Competition Act– an Industry Perspective

- Jasmeet Wadehra

A

Objectives of Competition Law

Promote competition

Promote free trade

Protect consumers

Prevent adverse effect on competition

Promote freedom of trade

Facilitate BUSINESS !!

Balance interests of Intellectual Property protection

FICCI’s Business Confidence Survey for Q4 FY13 indicated a decline in the Overall Business Confidence Index for the second consecutive quarter. The index dropped to 57.4 in Q4 FY13 survey from 61.2 in Q3 FY13. Global Competitiveness Report ranks India at all time low of 60.

World Bank’s six indicators of country’s governance- Voice and accountability (respect for civil liberties, public participation in voting process, media independence and transparency in govt. decisions.

- Political stability

- Government effectiveness (quality of civil service/bureaucracy, independence from politics, etc.)

- Regulatory quality- Rule of law

- Control of corruption

Efficiency and quality of regulatory regime affects the economic performance and investments in a country

CCI has a role to proactively bring about Government policies that lower barriers to entry, promote deregulation and trade liberalization and promote competition in market.

Regulatory institutions affect investments & economic growth

ClarityConsistencyCompliance Cost Reduction Quick disposalOutreachNo duplicity of regulationReasonableness

Industry looks for

Brings economies of scale, synchronizes demand & supply and reduces uncertainties

At the same time, mergers should not adversely affect consumer choice or distort market

Fast disposal rate – 120 of 123 cases cleared – majority within 30 days

M&A – balancing act

Competitive Neutrality principleBrings level playing fieldLaudable efforts – but more neededBCCI, Coal India, Indian RailwaysMore scrutiny required – Air India, PSU

preference in Rail Freight, non-tariff restrictions of states, etc.

Public Sector Enterprises within fold

Memorandum of Understanding - Extra Territorial JurisdictionProvision of informal verbal non-binding consultation before filing

notice of proposed combinationProvisions of Combination Regulations largely aligned with

securities laws viz. takeover regulations – definition of ‘control’ needs to emerge clearly

Mergers and amalgamations within group entities have been liberalized by clarifying 50% shareholding/voting control threshold vs. wholly owned subsidiary exemption

Two amendments in combination regulations – CCI quick on its feet to learn from experience

Combination wholly outside India with insignificant local nexus and effect on markets in India –market share criteria??

Speedy disposals – 364 cases received, 166 investigated, 134 reports received, 109 cases concluded

Advocacy – Quarterly Newsletter

SuggestionsModel corporate compliance policy – provide

internal training aidsPolicy advocacyStep up public advocacy efforts – advertise

decisionsSet up benches in different statesHigher scrutiny of public sector enterprises

particularly quasi monopolies

Thank you