CONSTITUTION , POWERS , FUNCTIONS AND JURISDICTION OF THE COMPETITION COMMISSION OF I NDIA

INTRODUCTION

In a free market economy, competition plays a pivotal role in shaping the economic
landscape and driving efficiency. The fundamental premise of a free market is rooted in the idea
that individuals and businesses engage in a dynamic interplay to produce, exchange, and
consume goods and services. Competition emerges as a natural consequence of this pursuit,
resulting in a system where market forces dictate resource allocation, innovation, and overall
economic progress. This competitive environment encourages businesses to constantly strive for
excellence, promoting efficiency in resource utilization, technological advancements, and cost-
effectiveness. The ensuing benefits include lower prices for consumers, a multitude of choices,
and an atmosphere that nurtures innovation and adaptability. 1 The purpose of competition in a
free market, therefore, is not merely to pit entities against each other but to create a vibrant and
responsive economic ecosystem that enhances the well-being of society at large.2

Furthermore, competition acts as a safeguard against the emergence of monopolies,

promoting a diverse business landscape and preventing the concentration of economic power.
Ultimately, the purpose of competition in a free market extends beyond individual gain; it serves

1
Ducci, Francesco, and Sabrina Tremblay-Huet. “Competition Law and Policy Issues in the Sharing Economy.”
Law and the “Sharing Economy”: Regulating Online Market Platforms, edited by Derek McKee et al., University of
Ottawa Press, 2018, pp. 295–318. JSTOR, https://doi.org/10.2307/j.ctv5vdczv.13. Accessed 1 Mar. 2024.
2
Chauhan, B. S. “INDIAN COMPETITION LAW: GLOBAL CONTEXT.” Journal of the Indian Law Institute, vol.
54, no. 3, 2012, pp. 315–23. JSTOR, http://www.jstor.org/stable/44782475. Accessed 1 Mar. 2024.

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as a mechanism for the collective betterment of society, fostering a dynamic and resilient
economic environment.3

HISTORY OF COMPETITION LAW IN INDIA

The importance of competition in an increasingly innovative and globalised economy is

clear. Vigorous competition between firms is the lifeblood of strong and effective markets.
Competition helps consumers get a good deal.4 It encourages firms to innovate by reducing
slack, putting downward pressure on costs and providing incentives for the efficient organization
of production.5

The first law to regulate competition in India was the Monopolies and Restrictive
Trade Practices Act, 1969 (MRTP Act). It was primarily based on three reports, which were:

1. The first was a study by the committee chaired by R.K. Hazarithe which studied the
industrial licensing procedure under the Industrial (Development and Regulation)
Act, 1951
2. The second was a study was conducted by the committee chaired by Professor P.C.
Mahalonobis to study the distribution and levels of income in the country
3. The Monopolies Inquiry Commission (MIC), appointed by the government in April
1964 and chaired by K.C Das Gupta, conducted the third study. Tasked with
investigating the scope and impact of power concentration in private entities, as well
as the prevalence of monopolistic and restrictive trade practices in significant sectors
of economic activity, the MIC played a crucial role in examining these aspects

As a consequence of its findings, the Monopolies Inquiry Commission (MIC) formulated

a bill aimed at regulating the functioning of the economic system to prevent the concentration of
3
Agger, Eugene E. “Monopoly and Competitive Prices.” The American Economic Review, vol. 3, no. 3, 1913, pp.
589–97. JSTOR, http://www.jstor.org/stable/1804419. Accessed 1 Mar. 2024.
4
Chawla, Ashok. “Global Business and Competition Law in India.” Indian Foreign Affairs Journal, vol. 9, no. 2,
2014, pp. 173–81. JSTOR, http://www.jstor.org/stable/45341926. Accessed 1 Mar. 2024.
5
International Journal of Socio-Legal Research Volume 5| Issue 1|ISSN-2393-8250 53 EVOLUTION OF
COMPETITION LAW IN INDIA Himanshu Handa

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economic power. This legislation also outlined measures for controlling monopolies and
prohibiting practices that were monopolistic and restrictive, posing a threat to public interest.

