AN UNCOMPROMISING CCI AND ITS        IMPACT ON THE MARKET

• FastrackGovind
• articles by interns
• March 21, 2025

INTRODUCTION TO UNCOMPROMISING CCI

The Competition Commission of India (CCI) is a statutory body established under the Competition Act, 2002, to promote competition and prevent anti-competitive practices in India. The CCI aims to create a level playing field for all market players, ensuring that no single entity abuses its dominant position to stifle competition. The Commission is responsible for enforcing the provisions of the Competition Act, investigating anti-competitive agreements, abuse of dominant position, and merger and acquisition transactions that may substantially lessen competition. The CCI also undertakes advocacy and awareness programs to promote competition and compliance with the Competition Act.

(CCI)  being  a statutory body established by the Government of India to promote competition and prevent monopolistic practices in the Indian market. The CCI was established in 2003, but it became fully functional in 2009, replacing the Monopolies and Restrictive Trade Practices Commission, which was established under the Monopolies and Restrictive Trade Practices Act, 1969.

CCI,  India’s apex competition authority, headquartered in New Delhi, and tasked with ensuring a fair and competitive marketplace. Though formed in 2003, it became fully operational in 2009, operating as a body corporate with perpetual succession, empowered to acquire, hold, and dispose of property, enter contracts, and engage in legal proceedings. Initially, appeals against CCI orders were handled by the Competition Appellate Tribunal (COMPAT), but this was replaced by the National Company Law Appellate Tribunal (NCLAT) in 2017 through the Finance Act, 2017. The Competition Act, 2002 itself replaced the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act), following recommendations from the Raghavan Committee in 1999, thus transitioning the regulatory role from the Monopolies and Restrictive Trade Practices Commission to the CCI.

background

The Competition Commission of India (CCI) is the government body tasked with enforcing the Competition Act, 2002. Imagine it as a referee in a sporting event, but instead of athletes, it’s overseeing businesses. Its core function is to maintain a healthy competitive environment in the Indian market, ensuring that no single entity or group of entities can manipulate the market to their advantage, thereby harming consumers.

Specifically, the CCI focuses on three key areas: preventing anti-competitive agreements, prohibiting abuse of dominant position, and regulating combinations (mergers and acquisitions). Anti-competitive agreements are secret deals between companies to fix prices, limit production, or divide markets, all of which ultimately lead to higher prices

and fewer choices for consumers. Abuse of dominant position occurs when a powerful company uses its market strength to stifle competition, such as by predatory pricing or refusing to deal with competitors. Combinations are scrutinized to ensure that they don’t create monopolies or significantly reduce competition, which could also lead to higher prices or reduced innovation. In essence, the CCI acts as a protector of consumer interests by fostering a fair and competitive marketplace where businesses must compete on merit, not on unfair practices.

The CCI comprises a Chairperson and between two and six Members, appointed by the Central Government. These individuals must possess ability, integrity, and at least 15 years of professional experience in fields like international trade, economics, business, law, finance, and competition matters. The selection process involves a committee led by the Chief Justice of India, along with secretaries from the Ministry of Corporate Affairs and the Ministry of Law and Justice, and two expert members. The Chairperson and Members serve a five-year term, eligible for reappointment, with a maximum age limit of 65 years. They can resign by providing written notice to the Central Government or be removed on grounds of insolvency, engagement in paid employment, conviction of moral turpitude, conflict of interest, abuse of position, or physical or mental incapacity.

