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Posted by on Apr 20, 2014 in Competition Act 2002 |

Critical Analysis – Competition Act 2002

Critical Analysis

  • Excess control of Central Govt over CCI can be a cause of misuse of CCI by govt ministers in power to reflect decision of CCI in favour of their relatives or favourites. Here Excess control means a) CCI is bound to follow directions of central govt as may be issued time to time, b) power of central govt to exempt any number of enterprises from control of CCI as thinks fit in public interest.
  • No Advisory Power – Since to promote competition is one of main functions of CCI but CCI can’t advise govt on competition related issues or no power to suggest in formulation of laws and policies in matters related to competition.
  • IPRs and Competition – The act states that no provisions of this act shall apply to copyright act or patent act or trademark act to promote innovative or creative ideas ( Also act provides that any person or enterprise can impose reasonable conditions to protect IPRs). But this provision can be misused to create monopoly in any of sector as reasonable conditions are not defined (for e.g. Pharma or drug industry).   
  • Sectoral Regulators and CCI – Many sectoral regulatory authorities have been established over the yrs to promote competition or enhance efficiency such as TRAI, CERC or IRDA etc. So both CCI and sectoral regulators are defined to curb anti competitive practices but such overlap of powers can be a cause of turf b/t these bodies.

Suggestions

  • The CCI shall be an independent body like CAG, EC or High Court to make CCI more effective and efficient.
  • The protection of IPRs shall be defined completely and in case of any adverse affect on competition (such as high prices of en essential consumer product due to patent), there shall be a provision of rejection of IPRs or compulsory licensing as provided under TRIPS (a WTO agreement).
  • Competition Advocacy – it means to create a culture of competition. So CCI shall be enabled to actively participate in framing & reviewing laws and in formulation of economic policies related to competition.
  • The demarcation of powers b/w sectoral regulators and CCI shall be concisely defined for better functioning of CCI or regulators.
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