CUTS Highlights Competition Law Panel’s Failure on National Competition Policy

IANS, August 20, 2019

The over 200-page report, submitted to Finance Minister Nirmala Sitharaman on August 14, contains several recommendations, including changes in the Competition Act, 2002.

The Competition Law Review Committee, which recently submitted its report, has failed to institutionalise a national competition policy (NCP), said the Consumer Unity & Trust Society (CUTS) International, a non-governmental organisation, on Tuesday.

The over 200-page report, submitted to Union Finance Minister Nirmala Sitharaman on August 14, contains several recommendations, including changes in the Competition Act, 2002.

“While some recommendations of the panel are welcome, few need further public deliberations before being accepted by the government,” said Pradeep S. Mehta, Secretary General, CUTS International.

“Tragically, the committee discussed the NCP but did not suggest ways to implement it, which would have ushered in much-needed structural reforms in the economy in today’s downturn,” he said.

“The recommendations with respect to ensuring financial independence of the Competition Commission of India (CCI); introduction of a dedicated bench in the National Company Law Appellate Tribunal to entertain appeals from the CCI; having more non-binding guidelines, including on imposition of penalty; recognition of nuances that are typical of digital economy; introduction of merger threshold based on deal value; and introduction of settlement mechanisms (summary disposal) are some of the noteworthy suggestions,” Mehta said.

Certain recommendations suggesting changes in the present governance structure, such as introduction of a governance board and merging investigation wing (Director General) with the CCI, needed further public discussions before their acceptance by the government, he said.

Last year, CUTS International had made a detailed submission to the Competition Law Review Committee and the panel has taken cognisance of most suggestions in the report.

But Mehta termed the panel’s response to its suggestions regarding competition reform advocacy and its failure in institutionalising the NCP as unexpected, particularly when the economy was witnessing growing anti-competition conduct amid slowdown.

“If the resources meant for envisaged governance board are vested in institutionalising the NCP, it would not only promote economic democracy but would also provide an external perspective to the CCI,” Mehta said.

However, the committee had shown maturity while giving clarifications with respect to the competition law’s interface with digital economy, including suggesting more market inquiries and periodic review of market trends, he added.

The CUTS International is examining the report and will submit its comments to the government soon.

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