The CCI’s duties include eliminating anti-competitive practices, promoting and sustaining competition, protecting consumer interests, and ensuring freedom of trade. It investigates agreements that have an adverse effect on competition, abuse of dominant positions, and combinations (mergers, acquisitions) that could significantly reduce competition. It also provides opinions to statutory authorities on issues related to competition law and can seek opinions from them. If it finds violations of Sections 3 or 4 of the Act, it can order enterprises to discontinue anti-competitive practices, impose penalties, modify agreements, and issue interim orders. It can also direct the division of dominant enterprises to prevent abuse, approve or reject combinations, and regulate practices outside India that affect Indian competition. The CCI has the power to regulate its own procedure, subject to natural justice and the Competition Act, and possesses powers equivalent to a civil court for summoning evidence and witnesses. Furthermore, the CCI provides competition advocacy, offering opinions to the Central and State Governments on the competition implications of their policies, though these opinions are not binding.

Formation criteria of CCI

1. Eligibility Criteria for Chairperson

The Chairperson of the CCI shall be a person of ability, integrity, and standing, with special knowledge and professional experience of not less than 15 years in specified fields. The Chairperson shall be appointed by the Central Government.

• Eligibility Criteria for Members

The Members of the CCI shall also be persons of ability, integrity, and standing, with special knowledge and professional experience of not less than 15 years in specified fields. The Members shall be appointed by the Central Government.

• Specified Fields

The specified fields for eligibility criteria include:

• International trade
  • Economics
  • Business
  • Commerce
  • Law
  • Finance
  • Accountancy
  • Management
  • Industry
  • Public affairs
  • Competition matters
• Age Limit

The maximum age limit to hold the office of Chairperson or Member is 65 years.

• Other Eligibility Criteria

The CCI also considers other eligibility criteria, including:

1. The candidate should be a citizen of India.
   1. The candidate should have a good reputation and integrity.
   1. The candidate should have the ability to work independently and impartially.
   1. The candidate should have excellent communication and analytical skills.
2. Selection Process

The selection process for the Chairperson and Members of the CCI involves:

1. The Central Government constitutes a Selection Committee to recommend a panel of names.
   1. The Selection Committee consists of the Chief Justice of India, the Secretary in the Ministry of Corporate Affairs, the Secretary in the Ministry of Law and Justice, and two experts of repute.
   1. The Selection Committee recommends a panel of names to the Central Government.
   1. The Central Government appoints the Chairperson and Members from the recommended panel.

Hierarchy of CCI

1. The Competition Commission of India (CCI) has the following various posts:
   1. Chairperson
   1. The Chairperson is the head of the CCI.
   1. The Chairperson is responsible for the overall administration and management of the CCI.
2. Members
   1. The Members of the CCI assist the Chairperson in the discharge of their functions.
   1. The Members are responsible for hearing cases and making decisions on competition-related matters.
3. Director General
   1. The Director General is the chief executive officer of the CCI.
   1. The Director General is responsible for the day-to-day administration and management of the CCI.
4. Additional Directors General
   1. The Additional Directors General assist the Director General in the discharge of their functions.
   1. The Additional Directors General are responsible for overseeing the investigation and enforcement functions of the CCI.
5. Joint Directors General
   1. The Joint Directors General assist the Additional Directors General in the discharge of their functions.
   1. The Joint Directors General are responsible for overseeing the investigation and enforcement functions of the CCI.
6. Deputy Directors General
   1. The Deputy Directors General assist the Joint Directors General in the discharge of their functions.
   1. The Deputy Directors General are responsible for conducting investigations and enforcing competition laws.
7. Assistant Directors General
   1. The Assistant Directors General assist the Deputy Directors General in the discharge of their functions.
   1. The Assistant Directors General are responsible for assisting in investigations and enforcement functions.
8. Other Support Staff
   1. The CCI also has other support staff, including administrative officers, research associates, and other personnel who assist in the functioning of the CCI.

