|
| Q&A: William E Kovacic, Commissioner, FTC | | 'Narrow your focus to transactions posing genuine competition issues' |
| Joe C Mathew / New Delhi Apr 23, 2011, 00:11 IST |
|
 The Federal Trade Commission (FTC) is the American equivalent of India’s anti-competitive practices watchdog, Competition Commission of India (CCI). The agency, which has decades of experience in handling competition-related issues, like mergers, acquisitions and monopolistic practices, has been helping train and equip CCI in merger and acquisition (M&A) scrutiny. In an interview on the sidelines of a Ficci conference, FTC commissioner William E Kovacic spoke to Joe C Mathew on India’s competition laws and their implementation. Edited excerpts:
CCI is receiving a lot of support from FTC in training and equipping its officials in M&A scrutiny, a responsibility CCI is expected to take up from June 1. Is this assistance based on some bilateral understanding?
We don’t have a Memorandum of Understanding (MoU), but we have a cordial relationship (with CCI) for many years now. It’s based on handshake and we do lots of work on that basis.
You had mentioned that FTC took two years to finalise M&A rules and procedures after the US Congress (legislative) notified the Act. As compared to that, India is planning to operationalise its M&A provisions under the Competition Act within a month of finalising the rules. Are we in a hurry? Is it too short a period for the industry and stakeholders to understand M&A rules?
I think in many ways India has been conducting stakeholder consultations for a long time now. It took a longer time for us to do that, but then India has experience (from others such as FTC) to draw on. India has accelerated this process because it has learnt from others’ experiences.
CCI has hosted its draft M&A regulations for public comments. How does FTC view these draft regulations?
The scope of scrutiny should be narrowed. Focus only on transactions that pose genuine competition issues. The right scrutiny of transactions is important, as it will send the right signals in the beginning itself. That’s the essence of FTC comments, coming from our experience, to narrow the focus.
We have a situation where the ministry of finance has notified that M&As in the banking sector will be excluded from the regulatory purview of CCI and will remain with the banking regulator, Reserve Bank of India. How do you see such situations, where there are apparent conflicts with sectoral regulators?
Sometimes, there are statutory positions that determine who looks at certain things. The Congress in the statute that created FTC said you (FTC) have no jurisdiction over telecommunications, shipping, etc. These phenomena exist in every jurisdiction. Country by country, the issue that arises in every jurisdiction is (regulatory conflicts) between the competition authority and sector-specific regulators such as telecom regulator, energy regulator or the institution that regulates broadcasting, etc. This issue is everywhere.
How do you tackle such issues?
Typically, we form formal or informal relationships between the agencies and talk with each other for common understanding of the industry. Sometimes we sign an MoU, sometimes it’s less formal, you have working groups or you have meetings. What you try to do is to develop a common methodology, a common strategy. We need to work with each other.
But there are some jurisdictions that integrate the functions under one agency. Australia, for instance, has moved the functions of the sectoral regulator of telecom inside the competition authority. But, in general, the common question raised everywhere is: How do they work together?” So, India joins a long queue.
Industry is complaining of a plethora of rules they need to comply in case of M&A. All have different deadlines and disclosure requirements. How is the international experience?
Same. There are parallel rules framed by different agencies everywhere. In the US, if you buy shares and if you cross a certain threshold, you have to file a notice with the authority. In most countries, you have similarities between such regulatory regimes. So, the problem you are mentioning is universal.
How autonomous is FTC? Do government officials get selected as members?
The members have a seven-year term. I can only be removed for a cause, and it should be a very serious one. So, if any public official or members of the Congress want me to be fired, they cannot do it. There are considerable safeguards. The members tend to be lawyers and they are nominated by the President (of America). We have employee strength of 1,200, with 700 of them lawyers. So, it is an independent agency.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
