Environment Protection and

UNIT 13 COMPETITION LAW Sustainability

Objectives
After studying this unit, you should be able to:
Understand the Objectives of Competition Law and Brief Historical
Overview of Indian Competition Law
Describe Monopolies and Restrictive Trade Practices Act, 1969, and
Competition Act, 2002
Appreciate different Anti-competitive Agreements and Vertical Agreements
Explain the different Enforcement Authorities of Competition Law
Structure
13.1 Introduction
13.2 Objectives of Competition Law
13.3 Brief Historical Overview of Indian Competition Law
13.4 Monopolies and Restrictive Trade Practices Act, 1969
13.5 Raghavan Committee Report
13.6 Competition Act, 2002
13.7 Anti-competitive Agreements
13.8 Vertical Agreements
13.9 Relevant Market
13.10 Abuse of Dominance
13.11 Mergers and Combinations
13.12 Enforcement of Competition Law
13.13 Summary
13.14 Self-Assessment Questions
13.15 Further Readings/References

13.1 INTRODUCTION
Competition law, which is also referred to as antitrust law in some jurisdictions,
plays a pivotal role in ensuring smooth functioning of a dynamic market economy.
Competition law takes diverse measures and approaches for ensuring fair
competition among firms, which in turn can augment customer welfare by offering
quality products at lowest possible prices. Fair competition in markets is important
for all, be it the consumers, the competing firms, and the economy.

13.2 OBJECTIVES OF COMPETITION LAW

Competition law concerns itself with firms enjoying undisputed market power,
which opens up the possibility of hindering consumer welfare by increasing prices,
reducing output, diminishing product quality and suppressing innovation.1
Competition law also keeps a check on the possibility of business firms from
colluding with each other, affecting the supply of a product or a service, thereby
proving detrimental for the consumers. The basic assumption is that markets 257
Business and Sustainability populated by a few participants may prove to be less competitive than markets
housing multiple participants, as oligopolistic and monopolistic enterprises can
exert their dominance to hinder the entry of new participants.2

13.3 BRIEF HISTORICAL OVERVIEW OF INDIAN

COMPETITION LAW
The Indian Constitution has been drafted carefully with several measures aimed
at safeguarding diverse rights that can contribute to the flourishing of the country
as well as its citizens. Articles 38 and 39, though having been placed in part IV
of the Constitution as Directive Principles of State Policy and unenforceable in a
court of law, have proven extremely significant in laying down directions for
good governance of a State. They direct the State to frame policies for ensuring
that the ownership and control of the material resources are adequately distributed,
and that the operation of the economic system does not lead to a concentration of
wealth to the common detriment.3

The first phase of market regulation in India began in 1950-1951, which was
characterized by an increased reliance on the government to take the initiative in
economic activities. Also known as the closed economy model, policies at that
time were less focused on ensuring competition and more on the prevention of
concentration of economic power. The Government of India ordered the formation
of a committee, the Mahalanobis Committee, to assess the income distribution
in the society owing to rising monopolistic and restrictive trade practices in the
country. This led to the formation of the Monopolies Inquiry Committee and, the
report submitted by the former paved the way for the Monopolies and Restrictive
Trade Practices Act, 1969 (MRTP Act). This way, the Constitution of India,
specifically Article 39, sowed the seeds for the genesis of competition laws in
India.4

13.4 MONOPOLIES AND RESTRICTIVE TRADE

PRACTICES ACT, 1969
The MRTP Act was enacted to control monopolies, to ensure that the economic
system does not culminate in concentration of economic power and, to disallow
monopolistic and restrictive trade practices.5 What highlighted the second phase,
ranging from 1991 to present, was bringing forth market-oriented economic
policies with the coming of the New Economic Policy (NEP), that needed to be
in tune with the rise of globalization, liberalization and privatization policies.6
These policies led to de-licensing and deregulation of sectors, that were priorly
under the control of the public sector. Industrial activities which were exclusively
operated by the public sector were opened up for entry by the private sector. The
MRTP Act was observed to be incompatible with this shift in industrial policies,
which focused on competition and market orientation. Thus, arose the need for a
regulator which could facilitate market functioning in accordance with the
country’s changing industrial policies.7

13.5 RAGHAVAN COMMITTEE REPORT

The call seeking a shift of focus from restraining monopolies to the promotion of
competition was one of the primary reasons for the MRTP Act becoming obsolete,
258
thereby paving way for a new legislation.8 What ensued was the appointment of Competition Law
a High-Level Committee on Competition Policy and Law in 1999, often referred
to as the “Raghavan Committee”.9 The Committee was responsible for providing
suggestions for the establishment of a suitable legislative framework for
competition law and recommended changes in relation to restrictive trade
practices. The Committee, in its final report submitted to the Government in
May 2000, highlighted the need for a Competition Policy to attain efficient
allocation of resources, to regulate concentration of economic power and to
promote consumer welfare.10 It was submitted that Competition Policy has its
primary economic goal as the preservation and promotion of competition, which
can further contribute in making the process of production and allocation of
goods structured and more efficient.11 The Committee pressed on the need to
balance the conflict between the existing government policies and the competition
policy and, highlighted the requirement for a law and a law enforcement authority
in the form of Competition Act and Competition Commission of India (referred
as CCI or Commission hereinafter), respectively.12