COMPETITION ACT, 2002

THE Competition Act, 2002, IS THE PRIMARY LEGISLATION GOVERNING COMPETITION LAW IN INDIA.PASSED BY THE PARLIAMENT IN THE YEAR 2002, TO WHICH THE PRESIDENT ACCORDED ASSENT IN JANUARY 2003.  IT AIMS TO PROMOTE COMPETITION, SUBSEQUENTLY AMENDED BY THE COMPETITION (AMENDMENT) ACT 2007. IN ACCORDANCE WITH THE PROVISION OF THE AMENDMENT ACT THE COMPETITION COMMISSION OF INDIA AND THE COMPETITION APPELEATE TRIBUNAL HAVE BEEN ESTABLISHED. AIMS TO PREVENT ANTI-COMPETITIVE PRACTICES, AND PROTECT CONSUMER INTERESTS. THIS ACT HAD BEEN PASSED IN THE GAZETTE OF INODA ON 11TH APRIL, 2023

Key aspects of Act COMPETTION ACT AND CCI

Prohibition of Anti-competitive Agreements:

The Competition Act, 2002, specifically targets and prohibits anti-competitive agreements, which are essentially secret pacts between businesses that distort the market. These agreements can take various forms, such as price-fixing, where competitors collude to set artificially high prices; output limitation, where they agree to restrict production to create scarcity and drive up prices; market sharing, where they divide territories or customers amongst themselves; and bid-rigging, where they manipulate the bidding process in tenders. These practices undermine fair competition, deprive consumers of choice and competitive prices, and stifle innovation. The Act empowers the CCI to investigate and penalize such agreements, ensuring that businesses compete on merit rather than through collusion.

Prohibition of Abuse of Dominant Position:

A dominant position, in itself, is not illegal. However, the Competition Act, 2002, prohibits the abuse of such a position by enterprises. This provision aims to prevent large and powerful companies from using their market strength to engage in practices that harm competition. Such abuses can include predatory pricing, where a company sells products below cost to drive out competitors; discriminatory pricing, where similar customers are charged different prices without justification; limiting production or technical development to stifle innovation; and imposing unfair or discriminatory conditions in the purchase or sale of goods or services. The Act aims to level the playing field, ensuring that even smaller competitors have a fair chance to participate in the market and that consumers are not exploited by dominant players.

Regulation of Combinations (Mergers and Acquisitions):

The Competition Act, 2002, recognizes that mergers and acquisitions can have a significant impact on market structure and competition. Therefore, it mandates the regulation of combinations that exceed certain thresholds. This provision ensures that mergers and acquisitions do not lead to a substantial lessening of competition within the relevant market. The CCI reviews proposed combinations to assess their potential impact on competition, considering factors such as market share, barriers to entry, and the potential for increased efficiency. If the CCI determines that a proposed combination is likely to have an adverse effect on competition, it can either prohibit the combination or impose conditions to mitigate the adverse effects. This regulatory oversight prevents the formation of monopolies or oligopolies that could harm consumers and restrict competition.

legal & functional framework

The Competition Commission of India (CCI) operates within a well-defined legal framework,The Competition Act, 2002, and the Competition Commission of India (CCI) are two interconnected entities that work together to promote competition in India. The Competition Act, 2002, is the primary legislation that outlines the framework for competition law in India, while the CCI is the regulatory body established under the Act to enforce its provisions. In essence, the Competition Act, 2002, is the parent legislation that empowers the CCI to investigate anti-competitive practices, impose penalties, and take other measures to promote competition. Therefore, in terms of authority, the Competition Act, 2002, can be considered greater than the CCI, as it is the primary legislation that governs competition law in India. However, the CCI plays a vital role in enforcing and implementing the provisions of the Act, making it a crucial component of India’s competition law framework. which includes:

Primary function OF COMPETITION COMMISSION OF INDIA

1. Promoting Fair Competition and Consumer Protection:

Promoting fair competition and consumer protection are fundamental pillars of a healthy market economy, working in tandem to ensure both efficiency and equity. Fair competition drives businesses to innovate, improve quality, and offer competitive prices, directly benefiting consumers with increased choice and value. Simultaneously, robust consumer protection safeguards individuals from deceptive practices, ensures product safety, and empowers them with the knowledge to make informed decisions. This dual approach not only fosters a dynamic and innovative market but also builds consumer trust, which is essential for sustainable economic growth. By preventing monopolies and ensuring a level playing field, fair competition allows new businesses to thrive, while consumer protection guarantees that all market participants adhere to ethical standards, creating a balanced and just marketplace where both businesses and consumers can prosper.

