law, finance, industry, etc.;
• Governor of the RBI

The various terms and conditions associated with the offices of the chairperson of CCI and other members, include:

• The term of office for all the members including the chairperson, is five years, counted from the date on which the concerned member or chairperson takes the office;
• All of them are eligible for reappointment;
• All the members of the CCI are whole time members;
• The Chairperson and the other members, for two years after leaving the position, can also not accept any employment related to the management or administration of a business, that was a party in any proceeding before the CCI;
• The salaries of the staff and other expenses associated with the CCI are met from the Competition Fund;
• The salaries, allowances, and other terms and conditions associated with the office of the members and chairperson can not be revised to their disadvantage, once they enter upon the office;
• No suit can be brought upon against any actions done by the staff of the CCI that were done in good faith and under this Act;

The central government can remove the chairperson or any other staff from the office, if the member:

• “Is, or at any time has been, adjudged insolvent; or
• Has engaged at any time, during his term of office, in any paid employment; or
• Has been convicted of an offence which, in the opinion of the Central
• Government, involves moral turpitude; or
• Has acquired such financial or other interest as is likely to affect prejudicially his functions as a member; or
• Has so abused his position as to render his continuance in office prejudicial to the public interest; or
• Has become physically or mentally incapable of acting as member”.

The Act also provides for the appointment of a Director General (DG), appointed by the central government, for the purposes of assisting the CCI in conducting inspections against any party, or in any other function. The Director General will be further assisted by the Additional, Joint, Deputy, and Assistant Director General, and other consultants and officers, who will exercise the powers and functions of the Director General under his or her orders and supervisions4

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Powers & Functions

As I am sure that you have already learnt, the CCI acts as an enforcement agency for the Competition Act, 2002. Thus, its primary objective is to ensure that there can be free and fair competition in the markets for all products and services in India. To propagate those efforts, the CCI takes active steps to ensure that the anti competitive practices undertaken by various businesses are curbed, that new businesses are provided the suitable opportunity to enter a market and become a worthy contender there, that the consumers’ interests of buying quality products and services at reasonable prices can be protected, etc. In general, the CCI ensures freedom of trade in the Indian market. The specific powers and functions of the Commission can be underlined under a few broad heads:

• Inquiry: The primary power of the CCI is to conduct inquiries into businesses that are presumed to have undertaken anti competitive practices. For example, in cases  of abuse of dominance and anti competitive agreements, the CCI, under section 3, can take suo motu action, or may start a proceeding based upon an allegation. Additionally, the same power is provided to the Commission in cases of combinations under section 20, which provides that it can inquire and determine whether a particular combination will cause AAEC on the market.
• Reference: The CCI is also empowered to take reference in a number of cases which have the potential to distort competition in the market. Under section 21 of the Act, it is provided that if a decision by a statutory authority seems that it would be in conflict with the provisions of the Competition Act, 2002, the authority needs to make a reference of the same to the CCI. On the other hand, if during a proceeding an issue is raised by a party that a decision taken by the CCI is in contravention of the Act, and the implementation of the decision is entrusted to a statutory authority, the Commission can also make a reference of the issue to the authority.
• Interim orders: Section 33 of the Competition Act, 2002, provides the CCI with the power to issue interim orders in certain cases. These are utilized in cases of anti competitive agreements and abuse of dominance, where the Commission can make an interim order to restrain a party from carrying on such acts, while an investigation by the CCI stands pending. This is primarily done because in these cases, if the action is allowed to continue, during the pendency of the suit before the CCI, the guilty enterprises may very well harm competition in the market in a significant and irreversible manner. Thus, these interim orders by the CCI is used as a stopgap measure.
• Advocacy: One of the primary tasks of the CCI is to engage in competition advocacy, which is provided under section 49 of the Competition Act, 2002. In a country like India in its current context, competition advocacy is truly the need of the hour. Many of the consumers do not know the opportunities that they are supposed to receive from competition in the market, and the businesses themselves are mostly ignorant about the same. The CCI is thus encouraged to take upon competition advocacy effort, to educate the people about the same. This section also provides that the central and state governments, while formulating any policy related to competition, will forward such policy to the CCI for its opinion.

Aishwarya Says:

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