Coronavirus brings business competitors on one table; CCI allows firms to work together

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Updated: Apr 20, 2020 11:19 AM

Competition Commission of India has allowed the companies to make agreements with each other to collectively work in increasing efficiency.

business, CCI, competition commission of india, covid 19, coronavirusThe CCI approval for collaborative operations among competitors has come at a time when the businesses are at a standstill due to lockdown and the near-term outlook is also grim.

Business competitors operating under cut-throat competition are set to come on one table to unite and work in order to fight coronavirus-led disruption. Competition Commission of India (CCI) has allowed the companies to make agreements with each other to collectively work in increasing efficiency of production, supply, distribution, storage, acquisition, etc. CCI said that by sharing data on stock levels, timings of operation, distribution network, infrastructure, transport logistics, R & D, production etc, the firms can ensure continued supply and fair distribution of products. It will also help them to cope with significant changes in supply and demand patterns arising out of the extraordinary situation caused by the pandemic. 

The CCI approval for collaborative operations among competitors has come at a time when the businesses are at a standstill due to lockdown and the near-term outlook is also grim. Usually, the Competition Act, 2002 restricts conduct that can cause an adverse effect on competition, however, this presumption is not applicable to joint ventures, if agreements to increase efficiency is made in the benefit of consumers. 

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Highlighting the in-built safeguards to protect businesses from sanctions for certain coordinated conduct, the CCI has given a green flag to companies who wish to work in a collaborative environment. However, it has also been cautioned to businesses not to take advantage of COVID-19 to contravene any of the provisions of the Act. 

Meanwhile, there are many economic activities that have been started from today, even amid lockdown. The Modi government has extended the lockdown till May 3 but has given relief to certain sectors to operate with limited efficiency and following proper sanitisation and social-distancing norms.

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