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Competition Law Essay Competition 2014

TOPIC: ‘With the liberalization of the economy and enhancement of market competition, the role played by

Competition Commission as a regulator gains utmost importance. Often, while addressing issues of fair market

competition and alleged abuses by players, the regulator also addresses concerns of consumers. How do you assess

the role of the Competition Commission vis-à-vis the Consumer Protection Redressal Forum as established in

India. Please provide arguments supporting your position as to whether you think the Competition Commission has

a role to play or the reverse.’

TITLE: Rapport between Competition law and consumer law- that of comrades or foes

The essay was written with an objective to analyze the role, functions, aims and objectives, their

individual and collective tasks and the need for existence in the country and primarily the

relationship between the Competition law enforced by the Competition Commission of India

(CCI) and the Consumer law (enforced by Consumer forums at the district, national anf central

level) in India. An attempt to understand the rapport between the two had been made. Despite the

fact that the main goal that both the forums seek to achieve is enhancing the consumer welfare

and protecting consumer interests yet, there is friction between the two. The root cause of this

problem proves to be the overlapping functions and concurrent jurisdiction of the two regulators

and the same has been discussed in the light of the case of DLF V. BELAIRE owners. A

comparison has been made with the consumer law and competition law regulators in Australia

and the United Kingdom with India. The issues have been analyzed and recommendations have

been made that Jurisdictional clarity and a cooperation framework may be drawn, Demarcation

powers and duties of the respective forum and clarity as to who to regulate what. That an

atmosphere needs to be created that is Conducive to Effective Enforcement and to Proper

Governance by both the regulators.

NAME OF THE PARTICIPANT: Jasleen Kaur Dua

E-MAIL ID: jasleenkaurdua@yahoo.com

PHONE: (+91)097814-45305

INSTITUTION: Army Institute of Law

COURSE AND YEAR OF STUDY: B.A. LL.B. II YEAR

BATCH: 2013-2018

PERMANENT ADDRESS: House no: 565, sector 39, Urban

Estate, Chandigarh Road, Ludhiana (141010)

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TITLE: Rapport between Competition law and consumer law- that of comrades or foes

A market economy without any kind of competition would be a dreadful economy for the

consumers. The Hon’ble Supreme court observed in the case of Ashoka Smokeless Coal Ind. P.

Ltd. v. Union of India1 that the interest of consumers that a market economy that is free of any

kind of government or state control, competition is jargon. Where there exist a number of sellers

who offer consumers the choice of procurement of goods according to their own preferences,

competition amongst them is inevitable. For the consumer to be able to benefit from this, it is

important that the consumer welfare must be kept in mind by the state. Competition in a market

ensures fair allocation of resources, efficiency in its utilization, greater innovation and

enhancement offers wider choice and better products and services to the consumers. Owing to

the regulated competition in the market, the consumers get exactly what they require. Contrary to

this, unregulated competition in an industry left at its own disposal will result in exploitation of

consumers by charging high prices for poor quality goods, unfair trade practices, deficiency in

services etc.2.To understand the issue further, it is important to understand who is a consumer

under the two statutes. The main difference between the two is that consumer protection act,

1986 includes only the buyer who is also the user of the procured goods and these goods are not

brought for any kind of commercial purpose. Whereas the Competition Act, 2002 entertains a

larger audience. It includes the buyers of goods who procured the goods for a commercial

1 1 (2007) 2 SCC 640

2 Awaz v. Reserve Bank of India and DCM Financial Services Ltd. v. Mukesh Rajput, (2008 Bus LR764 NCDRC),

The National Consumer Disputes Redressal Commission observed: “Even in any free economy/deregulated

economy exploitation of the borrower/debtor is prohibited and is considered to be unfair trade practice. Free

economy would not mean license to exploit the borrowers/debtors by taking advantage of their basic needs for their

livelihood. This cannot be permitted in any civilized society – maybe a de-regulated free market economy.”

3

purpose as well as for resale. The constitution of India in article 383 and article 39

4 mandates

upon the state in the form of Directive principles of state policy to secure a social order for the

promotion and welfare of the people. Hence, with an aim of protecting the interest of the

consumers, Competition act, 2002 was enacted.5 With the same objective the consumer

protection act, 1986 was also enacted.6 Articles 14 to 19 of the constitution of India are the

sources from which the rights of the consumer under the act flow. Both the acts were enacted

after repealing the Monopolies and the Restrictive Trade Practices Act, 1969 with the primary

and the common objective of promoting the consumer welfare and protecting consumer interest.

The competition law tries to achieve the goal by establishing the basis for standard of proof and

legal framework of the enforcement whereas the consumer law stands for providing the

consumers a quick Redressal forum in order to improve his/her position in the market.7 The

Competition Commission of India is vested with the power to adjudicate the cases filed under the

3The Constitution Of India 1949, Article 38- State to secure a social order for the promotion of welfare of the

people:

(1) The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a

social order in which justice, social, economic and political, shall inform all the institutions of the national life

(2) The State shall, in particular, strive to minimize the inequalities in income, and endeavor to eliminate inequalities

in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in

different areas or engaged in different vocations. 4The Constitution Of India 1949, Article 39- Certain principles of policy to be followed by the State: The State

shall, in particular, direct its policy towards securing

(a) that the citizens, men and women equally, have the right to an adequate means to livelihood;

(b) that the ownership and control of the material resources of the community are so distributed as best to subserve

the common good;

(c) that the operation of the economic system does not result in the concentration of wealth and means of production

to the common detriment;

(d) that there is equal pay for equal work for both men and women;

(e) that the health and strength of workers, men and women, and the tender age of children are not abused and that

citizens are not forced by economic necessity to enter avocations unsuited to their age or strength;

(f) that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom

and dignity and that childhood and youth are protected against exploitation and against moral and material

abandonment. 5International Competition Law series Vol. 45 pg. 24 (case cited Glaxosmith v. Commission to state that the

objective of preserving competition is to protect the interests of the consumers) 6The preamble of consumer protection Act, 1986 reads as follows: “An act to provide for better protection of the

interest of consumers and for that purpose to make provision for the establishment of consumer councils and other

authorities for the settlement of consumer’s disputes and for matters connected therewith.” 7 K J Cseres, Amsterdam Center for International Law ‘Controversies of the Consumer Welfare Standard’ (2006)

3(2) CompL. Rev 122

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Competition act, 20028. The consumer forums at the district, state and national level conversely

adjudicate the cases filed under the consumer protection act, 19869. Though the ultimate goal

that both the bodies seek to achieve is protection of consumer interest and promotion of

consumer welfare, there may be discord between them owing to legislative vagueness regarding

the overlapping functions and muddled jurisdiction between the two adjudicating bodies. Due to

which there crops up uncertainty concerning the policy goals of competition law and that of

consumer law. While the former is concerned with maintaining conducive competitive

environment in the economy the latter concerns the transactions between the seller and the

consumer. And yet, both aim at promoting the consumer welfare and protecting consumer

interest.

