The Competition Commission of India (CCI): Its Origin, Structure, and Functions

PWOnlyIAS December 18, 2023 12:59 2782 0

The Competition Commission of India (CCI) is a statutory body set up under the provisions of the Competition Act 2002. It works within the Ministry of Corporate Affairs.

The Competition Commission of India (CCI): Its Origin, Structure, and Functions

Provision: The Competition Commission of India (CCI) is a statutory body set up under the provisions of the Competition Act 2002. It works within the Ministry of Corporate Affairs.

Origin of the Competition Commission of India (CCI)

Mandate: The Competition Commission of India (CCI) was set up to ensure competition by enforcing the Competition Act 2002. It seeks to prevent activities that have an appreciable adverse effect on competition in India.
Idea: Following the 1991 Indian economic liberalization, the government felt a need to promote competition among private enterprises.
- Based on the Raghavan Committee report, the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and replaced by the Competition Act 2002.
- Based on the Competition Act 2002, the Competition Commission of India and Competition Appellate Tribunal came into effect.

Structure of the Competition Commission of India (CCI)

Competition Commission of India

Appointment: The chairperson and members of the commission are appointed by the central government.
Composition: The Competition Commission of India consists of a chairperson and not less than two and not more than six other members.
Qualification: The member must be a person of ability, integrity, and standing and is qualified to be a judge of a High Court, or, has 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.

Objectives of the Competition Commission of India (CCI)

Ensuring the markets work for the benefit and welfare of consumers.
Implementing competition policies for efficient utilization of economic resources.
For faster and inclusive growth and development of the economy, ensure fair and healthy competition in economic activities.
Ensuring sectoral regulatory laws are in alignment with competition law.

Functions of the Competition Commission of India (CCI)

Investigate Negative Effects on Competition: The Competition Commission of India looks into cases and investigates them if they hurt competition.
Regulate Mergers: The commission approves mergers under the act so that the two merging entities do not capture the market.
Eliminate Anti-competitive Practices: The commission prohibits anti-competitive agreements, and abuse of dominant position by enterprises, and regulates combinations, which can have an appreciable adverse effect on competition within India.
Awareness Generation: The commission undertakes competition advocacy, and creates public awareness, and imparts training on competition.
Opinion on Competition: The commission has to give an opinion on competition issues on a reference received from a statutory authority established under any law.

Significance of the Competition Commission of India (CCI)

Handle Anti-trust cases: The Competition Commission of India has resolved more than 1,200 antitrust cases with a case disposal rate of 89 % in antitrust cases.
Handle Mergers and Acquisitions: The CCI has handled a large number of mergers and acquisitions till date, clearing most of them, within a record time.
Promote Small Business: The CCI has ensured that domestic business entities do not get suppressed by an increase in globalization.
Prevent Market Distortion: The CCI has the role of preventing entities from market distortions and abusing their dominant positions to resort to anti-competitive activities.
Peaceful Co-existence: The CCI facilitates peaceful co-existence between the small and the large enterprises.

Challenges for the Competition Commission of India (CCI)

Cartelization: Cartelization of business can lead to monopolistic/duopolistic tendencies, causing price rises and supply-side manipulations.
Digital Business: The emerging phenomenon of the digital economy and e-commerce can prove to be a problem for the CCI as the current competition laws talk only about assets and turnovers.
Low Manpower: The CCI has to increase the number of benches to pronounce judgments more speedily on the competition cases.
Evolving Business: The way business is undertaken and the evolving antitrust issue can prove to be a significant challenge for the CCI.

Way Forward for the Competition Commission of India (CCI)

New Technology: With the advent of new technologies such as IoT, blockchain, etc, the Competition Commission of India needs to modify its approach to achieving competition.
Transparent Functioning: The CCI must ensure complete transparency for the effectiveness of consumers’ benefit.

Recent Instances of the Competition Commission of India Investigation

Google Play Store Case: The Competition Commission of India ordered an antitrust probe against Google for misusing its dominant position with Android to block market rivals.
- The CCI observed that compulsory pre-installation of the entire Google Mobile Services (GMS) suite under Mobile application distribution agreements equaled the imposition of unfair conditions on the device manufacturers.
Android OS Licensing: Google was found to have misused its dominance in the licensing of Android OS for smartphones, general web search services, non-OS specific mobile web browsers, and online video hosting platforms in India.
Amazon’s Investment in Future Group: In 2019, the CCI refused to approve Amazon’s investment in a Future Group company. Amazon was blamed for concealing the scope and complete information of its investment while seeking approval.

Competition Appellate Tribunal (COMPAT)

About: The Competition Appellate Tribunal (COMPAT) is a statutory organization set up under the provisions of the Competition Act, 2002.
Aim: The COMPAT aims to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India.
- COMPAT also adjudicates compensation claims based on the findings of the Competition Commission of India or the orders of the Appellate Tribunal.
Composition: The Chairperson or a Member of the Appellate Tribunal serves for a term of five years and is eligible for re-appointment.
- The Chairperson can serve till the age of 68 years and other Members of the Appellate Tribunal shall hold office till 65 years.
Working: COMPAT will not be bound by the procedure laid down in the Code of Civil Procedure, 1908, but will be guided by the principles of natural justice and, subject to the other provisions of this Act and any rules made by the Central Government.
Powers: COMPAT shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908.
- Every order of the tribunal shall be enforced by it in the same manner as if it were a decree made by a court
Punishment for Violation: In case of violation of the order, the person may be liable for a penalty of not exceeding rupees one crore or imprisonment for a term of up to three years or with both.

Must Read: Patents Act Overrides The Competition Act

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Competition Commission of India FAQs

The Competition Commission of India (CCI) is a statutory body set up under the provisions of the Competition Act 2002. It works within the Ministry of Corporate Affairs.

The CCI was set up to ensure competition by enforcing the Competition Act, of 2002. It seeks to prevent activities that have an appreciable adverse effect on competition in India.

Based on the Raghavan Committee report, the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and replaced by the Competition Act 2002.

The chairperson and members of the commission are appointed by the central government. The CCI consists of a chairperson and not less than two and not more than six other members.

The Competition Appellate Tribunal (COMPAT) is a statutory organization set up under the provisions of the Competition Act, 2002.

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The Competition Commission of India (CCI): Its Origin, Structure, and Functions

Origin of the Competition Commission of India (CCI)

Structure of the Competition Commission of India (CCI)

Objectives of the Competition Commission of India (CCI)

Functions of the Competition Commission of India (CCI)

Significance of the Competition Commission of India (CCI)

Challenges for the Competition Commission of India (CCI)

Way Forward for the Competition Commission of India (CCI)

Recent Instances of the Competition Commission of India Investigation

Competition Appellate Tribunal (COMPAT)

Competition Commission of India FAQs

What is the Competition Commission of India (CCI)?

What is the main Mandate of the Competition Commission of India (CCI)?

The Competition Act 2002 replaced which act?

How are the members of the Competition Commission of India (CCI) Appointed?

What is the Competition Appellate Tribunal (COMPAT)?

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