• Maintaining Market Freedom

Maintaining market freedom is crucial for fostering a dynamic and prosperous economy. It allows businesses to operate with minimal unnecessary restrictions, encouraging innovation, investment, and competition. When market freedom is upheld, entrepreneurs are empowered to pursue new ideas, leading to the development of novel products and services that benefit consumers. This freedom also enables businesses to respond quickly to changing market conditions, adapting their strategies to meet evolving consumer demands. Furthermore, a free market promotes efficient resource allocation, as prices and supply are determined by the forces of supply and demand, rather than artificial constraints. While some regulation is necessary to prevent abuses and ensure fairness, excessive intervention can stifle innovation and hinder economic growth. Ultimately, maintaining market freedom ensures that businesses can compete on a level playing field, leading to lower prices, higher quality goods, and a more vibrant and resilient economy.

• Investigation and Penalties

The Competition Commission of India (CCI) plays a crucial role in maintaining market fairness through rigorous investigation and the imposition of penalties. When the CCI receives information suggesting anti-competitive practices, such as cartels, abuse of dominance, or anti-competitive mergers, it initiates a thorough investigation. This process can involve gathering evidence, conducting hearings, and analyzing market data to determine if violations of the Competition Act have occurred. If the CCI finds that a company has engaged in anti-competitive behavior, it has the authority to impose substantial penalties. These penalties are designed to deter future violations and can include fines, orders to cease and desist from specific practices, and even the restructuring of businesses. The CCI’s investigative powers and the capacity to levy significant penalties act as a powerful deterrent, ensuring that businesses operate within the bounds of fair competition and protecting consumer interests.

• eliminate practices that harm competitio

The Competition Commission of India (CCI) is dedicated to eliminating practices that harm competition, thereby safeguarding the integrity of the Indian market. The CCI’s primary objective is to identify and eradicate anti-competitive behaviors such as cartels, abuse of dominant position, and anti-competitive agreements that distort market dynamics. Through proactive market studies and meticulous investigations, the CCI seeks to uncover and dismantle these harmful practices. Cartels, which involve secret agreements among competitors to fix prices or divide markets, are particularly detrimental, as they stifle innovation and inflate prices for consumers. Similarly, the abuse of a dominant position by a company can prevent fair competition and limit consumer choice. The CCI uses its powers to prevent and rectify such situations, ensuring that businesses compete on merit, rather than through anti-competitive tactics. By actively eliminating these harmful practices, the CCI fosters a level playing field, encourages innovation, and ultimately protects consumer interests, contributing to a more efficient and vibrant Indian economy.

• protect consumer interests,

The Competition Commission of India (CCI) places a high priority on protecting consumer interests by ensuring that markets function competitively. By preventing anti-competitive practices, the CCI directly safeguards consumers from inflated prices, limited choices, and reduced quality of goods and services. When businesses collude to fix prices or abuse their dominant positions, consumers are the ones who ultimately bear the burden. The CCI’s actions, such as investigating cartels and preventing anti-competitive mergers, are designed to maintain a level playing field where businesses compete fairly. This competition drives innovation, efficiency, and ultimately benefits consumers by providing them with access to a wider range of high-quality products and services at competitive prices. Furthermore, the CCI’s advocacy for consumer awareness and its role in enforcing competition laws ensure that consumers are protected from unfair market practices and have access to redressal mechanisms when needed. In essence, the CCI’s commitment to promoting fair competition is intrinsically linked to its mission of protecting and enhancing consumer welfare in the Indian market.

• ensure freedom of trade in Indian markets.