Juncture between the Competition commission of India(CCI) and the consumer forums

8Competition act, 2002 section 7(1)

9Section 4 of Consumer Protection Act, 1986: The Central Consumer Protection Council.—

(1) The Central Government may, by notification, establish with effect from such date as it may specify in such

notification, a Council to be known as the Central Consumer Protection Council (hereinafter referred to as the

Central Council).

(2) The Central Council shall consist of the following members, namely :-

(a) the Minister in charge of Consumer Affairs in the Central Government, who shall be its Chairman, and

(b) such number of other official or non-official members representing such interests as may be prescribed

Section 7 of Consumer Protection Act, 1986: The State Consumer Protection Councils

(1) The State Government may, by notification, establish with effect from such date as it may specify in such

notification, a Council to be known as the Consumer Protection Council for ............. (hereinafter referred to as the

State Council).

(2) The State Council shall consist of the following members, namely :-

(a) the Minister in-charge of consumer affairs in the State Government who shall be its Chairman;

(b) such number of other official or non-official members representing such interest as may be prescribed by the

State Government.

(3) The State Council shall meet as and when necessary but not less than two meetings shall be held every year.

(4) The State Council shall meet at such time and place as the Chairman may think fit and shall observe such

procedure in regard to the transaction of its business as may be prescribed by the State Government.

Section 9 of Consumer Protection Act, 1986: Establishment of Consumer Disputes Redressal Agencies:

There shall be established for the purposes of this Act, the following agencies, namely :-

(a) a Consumer Disputes Redressal Forum to be known as the "District Forum" established by the State Government

in each District of the State by notification :

Provided that the State Government may, if it deems fit, establish more than one District Forum in a district.

(b) a Consumer Disputes Redressal Commission to be known as the "State Commission" established by the State

Government in the State by notification; and

(c) a National Consumer Disputes Redressal Commission established by the Central Government by notification.

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Ensuring consumer welfare and protecting of consumer interest as shared goals of competition

act, 2002 and consumer protection act, 1986:

The Hon’ble Supreme Court of India in the case of Competition Commission of India Vs. Steel

Authority of India Ltd. and Anr10

. held that the “The main objective of competition law is to

promote economic efficiency using competition as one of the means of assisting the creation of

market responsive to consumer preferences. The advantages of perfect competition are three-

fold: allocative efficiency, which ensures the effective allocation of resources, productive

efficiency, which ensures that costs of production are kept at a minimum and dynamic efficiency,

which promotes innovative practices. “

A High Level Committee set up in India on Competition Policy and Law was constituted to

examine its various aspects and make suggestions keeping in regard to the Competition policy of

India. This Committee made recommendations and submitted its report on 22nd of May, 2002

and was of the view that “the establishment of the Commission and enactment of the Act was

aimed at preventing practices having adverse effect on Competition, to protect the interest of

the consumer and to ensure fair trade carried out by other participants in the market in India and

for matters connected therewith or incidental thereto”.

The most important role of the CCI is competition advocacy11

. And through the course of

performing this role, it seeks to promote consumer welfare. It aims at protecting competition in

the market as a means of enhancing consumer welfare.12

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2010CompLR61(Supreme Court) 11

Section 49 of the Competition Act, 2002- Competition advocacy.-

1. In formulating a policy on competition (including review of laws related to competition), the Central

Government may make a reference to the Commission for its opinion on possible effect of such policy on

competition and on receipt of such a reference, the Commission shall, within sixty days of making such reference,

give its opinion to the Central Government, which may thereafter formulate the policy as it deems fit.

2. The opinion given by the Commission under sub-section (1) shall not be binding upon the Central Government

in formulating such policy.

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According to the European Commission, “the concept of ‘consumers’ encompasses all direct or

indirect users of the products covered by the agreement, including producers that use the

products as an input, wholesalers, retailers and final consumers”.13

The term Consumer welfare has not been explicitly defined. However, welfare as defined by the

black’s law dictionary is the “Resources and conditions needed for healthy and comfortable

living and Government support for members of society who are disadvantaged.”14

Hence, it can

be inferred that the object of promotion of consumer welfare is achieved when the resources and

conditions needed for healthy and comfortable living are provided to the consumers with the

support of the government. The meaning of consumer welfare has been made absolutely clear by

granting certain rights to the consumers to achieve the objective of supporting consumers.

3. The Commission shall take suitable measures, as may be prescribed, for the promotion of competition

advocacy, creating awareness and imparting training about competition issues. 12

6 2007 ICN Report 13

Article 81 of the EC Treaty (ex Article 85)

The following shall be prohibited as incompatible with the common market: all agreements between undertakings,

decisions by associations of undertakings and concerted practices which may affect trade between Member States

and which have as their object or effect the prevention, restriction or distortion of competition within the common

market, and in particular those which:

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(b) limit or control production, markets, technical development, or investment;

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a

competitive disadvantage;

(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which,

by their nature or according to commercial usage, have no connection with the subject of such contracts.

Any agreements or decisions prohibited pursuant to this Article shall be automatically void.

The provisions of paragraph 1 may, however, be declared inapplicable in the case of:

- any agreement or category of agreements between undertakings;

- any decision or category of decisions by associations of undertakings;

- any concerted practice or category of concerted practices,

which contributes to improving the production or distribution of goods or to promoting technical or economic

progress, while allowing consumers a fair share of the resulting benefit, and which does not:

(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these

objectives;

(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products

in question.. 14

Blacks law dictionary, Ed. 2

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At the outset, the United Nations Guidelines for Consumer Protection15

(UNGCP), adopted by

the UN General Assembly in 1985 and amended in 1999 provides a framework of these rights.