Subsequently, the bill was later modified by the parliamentary committee became the
Monopolies and Restrictive Trade Practices (MRTP) Act, officially enforced on June 1,
1970. The Act was crafted in alignment with the directive principles of the state policy in the
Indian constitution, striving to achieve social justice with economic growth. The foundational
principles of the MRTP Act encompass the unrestrained interplay of competitive forces, optimal
material progress through the rational allocation of resources, accessibility of quality goods and
services at reasonable prices, and, importantly, ensuring a just and equitable deal for consumers.
Notably, the statute extends its coverage to both the production and distribution of goods and
services.

Further, in 2000, the Raghavan Committee6 was established to examine the existing
legal and regulatory framework, identify gaps, and recommend measures to promote fair
competition, prevent anti-competitive practices, and protect consumer interests. These
recommendations laid the groundwork for the Competition Act, 2002, marking a departure from
the outdated MRTP Act. This new legislation introduced a contemporary and all-encompassing
framework for competition law in India, bringing it in line with global best practices.

The Competition Act, 2002 established the Competition Commission of India or the
CCI, which has played a pivotal role in promoting fair competition, preventing anti-competitive
practices, and protecting consumer interests in India. The CCI has been actively involved in
enforcing competition law, investigating anti-competitive behavior, and imposing penalties on
violators.

COMPETITION COMMISSION OF INDIA

The Competition Commission of India (CCI) operates as a statutory body under the
Ministry of Corporate Affairs. The commission was established on 14 October 2003. It became

6
‘Raghavan Committee Report’ available at
https://mbahub.in/business-law/raghavan-committee-report/#:~:text=The%20Raghavan%20Committee%20was
%20established,practices%2C%20and%20protect%20consumer%20interests.

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fully functional in May 2009 with Dhanendra Kumar as its first chairperson7. The current
Chairperson of the CCI is Ravneet Kaur, who was appointed to the role in 20238.

The objectives pursued by the Competition Commission of India include:

1. Facilitating markets to operate in a manner that promotes the well-being and welfare of
consumers.

2. Safeguarding fair and robust competition within the country's economic activities to
facilitate swift and inclusive growth and overall development.

3. Implementing competition policies to optimize the efficient utilization of economic

resources.

4. Cultivating productive relationships and collaborations with sectoral regulators to ensure

harmonious alignment between sectoral regulatory laws and competition law.

5. Conducting effective competition advocacy and disseminating information regarding the

advantages of competition to all stakeholders, with the aim of establishing and nurturing
a culture of competition in the Indian economy.

COMPOSITION OF THE CCI

Chapter III of the Competition Act, 2002 deals with the establishment of the Competition
Commission of India. As per section 8 of the Act, the Commission shall consist of a Chairperson
and not less than two and not more than six other Members to be appointed by the Central
Government. Further, the provision also lays down that the Chairperson and every other Member
must be a person of ability, integrity, and who, has been, or is qualified to be a judge of a High
Court. Alternatively, they must have special knowledge of, and professional experience of not
less than fifteen years in international trade, economics, business, commerce, law, finance,
accountancy, management, industry, public affairs, administration or in any other matter which,

7
"CCI through the eyes of the media: Doing well!". MoneyControl.com. 18 September 2012.
8
Kalra, Aditya. "India names ex-government official, former WhatsApp exec as new antitrust members, sources
say". Reuters.

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in the opinion of the Central Government, may be useful to the Commission. The chairperson
and other members are full time members.

Section 18 of the Competition Act, 2002 elucidates it to be the duty of CCI to eliminate
practices having a negative impact on the competition prevailing in the market, preserve the
interests of the consumers, and promote freedom of trade carried on by individuals in the Indian
market. Along with that, Section 19 is a complementary clause that ensures that CCI carries its
duties in the prescribed manner. It provides CCI the power to inquire into any alleged
contravention of provisions mentioned under Section 3(1) and Section 4(1) of the concerned act.
These provisions prohibit the parties from entering into any agreement that is likely to cause an
“appreciable adverse effect” on the market in India and abuse of dominant position in the market
in India respectively. The use of the “may” clause makes it a discretionary power at the instance
of CCI whether to carry out such inquiries or not. Also, Section 20 of the act provides CCI
similar powers to conduct inquiries in matters of the combination of entities.

