Discuss the role of the Competition Commission of India in containing the abuse of dominant position by the Multinational Corporations in India. Refer to the recent decisions.


05:23 AM

The question “Discuss the role of the Competition Commission of India in containing the abuse of dominant position by the Multinational Corporations in India. Refer to the recent decisions." was asked in the Mains 2023 GS Paper 2.  Let us look at the model answer to this question.

Answer: The Competition Commission of India (CCI), formed under the Competition Act, 2002, is India's primary authority for enforcing competition law, replacing the MRTP Act, 1969. The recent integration of the National Anti-Profiteering Authority (NAA) into the CCI enhances its role in upholding competition and protecting consumer interests.

Role of CCI in Containing Abuse of Dominant Position by the MNCs in India

  • Initiating Inquiries: Section 19(1) allows the CCI to initiate inquiries either on its own motion or based on complaints, information from various stakeholders, or references from government authorities.
    • WhatsApp's Privacy Probe: CCI initiated an investigation into WhatsApp's privacy policy, citing a prima facie case of abuse of dominance, ensuring data privacy and fair competition in the digital space.
  • Review of Mergers and Acquisitions: CCI reviews mergers and acquisitions involving MNCs to ensure they do not cause adverse impact on competition in the market.
  • Ensures fair competition: by encouraging new entrants and preventing the abuse of dominant position by MNCs.
    • Google's Dominance Exploitation: CCI ruled against Google, directing it to remove restrictions on device makers to promote fair competition in the Android OS market.
  • Consumer awareness: CCI educates consumers about their rights and encourages them to report any anti-competitive practices that they encounter.
  • Orders and Directions: Section 19(4) enables the CCI to pass orders, issue directions, and impose penalties when it determines that a company has abused its dominant position.
    • Axis Bank's Unnotified Acquisition: CCI imposed a Rs 40 lakh fine on Axis Bank for not notifying its acquisition of CSC e-Governance, violating competition regulations.
  • Binding Decisions: Section 19(5) underscores that the orders and directions of the CCI are binding on the parties involved. This ensures compliance with the CCI's decisions and promotes a competitive environment.
    • Coal India's Dominance Fine: CCI imposed a Rs 1,773-crore fine on Coal India for abusing its dominant position, addressing anti-competitive behavior in key industries.

Challenges Ahead for CCI

  • Digital Economy Oversight: Adapting to the evolving digital landscape and aligning with new digital legislations.
  • Addressing Pending Orders: Resolving pending orders and formulating regulations for new provisions.
  • NAA Cases Examination: Examining cases previously handled by the National Anti-Profiteering Authority.
  • Global Antitrust and Technology: Staying current with global antitrust practices and technological advancements.

Despite challenges, CCI's proactive actions and landmark decisions show its vital role in preserving competition, consumer interests, and innovation in India's evolving market. Committed to adapting and fulfilling its mandate, CCI is ready to promote a competitive economic environment in the digital age.