13.6 COMPETITION ACT, 2002

The Competition Act was enacted in 2002, based on the recommendations of the
Raghavan Committee for ensuring fair competition and ushering economic
development in the country. The primary aim of this piece of legislation is to
avert practices having anti-competitive effects, for the advancement of
competition in the markets, to safeguard the interests of the consumers and, to
guarantee freedom of trade to the market participants. This legislation is the
successor to Monopolies and Restrictive Trade Practices Act, 1961. The Act lays
down provisions relating to horizontal and vertical anti-competitive agreements
having an adverse effect on competition, prohibition of abuse of dominance, and
rules for combinations and their regulation. The Competition Act also contains
certain provisions to promote competition advocacy.

13.7 ANTI COMPETITIVE AGREEMENTS

Agreements entered between enterprises, persons, or association of enterprises
or persons in pursuance of production, distribution, supply, storage or control of
products or services, which have a tendency to result in Appreciable Adverse
Effect on Competition (AAEC) within the jurisdiction are referred to as anti-
competitive agreements13 and they shall be declared void.14 To determine if an
agreement has an appreciable adverse effect on competition, the Commission
shall have due regard to factors including, creation of barriers to new entrants,
driving off existing competitors, foreclosure of competition by hindering entry,
improvement of production or distribution of goods, etc.15

In a competitive market set-up, firms vying for the business or the consumers are
supposed to compete with one another, not collude and cooperate to alter the
process of competition. Cartels are horizontal agreements made for the purpose
of market allocation, price fixing, output restriction and, the submission of
collusive tenders to rig the outcome of competitive tenders are some of the
techniques employed by conniving firms to distort competition.16

Under the Competition Act, 2002, section 2(c) puts forth an inclusive definition
of ‘cartel’, as “an association of producers, sellers, distributors, traders or service
259
Business and Sustainability providers who, by agreement amongst themselves, limit, control or attempt to
control the production, distribution, sale or price of, or, trade in goods or provision
of services.” In the cartelization by public sector insurance companies’17case,
the CCI took suo motu cognizance to investigate if four public sector insurance
companies had formed a cartel and engaged in bid-rigging in response to a tender
issued by the Kerala Government. Rejecting the argument of the insurance
companies that they formed a single economic entity and were thus subject to
the control of the central government, the CCI held that the submission of separate
bids by the companies for the tender, along with the resolution regarding
determination of bid amounts being taken voluntarily through an internal meeting
without the supervision by the Finance Ministry, proved the contrary. Based on
the business sharing agreement and the evidence of the Opposite Parties (OPs)
having met one day before the submission of tender, the CCI held that there was
a conclusive proof of bid rigging and collusive bidding by the OPs, satisfying
the requirements for contravention under section 3(3)(d) of the Competition Act.

Any agreement entered or decision taken amongst enterprises, persons, association

of enterprises or persons or, between a person and an enterprise, including cartels,
shall be presumed to have an appreciable adverse effect on competition and shall
be considered anti-competitive per se, if they result in the following:18

a) Determination of sale prices:

The competition regulatory framework not only concerns itself with blatant
price fixing, but also agreements having an effect on suppressing price
competition. In other words, the act of price fixing does not just encompass
the final price but also instances having an indirect impact on the final price.

Reducing price competition by agreeing not to offer discounts, making use

of an open information scheme and, charging uniform delivered prices may
also be instances of price fixing.19 Market participants forming a cartel,
agreeing to offer identical discounts and applying the same in the downstream
market was also held to be another facet of price fixing and declared to be
anticompetitive in nature.20

