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Competition Commission of India (CCI)

05 Jul 2025 GS 2 Governance

  • Background

    • The Competition Commission of India (CCI) is a statutory body established under the Competition Act, 2002.

    • It was constituted in 2003 and became fully operational in 2009.

    • Objective: To prevent practices having adverse effects on competition, promote and sustain competition, protect consumer interests, and ensure freedom of trade.

    Objectives

    • Prevent anti-competitive agreements and abuse of dominance.

    • Regulate mergers and acquisitions (combinations).

    • Protect consumer interest and promote freedom of trade.

    • Support a competitive, innovation-friendly market economy.

    Legal Framework: Competition Act, 2002

    • Replaced the Monopolies and Restrictive Trade Practices Act (MRTP Act), 1969.

    • Key Provisions:

      • Section 3: Prohibits anti-competitive agreements.

      • Section 4: Prohibits abuse of dominant position.

      • Section 5 & 6: Regulates combinations (mergers, acquisitions).

      • Section 19: Allows inquiry into anti-competitive practices.

      • Section 26–27: Provides for inquiry, investigation, and penalties.

      • Section 53–Q: Appellate mechanism through National Company Law Appellate Tribunal (NCLAT).

    Composition of the CCI

    • A Chairperson and up to six Members, appointed by the Central Government.

    • Must have experience in economics, law, commerce, or public affairs.

    • Tenure: 5 years or till the age of 65 (whichever is earlier).

    Important Committees of CCI

    • Selection Committee: Constituted by the Central Government for appointment of members. Includes:

      • Chief Justice of India or nominee (Chair)

      • Secretary to Government of India, Ministry of Corporate Affairs

      • Two experts in law and economics

    • Expert Committees (Ad hoc):

      • Formed on sector-specific issues (digital markets, telecom, e-commerce, etc.)

    • Standing Committees: For internal matters, budget, HR, and policy.

    Powers and Functions

    • Quasi-judicial authority: Can summon, investigate, and penalise.

    • Conducts inquiries, orders investigation through the Director General (DG).

    • Grants approvals or blocks mergers and acquisitions that may hamper competition.

    • Advisory role to government on policy matters affecting competition

    Major Actions by CCI

    • Cement Cartel: Penalty on UltraTech, India Cements, Shree Digvijay, Dalmia (2020–25).

    • Google Android (2022): ₹1,337 crore fine for abusing dominance.

    • Auto Parts (2014): Fine for restricting spare parts access.

    • Beer Cartel (2021): ₹873 crore penalty.

    • Flipkart-Amazon probe: Anti-competitive preferential treatment.

    • Bharti Airtel-Jio merger, ZEE-Sony deal: Reviewed under combination regulations.

    Competition (Amendment) Act, 2023 

    1. Deal Value Threshold (DVT)

    • Mandatory CCI approval for transactions over ₹2,000 crore, even if asset/turnover thresholds are unmet.

    • Targets digital and startup mergers (e.g., WhatsApp acquisition).

    2. Merger Review Timeline Reduced

    • From 210 days to 150 days (extendable by 30 days).

    • Aims to improve ease of doing business.

    3. Settlement and Commitment Mechanism

    • Settlement: After investigation to avoid penalty.

    • Commitment: Before conclusion to rectify conduct.

    • Reduces litigation and improves compliance culture.

    4. Global Turnover-Based Penalties

    • CCI can now impose fines based on global turnover (not just Indian).

    • Strengthens enforcement against Big Tech and MNCs.

    5. Hub-and-Spoke Cartels Covered

    • Recognizes indirect coordination, especially relevant in e-commerce and logistics.

    6. 3-Year Limitation Period

    • Limits complaints on anti-competitive conduct to within 3 years of occurrence.

    7. Power to DG Expanded

    • Director General gets statutory powers for search, seizure, interrogation, etc.

    8. Anti-circumvention Clause

    • Prevents structuring of transactions to evade CCI scrutiny.

    Significance of the Amendment

    • Brings Indian competition law in line with global best practices (EU, UK, US).

    • Empowers CCI to tackle new-age market distortions, especially in digital platforms.

    • Enables swift action, improves procedural efficiency, and promotes regulatory certainty.

    • Boosts investor confidence and protects consumer welfare.

    Challenges Ahead

    • Capacity building within CCI to handle digital economy complexities.

    • Need for clear implementation guidelines for new mechanisms.

    • Coordination with sectoral regulators (SEBI, TRAI, RBI).

    • Addressing concerns of regulatory overreach and market disruption.

    Way Forward

    • Strengthen CCI’s digital enforcement capabilities.

    • Implement detailed rules for settlements and DVT.

    • Promote awareness and compliance through industry consultation.

    • Balance growth and regulation in emerging sectors.



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