COVID-19 lockdown: CCI cautions business not to flout competition norms

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Published: April 21, 2020 6:10 AM

The fair trade regulator said that COVID-19 has caused disruptions in supply chains, including those of critical healthcare products and other essential commodities and services.

The Act has in-built safeguards to protect businesses from sanctions for certain coordinated conduct, provided such arrangements result in increasing efficiencies.The Act has in-built safeguards to protect businesses from sanctions for certain coordinated conduct, provided such arrangements result in increasing efficiencies.

The competition commission of India (CCI) in an advisory on Monday asked companies and businesses to not to take advantage of the extraordinary situation on account of the novel coronavirus (COVID-19) outbreak to indulge in anti-competitive activities.

The fair trade regulator said that COVID-19 has caused disruptions in supply chains, including those of critical healthcare products and other essential commodities and services.

To cope with significant changes in supply and demand patterns arising out of this extraordinary situation, businesses may need to coordinate certain activities through sharing data on stock levels, timings of operation, sharing of distribution network and infrastructure, transport logistics, production etc. to ensure a continued supply and fair distribution of products such as ventilators, face masks, gloves, vaccines and other essential commodities.

The Competition Act, 2002 prohibits conduct that can cause an appreciable adverse effect on competition and section 3 of the Act presumes certain concerted actions between competitors to cause an appreciable adverse effect on competition.

However, this presumption is not applicable to joint ventures, if such agreements increase efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services, it explained.

“Also, while conducting competition assessment, section of the Act enables the commission to have due regard, amongst others, to the accrual of benefits to consumers; improvement in production or distribution of goods or provision of services; and promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services,” CCI said.

The Act has in-built safeguards to protect businesses from sanctions for certain coordinated conduct, provided such arrangements result in increasing efficiencies. These provisions will inform the decisions of the Commission. However, only such conduct of businesses which is necessary and proportionate to address concerns arising from the epidemic will be considered.

“Businesses are, however, cautioned not to take advantage of COVID-19 to contravene any of the provisions of the Act,” the regulator warned.

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