Competition Act may be operational within 6 months

The Competition Act 2002, which has run into rough weather even before being enforced, may be enforced soon and is expected to be operational in the next six months.

At present, the provisions relating to definitions and Competition Commission have been made effective, while rest of the Act has not been brought into force.

The ran into rough whether after writ petitions were filed in the Supreme Court challenging certain provisions of the Act.

"Writ petitions are pending before the Supreme Court challenging certain provisions of the Competition Act. We expect the apex court's decision soon and the Act to be enforced in the next six months," Vyas Ji, secretary, Competition Commission of India, told Business Standard on Monday.

The Competition Policy has two elements, one is a set of policies that enhance competition in local and national markets, which includes liberalised trade policy, industrial licensing policy, relaxed foreign investment, ownership requirements, economic deregulation, privatisation amongst others, while the second important element is legislation designed to prevent anti-competitive business practices with minimal government intervention.

"Merely having a competition law by itself cannot produce or ensure competition in the market unless this is facilitated by appropriate government policies. On the other hand, government policies without a law to enforce such as policies and prevent competition malpractices would also be incomplete. The competion policy has come a long way in India through the process of reform and liberalisation, and the law has also been enacted enabling setting up of Competition Commission for its enforcement," said Vinod Dhall, member- administrative, Competition Commission of India.

The jurisdiction of the Commission covers anti-competitive agreements such as cartels and sharing of markets. Abuse of dominance such as unfair or discriminatory pricing, limiting production or technical development and predatory pricing are also covered under the jurisdiction of the Commission.

The third area of jurisdiction is regulation of combinations like mergers, amalgamations, acquisitions and acquiring of control.

In addition, the Commission has fourth responsibility of competition advocacy, public awareness and training.

The law provides for investigation, inquiry and adjudication by the Commission, and it can take action based on complaints or references, and also on its own motion. The Act contains provisions for penalties and also for non compliance with Commissions orders.

The Commission was established in October 2003 and so far it has only one member and is undertaking preparatory and foundation work necessary for setting up the Commission as well as competition advocacy, but so far no judicial work is being undertaken.

The main challenges before the Commission in discharging its work after it becomes operational includes to promote a competition culture and awareness of competition law in a transitional economy which was hitherto subject to controls and regulations, to build up the commission into a highly professional organisation and to attract well professionals to work in the Commission.

As a part of its advocacy function, the Commission would be expected to identify government policies and laws that inhibit competition and to advocate suitable changes at the level of both central government and state government.

It would have to be ensured that adequate budgetary resources are made available to the commission and the budgetary constraints do not affect the financial and functional autonomy of the Commission.