b) Output control
An agreement among firms to control or limit production, supply, technical
progress, markets or provision of goods and services shall be presumed to
be anticompetitive.21 The CCI generally focuses on factors such as production
capacity, capacity utilization of the competitors, demand for the product in
question to decipher any patterns of output control for the concerned
product.22 In the Cement Cartel23case, the Commission found evidences
regarding the formation of understanding and agreement among the Opposite
Parties (OPs) via the Cement Manufacturing Association(CMA) for
communicating and information sharing in relation to manufacture of cement.
The Commission also unearthed low-capacity utilization leading to controlled
supply of cement by the companies, which was in clear contravention of
section 3(3)(b) of the Competition Act. The commission opined that limiting
the supplies of cement over the course of years and giving rise to shortages
had led to an upward demand, resulting in a hike in prices thereafter. In the
absence of any efficiency or improvement in manufacture owing to the
coordinated behavior of the cement manufacturing companies, the OPs were
held to have formed a cartel.
260
 Recently, the CCI passed a final order against three beer companies, viz., Competition Law
United Breweries Limited, SABMiller India Limited (renamed as Anheuser
Busch InBev India Ltd.) and, Carlsberg India Private Limited for forming a
cartel and selling beer in many States and Union Territories, in conjunction
with the All-India Brewers’ Association. The cartel had engaged in price
parallelism which was in contravention of Section 3(3)(a) of the Competition
Act, 2002.24
c) Market allocation
Competition may also be threatened by an agreement between the firms to
apportion segments of market amongst themselves, to be handled exclusively
by each seller such that they no longer have to compete with each other.
When the participating firms concur to share particular markets based on
geographical area, classes of customers or, on the basis of the product, such
agreements may be referred to as horizontal market sharing agreements.25
In HFB Holding v. Commission, the opposite parties were penalized for
forming a cartel and indulging in sharing of the entire European market
among themselves. They further engaged in acts to hinder the only substantial
competitor not forming a part of the cartel, driving it away from the concerned
market.26
d) Bid rigging or collusive bidding
Agreements capable of lessening or wiping off competition for bids or, which
have the effect of manipulating the process of bidding are held to be
anticompetitive per se. Bid rigging or collusive tendering is said to occur
when competing bidders decide not to compete genuinely, or endeavor to
secretly influence the outcome of a bidding process by submission of identical
or cover bids.27
In the case of cartelization in tenders of Pune Municipal Corporation for
Solid Waste Processing28, a prima facie opinion was formed by the CCI
against the OPs for having engaged in the acts of bid rigging or collusive
bidding violating Section 3(3)(d) of the Competition Act, 2002. The CCI
opined that bid rigging under Section 3(3)(d) shall be presumed to have an
adverse effect on the competition irrespective of the purpose or duration of
the cartel and, it is immaterial if the act culminated in a benefit being accrued
from the cartelization. The CCI also held that so long as a subset of bidders
are found rigging the bidding process by colluding, the onus shall shift on
the OPs to rebut the presumption of having caused an AAEC. Disagreeing
with the contention of the OPs that the latter were engaged in different
business activities at the time of the bidding process, and thus not amenable
under section 3, the commission held that the activity for which bidding was
held and in pursuance of which the alleged violation of law took place is
what proves significant in determination of cartels.

13.8 VERTICAL AGREEMENTS

Vertical agreements are agreements between persons or enterprises at different
levels of the production chain in distinct markets in relation to production,
distribution, supply, storage or price of goods or provision of services.29 Unlike
horizontal agreements, vertical agreements are not anti-competitive per se, and
it needs to be established that the alleged activity has caused an appreciable
adverse effect on competition (AAEC) in the country.30 Vertical agreements also
comprise the following: 261
Business and Sustainability i) Tie-in arrangement
Tying is the practice of supplying a product, the tying product, while also
making the buyer purchase a second product, known as the tied product.
Tying may be employed by a dominant firm for increasing the sales of the
tied product in the market by leveraging its position with respect to the tying
product, leading to a horizontal foreclosure of market.31 A tie-in arrangement
is detrimental for competition as a consumer is coerced into purchasing a
product (the tied product) which she or he may not necessarily require.32 In
Hilti AG v. Commission, Tetra Pak, a company engaged in the sale of liquid
packaging machines, required customers to also buy cartons from it, further
insisting that services for repair and maintenance should be provided by
them. The Commission opined that sale of cartons along with the machines
was not customary, with the former forming a separate market upon which
Tetra Pak was trying to eliminate competition.33

ii) Exclusive supply agreement:

Agreements restricting the buyer from purchasing goods or services other
than those of a particular supplier are termed as exclusive supply agreements.
Such agreements can also be referred to as exclusive purchasing or single
branding agreements. By employing such agreements, the purchaser is barred
from acquiring products from other competing sellers, defeating the process
of market competition.34 In Jindal Steel & Power Ltd. v Steel Authority of
India Ltd, it was alleged that the agreement between Steel Authority of India
Limited (SAIL) and Indian Railways (IR) for exclusive supply of rails to IR
was anti-competitive, resulting in foreclosure of market for new entrants,
including Jindal Steel. The Commission held that the exclusive arrangement
between SAIL and IR was not in violation of the provisions of competition
law, as only a small segment of SAIL’s total sales made up the sales to IR.
Also, IR required assurances for steadiness of supply of long rails which
was being offered by SAIL, with Jindal having failed to establish itself as a
viable competitor to SAIL.35

iii) Exclusive distribution agreement:

Agreements requiring the supplier to sell its goods to one specific distributor
in a particular territory, thereby restricting the output or supply of any
products, falls under the category of exclusive distribution agreements. These
may diminish intra-brand competition and heighten the risks of market
partitioning or market allocation for the sale of goods, facilitating price
discrimination.36

iv) Refusal to deal:

Refusal to deal refers to scenarios wherein restrictions are placed on persons
or classes of persons to whom goods may be sold or from whom the goods
may be bought.37 Refusal to deal agreements result in market foreclosure for
new entrants, making it difficult for the latter to compete. In English Welsh
& Scottish Railway Ltd. v. E. ON UK plc, the railway company was fined
for entering into exclusive agreements with various power stations for the
carriage of coal.38

