INTERFACE WITH SECTOR REGULATORS

The Competition Commission of India (CCI) has an overarching role as a market regulator across all sectors, focusing on anticompetitive behavior that may distort competition. Sector regulators frame ex ante rules after consulting industry and consumers, laying down performance criteria which are periodically reviewed for corrections. In contrast, CCI performs mostly ex post functions to curb concentration that may harm competition, such as collusion, cartelization, or abuse of dominance.

The Competition Act, 2002 has overriding effect and jurisdiction in addition to sector-specific laws, as they don’t define cartels, abuse of dominance, or provide an investigative mechanism. CCI intervenes only to prevent market failures, restrict anticompetitive practices, and promote public interest. CCI assesses market power to gauge the impact of consolidation on competition, considering the prevailing market structure at the time.
Mergers are regulated by CCI based on asset/turnover thresholds, not market share. Several high courts fail to appreciate CCI’s role as a market regulator in the Indian economy.

EXTRA-TERRITORIAL APPLICATION

The Competition Act, 2002 extends to the whole of India except Jammu & Kashmir [s.1].
CCI has extra-territorial jurisdiction over anti-competitive conduct outside India having an appreciable adverse effect on competition (AAEC) within India [s.32]. This covers any agreement or dominant position outside India or combination of enterprises abroad.
Presence of one of the parties to an anti-competitive agreement in India is sufficient to confer jurisdiction to CCI.

Foreign entities with no presence in India may still be subject to CCI’s jurisdiction if their conduct results in an AAEC in India.

CCI can also inquire into cross-border mergers meeting the asset/turnover thresholds, even if the merging parties are located outside India.

INTERNATIONAL COOPERATION

CCI can enter into any memorandum or arrangement with any foreign agency to discharge its duties or perform its functions [s.18]. This enables the exchange of information and enforcement cooperation between competition authorities.

India has signed MOUs with competition agencies of US, EU, Australia, Russia, Brazil, and South Africa. India is also a signatory to the OECD recommendation on cooperation between member countries on anti-competitive practices affecting international trade.
CCI is a member of the International Competition Network (ICN) and actively participates in its working groups. The BRICS competition authorities have signed a cooperation agreement for joint research and exchange of non-confidential information.

COMPETITION COMPLIANCE

CCI has emphasized the need for competition compliance by enterprises.
Benefits of compliance include:

• Reduced risk of CCI investigations
• Early detection of violations
• Limitation of liability
• Goodwill and corporate social responsibility

Essential elements of an effective compliance program:

• Management commitment and oversight
• Compliance policies and procedures
• Training and communication
• Monitoring, auditing, and reporting mechanisms

CCI has published a Competition Compliance Manual for Enterprises as guidance.
Enterprises must do a competition risk assessment, designate a compliance officer, conduct internal audits, and have a review mechanism. Competition compliance should be integrated with corporate governance and extend to all employees, especially senior management.

Compliance programs can’t eliminate but reduce the risk of violations and are considered a mitigating factor in penalties.

SELF-ASSESSMENT TOOLS

CCI has provided a Do It Yourself (DIY) competition assessment toolkit to enable self-assessment by enterprises of potential competition concerns.

Key questions in the DIY self-assessment:

• Does the agreement restrict competitors from competing on price, quality, or innovation? (Anti-competitive agreements)
• Does the conduct restrict or eliminate competition in the market? (Abuse of dominance)
• Does the merger eliminate a significant competitive force or enable the merged entity to harm competition? (Combination Regulation)

The toolkit provides a broad analytical framework for enterprises to identify red flags warranting a detailed competition assessment. It enables corrective actions to be taken at an early stage to ensure competition compliance and demonstrates a culture of compliance that can be a mitigating factor if CCI investigates.