The Competition Commission of India (CCI) plays a vital role in ensuring freedom of trade within Indian markets by actively preventing anti-competitive practices that could restrict or distort market access. By diligently enforcing the Competition Act, the CCI safeguards the principle that businesses should be able to compete on merit, without undue barriers or artificial constraints. This involves scrutinizing agreements between enterprises, examining potential abuses of dominant positions, and reviewing mergers and acquisitions to ensure they do not create or strengthen monopolies or oligopolies that could impede free trade. The CCI’s proactive approach to market surveillance and investigation aims to eliminate practices that might unfairly exclude competitors, limit consumer choice, or stifle innovation. By fostering a level playing field, the CCI promotes a dynamic and open market environment where businesses, both domestic and foreign, can freely engage in trade, contributing to economic growth and consumer welfare. This commitment to ensuring freedom of trade is fundamental to the CCI’s mission of fostering a competitive and efficient Indian economy.

CCI & ITS  IMPACT ON MARKET

Positive Impacts

1. Promotes Competition:

CCI encourages competition among businesses, leading to innovation, better quality products, and lower prices.

it  prevents the creation of MONOPOLIES ensuring DOMINATES DOMINATES the MARKET AND STIFLES COMPETITION

It promotes the entry of new players in the market increasing competition and innovation

Encourage companies to innovate and improve their products and services leading to better quality and lower price field

Promotes transparency and accountability in business practices ensuring that companies compete fairly and honestly

 encourages competition advocacy and awareness among stakeholders promoting a culture of competition in India

• Prevents Monopolies:

CCI prevents the creation of monopolies, ensuring that no single entity dominates the market and stifles competition.THAT NO SINGEL ENTITY

It Investigates cases where a dominant enterprises abuses its position to harm competitionSuch as price fixing and bid rigging

cci reviews mergers and acquisitions to ensure they don’t lead to a concentration of power that harms competition

CCI imposes remedies such as distributors or behavioral commitments to address potential competition concern

 Web preventing monopolis the CCI promotes competition innovation and consumer welfare

• Protects Consumer Interests:

CCI safeguards consumer interests by preventing anti-competitive practices, such as price-fixing and bid-rigging.

CCC cards consumer from unfair and deceptive business practices

 it ensures consumer have access to accurate and timely information about product and services

 consumer have access to accurate and timely information about product and services promoting competitive pricing and preventing price fixing our predatory pricing

 ensuring that products and services meet safety and quality standard

 channel establishing mechanisms for consumers to resolve disputes and seek compensation for grievances

 educating consumers about their rights and responsibilities

• Fosters Economic Growth:

CCI promotes economic growth by encouraging competition, innovation, and investment.

CCC ensures that businesses don’t engage in empty competitive practices such as price fixing which can destruct the monetary policies effectiveness

 CCI promotes competition which can lead to increase tax revenues for the government supporting fiscal policy objectives

 CNN shows that infrastructure development is not hindered by anti competitive practices promoting efficient allocation of resources

CCI promotes competition which encourages entrepreneur and innovation

Negative Impacts

1. Regulatory Burden:

CCI’s regulations and investigations can impose a significant burden on businesses, particularly small and medium-sized enterprises.

• Increased Compliance Costs:

Companies may need to invest significant resources to comply with CCI’s regulations, which can increase their costs.

• Uncertainty and Risk:

CCI’s investigations and penalties can create uncertainty and risk for businesses, which can affect their investment decisions.

• Potential for Over-Regulation:

CCI’s regulations can sometimes be overly restrictive, which can stifle innovation and competition.

Corrective Impacts

1. Penalties and Fines:

CCI imposes penalties and fines on companies that engage in anti-competitive practices, which can correct their behavior.