262
v) Resale price maintenance: Competition Law

Resale Price Maintenance occurs when a seller (mostly, manufacturer)

demands that the buyer (mostly retailers) should engage in resale of that
good only at a price fixed by the seller and the buyer cannot resell at prices
lower than the prices suggested by the seller. In Fx Enterprise Solutions
India Pvt. Ltd v. M/s Hyundai Motor India Limited 39, the CCI found
Hyundai Motors placing restrictions on its dealers by imposing a maximum
permissible discount at which the vehicles may be sold to an end-consumer.
Dealers not adhering to the upper limits on discount prices were being
penalized. The CCI held that the imposition of minimum resale price prevents
the dealers from effectively competing on the price factor, and is anti-
competitive in nature.

Section 3(5) of the Competition Act holds that such agreements shall not
affect the rights of any person to restrain infringement or, from laying down
reasonable conditions imperative to protect her or his intellectual property
rights, including patents, copyright, trademarks, designs, and geographical
indications.

13.9 RELEVANT MARKET

Under the statutory framework of the Competition Act, the delineation of a
relevant market is of utmost significance. For an abuse of dominance investigation,
an enterprise shall be considered dominant only if it has attained a position of
strength in the relevant market. Determination of a relevant market is also
significant in a combination analysis, where the CCI has to ensure that the
proposed combination does not result in appreciable adverse effect on competition.
In the case of Competition Commission of India (CCI) v. Coordination
Committee of Artists and Technicians of West Bengal Film and Television
Industry, the Supreme Court had held that the delineation of relevant market is
not a necessary precondition for investigations under Section 3 of the Act, as
there is a presumption of AAEC in an agreement between market participants
under that provision.

Relevant market may be determined by the CCI with respect to the relevant
product market or the relevant geographic market or with regards to both.40
Relevant product market is referred to as a market with products or services
considered interchangeable or substitutable by a consumer due to factors such as
characteristics of the products, price, or use.41 In the case of In Re Matrimony.com
and Google, Google was charged with abusing its dominant position by granting
preference to its own services and its verticals by manipulating the search results.
The relevant market in this case was delineated to be - the market for online web
search services in India and, the market for online search advertising in India.
This was done by differentiating between offline and online sections of
advertising, on the basis that they are not substitutable.42 Relevant geographic
market is referred to a market comprising the area where the conditions of
competition for supply of goods or provision of services are distinctly
homogeneous and can be differentiated from the conditions existing in the adjacent
areas.43 In Re Harshita Chawla and Others, since conditions for the functionality
of OTT messaging apps through smartphones were found to be homogeneous
throughout India, the entire geographic area of India was delineated to be the
relevant geographic market.44 263
Business and Sustainability
13.10 ABUSE OF DOMINANCE
Under Competition law, mere dominance exerted by a firm is neither considered
bad nor held punishable. However, the abuse of its dominance by an enterprise
merits investigation by the competition authorities. This is in contrast with the
earlier legislative framework, as under the erstwhile MRTP Act, violation was
gauged based on the size of an enterprise, rather than the abusive conduct of the
latter.45

An enterprise is said to be in a dominant position, when it is able to operate

independent of other competitive forces existing in the relevant market and has
the power to affect the consumers or its competitors in its favour.46 Competition
law makes abuse of dominance by an enterprise punishable under law. Some of
the acts considered to be an abuse of dominant position includes, imposing of
conditions or prices which are unfair or discriminatory either through direct or
indirect means (which includes price discrimination and predatory pricing) and,
restricting the production of goods or provision of services.47 The Commission
seeks to capture conduct which may be exploitative (wherein the acts of the
enterprise prove detrimental to the consumers in the form of rise in prices, reducing
output or imposition of other unfair terms and conditions) and, exclusionary
(affecting the competitors of the dominant firm through the acts of exclusive
dealing, margin squeezing, denying market entry etc. to name a few).

In the case of European Union v. Google, also known as Google Search

(shopping) case, Google was fined €2.42 billion by the European
Commission for abusing its dominance in the general search market, and
stifling market competition by granting primacy to its own vertical
comparison-shopping services. It was held that Google’s self-preferencing
conduct had foreclosed competition in the shopping services market, which
represented a separate market from the search market. Leveraging its position
in the general search market, Google had resorted to bumping down other
rival sites down the list, distorting competition.48

The three important steps required in every abuse of dominance investigation

are as follows:
Determination of the relevant market.
Determining if the enterprise is dominant in the relevant market.
If found dominant, investigating whether the dominant entity has engaged
in acts falling under the purview of abuse of dominance.
The CCI, while inquiring into the dominance of an enterprise, shall consider the
factors provided under Section 19(4) of the Competition Act, which include market
share, size and resources, countervailing buyer power, market structure, and
dependence of consumers.49

Section 4 of the Indian Competition Act also takes into account the use of
dominance in one market to enter into another relevant market. In the case of
Harshita Chawla and WhatsApp50 the issue was whether WhatsApp was using
its dominance in the relevant market of internet based instant messaging apps to
gain entry into another relevant market, being Unified Payments Interface (UPI)
264 digital payments app market (WhatsApp Pay), which was aided by pre-installation
of WhatsApp on mobile phones. The Commission, post investigation, held that Competition Law
there was no abuse of dominance as the users were allowed discretion before
usage of the payment app along with separate registration requirements (terms
and conditions) prior to initiation of services.

