CCI gears to check malpractices in biz

The Competition Commission of India (CCI) plans to take stringent action against the business outfits engaged in malpractices that undermine the interests of the consumers. Sectors like real estate, entertainment, cement, petroleum, steel, travel industry, healthcare and education are on CCI’s radar.

Speaking to the media in Chandigarh today, CCI Chairman Dharender Kumar said Competition Commission of India has settled 40 of the 150 cases received since its inception, with far-reaching implications for business, industry and the film world.The CCI has begun to attract lot many cases from affected parties belonging to different segments of society.

He added, CCI got more teeth than The Monopolies And Restrictive Trade Practices Act, 1969, as they can impose a fine of three times of the annual profit or 10 per cent of the turnover whichever is higher if the business outfit is found guilty of the unethical practices.

 

Dhanendra Kumar said the CCI had begun to enforce provisions contained in Section 3 (relating to anti-competitive agreements) and Section 4 (abuse of dominant position) of the Competition (Amendment) Act, 2007, duly notified on May 20, 2009.

He explained, Section 3 dealt with anti-competitive agreements that seek to exercise appreciable adverse effect on competition. Such agreements include, but are not limited to, agreement to limit production and/or supply; to allocate markets; to fix price; bid rigging or collusive bidding; conditional purchase/ sale (tie-in arrangement); exclusive supply/distribution arrangement; resale price maintenance; and refusal to deal. Section 4 dwells on abuse of dominant position. It refers to position of strength which enables an enterprise to operate independently of competitive forces or affect its competitors or consumers or the market in its favour. Abuse of dominant position impedes fair competition between firms, exploits consumers and makes it difficult for other players to compete with the dominant undertaking on merit.

Kumar said the abuse of dominant position included imposing unfair conditions or price; predatory pricing; limiting production/market or technical development; creating barriers to entry; applying dissimilar conditions to similar transactions; denying market access; and using dominant position in one market to gain advantages in another market.

Absence of competition in a market place, CCI Chairman said, restricted consumers’ right to choice and reduced consumer surplus. The vulnerable sections of the society are more liable to fall into the traps of poverty by price hikes resorted to by anti-competitive practices. Competition law keeps a check on such practices.

Kumar said CCI is now fully geared to play its stipulated role as an effective instrument in accelerating economic growth through the various spin-off effects of competition in the economy and ensuring the markets work for the benefit of the common man.