Competition Act-2002
Umesh Kumar, Rtd IPS,
Tanuj Goswami, Rtd ACS
The competition is a universal phenomenon that continues to grow inherently in enterprises, individuals, institutions, corporations, industries, etc. in terms of achieving competence, quality, profitability, prestige, reputation, power, etc. Any foul means used to achieve such excellence constitutes unfair practices, which the business world refers to as anti-competitive practices. The Competition Act-2002 deals with all manner of illegal activities that might create an appreciable adverse effect on competition (AARC) in India.
Following the enactment of the Competition Act-2002 (CA), which replaced the MRTP Act-1969, there has been a big turnaround in the competitive business environment across all sectors of the Indian economy. It is purposefully meant to avert monopolistic business practices/behaviour and to ensure free-and-fair competition and a level playing field in our fast-expanding market.
The Act stands with its core principle of not allowing any business to engage in collusion or sharing of pre-sensitive information like prices, capacity utilisation, production, targeted geographical markets or customers or groups and any other key strategic business matters with their rivals. Anyone ignoring/breaching this basic principle of fair trade is seriously liable for violation of the Competition Act with harsh consequences.
The Competition Commission of India (CCI), constituted in 2009, U/S.7 of the Competition Act, has been the most powerful market regulator. In the meantime, the Commission has disposed of hundreds of cases related to anti-trust competitive practices under Section 3, abuse or misuse of dominance by enterprises under Section 4, and anti-competitive combinations, mergers, amalgamations, or acquisitions under Sections 4 and 5, covering diverse sectors in the Indian economy such as cement, automobiles, tyres, insurance, real estate, airlines, pharmaceuticals, the IT sector, Indian Railways, and even government departments.
To build massive awareness about the Act, the CCI has long initiated many outreach programmes principally targeting government departments, PSUs, academic institutions, universities, Chambers of Commerce, trade organisations, Contractor & Suppliers Associations, Law Institutes, etc. In the past few years, the CCI has conducted over 300 such programmes in a hybrid mode across Assam.
The CCI is vested with the powers like that of a civil court under the code of civil procedure and authorized to impose harsh monetary penalties, fines, cease & desist orders and issue different directions or decisions as deemed fit by the Commission U/S27 & 28. Being empowered with inquisitorial, regulatory and adjudicatory functions, the CCI is striving to ensure the freedom of trade & business to all the market players or stakeholders across India.
However, to deal with the complicated and rapidly changing landscape created by e-commerce, extensive market digitalisation, and AI integration, local contractors, suppliers, manufacturers, businessmen, merchants, and entrepreneurs must stay informed, adaptable, and competitive to succeed in a highly competitive business environment.
At least a working knowledge about the Act and evolving trends would make them an informed citizenry with the ability to understand the market dynamics and all critical competition issues and challenges. CCI disposed of hundreds of antitrust cases. After a lengthy investigation, some tyre majors were found to have violated competition law by forming a cartel and intentionally disregarding the Competition Act by sharing sensitive company information and making collective decisions for substantial profits. This blatant unethical act was inimical to the provision of Section 3 of the Competition Act, which obliged them to pay a whopping Rs 1786 crore as a penalty.
Even the government sectors couldn't escape from the competition lens of CCI. The four insurance companies were found to be seriously guilty of cartelisation and price manipulation while participating in a tender floated by the Government of Kerala for an insurance service provider for their flagship scheme, the "Rastriya Swastha Bima Yojana Scheme", for Kerala for an insurance service provider for their flagship scheme, the "Rastriya Swastha Bima Yojana Scheme' meant for downtrodden people. All four had to incur Rs 671 crore as a penalty imposed by CCI.
Very recently the CCI disposed of an anti-trust case based on a petition filed by the Office of the AG (Audit), Assam, before the CCI in respect of a tendered work floated by the Assam Police Housing Corporation against 17 Class I Electrical contractors, who were indulged in cartelisation and submission of cover bids in violation of Section 3(3)(d) of the Competition Act.
The alleged contractors submitted a prayer petition before CCI for consideration of certain mitigating factors like their ignorance of the Competition Act, lack of knowledge of technology, no previous experience of participation in e-tendering, etc. Further, they pleaded that they were petty business firms, so if a monetary penalty was imposed, that would ruin them economically. The CCI directed the contractors to cease and desist from indulging such practices in the future with stern warning.
Meanwhile, the commission's perseverance and timely action led to the thriving of a very strong competitive culture in the country. With the positive spin given to competitiveness and fairness in the market, the CCI is doing a wonderful job of earning strong credibility in maintaining oversight and enhancing economic efficiency and market equitability. A nation setting a goal to transform into a $30 trillion developed country by 2047 has to have an ever-vigilant, strong regulatory mechanism to ensure fairness, transparency, inclusivity and competitive neutrality.
So, it is high time all the business-related persons/organisations stayed updated in order to reap the maximum benefits out of a sea of opportunities presently unfolding, consequent on the Government of Assam's commendable sustained effort of making Assam a shining economic hub and gateway to Southeast Asia.
In our country the government procurement holds considerable importance in the economy, as 25%-30% of our GDP is spent in terms of purchasing of goods or services by the government from the market or private agencies. This mind-boggling amount entails very careful utilization of scarce resources to achieve optimal productive efficiency through competitiveness.
Anyone interested to know about the Competition Act-2002 and the underlying competition issues/concerns may obtain different publications issued by the CCI, New Delhi, in all languages, including Assamese, on its website (www.cci.gov.in).