13.11 MERGERS AND COMBINATIONS

One of the significant business developments in the field of corporate law has
been a plethora of transactions encompassing mergers and acquisitions. The
rationale behind companies opting to merge may range from increasing market
power, economies of scope, economies of scale, synergistic gains, eliminating
competition, obtaining access to R&D and technological knowhow.

Competition law is entrusted with the task of scrutinizing mergers that have a
potential for undermining competition. While assessing a merger, the competition
authorities investigate if the merger will generate horizontal effects (effects borne
out of mergers between actual or potential competitors at the same level of the
production chain and dealing with the same product or geographic markets),
vertical effects (effects occurring as a result of merger between enterprises
operating in different albeit complementary stages or levels in the market for the
same final product)51or, conglomerate effects (effects originating due to mergers,
which is neither functionally vertical or horizontal, but enables the merged entity
to foreclose competition in two distinct but related/unrelated markets by exercise
of its market power.52

Merger control, as a means to keep a check on the market power of dominant

firms on an ex-ante basis, is essential to preserve competitive market structures
and for achieving pro-competitive effects for the consumers.53 A complicated
element of merger control is that its role is forward looking in nature, focusing
on whether a proposed merger will lead to detrimental effects on competition in
the future.54 Numerous theories of competitive harm have been brought forth to
highlight the negative impact of a merger on consumer welfare, which includes
unilateral effects (resulting entity of a merger exercising market power post-
merger)55, coordinated effects (resulting entity of a merger able to harmonize
competitive behaviour with other firms in the market), vertical effects and
conglomerate effects.56 Competition authorities conduct merger assessment by
weighing the pro-competitive effects of a combination on the market against the
anti-competitive ramifications if the merger is allowed to be consummated.

Under the Indian Competition Act, Sections 5 and 6 are the significant provisions
regulating combinations, encompassing corporate restructuring methods such as
mergers, acquisitions & amalgamations. According to these provisions, enterprises
or persons choosing to enter into combinations crossing the specified assets or
turnover thresholds mentioned in Section 5 have to inform the CCI, divulging
the details of the proposed combination.57 A combination likely to result in an
AAEC within the relevant market shall be void, in accordance with section 6.
The various factors providing guidance to the Commission for approving or
rejecting a combination are given under section 20(4) of the Competition Act
and includes factors such as, extent of barriers to entry, the extent of countervailing
power present in the market, market share of the enterprise, the presence of
substitutes, etc. The notifications are handled with reference to Procedure in
Regard to the Transaction of Business Relating to Combinations Regulations
265
Business and Sustainability 2011. Within 210 days after the notification of the proposed combination gets
served, the CCI performs analysis if the combination causes or is likely to cause
an appreciable adverse effect on competition (AAEC) which is done based on
the factors enlisted under section 20(4) of the Competition Act.58 The commission
can approve59 a combination to take effect if found not to be causing an AAEC or
disallow60otherwise.

The assessment of significant AAEC that may arise as a result of a combination

and the subsequent decision in case of the former can also be assuaged by remedies
or notifications, termed as ‘modifications.61 Under the Act, modifications may
be suggested by the CCI62or the parties, who can also propose changes to the
suggested modifications63in order to bring about a mutually workable feature
within the specified time. Merger modifications rather than outright rejections is
slowly gaining momentum for resolving combination issues threatening to disturb
the status quo in the market framework.64

For instance, in Abbott Laboratories & St. Jude Medical, Inc., a proposed
combination was notified to the CCI under section 6(2) of the Competition Act,
2002 between Abbott laboratories and St. Jude Medical, Inc (SJM). Abbott dealt
in manufacture, sale and research of global healthcare products. SJM, on the
other hand, is a global medical device company in the United States, engaged in
the production, development and research of cardiovascular medical devices. It
was observed that the functions of both the parties intersected in the manufacture
of ‘small hole’ VCDs (VCDs are healthcare devices used in covering the holes
arising out of the arteries). As a result of the combination, the market share of the
combined entity would be elevated to around 90-100 percent in the small hole
segment, and the other active competitor would only have a market share of 5
percent. The entities proposed a voluntary modification by agreeing to engage in
a divestiture involving the small hole VCD segment of SJM to Terumo
Corporation, a third-party provider of cardiovascular products based in Japan
not having any structural or financial linkages with the parties on a world-wide
scale, and this was approved by the CCI.65

Also, one of the recent developments in the area of combinations is the advent of
‘green channel’ for combinations that are unlikely to have any anti-competitive
effects in the relevant market. The merging parties, based on their self-assessment,
specified criteria and subsequent consultation with the Commission may qualify
for green channel and, after notifying the CCI may consummate their combination
through an automatic approval, whereby they may avoid the 210-day statutory
standstill period.66 An example for a transaction that has taken the green channel
route is the acquisition of Dodla Dairy Limited (Dodla), a public limited company
engaged in sale and processing of milk and milk products, by, Industrial Finance
Corporation (IFC), a multilateral finance institution, under sec 6(2) read with
sec 5(a)(i)(A) of the Competition Act. Since the proposed combination was not
likely to result in any AAEC concerns, the relevant market definition was kept
open. After ensuring that the acquirer was not engaged in any activities of
production, distribution etc. which were similar to that of the target, the
combination was given a go-ahead under the green channel route.

