Roles of CCI, sectoral regulators complementary, says Ashok Chawla

Apr 18 2014, 22:18 IST
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SummaryEmphasising the importance of competition norms for good business environment, fair trade watchdog CCI chief Ashok Chawla has said its mandate and that of sectoral regulators are complementary in nature.

Emphasising the importance of competition norms for good business environment, fair trade watchdog CCI chief Ashok Chawla has said its mandate and that of sectoral regulators are complementary in nature.

The Competition Commission of India (CCI), a relatively new entity in the country's regulatory landscape, has the mandate to keep a tab on unfair business ways across sectors.

"Simply put, the Competition Act tells the market participants what they should not do, while sector regulation tells market participants what to do.

"The mandate of the CCI and the sectoral regulators are, therefore, complementary to each other," CCI Chairman Ashok Chawla said during an address on Thursday.

His comments comes against the backdrop of apprehensions in certain quarters that compliance requirement with competition norms could make conditions for doing business more difficult.

Besides there have been instances of differences between CCI and certain sectoral regulators.

While sectoral regulators provide ex-ante specialised technical regulation to enhance competition in a particular sector, CCI ex-post penalises behaviour which distorts such competition, he noted.

"Sectoral regulations aim to competitively structure a particular sector, but it cannot ensure that market participants do not distort such competitive markets through conduct. Hence, the need for an expert body to regulate the process of competition in all aspects of the Indian market," Chawla said.

CCI has been making efforts to create more awareness about competition law and has also acted against many entities, across sectors, that were found violating the norms.

According to Chawla, complying with competition law is crucial especially because tomorrow's corporate managers would have to operate in a regulatory climate that has "zero tolerance" for any non-compliance.

"The ongoing saga between Sahara group of companies and the Sebi (Securities and Exchange Board of India) before the Supreme Court of India is a concrete and live example of how judicial and regulatory bodies have increasingly become averse to regulatory non-compliance," Chawla said.

The fair trade watchdog, since becoming functional in May 2009, has imposed financial penalties worth more than Rs 8,000 crore on entities for violating competition rules.

"Corporate managers by adopting efficient competition law compliance programmes not only reduce competition law risks but also create an appropriate business environment for firms to seamlessly comply with the applicable sectoral regulations," he added.

Chawla was speaking at an event at Jindal Global Business School yesterday.

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