CCI and its conflict with IPR and statutory regulatory authorities: The Competition
Act, 2002, through its section 3(5) tries to create such balance by excluding IPR holders and their
rights to restrain from any kind of infringement or to impose any “reasonable” restrictions
necessary for the protection of their IPR, from the purview of anti-trust or anti-competitive
agreements. In Super Cassettes Industries Ltd. vs. UOI & Ors. 9 the Delhi High Court held that
in case there exists a conflict between the Competition Act and the Copyright Act, the authority
to determine the jurisdiction shall vest in the Competition Commission of India.

Through the decision, the court has tried to strike a balance between the ambit of the
exercise of the power of regulatory authorities and the unruly jurisdiction of CCI. It can be said
that there exists no thumb rule to determine the jurisdiction of CCI over certain matters. There
exists overlap and such overlap is something that needs to be taken care of in order to reduce the
litigation period and overburdening of the judiciary.

9
W.P. (C) 1263/2005

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FUNCTIONS OF THE CCI

It is the duty of the Commission to eliminate practices having adverse effect on

competition, promote and sustain competition, protect the interests of consumers and ensure
freedom of trade in the markets of India. The Commission is also required to give opinion on
competition issues on a reference received from a statutory authority established under any law
and to undertake competition advocacy, create public awareness and impart training on
competition issues.10 Further, the Commission may enter into any memorandum or arrangement
with prior approval of the Central Government with any agency of any foreign country, for the
purpose of discharging its duties or performing its functions under the Act.

Chapter IV of the Act provides the major duties of the competition Commission.

1. Prohibit Practices Detrimental to Competition: The commission is tasked with acting as a

watchdog to proactively forbid any practices associated with the abuse of competition
within markets.

2. Foster and Uphold Competition: The primary objective of the Commission is to

encourage competition within Indian markets and actively strive to maintain
competitiveness.

3. Safeguard Consumer Interests: The overarching goal of competition law and the
competition commission is to shield consumers from the misuse of competition in
markets. All forms of anti-competitive activities are prohibited with the ultimate aim of
protecting consumers.

4. Preserve the Freedom of Trade for Other Participants in Indian Markets: To safeguard
competition within markets, the commission has the responsibility of ensuring that the
freedom of trade for all participants in Indian markets is not unduly impeded.

5. Power of Enquiry: The commission has the authority to enquire into certain agreements
and dominant position of enterprise as per Section 19, either on an application by a party
or suo moto as well.
10
Official website Competition Commission of India, available at: https://www.cci.gov.in/about-cci

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6. As per section 26, if, upon receiving a reference or based on its own knowledge or
information received under section 19, the CCI is of the opinion that there is a prima
facie case, it directs the Director General to initiate an investigation. However, if the
subject matter of the received information is deemed substantially similar to or covered
by a previous instance, the new information may be consolidated with the previous one.
In cases where the CCI finds no prima facie case, it closes the matter.

Furthermore, if the CCI receives the Director General's report suggesting no

contravention, the CCI invites objections or suggestions from relevant entities. If the CCI
concurs with the Director General's recommendation after considering objections or
suggestions, it closes the matter and communicates its decision to the respective
authorities or parties. Conversely, if further investigation is deemed necessary, the CCI
may direct the Director General to conduct additional inquiries or proceed with an
inquiry on its own. In cases where the Director General's report indicates a contravention,
and the CCI believes further inquiry is warranted, it conducts an inquiry in accordance
with the provisions of the Act.

7. Power to give opinion on reference by authority: In the course of any proceedings before
a statutory authority, if any party raises the concern that a decision taken or contemplated
by the authority goes against the provisions of this Act, the statutory authority has the
option to refer the issue to the Commission, as per section 21 of the Act. Additionally, a
statutory authority can, on its own initiative, make a reference to the Commission. Upon
receiving such a reference, the Commission is obligated to provide its opinion within
sixty days. This process ensures a mechanism for addressing concerns related to
decisions made by statutory authorities in potential contravention of the provisions
outlined in the Act. A reciprocal power is also given in section 21A, wherein the
commission can make such reference to the statutory body.

8. Section 27 outlines the authority of the Commission to issue orders subsequent to an

inquiry into agreements or the abuse of a dominant position. The orders may include:

directing discontinuation and preventing re-entry into agreements or stopping the abuse
of a dominant position.

