By Dhanendra Kumar
Competition is the life force of an open economy. Fair competition keeps the economy growing with innovation and technology. As US President Biden said while notifying his executive order of July 2021 to promote competition in US economy, ‘capitalism without competition isn’t capitalism; it’s exploitation’.
Competition Commission of India (CCI), completing its 12 years of enforcement, has won its place on the table of key market regulators worldwide. Though young, it has adjudicated over 1,100 antitrust cases, after in-depth market analysis, keeping in view specificities of each sector, market structure and nature of contraventions, in diverse sectors such as airlines, automobile, banking, e-commerce, entertainment, pharmaceuticals, manufacturing, etc. It has also approved nearly 900 mergers and acquisitions, with 45 transactions approved under the novel ‘green channel’ route.
During the pandemic, the Commission was noted for its nuanced approach in not imposing big penalties on MSMEs and loss-making entities. On the other hand, it did not shy away from moving against companies like Amazon, Facebook, WhatsApp, Google and Apple and others.
In December, 2021, CCI suspended the US retail giant Amazon’s 2019 deal with Future Retail for suppressing information about the scope and purpose of the deal, levying a hefty penalty of Rs 200 crore. This is the first ever revocation of a combination done by CCI with high penalty.
CCI found Carlsberg India, United Breweries and other beer manufacturers guilty of cartelisation (Beer Cartel case) and imposed a Rs 873-crore penalty. However, the order is stayed by NCLAT upon an appeal.
CCI penalised Maruti Suzuki for indulging in resale price maintenance by restraining dealer discount control and imposed a penalty of Rs 200 crore. Not to let go a government undertaking, CCI imposed a fine of Rs 1 crore on Uttarakhand Agricultural Produce Marketing Board for abusing its dominant position in wholesale procurement and distribution of alcoholic beverages in Uttarakhand.
On merger control side, CCI readily approved several major transactions, which included, acquisition of minority stake in Delhivery by FedEx India; investments by Carlyle Group in PNB Housing Finance; Byju’s acquisition of Aakash Educational Services; BigBasket’s 64% stake sale to Tata Digital; Flipkart’s minority stake in Aditya Birla Fashion and Retail Limited; acquisition of Yes Mutual Fund by White Oak Group, etc. CCI also readily approved internal restructuring of TVS Group, IBM, Motherson Group, Daimler AG Group in 2021.
Sector-wise studies are important tools for analysing market, market players and market practices, and advocacy. In January, the Commission came up with its market study on telecom sector, highlighting several competition issues. In April, CCI published a paper on blockchain technology, with several issues. In November, CCI came up with its market study on pharmaceutical sector, recommending creation of a national digital drugs database to address information asymmetry.
In keeping with the reforms under ‘Ease of Doing Business’, CCI has been continuously streamlining and reforming its interface with stakeholders, like inclusion of the ‘green channel’ route in M&A cases based on self-assessment. Several changes are on anvil to keep pace with the challenges of ‘new age economy’, and emerging trends like data privacy, blockchain, AI, digital markets, non-price factors. Among the changes proposed in the Competition Amendment Bill 2020 pending with the Parliament, there are features like mechanisms for ‘settlement and commitments’, measured focus on deal size and data in M&A, etc. designed to equip it with emerging challenges.
The regular updating of its analytical tools to keep pace with emerging global and technological trends, bilateral agreements with major competition jurisdictions (the latest being with Japan during 2021), continuous reforms in regulations and interface with stakeholders, opening new offices in Chennai and another proposed in Mumbai, have been some of the hallmark of the enforcement of Competition Law during 2021. It can be expected that the new challenges in the new year will further sharpen and chisel its tools further, accelerating economic growth on a new trajectory to achieve our 5 trillion economy.
(The author is the former chairman of Competition Commission of India. With research inputs from Aditya Trivedi, intern, Competition Advisory Services LLP. Views expressed are personal and not necessarily that of Financial Express Online.)