As a result of which, a set of eight rights was abridged by the Consumer international that

guarantee consumer welfare.

These rights are: Right to Basic Needs, Right to Safety, Right to Choice, Right to Redress, Right

to Information, Right to Consumer Education, Right to Representation and Right to Healthy

Environment. The intention of protecting the consumer welfare has also been expressed various

other international documents. For instance the in United Nations Guideline for Consumer

Protection in 1999.

In India, competition act, 2002 was also enacted with the same intention. The preamble to the

act16

clearly sets out in the introduction to this legislation its aim of protecting consumer interest.

Section 1817

and section 1918

of the act also support this view. The National Competition Policy,

15

UNCTAD (2001), United Nations Guidelines for Consumer Protection, United Nations, New York and Geneva 16

The preamble to the Competition Act, 2002 says that it aims “to prevent practices that have an adverse effect on

competition, promote and sustain competition in markets, protect the interests of consumers, and ensure freedom of

trade carried on by other participants in markets, while keeping in view the economic development of the country.” 17

Section 18 of the competition act, 2002 Duties of Commission:

Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse

effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of

trade carried on by other participants, in markets in India: Provided that the Commission may, for the purpose of

discharging its duties or performing its functions under this Act, enter into any memorandum or arrangement with

the prior approval of the Central Government, with any agency of any foreign country. 18

Section 19 of the competition act, 2002- Inquiry into certain agreements and dominant position of enterprise

(1) The Commission may inquire into any alleged contravention of the provisions contained in subsection (1) of

section 3 or sub-section (1) of section 4 either on its own motion or on—

(a) receipt of a complaint, accompanied by such fee as may be determined by regulations, from any person,

consumer or their association or trade association; or

(b) a reference made to it by the Central Government or a State Government or a statutory authority.

(2) Without prejudice to the provisions contained in sub-section (1), the powers and functions of the Commission

shall include the powers and functions specified in sub-sections (3) to (7).

(3) The Commission shall, while determining whether an agreement has an appreciable adverse effect on

competition under section 3, have due regard to all or any of the following factors, namely:—

(a) creation of barriers to new entrants in the market;

(b) driving existing competitors out of the market;

(c) foreclosure of competition by hindering entry into the market;

(d) accrual of benefits to consumers;

(e) improvements in production or distribution of goods or provision of services;

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201119

also stated that the main role of the competition welfare by ensuring optimal allocation of

resources and granting economic agents appropriate incentives to pursue productive efficiency,

quality and innovation. The 11th Planning Commission Report also recognizes the significance

of consumer welfare20

.

(f) promotion of technical, scientific and economic development by means of production or distribution of goods or

provision of services.

(4) The Commission shall, while inquiring whether an enterprise enjoys a dominant position or not under section 4,

have due regard to all or any of the following factors, namely:—

(a) market share of the enterprise;

(b) size and resources of the enterprise;

(c) size and importance of the competitors;

(d) economic power of the enterprise including commercial advantages over competitors;

(e) vertical integration of the enterprises or sale or service network of such enterprises;

(f) dependence of consumers on the enterprise;

(g) monopoly or dominant position whether acquired as a result of any statute or by virtue of being a Government

company or a public sector undertaking or otherwise;

(h) entry barriers including barriers such as regulatory barriers, financial risk, high capital cost of entry, marketing

entry barriers, technical entry barriers, economies of scale, high cost of substitutable goods or service for consumers;

(i) countervailing buying power;

(j) market structure and size of market;

(k) social obligations and social costs;

(l) relative advantage, by way of the contribution to the economic development, by the enterprise enjoying a

dominant position having or likely to have an appreciable adverse effect on competition;

(m) any other factor which the Commission may consider relevant for the inquiry.

(5) For determining whether a market constitutes a “relevant market” for the purposes of this Act, the Commission

shall have due regard to the “relevant geographic market” and “relevant product market”.

(6) The Commission shall, while determining the “relevant geographic market”, have due regard to all or any of the

following factors, namely:—

(a) regulatory trade barriers;

(b) local specification requirements;

(c) national procurement policies;

(d) adequate distribution facilities;

(e) transport costs;

(f) language;

(g) consumer preferences;

(h) need for secure or regular supplies or rapid after-sales services.

(7) The Commission shall, while determining the “relevant product market”, have due regard to all or any of the

following factors, namely:—

(a) physical characteristics or end-use of goods;

(b) price of goods or service;

(c) consumer preferences;

(d) exclusion of in-house production;

(e) existence of specialised producers;

(f) classification of industrial products. 19

Draft National Competition Policy 2011, Protecting Consumer Interests under Competition Law available at

http://www.mca.gov.in/Ministry/pdf/Draft_National_Competition_Policy.pdf (last accessed on 15/11/14) 20

The 11th Planning Commission Report states that promotion of consumer welfare is the common goal of consumer

protection and competition policy available at

http://planningcommission.nic.in/plans/planrel/fiveyr/11th/11_v1/11th_vol1.pdf (last accessed: 15/11/14.

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The Raghavan Committee21

itself draws a connection between competition law and consumer

interest though it talks specifically about the anti-competitive governmental policies only. It

states that `In the name of public interest, many Governmental policies are formulated which are

either anti-competitive in nature or which manifest themselves in anti-competitive behaviour. If

the consumer is at the fulcrum, consumer interest and consumer welfare should have primacy in

all Governmental policy formulations.’22

Consumer protection and competition policy are

complementary to each other. At the root, both of them recognize the aim of increasing the

consumer wellbeing and promoting their interests. Since, these policies are a foil for each other,

when applied together has a balanced and complimentary effect because both the policies

reinforce one another. The sole difference is the approach that both these policies adopt to

reinforce the same objectives.

