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Almost midway through his five-year term, Ashok Chawla, chairman, Competition Commission of India, wants to streamline the delivery mechanism of the market regulator. The idea is to arrive at a decision within 12 months of picking up any case unlike the current practice of around 18 months. In an interaction with Sudipto Dey, Chawla speaks about the need for industry to sensitise people down the line in an organisation on the various aspects of competition laws, and the challenges in the current regulatory environment. Edited excerpts:
Even after a decade industry sees competition laws as another barrier to doing business. How are you trying to assuage that feeling?
It is a new piece of economic legislation, with reasonably high penalties. It is possible that industry on the whole - I am not talking about a particular company or a particular sector - may not be familiar with the legal architecture. We also get the impression in the advocacy that the contours of the law are not known to people in enterprises down the line. People at the top, or people at senior level are aware, but not everybody. That is the second challenge that the industry has to be cope with.
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Whenever there is a new regulatory architecture, and there is a new person looking at a certain paradigm, it certainly means a little more effort on the part of industry to respond to that. These are the kind of challenges that the industry has to cope with, but at the same time it is a great opportunity. What the Act hopes to achieve, and the objective that Parliament has spelt out in the preamble to the Act is to make markets function more effectively, to ensure there is a fair play between and among enterprises operating in a commercial space. At the end of the day it benefits the consumer.
In that sense while there are challenges there are also great opportunities.
There are a lot of regulatory challenges facing sectors such as pharma, aviation, automobiles, among others. Many perceive the Competition Commission as another regulatory hurdle...
Businesses have to be given a free hand. At the same time, there has to be effective regulation to ensure that it does not work in an arbitrary and discretionary manner. Appropriate and effective regulation is something that the industry has to live with. There is no getting away from that. Even the most laissez-faire economies in the world have this type of arrangements.
How do you view the recent instances of our regulatory system and industry being rapped by regulators abroad?
Every regulator will look at his mandate under the law, the scope within the jurisdiction under which the regulator operates. If foreign regulators are looking at the behaviour of enterprises in those countries, they will look at it from their point of view. The regulators here are neither entitled to, and nor expected to focus on what the concerns of regulators in other countries are.
As businesses become global and as operations extend to all parts of the world, different regulators will look at the same enterprise from their point of view, and there is no getting away for enterprises from responding to that challenge.
With so many regulators around do you see some degree of a turf battle, especially given that there is talk of a regulator of regulators?
I don't think there has been any talk of a regulator of regulators in India except maybe in the financial sector where there has been some discussion on this aspect. Otherwise, in different sectors, there are sectoral regulators who have their own mandate on technical issues, issues of licensing, issues around tariff, orderly and healthy growth of the sector. Then there is the Competition Commission, which looks at operations and behaviour in the market place. The requirement is that the sector and the market regulator, which in this case is Competiton Commission of India, should work in such a fashion that they do not contradict each other and lead to unnecessary regulatory burden. There is no possibility or discussion on regulator of regulators in the Indian context.