CCI imposes monetary policy penalties up to 10% of the average turnover of the enterprise for the last 3 financial years

 CCI imposes and ceases and disaster orders directing the enterprises to stop anti competitive practices

 CCI orders to enterprises to divest asset or shares

 CCA hair powder impose penalties and fines but the actual amount imposed can vary depending on the specific circumstances of each keys

• Cease and Desist Orders:

CCI can issue cease and desist orders to companies that engage in anti-competitive practices, which can stop their harmful behavior.

 CCI can issue interim orders during investigation to prevent further harm

 cca orders enterprises to cease and desist from anti competitive agreements are reviews of dominant position

 CCI orders enterprises to cease and desist from anti competitive agreements are reviews of dominant position CCI make compliance required and enterprises must COMPLy with the order immediately

As per CCI although penalties can be imposed separately

 ccms impose interim or final orders that can be issued during or after investigation

• Divestiture Orders:

CCI can order companies to divest certain assets or businesses to restore competition in the market.

CCI orders enterprises to sell or divest assets business or shares

 the aim to at eliminating anti competitive effects of mergers acquisitions or abuse of dominant

 the aim to at eliminating anti competitive effects of mergers acquisitions or abuse of dominance DIVESTITURE helps restore competition in the market as per CCI

Enterprises most complex with divestiture orders within a specified time frame

• Compliance Orders:

CCI can issue compliance orders to companies to ensure they comply with its regulations and decisions.

cci orders enterprises to comply with competition act 2002 and regulations

CCI orders enterprises to comply with Competition Act 2002 and regulations aimed at correcting anti competitive agreements abuse of dominance or other contraventions aimed at correcting anti competitive agreements abuse of dominance or other contraventions enterprises mostly specific actions to complex such as modifying agreements or business practices

CMA require enterprises to submit compliance reports or allow monitorin

Uncompromising cci

When we say the CCI is “uncompromising,” it means it rigorously enforces the Competition Act, 2002, without yielding to pressure or allowing exceptions for anti-competitive behavior. This translates to a firm stance against practices that distort market competition, such as cartels, abuse of dominance, and harmful mergers. The CCI’s uncompromising approach involves:

‘Strict Enforcement,’ It conducts thorough investigations into suspected violations, regardless of the size or influence of the companies involved.

Imposing Stiff Penalties: When violations are found, the CCI levies significant fines and orders corrective actions to deter future misconduct.

Resisting Influence: It maintains its independence and impartiality, refusing to be swayed by lobbying or political pressure.

‘Diligent Scrutiny,’ It carefully reviews mergers and acquisitions to ensure they do not create monopolies or reduce competition.

Proactive Monitoring: It actively monitors market behavior to identify and address potential anti-competitive practices before they cause significant harm

Essentially, an uncompromising CCI is one that prioritizes the integrity of the market and the protection of consumer interests above all else, consistently applying the law to create a level playing field for all businesses.

Conclusion

In conclusion, the Competition Commission of India’s (CCI) unwavering commitment to its mandate, as evidenced by its strict enforcement, stiff penalties, resistance to influence, diligent scrutiny, and proactive monitoring, is crucial for fostering a healthy and competitive market. This uncompromising stance ensures that businesses operate on a level playing field, consumers are protected from anti-competitive practices, and the overall economic landscape remains dynamic and innovative. By consistently upholding the principles of fair competition, the CCI plays a vital role in safeguarding the integrity of the Indian market and promoting sustainable economic growth.

Similarly,   the Competition Commission of India (CCI) plays a vital role in promoting fair competition and preventing anti-competitive practices in the Indian market. With its robust framework and uncompromising approach, the CCI has established itself as a formidable regulator, feared by those who seek to exploit market dominance. Through its tireless efforts, the CCI has sent a strong message that competition law will be enforced strictly, and those who violate it will face severe consequences. As India continues to grow and evolve as a major economic power, the CCI remains committed to upholding the principles of fair competition, protecting consumer interests, and promoting economic growth and development

Article by Vasundhara chauhan intern at Fatsrack Legal Solutions