The approach adopted by competition law is an attempt to control the market forces in order to

promote healthy competition. Focus is laid on technology being used, exports and imports,

industrialization, and creating a conducive atmosphere for the competitors in the market and

provide higher efficiency. The primary rationale is not to encourage consumer welfare directly

but to regulate and maintain healthy competition by safeguarding the competitive process. As a

consequence of which, it proactively and passively protects the interests of consumers by

ensuring a wider choice and greater availability of goods and services at affordable prices. While

performing this function, consumer protection becomes the secondary objective that emanates

from this approach. Section 19 of the competition act, 200223

contains provisions for a consumer,

21

J. Sagar associates advocates and solicitors ‘Competition Policy and Law…Role of State Governments – A

Lawyer’s Perspective’ available at http://www.competition-commission-india.nic.in/advocacy/amit_presentation.pdf

(last accessed: 28/10/14) 22

P.D. Sudhakar & K.K. Sharma ‘Competition law and policy in India’ available at

http://cci.gov.in/images/media/presentations/OECDKoreaCentreIndianCompetitionLaw14Nov2008.pdf (last

accessed: 11/11/14) 23

Supra note 18

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consumer association and a person. The fact that word consumer is expressly included in the

definition (while it is to be noted that the word ‘person’ has also been used and it could include a

consumer impliedly) itself conveys that one of the aims of this act is protect the consumers.

Moreover, In the case of Competition Commission of India v. Steel Authority of India Ltd24

the

Hon’ble Supreme Court of India observed that the principle aims of the act are to eliminate

practices having adverse effects on the competition to promote and sustain competition in the

market, to protect the interests of the consumers and ensure freedom of trade carried on by the

participants in the market, in view of the economic developments of the country.

On the other hand, the approach that is adopted by the consumer law is to dynamically and

actively protect consumer interests by providing redressal mechanisms against consumer abuse.

It is concerned with the basic needs of people, poverty, marginalization, the consumer

transactions and trying to improve market conditions for the consumers. As a result; the

regulation of competition becomes an integral part of this policy.

The two approaches hence overlap and perform a similar function in the market which

simultaneously used. Their focus is on two different market failures and together they try to

uphold consumer welfare.

Thereby, consumer welfare and consumer procreation are the conjecture points of consumer

protection act, 1986 and the competition act, 2002.

Friction between the two:

The conflicts between the CCI and the consumer court occur mainly due to the ambiguity in the

legislation itself. The dissection of matters that each of them will deal in has not been done

clearly. As a consequence of which, there exist:

(i) Overlapping functions of CCI and Consumer court as regulators

24

(2010) 10 SCC744

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(ii) As regards to Jurisdiction

(iii) In the light of the case of DLF V. BELAIRE owners: Consumer court or CCI

The territorial Jurisdiction of the competition commission is given under section 25 of the

competition act, 200225

. The commission in order to achieve its objectives and fulfill its duties as

stated in section 1826

has the jurisdiction to enquire into Anti-Competitive Agreements27

, enquire

25

Section 25 of The Competition Act, 2002- Duties of Commission.-

An inquiry shall be initiated or a complaint be instituted or a reference be made under this Act before a Bench within

the local limits of whose jurisdiction-

a. the respondent, or each of the respondents, where there are more than one, at the time of the initiation of inquiry

or institution of the complaint or making of reference, as the case may be, actually and voluntarily resides, or carries

on business, r personally works for gain; or

b. any of the respondents, where there are more than one, at the time of the initiation of the inquiry or institution of

complaint or making of reference, as the case may be, actually and voluntarily resides or carries on business or

personally works for gain provided that in such case either the leave of the Bench is given, or the respondents who

do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or

c. the cause of action, wholly or in part, arises.

Explanation.- A respondent, being a person referred to in sub-clause (iii) or sub-clause (vi) or sub-clause (vii) or

sub-clause (viii) of clause (l) of section 2, shall be deemed to carry on business at its sole or principal place of

business in India or t its registered office in India or where it has also a subordinate office at such place 26

Section 18 of The Competition Act, 2002- Duties of Commission.-

Subject to the provisions of this Act, it shall be the duty of the Commission to eliminate practices having adverse

effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of

trade carried on by other participants, in markets in India: Provided that the Commission may, for the purpose of

discharging its duties or performing its functions under this Act, enter into any memorandum or arrangement with

the prior approval of the Central Government, with any agency of any foreign country. 27

Section 3 of The Competition Act, 2002- Anti-competitive agreements.-

1. No enterprise or association of enterprises or person or association of persons shall enter into any agreement in

respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which

causes or is likely to cause an appreciable adverse effect on competition within India.

2. Any agreement entered into in contravention of the provisions contained in sub-section (1) shall be void.

3. Any agreement entered into between enterprises or associations of enterprises or persons or associations of

persons or between any person and enterprise or practice carried on, or decision taken by, any association of

enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of

services, which-

a. directly or indirectly determines purchase or sale prices;

b. limits or controls production, supply, markets, technical development, investment or provision of services;

c. shares the market or source of production or provision of services by way of allocation of geographical area of

market, or type of goods or services, or number of customers in the market or any other similar way;

d. directly or indirectly results in bid rigging or collusive bidding, shall be presumed to have an appreciable

adverse effect on competition: Provided that nothing contained in this sub-section shall apply to any agreement

entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution,

storage, acquisition or control of goods or provision of services.

Explanation.- For the purposes of this sub-section, "bid rigging" means any agreement, between enterprises or

persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of

services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating

the process for bidding.

12

into abuse of dominant position28

, regulate combinations29

, undertake Competition Advocacy,

create public awareness and impart training on competition issues30

. The extra territorial

4. Any agreement amongst enterprises or persons at different stages or levels of the production chain in different

markets, in respect of production, supply, distribution, storage, sale or price of, or trade in goods or provision of

services, including-

a. tie-in arrangement;

b. exclusive supply agreement;

c. exclusive distribution agreement;

d. refusal to deal;

e. resale price maintenance, shall be an agreement in contravention of sub-section (1) if such agreement causes or

is likely to cause an appreciable adverse effect on competition in India.

Explanation.-For the purposes of this sub-section,-

a. "tie-in arrangement" includes any agreement requiring a purchaser of goods, as a condition of such purchase, to

purchase some other goods;

b. "exclusive supply agreement" includes any agreement restricting in any manner the purchaser in the course of

his trade from acquiring or otherwise dealing in any goods other than those of the seller or any other person;

c. "exclusive distribution agreement" includes any agreement to limit, restrict or withhold the output or supply of

any goods or allocate any area or market for the disposal or sale of the goods;

d. "refusal to deal" includes any agreement which restricts, or is likely to restrict, by any method the persons or

classes of persons to whom goods are sold or from whom goods are bought;

e. "resale price maintenance" includes any agreement to sell goods on condition that the prices to be charged on

the resale by the purchaser shall be the prices stipulated by the seller unless it is clearly stated that prices lower than

those prices may be charged.

