As Indian business pauses to recover its breath after the Rs 600 crore penalty levied by the Competition Commission of India on realty major DLF, and the dawning realisation that the Commission is quite willing to play hardball where it thinks necessary, another interesting threat to the way companies do business in India looms on the horizon.
The non-profit consumer advocacy group Consumer Unity and Trust Society (CUTS) has apparently approached the Competition Commission with an entirely novel and extraordinary submission. CUTS’ credentials and track record are unimpeachable. But the process it has adopted here is a bit perplexing. It has filed what it calls a “preliminary information report” with the Commission with regard to numerous operations of Google. The information provided in this report appears to be based purely upon the fact that Google is being investigated by authorities in the European Union and the United States for potential anti-competitive practices as a result of its dominance in those markets.
It appears to contain almost no evidence or material to establish that there is any case for investigation by the Commission in India. In fact, the preliminary information report virtually concedes, by implication, that there is no cause for investigation in India. There is no specific instance or practice mentioned regarding an Indian market which gives cause for complaint.
The report filed only generally observes that Google needs to be investigated for all possible infringements against the Competition Act, and that it “may be useful if the Commission keeps an eye on its activities” with respect to patents. Google, like many large entities, operates in several different markets in the course of its business operations: software technology and services, online travel, mobile advertising networks, mobile phone manufacture, to name just a few. The information provided raises a concern that Google may misuse its market power in the Indian search advertising and e-commerce markets — but without providing any information on actual practice or behaviour.
There does not appear to be any provision under the act that permits the filing of a preliminary information report. Further, unlike in certain jurisdictions such as the United Kingdom (market investigations) and the EU (sector inquiries), there is no power vested in India’s Competition Commission to undertake wide-ranging, general market investigations. Needless to state, there is also no provision which allows the Commission to launch investigations on a cautionary basis or mere conjecture. In any event, given its staffing resources position, it hardly seems practical for the Commission to effectively become some sort of monitor of the diverse markets in which an international corporate behemoth operates.
This brings us back to the point where we started. The Competition Act permits any person to provide information with respect to anti-competitive practices. This is fundamental to the working of the entire competition law superstructure. By its very nature, such wide and untrammelled power may be used or abused by people in different ways and for different innocent or ulterior purposes. The fact is that the report against Google has been filed by CUTS, which is a known and reputable organisation. Other filings may not be so well-intentioned or innocent.
The information submitted underlines the lurking danger that hangs over companies and businesses: that the Commission has an open door for all sorts of complaints, be they motivated or perhaps even actions made with the intention of not so much genuinely seeking to protect the market (which is the bona fide intention of CUTS in this case), but to cause trouble and difficulty for business rivals, or parties with whom the complainant has an axe to grind.
For this reason alone, it is important for the commission to seize the opportunity to send out a message which moderates and delineates the extent to which it will entertain general and unsubstantiated apprehensions in future. The commission would do well to also utilise the opportunity to lay down parameters which would guide them in determining whether or not a complaint is credible and complete. It would also do well to establish at this early stage in its development that its doors are not wide open to those raising general apprehensions, or requesting the blanket monitoring of sectors or markets on an ongoing basis.