Interestingly, when it comes to digital platforms, the conventional methods

employed to assess anti-competitive effects may fall short. With the advent of
Big Data, strong network effects and the significance of personal data in the
266 digital ecosystems, relying on traditional thresholds for gauging market power
may not yield fruitful results. Different jurisdictions have opened up investigations Competition Law
to ensure that dominant online platforms do not engage in anti-competitive
practices. The European Commission had initiated a formal antitrust investigation
to unearth if Amazon’s utilization of sensitive data obtained from independent
retailers doing business in its marketplace is in contravention of EU competition
rules.67 The CCI, has also acknowledged the dual role played by data as an input
and as a currency for monetizing services while investigating abuse of dominance
and combination cases.68 In Re Updated Terms of Service and Privacy Policy
for WhatsApp Users and WhatsApp LLC & Facebook, the CCI stated that factors
such as, innovation, customer service and quality have been elevated as non-
price parameters of competition on the basis of which market participants
compete.69 Recently, a probe conducted by CCI found tech giant Google guilty
of stifling competition and engaging in practices leading to denial of market
access to extend its dominance in services such as, browser, search, app library
among others for ensuring that its services serve as default options for achieving
highest user preference.70 There have been calls in multiple jurisdictions to revisit
the traditional thresholds in accordance with challenges posed in the digital
markets.71 The Competition Law Review Committee has also recommended
inclusion of data deals as one of the thresholds to be employed during merger
control.72

13.12 ENFORCEMENT OF COMPETITION LAW

The Competition Act also provides a multi-tiered enforcement mechanism. As
per the provisions of the Competition Act, the Commission can inquire into any
alleged infringement of Section 3(1) or Section 4(1) of the Competition Act,
based on its own motion or on the receipt of any information or, by a reference
received from the Central Government, State Government or any statutory
authority.73 Under the statute, there is no locus standi requirement. The CCI,
after the receipt of the information, is expected to satisfy itself as to the existence
of a prima facie case, and pass directions to the Director General under Section
26(1) for initiating investigation.74

Director-General:
The Director General or the DG, is duty bound to assist the Commission whilst
conducting investigation for infringement of any provisions, rules or regulations
made under the Competition Act, for which the DG shall be empowered with all
the powers that are conferred on the Commission by the Act.75 Where the
Commission considers that a prima facie case exists, it directs the DG to
investigate the matter. In Excel Crop Care Limited v. Competition Commission
of India & Another, the Supreme Court held that an investigation by the DG
must cover all the relevant facts and evidence in order to assess any anti-
competitive conduct complained of. The Court held that the “the starting point
of the inquiry would be the allegations contained in the complaint but during the
course of the investigation if other facts also get revealed and are brought to
light, the DG would be well within his powers to include those as well in his
report”.76

Competition Commission of India (CCI):

The Director General shall, after conducting investigation, submit his findings
to the Commission. The Commission, based on the findings of the DG may either
267
Business and Sustainability choose to close the matter and pass such orders as it deems fit (if no contravention
of the provision of the Act is found) or, call for further investigation if required.77
The Competition Commission of India, being the statutory regulatory authority
entrusted to promote and sustain competition in the markets in India is empowered
to issue interim orders in the course of inquiry to prevent acts that may have an
appreciable adverse effect on competition or culminates in abuse of dominance
by a group or an enterprise.78The Commission also has the power to impose
penalties for non-compliance with the directions of Commission and the Director
General79 and for failing to provide adequate information on combinations when
sought by the CCI.80 Aside from the power to impose penalties for omission,
willful alteration or furnishing a false statement before the Commission,81 the
CCI also has the power to impose lesser penalty on a person included in a cartel,
provided he makes a full disclosure regarding the violations. However, it needs
to be noted that this feature of imposing lesser penalty shall not be available if
the investigation report pertaining to the cartel has been received from the Director
General by the Commission before making of such disclosure.82 The CCI is also
required to provide its opinion to the Government in the formulation of
competition policy.83

