Useful, but not really so

Business Standard, March 23, 2007

A useful compendium of various dimensions of competition law, and can be a good reference to any reader who is looking for all of this in one place. Alas, most of the chapters are rehashed with a little tweaking, say

Pradeep S. Mehta

on “Competition Law Today: Concepts, Issues and the Law in Practice” by Vinod Dhall (ed.)

The book “Competition Law Today: Concepts, Issues and the Law in Practice” Vinod Dhall (ed.) is a useful compendium of various dimensions of competition law, and can be a good reference to any reader who is looking for all of this in one place. Alas, most of the chapters are rehashed with a little tweaking. This has been honestly admitted to by some authors, though not by all. Writings on the dimensions of competition laws by these and many others are available in published papers, which can be easily obtained from the Internet and libraries. Also, most of the papers are on rich-country experiences with hardly anything from a developing country.

All the international organisations in the area of competition law—Unctad, the International Competition Network, CUTS, OECD, World Bank, ADB, etc—have done a huge amount of work on this subject in developing countries. Of these, Unctad leads in its work, and could have been an excellent source for useful material for the Indian readers, if that is the targeted audience.

Here I am reminded of a very recent candid comment by this newspaper’s economic commentator, T C A Srinivas-Raghavan, in his Okonomos column “Inflation and exchange rate management,” (March 16): “ … [M]ost of our policy-oriented economists tend to think that what works in the west is exactly the same (as) … in India. The ‘stages of development’ problem completely escapes them. Second, because of this aping, Indian economic research is sadly lacking in microeconomic strength. It is mostly what is called hawa mein baten (talking in the air).”

Vinod Dhall is no policy-oriented economist, but a generalist, a retired civil servant. Admittedly, the efforts made by him in learning about competition law over the last two plus years have been good, and thus this effort is a step forward. The overview written by him reflects his learning and is a good piece. Alas, he does commit a few mistakes, one by stating that the US was the first country in the world to adopt a competition law in 1890 through the Sherman Act. In fact, Canada was the first country in the world to adopt a competition law in 1889: The Act for the Prevention and Suppression of Combinations in Restraint of Trade. The triggers for both the North American laws were the exploitation of agrarian interests by monopsonistic farm goods traders.

One part of the book deals with competition laws in various developed country jurisdictions, save South Africa and Mexico, which don’t really count for much in India, and is part of the continuing tragedy of relying upon jurisdictions where the political economy is quite different. Rather, some substance on developing country jurisdictions would have helped the reader. These could have included some regulatory failures as well, such as in Thailand, when similar conditions prevail in India. There is a huge amount of literature in the realm, and it would not have been difficult at all for the editor to have delved into them or asked researchers from such developing countries to write them.

I speed-read through the whole book to see if there was anything which might help the Indian regime, but did not find anything. In fact, one chapter on the “abuse of dominance”, which is going to be a big thing in India due to the thrust of the new law, did contain a reference to developing countries in the title, but a close look exhibited no analysis of a likely situation in India, neither did it contain any prescriptions for India or even other developing countries. It is otherwise a good essay.

If it is part of the advocacy agenda of the Competition Commission of India (CCI) to educate Indians, it is quite disappointing. As stated before, all the knowledge is available in various texts, and thus nothing new has been contributed to the rich literature on competition law. The CCI personnel have also worked behind the scenes, while two of them have contributed a chapter each. But these two chapters have not carried any analysis. If the authors felt hamstrung about being critical, the editor could have asked other Indian scholars to write and thus do justice. What the CCI has not been able to do for the last two plus years of its advocacy phase is to publish reader-friendly pamphlets or even a newsletter which could have helped educate Indians and themselves.

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