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 Imposing penalties, not exceeding ten percent of the average turnover for the last
three financial years, on involved entities. In the case of cartel agreements,
penalties may be levied on each member based on profits or turnover.
 Directing the modification of agreements and instructing compliance with specific
orders.
 It may issue other directives it deems fit and pass orders against group members
contributing to the violation.
 Section 28 grants the Commission the power to divide an enterprise enjoying a
dominant position.

9. Under Section 29, the Competition Commission of India can investigate combinations
with potential adverse effects on competition. If the Commission believes a combination
may be problematic, it issues a notice to the parties, who have 30 days to respond. After
reviewing responses or a report from the Director General, if the Commission maintains
concerns, it instructs the parties to publish combination details within ten days for public
awareness. Interested parties can submit objections within fifteen days. The Commission
may seek additional information, and within forty-five working days from the specified
period's end, it proceeds with the case under Section 31, ensuring a fair and transparent
process.

10. Section 32 grants the Competition Commission of India extraterritorial jurisdiction,

allowing it to investigate and take action outside the territory of India as well. The
Commission can inquire into such matters if they have or are likely to have a significant
adverse effect on competition in the relevant Indian market.

11. Power to Issue Interim orders: As per section 33, if the commission believes if any entity
is involved in any activity in contravention of Section 4(1), 3(1) or section 6, the
Commission may temporarily restrain any party from carrying on such act until the
conclusion of such inquiry or until further orders.

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LANDMARK CASES

1. Coal India Ltd & Anr. v. Competition Commission of India & Another 11: The
Supreme Court held that the provisions of the Competition Act, 2002 (Competition Act)
apply to Coal India Ltd. and similar public sector undertakings. The Supreme Court
decision clarified that the Competition Act is applicable to all government companies and
statutory monopolies that operate to further “common good” under the Constitution of
India. Given the Supreme Court’s decision, the CCI’s jurisdiction to investigate and take
measures against statutory monopolies similar to CIL in abuse of dominance cases has
been confirmed.
2. Institute of Chartered Accounts of India v. Competition Commission of India &
Others12: The Delhi High Court held that the CCI does not have jurisdiction to examine
the decisions of other statutory regulators taken by them in exercise of their regulatory
functions, with no interface with trade or commerce. The Delhi High Court also held that
the Competition Act does not contemplate the CCI acting as an appellate court or a
grievance redressal forum against decisions of statutory bodies, which are taken in
exercise of their statutory powers.

3. Ultratech Cement Ltd v. Competition Commission of India & Another 13: The Delhi
High Court ruled that the CCI has the power to implead any party to a competition
proceeding at any stage provided it satisfies the two-fold test of ‘substantial interest’ and
‘public interest’ under Regulation 25 of the Competition Commission of India (General)
Regulations, 2009 because it assists the CCI to conduct proceedings in a better and
effective manner enabling it to reach an informed decision.

4. Google LLC & Anr v Competition Commission of India & Others 14: The NCLAT
held that the CCI must conduct an “effects analysis” to prove that an entity has abused its
11
CIVIL APPEAL NO.2845 of 2017
12
W.P.(C) 2815/2014 and CM Nos. 5836/2014 & 15032/2014
13
W.P.(C) 9854/2023 & CM APPLs. 37860/2023, 37861/2023
14
Competition Appeal (AT) No.01 of 2023

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dominant position in violation of Section 4 of the Competition Act. The test to be

employed while conducting an “effects analysis” is to show whether the abusive conduct
in question is anticompetitive. Notably, the NCLAT also held that the CCI cannot impose
a behavioural remedy on a dominant enterprise unless there is a specific finding of abuse
of dominance in relation to such conduct.