5. Nothing contained in this section shall restrict-

i. the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be

necessary for protecting any of his rights which have been or may be conferred upon him under-

a. the Copyright Act, 1957 (14 of 1957);

b. the Patents Act, 1970 (39 of 1970);

c. the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act, 1999 (47 of 1999);

d. the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999);

e. the Designs Act, 2000 (16 of 2000);

f. the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000);

ii. the right of any person to export goods from India to the extent to which the agreement relates

exclusively to the production, supply, distribution or control of goods or provision of services for such export.

Prohibition of abuse of dominant position 28

Section 4 of The Competition Act, 2002- Abuse of dominant position.-

1. No enterprise shall abuse its dominant position.

2. There shall be an abuse of dominant position under sub-section (1), if an enterprise,-

a. directly or indirectly, imposes unfair or discriminatory-

i. condition in purchase or sale of goods or service; or

ii. price in purchase or sale (including predatory price) of goods or service.

Explanation.-For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or

service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including

predatory price) or service referred to in sub-clause (ii) shall not include such discriminatory condition or price

which may be adopted to meet the competition; or

b. limits or restricts-

i. production of goods or provision of services or market there for; or

ii. technical or scientific development relating to goods or services to the prejudice of consumers;

or

c. indulges in practice or practices resulting in denial of market access; or

d. makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by

their nature or according to commercial usage, have no connection with the subject of such contracts; or

13

e. uses its dominant position in one relevant market to enter into, or protect, other relevant market. Explanation.-

For the purposes of this section, the expression-

a. "dominant position" means a position of strength, enjoyed by an enterprise, in the relevant market, in India,

which enables it to-

i. operate independently of competitive forces prevailing in the relevant market; or

ii. affect its competitors or consumers or the relevant market in its favour;

b. "predatory price" means the sale of goods or provision of services, at a price which is below the cost, as may be

determined by regulations, of production of the goods or provision of services, with a view to reduce competition or

eliminate the competitors. Regulation of combinations 29

Section 5 of The Competition Act, 2002- Combination.-

The acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises shall be

a combination of such enterprises and persons or enterprises, if-

a. any acquisition where-

i. the parties to the acquisition, being the acquirer and the enterprise, whose control, shares, voting

rights or assets have been acquired or are being acquired jointly have,-

A. either, in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees

three thousand crores; or

B. in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars or

turnover more than fifteen hundred million US dollars; or

ii. the group, to which the enterprise whose control, shares, assets or voting rights have been acquired or

are being acquired, would belong after the acquisition, jointly have or would jointly have,-

A. either in India, the assets of the value of more than rupees four thousand crores or turnover more than rupees

twelve thousand crores; or

B. in India or outside India, in aggregate, the assets of the value of more than two billion US dollars or turnover

more than six billion US dollars; or

b. acquiring of control by a person over an enterprise when such person has already direct or indirect control over

another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods or

provision of a simi ar or identical or substitutable service, if-

i. the enterprise over which control has been acquired along with the enterprise over which the acquirer

already has direct or indirect control jointly have,-

A. either in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees

three thousand crores; or

B. in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars or

turnover more than fifteen hundred million US dollars; or

ii. the group, to which enterprise whose control has been acquired, or is being acquired, would belong

after the acquisition, jointly have or would jointly have,-

A. either in India, the assets of the value of more than rupees four thousand crores or turnover more than rupees

twelve thousand crores; or

B. in India or outside India, in aggregate, the assets of the value of more than two billion US dollars or turnover

more than six billion US dollars; or

C. any merger or amalgamation in which-

i. the enterprise remaining after merger or the enterprise created as a result of the amalgamation,

as the case may be, have,-

A. either in India, the assets of the value of more than rupees one thousand crores or turnover more than rupees

three thousand crores; or

B. in India or outside India, in aggregate, the assets of the value of more than five hundred million US dollars or

turnover more than fifteen hundred million US dollars; or

ii. the group, to which the enterprise remaining after the merger or the enterprise created as a result

of the amalgamation, would belong after the merger or the amalgamation, as the case may be, have or would have,-

A. either in India, the assets of the value of more than rupees four thousand crores or turnover more than rupees

twelve thousand crores; or

B. In India or outside India, the assets of the value of more than two billion US dollars or turnover more than six

billion US dollars. Explanation.-For the purposes of this section,-

a. "control" includes controlling the affairs or management by-

i. one or more enterprises, either jointly or singly, over another enterprise or group;

14

jurisdiction is given under section 3(5)31

and section 3232

of the said act. Under section 19(3)33

,

the commission, while determining the effect of the competition under section 334

of the act is

ii. one or more groups, either jointly or singly, over another group or enterprise;

b. "group" means two or more enterprises which, directly or indirectly, are in a position to –

i. exercise twenty-six per cent. or more of the voting rights in the other enterprise; or

ii. appoint more than fifty per cent. of the members of the board of directors in the other

enterprise; or

iii. control the management or affairs of the other enterprise;

c. the value of assets shall be determined by taking the book value of the assets as shown, in the audited books of

account of the enterprise, in the financial year immediately preceding the financial year in which the date of

proposed merger falls, as educed by any depreciation, and the value of assets shall include the brand value, value of

goodwill, or value of copyright, patent, permitted use, collective mark, registered proprietor, registered trade mark,

registered user, homonymous geographical indication, geographical indications, design or layout-design or similar

other commercial rights, if any, referred to in sub-section (5) of section 3.

Section 6 of The Competition Act, 2002: 6. Regulation of combinations.- 1. No person or enterprise shall enter into a combination which causes or is likely to cause an appreciable adverse

effect on competition within the relevant market in India and such a combination shall be void.

2. Subject to the provisions contained in sub-section (1), any person or enterprise, who or which proposes to enter

into a combination, may, at his or its option, give notice to the Commission, in the form as may be specified, and the

fee which may be determined, by regulations, disclosing the details of the proposed combination, within seven days

of-

a. approval of the proposal relating to merger or amalgamation, referred to in clause (c) of section 5, by the board

of directors of the enterprises concerned with such merger or amalgamation, as the case may be;

b. execution of any agreement or other document for acquisition referred to in clause (a) of section 5 or acquiring

of control referred to in clause (b) of that section.

