SEM V Competition Law – Unit V Class Notes
Duties of Director General (DG)
Overview:
- The Director General (DG) is a key official appointed under the Competition Act, 2002, responsible for carrying out investigations and gathering evidence to support the Competition Commission of India (CCI) in its enforcement of competition law.
Duties of the Director General:
- Conducting Investigations:
- Investigation of Complaints: The DG investigates complaints and information related to alleged violations of the Competition Act, including anti-competitive agreements and abuse of dominant position.
- Evidence Collection: Collects evidence, conducts interviews, and undertakes search and seizure operations (dawn raids) as directed by the CCI.
- Preparation of Reports:
- Investigation Reports: Prepares detailed investigation reports based on the findings and evidence gathered during the investigation.
- Recommendations: Submits recommendations to the CCI regarding the action to be taken based on the investigation.
- Compliance and Enforcement:
- Monitoring Compliance: Assists in monitoring compliance with the CCI’s orders and directions.
- Coordination: Coordinates with other regulatory agencies and authorities as needed during investigations.
- Support to CCI:
- Legal Support: Provides legal and technical support to the CCI in adjudicating cases.
- Implementation: Helps in the implementation of orders and directives issued by the CCI.
Penalties
Overview:
- The Competition Act, 2002, prescribes penalties for various violations, including anti-competitive agreements, abuse of dominant position, and failure to comply with orders.
Types of Penalties:
- Monetary Fines:
- For Anti-Competitive Agreements: Companies found to be participating in anti-competitive agreements (e.g., cartels) can face fines up to 10% of their average turnover for the last three financial years.
- For Abuse of Dominant Position: Firms abusing their dominant position can be fined up to 10% of their average turnover for the last three financial years.
- Cease and Desist Orders:
- Order to Stop Practices: The CCI can issue cease and desist orders requiring companies to stop engaging in anti-competitive practices.
- Divestiture Orders:
- Asset Disposal: In cases involving mergers or acquisitions that substantially reduce competition, the CCI may order divestiture of assets to restore competition.
- Compensation:
- Consumer Compensation: The CCI may order firms to compensate consumers who have suffered losses due to anti-competitive practices.
- Criminal Penalties:
- Imprisonment: In certain severe cases, individuals involved in anti-competitive practices may face criminal charges and imprisonment.
Competition Advocacy
Overview:
- Competition advocacy involves promoting competition policy and encouraging fair market practices. The CCI undertakes various initiatives to educate stakeholders and advocate for competitive markets.
Key Activities in Competition Advocacy:
- Public Awareness:
- Educational Programs: Organizes seminars, workshops, and training programs to raise awareness about competition law and its benefits.
- Publications: Publishes reports, guidelines, and articles on competition issues.
- Policy Recommendations:
- Advisory Role: Advises the government on policy matters and legislative changes to promote competition and improve market conditions.
- Market Research: Conducts research and market studies to understand competition dynamics and provide recommendations.
- Collaboration with Stakeholders:
- Engagement: Engages with businesses, consumer organizations, and other stakeholders to promote competition principles.
- Partnerships: Collaborates with international competition authorities and organizations to exchange knowledge and best practices.
Important Judgments of the Supreme Court
Overview:
- Supreme Court judgments play a crucial role in interpreting and shaping competition law in India. Key judgments provide insights into how the law is applied and enforced.
Notable Judgments:
- Competition Commission of India v. Bharti Airtel Limited (2019):
- Issue: Whether the merger between Bharti Airtel and Tata Tele Services Limited violated competition norms.
- Judgment: The Supreme Court upheld the CCI’s decision to approve the merger with certain conditions, emphasizing the importance of competition assessments in merger control.
- Competition Commission of India v. SAIL (2010):
- Issue: Whether the Steel Authority of India Limited (SAIL) abused its dominant position by charging discriminatory prices.
- Judgment: The Supreme Court held that SAIL had not abused its dominant position and clarified the standard for assessing abuse of dominance under the Competition Act.
- Excel Crop Care Limited v. Competition Commission of India (2017):
- Issue: Whether Excel Crop Care Limited engaged in anti-competitive practices by entering into an exclusive distribution agreement.
- Judgment: The Supreme Court upheld the CCI’s decision to impose penalties for anti-competitive agreements and provided guidance on the assessment of exclusivity agreements.
- Dr. K.K. Sharma v. Competition Commission of India (2014):
- Issue: Whether the CCI’s decision to impose penalties on certain pharmaceutical companies for anti-competitive practices was justified.
- Judgment: The Supreme Court affirmed the CCI’s orders, reinforcing the need for strict compliance with competition law.
- Alstom (India) Limited v. Competition Commission of India (2020):
- Issue: Whether the CCI’s decision to impose a penalty for cartelization in the power sector was valid.
- Judgment: The Court upheld the CCI’s findings and penalties, emphasizing the role of competition law in regulating anti-competitive practices.
