Competition Commission of India to promote ease of doing business

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By Nikhilesh Iyer

Mumbai: An office in Mumbai, an online cell for self assessment of companies that wish to comply with the Competition Law,  issuance of definite guidelines that will help companies in India to know the exact nature of documents they need to file during mergers and acquisitions and inclusion of Non Government Agencies (NGAs) to help the country develop its Competition Law practices in line with international standards can shortly be expected by the Indian industry, Devendra Kumar Sikri, Chairman, Competition Commission of India said here yesterday.

Addressing the Conference on Competition Law and Practices held at the Taj Mahal Palace hotel here, Sikri said, he was aware that a large number of companies- almost 80 percent- were based in Mumbai and hence, there exists a demand for a dedicated office of the Competition Commission of India (CCI) to be opened in this city. The CCI is favorably considering this request from the corporate sector, he added. The conference was organized by the Confederation of Indian Industries (CII). Sikri was the chief guest at the event.

He said, the CCI intends to make filings by the corporate sector for compliance with the Competition Law easier and faster.  Hence, the CCI will shortly unveil an online portal that will facilitate self assessment of firms and its practices by company lawyers and others concerned with the compliance regulations. The CCI will try and minimize ambiguities in its prescribed rules and regulations by offering explicit guidelines to companies about competition compliance and other related systems.

“ Overall in the past 7 years of the anti-trust enforcement, we have crossed some important mile stones and have made critical interventions.  First in terms of numbers, we have by now handled more than 700 anti-trust cases and have disposed of more than 600 of them.  In terms of impact, our interventions have brought about positive outcomes. Businesses and associations have corrected their policies and practices to bring them in alignment with principles of competition.  In some cases corrections have taken place mid-course also,”  Sikri said.

He disclosed, the Indian Trade Promotion Organization (ITPO) revised its policy for licensing exhibition space after the Indian Exhibition Industry Association complained of discriminatory time gap in it.  Coal India initiated the process of examining their e-spot auction scheme after an advisory from the CCI.  A leading real estate company and following it, many others, redrafted the terms and conditions of their allotment letter in the realty sector.  In the pharmaceuticals sector, the All India Organization of Chemists and Druggists (AIOCD) issued instructions to all the State level chemists and druggists associations as well as drug manufacturers to refrain from indulging in practices which have been identified as anti-competitive by the Commission. It is now incumbent on pharmaceutical companies which have been seen as victims to come forward and play a pro-active role in curbing such practices.

Sikri, in his speech emphasized, the CCI will firmly crack down on any attempts to cartelize the Indian industry. Indian Competition Law does offer leniency and amnesty to companies that voluntary disclose any attempts to form cartels, exempts them from stiff penalties. “ This has caused a surge in the number of leniency applications and in coming years, we expect more such applications that will help uncover cartels,” he added. For such self disclosures, the CCI has the authority to either waive the penalty or offer a lower rate of between 50 and 30 percent of the violating company’s annual turnover.

The CCI chief offered to review the grievance of some companies that the target time of 30 days for filing papers in cases of mergers and acquisitions was too short since it led to incomplete filings or inclusion of insufficient information. Corporate houses had complained, this target period left little time for their lawyers to comply with all documentation requirements.

The CCI, he noted, had achieve some important milestones since its inception around seven years ago. “Overall in the past seven years of the anti-trust enforcement, we have crossed some important mile stones and have made critical interventions.  We have handled more than 700 anti-trust cases and have disposed of more than 600.  Our interventions have brought about positive outcomes. Businesses and associations have corrected their policies and practices to bring them in alignment with principles of competition.  In some cases corrections have taken place mid-course too,” he added.

Giving details of cases handled by the CCI, he said: About eighty percent of the orders passed by the Commission during the last one year were orders of closure. “Thus, we undertake to intervene only when the impugned conduct is apparently anti-competitive and is likely to result in an appreciable adverse effect on competition in the markets. In case, in which the investigation is ordered, we are providing the parties with full opportunity to defend their position and contest the findings of the DG’s investigation. Our ultimate goal is to ensure that markets are competitive and that enterprises are competition compliant,” he added. Sikri lauded the CII for its initiatives in promoting awareness about the Competition Law, acquisition issues and advocacy, among other topics, among the Indian corporate sector.

The CCI chief lamented that India continues to lack a proper network of NGAs and companies that can facilitate the commission and the country to help enforce laws that prevent unfair competition. He pointed out the example of his participation at the recent meeting of the International Competition Network (ICN) in Singapore which attracted participation by 130 nations. India, despite being at the forefront of developing nations and having a robust growing economy, was represented at this key forum by a sole organization- the CCI. He said, the commission will strive to encourage NGA participation to ensure that India complies with international standards on business practices and helps propel the Make In India initiative launched by Prime Minister Narendra Modi and the ensuing ease-of-doing-business drive being implemented at various echelons of the Union and state administrations.

Meanwhile, the day-long conference began with a welcome address by Dr. Ajit Ranade, Chief Economist, Aditya Birla Group. Ranade said, the conference with CCI was vital since the Competition Law has significant impact on budgets, trade policies, permits and licensing, fiscal policy and other aspects of Indian business. “ Rather than viewing the CCI as a penalizing agency, it should be seen as a facilitator that is essential to a well thriving economy and one that will boost the country’s business,” he said. He called upon Sikri and the CCI to fix a minimum limit for companies to seek compliance, which will help smaller mergers and acquisitions to comply with the Competition Law without engaging in extensive documentation and processes.

Bharat Vasani, Chief, Legal and Group General Counsel, Tata Sons Ltd pointed out that more definite and exhaustive legislative and judicial framework was required in India for companies to comply with the Competition Law. He noted, the earlier Monopoly and Restrictive Trade Practices Act (MRTPA) stifled companies and despite its abrogation several years ago, some of its negative clauses had seeped into the new Competition Law.

Zia Mody, Chairpeson, CII National Committee on Regulatory Affairs and Senior Partner at AZB and Partners said, it is essential for the Competition Commission of India to have regular interactions with all sections of the Indian industry which will help all stakeholders. She questioned the target period of 30 days for companies to file for compliance of the law and sought its review.

Meanwhile, the Conference on Competition Law and Practices also included panel discussions titled ‘Cartels and Leniency‘ and  ‘Merger Control- What Impacts Industry.’

 

Ends

 

 

 

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