Competition panel plans stiff fines
Going strong on busting cartels, the Competition Commission of India(CCI), that is expected to be in action from the last quarter of this fiscal, is mulling to impose a penalty that can be as high as three times the firm's profit or 10 per cent of its turnover if a cartelisation charge is proved.
“Each of the parties involved in a cartel will be heavily fined on its profit or turnover during the period of cartelisation if charges are proved.”, said Augustine Peter, economic advisor, CCI.
“CCI can act suo-moto based on information that it has. A public interest litigation is not necessary to initiate action. The earlier Monopolistic and Restrictive Trade Practices (MRTP) Act gave limited powers like to cease and desist”, Peter added.
The Commission now has powers to investigate and take legal action besides imposing a penalty. This apart, it also planned to ensure that there was a reasonable use of the intellectual property rights(IPR) by corporates. “Around five to six types of abuses of IPR were identified that included charging an excessive price, or using an IPR protected product to sell another one which did not have an IPR registration, or malpractices like denying market access”, Peter explained. As for the penalty, he said that while it would not be that high as in case of a cartel, CCI would take a decision on a case-to-case basis. The Cabinet is expected to take a decision on the composition of the Commission by November.
An autonomous body under Supreme Court judge A Kabir has submitted its report shortlisting six members, including a chairman and five members, to the ministry of Corporate Affairs.
The bulk of operations reportedly have come from top bureaucrats and some from the legal circles. CCI recently decided to start a new scheme for the state governments last month, whereby it would fund training or workshops organised by state governments to educate the government officials. “As government regulations can, at times, act as impediments to promoting competition, like entry barriers to a new enterprise, the officials need to be adequately trained to raise awareness. We have written to all the state governments to appoint a nodal agency in each state that would organise workshops and the CCI can provide the resource persons”, Peter informed.
Each state could get up to Rs50,000 per workshop, and if it spanned an entire region, the amount could be higher at Rs1.5 lakh.
Around five such workshops have already been conducted in Delhi and the CCI is now looking at spreading its wings. It would also work with industry chambers and professional bodies like the Institute of Company Secretaries of India(ICSI) to reach out to professionals.