Appellate authorities:
The National Company Law Appellate Tribunal (NCLAT) has been designated
as the Appellate Tribunal for handling the appeals arising from the CCI. The
Appellate body has been empowered to hear and dispose of appeals against any
order, direction or decision issued by the CCI. Additionally, the NCLAT has
been empowered to adjudicate on claims for compensation arising from the
findings of the Commission as well as passing of orders for the recovery of
compensation.84The Appellate Tribunal, after providing parties to the appeal an
opportunity of being heard, is empowered to pass orders modifying, affirming or
setting aside the decision, direction or order appealed against.85The Appellate
Tribunal need not be bound by the Code of Civil Procedure, 1908 but must
conform to the principles of natural justice while conducting its procedure. The
Tribunal shall be vested with all the powers that are vested in a civil court for
performing its functions during the trial of suit.86 Appeals from the Appellate
Tribunal shall lie to the Supreme Court which needs to be filed within sixty days
from the date of communication of the decision or order passed by the Appellate
Tribunal.87

13.13 SUMMARY
Competition law is an economic legislation of immense significance and plays
an important role in managing the dynamics of the market. The provisions related
to anti-competitive arguments, abuse of dominance and combinations help to
ensure fair competition in the market and thereby augment consumer welfare.
With the rise in online platforms and the rapid shift to e-markets, competition
authorities are also forced to recognize the significance of non-price parameters
of competition such as quality, innovation, privacy, etc. Ensuring fair competition
in digital markets poses far more challenges for the competition enforcement
authorities as compared to the traditional markets. But the dynamic character of
the markets and the constant emergence of new challenges also make competition
law one of the most interesting areas of law for students as well as practitioners.

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 Competition Law
13.14 SELF ASSESSMENT QUESTIONS
1) Competition Law facilitates in-
a) increasing prices b) diminishing output
c) thwarting innovation d) improving product quality
2) Which of the following legislation was the predecessor to the Competition
Act, 2002?
a) Consumer Protection Act, 1986
b) Monopolies and Restrictive Trade Practices Act, 1969
c) Unfair Trade Practices Act, 1972
d) Companies Act, 1956
3) Which Committee was constituted by the Government before enacting the
Competition Act, 2002?
a) Mahalanobis Committee b) Dr. J J Irani Committee
c) Bhabha Committee d) Raghavan Committee
4) Competition Commission of India (CCI) is a -
a) Statutory body b) Administrative body c) Quasi-judicial body
5) What are the different kinds of horizontal and vertical agreements? Explain
with relevant examples.
6) What is meant by abuse of dominance? Mention the three important steps
required in every abuse of dominance investigation.
7) How are mergers and combinations regulated under the Competition Act,
2002?
8) What do you understand by the term “Green Channel” under the Competition
Act, 2002?
9) Write a brief note on the powers and functions of the Competition
Commission of India (CCI) under the Competition Act, 2002.

