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INVESTMENT AND COMPETITION LAW

RAGHAVAN COMMITTEE AND DEVELOPMENT OF

COMPETITION LAW, 2002

SUBMITTED TO – Professor Dr. Kanwal D.P.Singh

GAUTAM CHOPRA (01816503520)
HIMANI VERMA (02116503520)
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INTRODUCTION
The Parliament of India passed the Competition Act, 2002 on January 13, 2003, which repealed the
Monopolies and Restrictive Trade Practices Act, 1969. It came into force on March 31st, 2003. The
Competition Act, 2002 was changed twice after its enactment, with the Competition (Amendment) Act,
2007 and the Competition (Amendment) Act, 2009. It was a result of India’s drive for globalization and
economic liberalization. The primary goal of the Act is to control the anti-competitive behaviors of a firm
or company that has a negative impact on competition in India’s market. Furthermore, the Act seeks to
encourage and maintain market competition, safeguard the interests of consumers, and safeguard market
freedom in our country.
The Competition Act, 2002, was adopted in India to achieve the dual goals of regulating anti- competitive
conduct and lending support to the agreements of the World Trade Organization (WTO). The Act also
establishes the Competition Commission of India (CCI) as a market controller for stopping and controlling
anti-competitive behaviors in the country. It also establishes the Competition Appellate Tribunal
(COMPAT), a quasi-judicial authority formed to listen to and decide on appeals against any direction issued
or decision taken by the CCI.

MONOPOLIES AND RESTRICTIVE TRADE PRACTICE ACT

The Monopolies and Restrictive Trade Practices Act, 1969 was enacted as the first statute regulating
competition in the Indian economy and was aimed at reforms to prevent concentration of power. The MRTP
Act sought to prevent any form of monopolistic activities and other such practices which were deemed as
restrictive and/or unfair. The MRTP Act elaborated and gave meaning to monopolistic as also restrictive
practices and provided a list of offences which was against healthy competition in the economy.

LOOPHOLES IN THE MRTP ACT AND SUBSEQUENT AMENDMENTS

Up until 1984, MRTP Act was successful in regulating the competition in the Indian market. However, by
1984, amendments were needed to update the act as per the needs of the economy. Following are the two
major amendments made to the MRTP Act
1984 Amendment This amendment was brought on the recommendations of the Sachar Committee. The
amendment ensured that Section 36A was added to the Act to protect the consumers against unfair trade
practices so that effective action can be taken against them. Claims against fake and misleading
advertisements, wrong representation of goods, false guarantees came under this Act.
1991 Amendment This amendment permitted the MRTP Act to be extended to the public sector and
government-owned companies. Post this amendment, private players who function in the market were no
longer needed to take special permissions from the government before undergoing any reconstruction of the
corporate nature. This amendment to the MRTP Act came to effect in the light of the New Economic Policy
which led to the opening of the Indian economy. The License Raj which restricted the growth of the Indian
economy was thus abolished.

RAGHVAN COMMITTEE
The Raghavan Committee was appointed in 1999 by the Government of India to study the need for a
competition law and policy framework in India. The committee submitted its report to the government in
2000, which formed the basis for the establishment of the Competition Commission of India (CCI) in 2003.
The Raghavan Committee report highlighted the need for a competition law and policy framework in India,
to promote competition and protect consumer welfare.
One of the key recommendations of the Raghavan Committee report was the establishment of an
independent regulator, the Competition Commission of India (CCI), to promote and regulate competition in
the Indian market. The committee recommended that the CCI should have wide-ranging powers to
investigate and penalize anti-competitive practices, such as cartels and abuse of dominant positions.
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The committee also recommended that the CCI should be supported by a comprehensive legal framework,
including provisions for the review of mergers and acquisitions, and the regulation of predatory pricing
and other anti-competitive practices.
However, there have been criticisms of the CCI’s functioning, such as delays in investigations and lack of
transparency in decision-making. The Raghavan Committee report had emphasized the need for the CCI
to be independent and transparent, and for its decisions to be based on rigorous economic analysis.
Overall, the establishment of the CCI was a significant step towards promoting competition and protecting
consumer welfare in India. The Raghavan Committee report provided the foundation for the development
of competition law and policy in India, and the CCI has been instrumental in enforcing these laws and
promoting a competitive market.
NEED
India has been making continuous progress in various areas, with a strong emphasis on comprehensive and
inclusive development. The government has been dedicated to implementing a professional and process-
driven approach to governance. The guiding principle has been to initiate reforms with a clear purpose,
execute tasks with integrity, and drive transformation with great determination. In this context, the role of
the Competition Commission of India (CCI) becomes increasingly significant.
The CCI plays a crucial role in promoting healthy competition and inspiring stakeholders to innovate and
enhance their effectiveness. One of its primary objectives is to ensure a level playing field for businesses
operating in India. By preventing anti-competitive practices, such as cartels, abuse of dominant market
positions, and unfair trade practices, the CCI encourages fair competition among market participants. This
fosters innovation, efficiency, and better services or products for consumers.
Additionally, the CCI plays a vital role in stimulating business processes by ensuring a conducive
environment for competition. It actively reviews mergers and acquisitions to prevent any potential adverse
effects on competition. By scrutinizing these transactions, the CCI ensures that they do not result in the
creation of monopolies or significantly lessen competition in the market.
The CCI also promotes competition advocacy, which involves educating businesses, consumers, and other
stakeholders about the benefits of competition. Through awareness campaigns and outreach programs, the
CCI encourages market players to adopt fair practices and compete within the boundaries of the law. This
helps in creating a culture of healthy competition, where businesses are encouraged to innovate, invest,
and grow while adhering to ethical business conduct.