THE CCI IN NEWS

1. On 8 February 2013, the Competition Commission of India (CCI) imposed a ₹522

million (US$6.5 million) penalty on the Board of Control for Cricket in India (BCCI) for
abusing its dominant position. The CCI determined that IPL team ownership agreements
were unjust and discriminatory, with franchise agreements favoring BCCI excessively
and limiting franchises' influence on contract terms. The CCI directed BCCI to refrain
from practices denying market access to potential competitors and from utilizing
regulatory powers in commercial activity-related decisions in the future.15

2. In 2014, CCI imposed a fine of ₹2544 crores on 14 Indian car manufacturers as they
failed to provide branded spare parts and diagnostic tools to independent repairers, thus
hampering their ability to repair and maintain certain car models. The companies fined
were Maruti Suzuki, Mahindra & Mahindra, Tata Motors, Toyota, Honda, Volkswagen,
Ford, Hindustan Motors, Mercedes Benz among others.16

15
"Competition watchdog slaps Rs.52.24 crore fine on BCCI". Live Mint. 8 February 2013
16
Sondhi, Aditya. “The Legal Status of BCCI: Unwarranted Ad-Hocism, Constitutional Hurdles and the Pressing
Need for a Cricket-Legislation.” National Law School of India Review, vol. 22, no. 2, 2010, pp. 111–23. JSTOR,
http://www.jstor.org/stable/44283793. Accessed 1 Mar. 2024.

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CONCLUSION

Competition law plays a pivotal role in fostering fair and competitive market
environments, ensuring that businesses operate ethically and consumers benefit from choices,
innovation, and reasonable prices. By preventing anti-competitive practices, such as collusion,
abuse of dominance, and mergers that may harm competition, competition law aims to strike a
delicate balance between encouraging entrepreneurship and safeguarding the interests of both
businesses and consumers.

As global economies continue to evolve and technology advances, the relevance of

competition law becomes even more pronounced. The digital age has brought about new
challenges, with concerns about the dominance of tech giants and the impact on innovation and
consumer welfare. Adaptations and enhancements to competition law frameworks are crucial to
address emerging issues, promote a level playing field, and ensure that markets remain dynamic
and responsive to change.17

Competition law serves as a cornerstone for the proper functioning of free-market

economies, contributing to economic efficiency, consumer choice, and innovation. Regular
reviews, updates, and international collaboration are essential to ensure that competition laws
remain relevant and effective in addressing the evolving nature of markets, fostering a landscape
where fair competition thrives and benefits society as a whole.

One such regulatory framework is the Competition Commission of India, established by

the Competition Act of 2002. The CCI stands as a pivotal institution, playing a crucial role in
promoting fair competition and ensuring a level playing field in the Indian market. Established to
prevent anti-competitive practices and safeguard the interests of consumers, businesses, and the
overall economy, the CCI has been instrumental in shaping the competitive landscape in India.
As markets evolve and new challenges emerge, the CCI's adaptability and responsiveness
become increasingly important. The Commission's continuous efforts to stay abreast of global

17
Sundie, Jill M., et al. “Economic Reality Versus Consumer Perceptions of Monopoly.” Journal of Public Policy &
Marketing, vol. 27, no. 2, 2008, pp. 178–81. JSTOR, http://www.jstor.org/stable/25651594. Accessed 3 Mar. 2024.

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best practices, coupled with its proactive approach to addressing emerging issues, position it as a
vital force in sustaining and enhancing a competitive marketplace.

BIBLIOGRAPHY

1. Bhattacharjea, Aditya, et al. “Competition Law and Competition Policy in India: How
the Competition Commission Has Dealt with Anticompetitive Restraints by
Government Entities.” Review of Industrial Organization, vol. 54, no. 2, 2019, pp.
221–50. JSTOR, https://www.jstor.org/stable/48702957. Accessed 1 Mar. 2024.
2. Gerber, David J. “Competition Law.” The American Journal of Comparative Law,
vol. 50, 2002, pp. 263–96. JSTOR, https://doi.org/10.2307/840879. Accessed 1 Mar.
2024.
3. Ducci, Francesco, and Sabrina Tremblay-Huet. “Competition Law and Policy Issues
in the Sharing Economy.” Law and the “Sharing Economy”: Regulating Online
Market Platforms, edited by Derek McKee et al., University of Ottawa Press, 2018,
pp. 295–318. JSTOR, https://doi.org/10.2307/j.ctv5vdczv.13. Accessed 1 Mar. 2024.
4. https://cbcl.nliu.ac.in/competition-law/jurisdiction-of-competition-commission-of-
india-an-authority-under-perpetual-judicial-scrutiny/

Websites

1. scconline.com

2. manupatrafast.com

3. livelaw.in

4. heinonline.org

5. www.merriam-webster.com

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