CCI may soon lose adjudicating powers, authority to pass orders & penalise

The government is considering taking away the adjudicating authority from the Competition Commission of India (CCI).  Essentially, this could take away the competition watchdog’s authority to pass orders and penalise those contravening the Competition Act.
 

Competition experts say this could render the commission toothless. The anti-trust regulator investigates and penalises cartels, apart from ensuring that mergers do not lead to monopoly. 

“(The move would mean) the commission would become an advisory authority only and would become redundant. Somebody will have to take this power and it may go to the corporate affairs ministry,” said R Prasad, a competition expert.

He added this would mean the CCI would conduct investigations and recommend actions such as closure.

Vaibhav Gaggar, managing partner at Gaggar & Associates, said it would be a travesty if the adjudicatory powers were vested with bodies that did not possess any experience in the field as all the learnings of the past decade would be lost.

Corporate Affairs Secretary Injeti Srinivas recently said the commission should work like a regulator and not a tribunal or a court. He also stated that in discharging its advocacy role, the commission needed to do more.

Further, the government planned to set up regional offices of the commission so that the body at the centre was not burdened, he said.
 

Recently, the government reduced the number of members in the commission. It now has a chairperson and three members, against six earlier. The government plans to let the commission have part-time members in order to ease its workload.

Below these members, the commission has 43 vacant positions of the total sanctioned 91 at the level of secretary, advisor, director, joint director and deputy director.  

In the director-general’s office under the CCI, which investigates cases, there are 17 vacancies in 33 sanctioned posts at the levels of director-general, additional director-general, joint director-general and deputy director.

Over the years, fewer orders passed by the CCI are being quashed by the appellate body that looks at competition appeals. 

According to the official data, 87 orders passed by the CCI were set aside by the appellate tribunal in 2015-16, and it came down to 69 in 2016-17 and just four in 2017-18. 

Competition lawyers say this is because the commission has streamlined its investigations. Many orders passed by the commission have been quashed on procedural grounds, which is not happening now.

In 2017, the government merged the Competition Appellate Tribunal (COMPAT) with the National Company Law Tribunal (NCLAT).
 

The number of anti-trust cases pending with the CCI stands at 223 as on January 31, 2018. Of these, 176 cases are pending for more than one year. Further, 564 combination notices have been filed. Of these, only 15 notices are pending and none is more than one year old.

The Competition Act was enacted in 2002 to prevent monopoly and break cartels. Cement manufacturers, automobile parts makers, pharmaceutical companies and aviation firms have been regularly investigated by the CCI.