FUNCTIONS

⮚ The preamble of the Competition Act focuses on the development of the economy and the country by
avoiding unfair competition practices and promoting constructive competition. The functions of the CCI
are:
⮚ Ensuring the preservation of customers' well-being and interests in the Indian market.
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⮚ Promoting a fast-paced and equitable economic expansion by fostering a level playing field and
encouraging robust competition in the nation's economic endeavors.
⮚ Promoting the effective utilization of the country's resources by implementing policies that foster
competition.
⮚ Additionally, the Commission engages in competition advocacy efforts.
⮚ The CCI will also examine any foreign company that enters the Indian market through a merger or
acquisition to verify its compliance with India's competition laws, namely the Competition Act of
2002.
⮚ CCI also guarantees collaboration and coordination with other regulatory bodies in the economy to
ensure alignment between sector-specific regulatory laws and competition laws.
⮚ In addition, it serves as a facilitator for businesses by preventing the establishment of market
dominance by a few firms and promoting harmonious coexistence between small and large
enterprises.

CHALLENGES
⮚ The CCI faces multiple challenges while implementing the Competition Laws. The challenges can be
both internal and external.
⮚ The dynamic and ongoing transformation in business practices and the ever-evolving concerns related
to antitrust present a substantial obstacle for the CCI (Competition Commission of India).
⮚ The emergence of digital economy and e-commerce-based business models poses a challenge for the
CCI, as the existing competition laws solely focus on assets and turnovers, failing to address the nuances
of these new business models.
⮚ Expanding the number of benches within the CCI is crucial to enhance the efficiency of adjudicating
competition cases and ensuring prompt judgments.
⮚ Incorporating elements like data accessibility and network effects into competition and antitrust laws is
essential to ensure their applicability and relevance in the context of a digital economy.

POWERS

⮚ Any party or information from the state and Central governments can initiate a case concerning a
particular issue under the purview of the CCI. Section 26 outlines the process of investigation by the
CCI, where if the Commission establishes a prima facie case, it is forwarded to the Director General for
further investigation. Working closely with the complainant, the Director General drafts a report which
is then considered by the Commission in reaching a decision.
⮚ Furthermore, as per Section 33, the CCI has the authority to impose a temporary injunction to halt any
party from engaging in specific activities. A notable case handled by the CCI is the DLF case, in which
the company was fined for abusing its market dominance and participating in unfair business practices.
⮚ Under Section 19(1) of the Act, the Commission possesses the power to initiate an investigation into
any alleged violation of Section 3 or Section 4. This can be done either through its own initiative or
upon receiving information from various sources, including individuals, consumer groups, trade
organizations, as well as references made by the Central Government, state governments, or statutory
authorities.
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Under Section 19 of the Act, the CCI is empowered to investigate specific types of agreements and dominant
positions held by enterprises. It has the authority to probe alleged violations of anti- competitive agreements as
outlined in sub-section (1) of Section 3, as well as instances of abuse of dominant position as outlined in sub-
section (1) of Section 4.
⮚ In cases where mergers, acquisitions, or combinations are suspected to undermine competition, the CCI
conducts investigations and makes decisions. However, in some instances, the Commission must strike
a balance between the potential harm to competition and the economic benefits brought about by the
merger.
⮚ Furthermore, if any decision made by a statutory authority contradicts the provisions of the Competition
Act, Section 32 mandates that the Commission must be referred to. The Commission is also authorized
under this section to investigate agreements that have an impact on India, even if they are formed outside
the country's borders.

RECENT UPDATES FROM CCI

The Competition Commission of India (CCI) organized a virtual workshop on competition issues in the
automotive sector for BRICS Competition Agencies on November 5 and 6, 2020. In May 2016, the
BRICS Competition Agencies had signed a Memorandum of Understanding (MoU) to enhance
cooperation and interaction in the field of competition law and policy. The MoU was extended
indefinitely in 2020.

Recently, a group of 15 startup founders held a virtual meeting with the CCI to inform the regulator
about Google's alleged anti-competitive policies in India. The discussion centred around Google's
imposition of its Play Store billing system on Indian developers and the 30% commission it charges for
the sale of digital goods and services through the system.

Due to the restrictions on physical movement during the pandemic, the CCI promptly introduced
flexible procedures. This included the option for electronic filing of antitrust cases, combination notices,
and Green Channel notifications. Non-urgent cases were deferred, and the CCI facilitated Pre-Filing
Consultation (PFC) for combinations through video conferences. To address stakeholder queries during
the pandemic, a dedicated helpline was established, and relevant public notices were regularly posted
on the CCI's website. Additionally, the CCI implemented video conferencing as a means to conduct
proceedings, prioritizing safety and minimizing physical contact.

And CCI Is also playing an important role in the merger of three very big airlines or the biggest airline
merger between Air India, Singapore Airlines and Vistara, when Air India was recently acquired by
TATA group with almost 25 percent of the shares of the company, though the confirmation is still
pending with CCI they have not approved it officially.

CONCLUSION
In conclusion, the Competition Act, 2002, replaced the Monopolies and Restrictive Trade Practices Act,
1969, in India with the aim of promoting competition, safeguarding consumer interests, and fostering
market freedom. The establishment of the Competition Commission of India (CCI) and the subsequent
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amendments to the Act have played a significant role in regulating anti-competitive behavior, reviewing
mergers and acquisitions, and promoting a competitive market. Despite facing challenges in adapting
to evolving business practices and addressing digital economy concerns, the CCI continues to exercise
its powers to investigate violations and ensure a level playing field for businesses. Recent updates
demonstrate the CCI's efforts to enhance cooperation with other competition agencies, address anti-
competitive policies, and adapt to the challenges posed by the pandemic. Overall, the CCI's role in
enforcing competition laws and promoting fair practices contributes to India's economic development
and consumer welfare.