3. The Commission shall, after receipt of notice under sub-section (2), deal with such notice in accordance with

the provisions contained in sections 29, 30 and 31.

4. The provisions of this section shall not apply to share subscription or financing facility or any acquisition, by a

public financial institution, foreign institutional investor, bank or venture capital fund, pursuant to any covenant of a

loan agreement or investment agreement.

5. The public financial institution, foreign institutional investor, bank or venture capital fund, referred to in sub-

section (4), shall, within seven days from the date of the acquisition, file, in the form as may be specified by

regulations, with the commission the details of the acquisition including the details of control, the circumstances for

exercise of such control and the consequences of default arising out of such loan agreement or investment

agreement, as the case may be.

Explanation.- For the purposes of this section, the expression-

a. "foreign institutional investor" has the same meaning as assigned to it in clause (a) of the Explanation to section

115AD of the Income-tax Act, 1961 (43 of 1961); (b) "venture capital fund" has the same meaning as assigned to it

in clause (b) of the Explanation to clause (23FB) of section 10 of the Income-tax Act, 1961 (43 of 1961). 30

Supra note 11 31

Supra note 27 32

Section 32 of The Competition Act, 2002- Acts taking place outside India but having an effect on competition in

India.—The Commission shall, notwithstanding that,—

(a) an agreement referred to in section 3 has been entered into outside India; or

(b) any party to such agreement is outside India; or

(c) any enterprise abusing the dominant position is outside India; or

(d) a combination has taken place outside India; or

(e) any party to combination is outside India; or"

(f) any other matter or practice or action arising out of such agreement or dominant position or combination is

outside India, have power to inquire into such agreement or abuse of dominant position or combination if such

agreement or dominant position or combination has, or is likely to have, an appreciable adverse effect on

competition in the relevant market in India.

15

for due regards to the accrual benefits to the consumers. In Section 19(1) (a) of the Act35

, it is

clearly stated that a complaint to the competition commission of India may be filed by any

person or consumer36

as defined in the act, or their association or trade association. However, the

complaint may be filed only against the issues given in section 337

, section 4

38, section 5

39 and section 6

40.

Apart from the above, the competition commission of India has also been vested with the powers

of a civil court under sections. It includes powers given in section 240 and 240A of the

Companies act, 1956. Furthermore, the civil courts or any other courts will not have jurisdiction

over the matters that fall within the ambit of CCI41

.

33

Section of 19(3) The Competition Act, 2002- The Commission shall, while determining whether an agreement

has an appreciable adverse effect on competition under section 3, have due regard to all or any of the following

factors, namely:—

(a) creation of barriers to new entrants in the market;

(b) driving existing competitors out of the market;

(c) foreclosure of competition by hindering entry into the market;

(d) accrual of benefits to consumers;

(e) improvements in production or distribution of goods or provision of services;

(f) promotion of technical, scientific and economic development by means of production or distribution of goods or

provision of services. 34

Supra note 27 35

Supra note 18 36

Section 2(f) of The Competition Act, 2002- consumer” means any person who—

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under

any system of deferred payment and includes any user of such goods other than the person who buys such goods for

consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when

such use is made with the approval of such person, whether such purchase of goods is for resale or for any

commercial purpose or for personal use;

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly

promised, or under any system of deferred payment and includes any beneficiary of such services other than the

person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or

under any system of deferred payment, when such services are availed of with the approval of the first-mentioned

person whether such hiring or availing of services is for any commercial purpose or for personal use 37

Supra note 27 38

Supra note 9 39

Supra note 29 40

Supra note 29 41

Section 61of The Competition Act, 2002- Exclusion of jurisdiction of civil courts. —No civil court shall have

jurisdiction to entertain any suit or proceeding in respect of any matter which the Commission or the Appellate

Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other

authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

16

Under the consumer protection act, 1986, the definition of consumer as under section 2(d)42

is

restricted as compared to that given under the competition act. But the complaint can be filed for

the services defined under section 2(o) of the competition act, 2002, including the four grounds

as given in the competition act, 2002.

The choice of forums primarily depends on the relief that the consumer is seeking. The reliefs

offered under the consumer court are may give order for removal of defects from the goods,

replacement of goods, refund of consideration paid, award of compensation for the loss or injury

suffered. Similarly, the competition commission of India on the other hand has the power to

grant interim relief43

and award compensation44

to the aggrieved party. The consumer under the

42

Section 2(d) of The Consumer Protection Act, 1986: “consumer” means any person who-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under

any system of deferred payment and includes any user of such goods other than the person who buys such goods for

consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when

such use is made with the approval of such person, but does not include a person who obtains such goods for resale

or for any commercial purpose; or

(ii) 1[hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly

promised, or under any system of deferred payment and includes any beneficiary of such services other than the

person who 1[hires or avails of] the services for consideration paid or promised, or partly paid and partly promised,

or under any system of deferred payments, when such services are availed of with the approval of the first-

mentioned person;

2[Explanation: For the purposes of sub-clause (i), "commercial purpose" does not include use by a consumer of

goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;] 43

Section 33of The Competition Act, 2002:

(1) Where during an inquiry before the Commission, it is proved to the satisfaction of the Commission, by affidavit

or otherwise, that an act in contravention of sub-section (1) of section 3 or sub-section (1) of section 4 or section 6

has been committed and continues to be committed or that such act is about to be committed, the Commission may,

by order, grant a temporary injunction restraining any party from carrying on such act until the conclusion of such

inquiry or until further orders, without giving notice to the opposite party, where it deems it necessary.

(2) Where during the inquiry before the Commission it is proved to the satisfaction of the Commission by affidavit

or otherwise that import of any goods is likely to contravene sub-section (1) of section 3 or subsection (1) of section

4 or section 6, it may, by order, grant a temporary injunction restraining any party from importing such goods until

the conclusion of such inquiry or until further orders, without giving notice to the opposite party, where it deems it

necessary and a copy of such order granting temporary injunction shall be sent to the concerned authorities.

(3) The provisions of rules 2A to 5 (both inclusive) of Order XXXIX of the First Schedule to the Code of Civil

Procedure, 1908 (5 of 1908) shall, as far as may be, apply to a temporary injunction issued by the Commission under

this Act, as they apply to a temporary injunction issued by a civil court, and any reference in any such rule to a suit

shall be construed as a reference to any inquiry before the Commission. 44

Section 34 of The Competition Act, 2002- (1) Without prejudice to any other provisions contained in this Act,

any person may make an application to the Commission for an order for the recovery of compensation from any

enterprise for any loss or damage shown to have been suffered, by such person as a result of any contravention of

the provisions of Chapter II, having been committed by such enterprise.

