October 20, 2010, New Delhi
To broad-base the virtues of competition culture by sensitising consumer groups and other stakeholders on the benefits of competition to the common man as consumer.
Background and Context
Competition is now universally acknowledged as the best means of ensuring that consumers, even more so the aam adami or common man, have access to the broadest range of services at the most competitive prices. Producers will have maximum incentive to innovate, reduce their costs and meet consumer demand. Competition thus promotes allocative and productive efficiency. But all this requires healthy market conditions and government across the globe are increasingly trying to remove market imperfections through appropriate regulations to promote competition.
Absence of competition in a market place restricts consumers’ right to choice thereby reduces consumer surplus. The vulnerable sections of the society are more liable to fall into traps of poverty by price hikes and other shocks generated by anti-competitive practices. Competition law keeps a check on those practices. International experience has revealed that the competition spurs innovation, increases static and dynamic efficiency and productivity, thus lowering price with simultaneous improvement of quality of goods and services. Moreover, competition fosters economic growth, thereby creating opportunities of employment; the essential tool for alleviating poverty.
Benefits of enhanced competition in tele-communication and aviation sector in India are know facts. The accured benefits to consumers in these sectors are lower prices, more choices and better services. The experiences of these sectors suggest that the benefits of competition should extend to all sectors of economy. There are two issues to be addressed. First, identification of anti-competitive practices especially in the sectors that intimately impact on ordinary consumer. Secondly, extending the scope beyond the Consumer Protection Act. Individual redressal mechanism while available under the Consumer Protection Act, are not open to address systemic anti competitive practices, which call for a different approach and redress mechanism.
The Competition Law aims at removing all impediments in the ways of freedom of trade and eliminating all practices which may have anti-competitive effect in the market causing harm to the consumers. The Competition Commission of India is fully functional and has started initiating actions against anti-competitive practices.
It is imperative for the consumer organizations to be aware of the Act and to be with the Commission for achieving the common objective of consumer welfare through competition.
With examples from the evolution of competition and consumer welfare in India and drawing from international experiences, the Agenda will be as follows.
Competition Law and the Consumer – This session will focus on how effective competition in certain sectors has benefited the consumer with support from national and international experience. In addition, salient features of the Indian Competiton Act and the powers and functions of the Competition Commission of India would be explained.
Anti-Competitive Practices and the Consumer – This session will foucs on various types of anti-competitive practices in certain sectors, which are affecting consumers at large and also foucs on the corrective measures that can be initiated by consumer organisations. The redressal mechanism will also be discussed.
Challenges and the Way Forward –This session will deliberate on the role that consumer organisations can and should play in generating an environment conducive for implementing an effective competition regime.
The participants will be drawn from among the following:
- Consumer groups and other civil society organisations
- Representatives from the various relevant Ministries of the Government of India
- Representatives from the state governments
- Competition experts and opinion makers