13.15 FURTHER READINGS/REFERENCES

Books:
1) Richard Whish & David Bailey, 2015, Competition Law, Oxford University
press.
2) Abir Roy & Jayant Kumar, 2018, Competition Law in India, Eastern Law
House.
3) Versha Vahini, 2020, Textbook on Indian Competition Law, Lexis Nexis.
References:
1
RICHARD WHISH & DAVID BAILEY, COMPETITION LAW 1(7TH ED., 2016).
2
Lina M. Khan, Amazon’s Antitrust Paradox, The Yale L.J. 710,718 (2017).
3
India Const. art 39.
4
Altamas Kabir, Competition Laws and the Indian Economy, 23(1) National
Law School of India Review. 1, 1 (2011).
269
Business and Sustainability 5
Monopolies and Restrictive Trade Practices Act, 1969, No. 54, Acts of
Parliament, 1969 (India).
6
B.S. Chauhan, Indian Competition Law: Global Context, 54(3) J. of the Ind.
L. Inst. 315, 316 (2012).
7
Geeta Gouri, Convergence of competition policy, competition law and public
interest in India, 6 Russ. J. of Economics. 277, 280 (2020).
8
Budget Speech of Shri Yashwant Sinha, Finance Minister, GOI, 27th Feb,
1999 (Union Budget 1999-2000).
9
Report Of the Working Group On Competition Policy, Planning Commission,
Government of India. 15 (2007), https://niti.gov.in/planningcommission.
gov.in/docs/aboutus/committee/wrkgrp11/wg11_cpolicy.pdf (Last accessed
on Oct. 2, 2021).
10
Ibid.
11
Ibid.
12
Id. at 16.
13
Competition Act, 2002, § 3(1), No. 12, Acts of Parliament, 2003 (India).
14
Id. at § 3(2).
15
Competition Act, supra note 13, at § 19(3).
16
WHISH, supra note 1, at 513.
17
In Re Cartelization by public sector insurance companies in rigging the bids
submitted in response to the tenders floated by the Government of Kerala for
selecting insurance service provider for Rashtriya Swasthya Bima Yojna, 2015
SCC OnLine CCI 192.
18
Competition Act, supra note 13, at § 3(3).
19
IFTRA Rules on Glass Containers, OJ [1974] L160/1.
20
Italian Flat Glass, OJ [198] L 33/44.
21
Competition Act, supra note 13, at § 3(3)(b)
22
ABIR ROY, COMPETITION LAW IN INDIA: A PRACTICAL GUIDE 31 (2016).
23
In Re Builders Association of India and Cement Manufacturers’ Association
& Ors., 2016 SCC OnLine CCI 46.
24
Competition Commission penalises beer companies for indulging into
cartelisation, Press Release No. 40/2021-22, https://www.cci.gov.in/sites/
default/files/press_release/PR40-2021-22.pdf (Last accessed on Oct. 2, 2021).
25
WHISH, supra note 1, at 530.
26
HFB Holding v. Commission, [2001] 4 CMLR 1066.
27
ROY, supra note 22, at 32.
28
In re Cartelization in Tender No. 59 of 2014 of Pune Municipal Corporation
for Solid Waste Processing, 2018 SCC OnLine CCI 40.
29
Competition Act, supra note 13, at § 3(4).
30
Ibid.
31
WHISH, supra note 1, at 689.
32
In Re IELTS Australia Pty Ltd., IDP Education Pty Ltd., IDP Education India
Pvt. Ltd. and Planet EDU Pvt. Ltd., 2010 SCC OnLine CCI 33.
270
33
Hilti AG v. Commission, [1992] 4 CMLR 16.
34
WHISH, supra note 1, at 683. Competition Law
35
Jindal Steel & Power Ltd. v Steel Authority of India Ltd, [2012] 107 CLA
278.
36
ROY, supra note 22, at 82.
37
Competition Act, 2002, § 3(4), No. 12, Acts of Parliament, 2003 (India).
38
English Welsh & Scottish Railway Ltd. v. E. ON UK plc, [2007] UKCLR
1653.
39
Fx Enterprise Solutions India Pvt. Ltd v. M/s Hyundai Motor India Limited,
2017 SCC OnLine CCI 26.
40
Competition Act, supra note 13, at § 2(r).
41
Id. at § 2(t).
42
In Re Matrimony.com and Google, 2018 SCC OnLine CCI 1.
43
Competition Act, supra note 13, at § 2(s).
44
In Re Harshita Chawla and Others, 2020 SCC OnLine CCI 32.
45
ROY, supra note 22, at 95.
46
Competition Act, 2002, § 4, No. 12, Acts of Parliament, 2003 (India).
47
Ibid.
48
Antitrust: Commission fines Google €2.42 billion for abusing dominance as
search engine by giving illegal advantage to own comparison-shopping
service, (Jun. 27, 2017) https://ec.europa.eu/commission/presscorner/detail/
en/IP_17_1784.
49
Competition Act, supra note 13, at § 19(4).
50
In Re Harshita Chawla and Others, 2020 SCC OnLine CCI 32.
51
WHISH, supra note 1, at 810.
52
Id. at 811.
53
WHISH, supra note 1, at 817.
54
Ibid.
55
Id. at 818
56
Id. at 819.
57
Competition Act, supra note 13, at § 6(2).
58
Id. at § 6(2A).
59
Id. at § 31(1).
60
Id. at § 31(2).
61
Combination Regulations 2011, Regulation 25 (1).
62
Competition Act, supra note 13, at § 31(3).
63
Id. at § 31(6).
64
John Kwoka, Merger Remedies: An Incentives/Constraints Framework, 62
Antitrust Bull. 367, 368(2017).
65
In re Abbott Laboratories, 2016 SCC OnLine CCI 83.
66
Combination Regulations 2011, Regulation 5A.
67
Antitrust: Commission opens investigation into possible anti-competitive
conduct of Amazon, https://ec.europa.eu/commission/presscorner/detail/pl/
ip_19_4291 (Last accessed on Oct. 4, 2021). 271
Business and Sustainability 68
Matrimony.com Ltd v. Google LLC, 2018 SCC OnLine CCI 1.
69
In Re Updated Terms of Service and Privacy Policy for WhatsApp Users and
WhatsApp LLC & Facebook, 2021 SCC OnLine CCI 19.
70
Pankaj Doval, Google abusing position, playing unfair: CCI probe, (Sept.
18, 2021), https://timesofindia.indiatimes.com/business/india-business/
google-abusing-position-playing-unfair-cci-probe/articleshow/86306396.cms
(Last accessed on Oct. 4, 2021).
71
Ariel Ezrachi & Jay Modrall, Rising to the Challenge - Competition Law and
the Digital Economy, 15 COMPETITION L. INT’L 117, 122 (2019).
72
Report of The Competition Law Review Committee, 2019.
73
Competition Act, 2002, § 19(1)(a), No. 12, Acts of Parliament, 2003 (India).
74
Id. at § 26(1).
75
Id. at § 41.
76
Excel Crop Care Limited v. Competition Commission of India & Another,
(2017) 8 SCC 47.
77
Competition Act, 2002, § 26, No. 12, Acts of Parliament, 2003 (India).
78
Id. at § 33.
79
Id. at § 43A.
80
Id. at § 44.
81
Id. at § 45(1).
82
Id. at § 46.
83
Id. at § 49.
84
Id. at § 53A.
85
Id. at § 53B (3).
86
Id. at § 53(O).
87
Id. at § 53T.

272