17

respective definitions under the consumer protection act, 1986 and the competition act, 2002

may seek a relief under either of the two forums. The consumer’s choice in the matter of which

forum to file a complaint in becomes the root cause of the problem since, both the forums have

the power vested in them to decide matters regarding the same issues.

A decent instance to explain the same point would be the DLF case45

. The complainants alleged

that DLF had abused its dominant position by imposing unfair terms and conditions in the

agreement under section 4(2) (a) of the act. In this case, the injury to the consumer was related to

the unfair terms and conditions of the agreement covered under the unfair trade practices under

section 2(r) of the consumer protection act. Prima facie the complaint would lie to the consumer

forum on the grounds of unfair trade practice46

. However, it was filed with the competition

commission of India under the allegations of abuse of dominance. This is where the dilemma

arises. Since the jurisdiction and the functions performed by the two forums are exceedingly

similar in nature the complainant is put forth with the question regarding in which of the two

forums should the complaint be filed? Even though there is no formal mechanism for consumer

redressal in the competition act, 2002, it performs the same function.

2. A Comparison with consumer and competition laws of the countries with a different

structure:

(2) The Commission may, after an inquiry made into the allegations mentioned in the application made under sub-

section (1), pass an order directing the enterprise to make payment to the applicant, of the amount determined by it

as realisable from the enterprise as compensation for the loss or damage caused to the applicant as a result of any

contravention of the provisions of Chapter II having been committed by such enterprise.

(3) Where any loss or damage referred to in sub-section (1) is caused to numerous persons having the same interest,

one or more of such persons may, with the permission of the Commission, make an application under that sub-

section for and on behalf of, or for the benefit of, the persons so interested, and thereupon, the provisions of rule 8 of

Order 1 of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908), shall apply subject to the

modification that every reference therein to a suit or decree

shall be construed as a reference to the application before the Commission and the order of the Commission thereon. 45

2011CompLR239(CCI) 46

Section 2(c) of The Compettion Act, 2002- “complaint” means any allegation in writing made by a complainant

that-

(i) an unfair trade practice or a restrictive trade practice has been adopted by any trader

18

i) Competition and consumer laws in Australia

ii) United Kingdom

(a) Competition and Consumer laws in Australia:

Formerly, known as the trade practices Act, 1974; presently The Competition and Consumer Act

201047

governs the:

a) Competition in the market. The rules against the anti competitive agreements, price fixing etc.

are included in order to ensure a favorable environment for the fair and effective competition to

take place.

b) As well as the rules regarding consumer protection those are to abide by on all their dealings

with the consumers. Such rules include rules pertaining to refunds, warranties, contracts,

advertising and marketing etc.

The Act seeks to promote the competition and fair trading. The provisions for consumer

protection have also been enacted under the Act. The sole object for enacting such provisions

regarding the competition and consumer protection is for the welfare of the Australians.48

By drafting a common legislation for fair competition in the economy and consumer protection,

the legislation recognizes that firstly, the common goal i.e. the consumer welfare, can be

achieved only is there is no distinction made between the two for they perform the same function

in the market.

The regulatory body as established by the act is Australian Competition and Consumer

Commission (ACCC) with the National Competition Council (NCC). Though the provisions

regarding the competition law and consumer protection are contained in different parts of the

47

The Competition and Consumer Act, 2010 available at official website

http://www.comlaw.gov.au/Details/C2011C00003 (last accessed: 13/11/14) 48

Section 2 of The Competition and Consumer Act, 2010 - The object of this Act is to enhance the welfare of

Australians through the promotion of competition and fair trading and provision for consumer protection.

19

Act, integrated and mutual enforcement of the laws is emphasized upon by the government of

Australia. The entire staff for consumer protection and competition law enforcement is same.

Hence, no issues regarding the overlapping jurisdiction or functions arise. Both the areas are

dealt by a single common legislation and the same redressal agency i.e. the ACCC which thereby

establishes that the competition in an economy and the consumer protection share a convoluted

relationship.

b) United Kingdom:

The situation in UK was much similar to that of Australia. In the United Kingdom, the issues

regarding the competition as well as consumer protection were dealt with by The Office of Fair

Trading (OFT) established under the Fair Trading Act, 197349

; who investigated into the matter.

It was the official watchdog of UK in matters of maintaining a beneficial environment for the

competitors as well as consumers. The office of fair trading however, shut down on 1st April

2014 which passed on the functions of the OFT to Competition Markets Authority (CMA) and

Financial Conduct Authority (FCA) etc. The CMA works in partnership with various

organizations nationally and internationally50

. These national organizations include trading

standards51

, Citizens Advice52

, Citizens Advice Scotland53

, consumer council for Northern

Ireland54

. Internationally, CMA works with the European partners in the Consumer Protection

Cooperation (CPC)55

, Network and the European Competition Network (ECN)56

,

49

The Fair Trading Act, 1973 available at official website http://www.legislation.gov.uk/ukpga/1973/41 (last

accessed: 12/11/14) 50

Official website https://www.gov.uk/government/organisations/competition-and-markets-authority/about (last

accessed: 14/11/14) 51

Official website http://www.tradingstandards.gov.uk/ (last accessed: 14/11/14) 52

Official website http://www.citizensadvice.org.uk/ (last accessed: 14/11/14) 53

Official website http://www.cas.org.uk/ (last accessed: 14/11/14) 54

Official website http://www.consumercouncil.org.uk/ (last accessed: 14/11/14) 55

Official website http://ec.europa.eu/consumers/enforcement/index_en.htm (last accessed: 14/11/14) 56

Official website http://ec.europa.eu/competition/ecn/index_en.html (last accessed: 14/11/14)

20

the Organization for Economic Cooperation and Development (OECD)57

, the International

Competition Network (ICN)58

, the International Consumer Protection Enforcement Network

(ICPEN)59

.

It combines the competition law and consumer protection for the attainment of its objectives of

providing trusted competition across government and focus on consumer protection. Thus, the

question of coinciding jurisdiction and functions does not arise.

3. Analysis:

From the above, the following inferences have been made with regard to the differences between

the Consumer Court and the Competition Commission in the countries:

Firstly, there is only one authority that deals with the issues regarding the competition in the

economy and consumer protection.

Secondly, since both the cases i.e. the consumer law cases as well as the competition law cases

are dealt together, in collaboration with each other, it expressly recognizes the existing fact. The

fact being that the main objective and purpose of both the laws is the same i.e. consumer welfare.

Thirdly, the issue regarding the overlapping jurisdiction and overlapping functions don’t even

arise since they are both blended together to achieve the same goal.

Fourthly, there is only single authority dealing in both the areas of law. Therefore, the question

of overlapping functions also does not arise.

Last but not the least, consumer welfare as a common aim of the competition law and consumer

law is not only explicitly acknowledged but the same has also been brought into practice. A

quandary has not been created by avoiding two forums that exist for the same purpose to perform

the same functions and having the same jurisdiction.

57

Official website http://www.oecd.org/ (last accessed: 14/11/14) 58

Official website http://www.internationalcompetitionnetwork.org (last accessed: 14/11/14) 59

Official website https://icpen.org/ (last accessed: 14/11/14)

21

In the light of the above, it is submitted that in India, the consumer forum and the CCI exist for

the same rationale. Both perform the same function for the consumers and have concurrent

jurisdiction in various matters. In regard to this issue, the following recommendations have been

made. Since it is a herculean task and impractical to suggest that the consumer forum be shut

down and its role to be performed by the Competition Commission of India, it is suggested that:

a) Jurisdictional clarity and a cooperation framework may be drawn in order to clarify the roles of

both the bodies that are distinct from each other. The consumer welfare goal is common to both

and it is important that both the bodies work in cooperation with each other. A consumer to seek

justice must go to the consumer court under the shelter of the consumer protection act, 1986

where as the Competition Commission of India must be only approached by the competitors in

the market.

b) Demarcation powers and duties of the respective forums. Who to regulate what?

The demarcation of powers and duties of each forum is required to be done. It needs to be

clarified that the direct role of consumer protection is to be performed by the Consumer forums

set up under the Consumer Protection Act, 1986. Hence, the power and the corresponding duty to

deal with the consumers should be with the consumer forum only. The Competition Commission

of India is to perform the role of being a watchdog of the competition in the economy. No doubt

consumer protection is a consequence of the same function but the same is secondary to its main

objective i.e. maintaining fair competition in the economy. The power to deal with the matters

that directly deal with the competition issues in the country and the corresponding duty for the

same must lie with the Competition Commission of India.

c) Can competition be regulated without protecting consumers?

22

As pointed out by Hovenkamp: ‘judges have spoken of antitrust law as a “consumer welfare

prescription” for so long that the phrase seldom produces anything but yawns… The rhetoric of

“consumer welfare” is very powerful. A statute declaring protection of consumers to be the goal

of antitrust would probably pass Congress by a unanimous vote’.60

An analysis of laws in the US and EU shows that the goal of com- petition law is to protect the

freedom of individuals to compete. The goal of competition law is not to promote consumer

welfare directly61

. It is an indirect consequence of the function that the Competition law is to

perform. It is out of question that the competition and consumer law can work completely

independent of each other; rather both the areas would have to work in their own jurisdictions

and stick to their functions respectively in order to avoid any further conflicts by cooperating

with each other and take charge of their own areas of the economy.

4. Conclusion

The Hon’ble Apex Court of India while commenting on the role of competition law in the case

of Competition Commission of India v. Steel Authority of India Ltd62

was of the view that “the

overall intention of the Consumer Protection Act, 1986 is to limit the role of market power that

might result from substantial concentration in a particular industry. The major concern with

monopoly and similar kinds of concentration is not that being big is necessarily undesirable.

However, because of the control exerted by a monopoly over price, there are economic

efficiency losses to society and product quality and diversity may also be affected. Thus, there is

a need to protect competition. The primary purpose of competition law is to remedy some of

those situations where the activities of one firm or two lead to the breakdown of the free market

60

Herbert Hovenkamp, ‘The Antitrust Enterprise’ Principle and Execution, Harvard University Press, 2005. 61

Roger Zach and Adrian Kunzler, ‘Freedom to Compete or Consumer Welfare: The Goal of Competition Law

according to Constitutional Law in the development of competition law: global perspectives 61, 71 (2010) 62

Supra note 24

23

system, or, to prevent such a breakdown by laying down rules by which rival businesses can

compete with each other. The model of perfect competition is the 'economic model' that usually

comes to an economist's mind when thinking about the competitive markets.”

On the other hand, the consumer protection act, 1968 was enacted with an objective of the statute

was "to provide for better protection of the interests of ‘consumer’." It seeks to provide a speedy

and inexpensive remedy to the ‘consumer’. The Hon’ble Supreme Court of India in the case

of C. Venkatachalam V. Ajitkumar C. Shah and Ors63

. And Bar Council of India V. Sanjay R.

Kothari and Ors.64

was of the view that “the Consumer Protection Act, 1986 is one of the

benevolent social legislations intended to protect the large body of consumers from exploitation.

The Act has come as a panacea for consumers all over the country and is considered as one of

the most important legislations enacted for the benefit of the consumers. The Consumer

Protection Act, 1986 is dedicated, as its preamble shows, to provide for effective protection of

the rights of the consumers.

A perusal of Chapter II of the Act clearly shows that the statute seeks to protect the ‘Consumer’

of goods and services in every possible way. It aims at providing a speedy and inexpensive

remedy. Any interpretation of the provisions of the 1986 Act and the rules framed there under

must promote this objective of the enactment.”

From the above two views of the Hon’ble Supreme Court it becomes apparent that the role of

Consumer Protection Act, 1986 and the role of the Competition Act, 2002 is distinct in nature.

While the role to be performed is diametrically opposed, the problem only arises with regard to

the concurrent jurisdiction and functions of both the forums in certain matters. The same can be

resolved by effecting the recommendations made above with regard to bringing jurisdictional

63

(2008) 10 SCC 308 64

1991 AIR 1581

24

clarity and a cooperative framework and carefully demarcating the powers and the duties of both

the forums.

Nevertheless,

“Competition is not only the basis of protection to the consumer, but is the incentive to

progress.”

-Herbert Hoover