The Competition Act, 2002 was sanctioned to meet the necessities of evolving
time. A committee laid by S.V.S. Raghavan recommended a law on Competition
in line with the anti-trust laws around the globe. 1 The act establishes a
Competition Commission whose duty is to “eliminate practices having adverse
effect on competition, promote and sustain competition, protect the interests of
consumers and ensure freedom of trade carried on by other participants, in
markets in Indiaâ€. 2
After adoption of policy of Liberalisation, Privatization and
Globalization in 1991 there were various sectoral developments in India as well
which led to the creation of various sectoral regulators like SEBI, TRAI, CERC,
etc. and henceforth, given the powers to manage issues relating to competition.
Subsequently, there has been a conflict of jurisdiction between Competition
commission of India (hereinafter, "CCI") and different sectoral controllers over
competition related issue. The sectors have the benefit of having competence in
their field however it is CCI which can consider economy wide point of view,
limiting business sector distortion and to keep up uniform utilization of laws
over all the sectors. 3
Conflict of Jurisdiction
The contention pertaining to the CCI and sector specific regulators has been a
perpetual source of litigation between the respective parties which have time and
again engaged judicial intervention. The link between the CCI and sectoral
regulators is judicial. The basic target of these sectoral regulators and
competition authorities is to safeguard the interests of the consumer and promote
their welfare. 4
The fundamental proposition that is to be understood here is that
the sectoral regulators have domain prowess in their pertinent sectors. Whereas
the Commission has a wide ambit to deal with competition for which certain
distinct parameters are set down under the Act. A cemented system which
promotes the coordination between CCI and the sectoral regulators is of umpteen
importance. While sectoral regulators employ ex-ante regulation in a pro-active
manner, competition authorities largely use ex-post assessment in a reactive
manner. 5 Certain provisions in the Competition Act, 2002 further illustrates the conceivable strain. The stub of the interface between the competition authority
and sector specific regulators in India lies on the four branches of Sections 18,
21, 60 and 62 of the Act.
The conflicts between CCI and the sectoral regulators could be caused by
legislative ambiguity or jurisdictional overlap or legislative omission. 6 The
difference in interpretation of regulatory jurisprudence by the administration
could also heighten conflicts.
For example, The Electricity Act, 2003 is a
fragrant of the problem brought about by overlapping jurisdictions of regulatory
authorities in India. One of the aims underlying the Electricity Act is that of
furtherance of competition. 7
This is analogous to the language utilized in
segment 3 8 and 4 9 of the Competition Act, 2002 which relate to anti-competitive
agreements, abuse of dominant position and regulation of combinations.
The Ministry of Finance in Financial Sector Legislative Reforms Committee
Report 10 , recognizes similar complexity due to the multiple regulators in India.
CCI has more extensive jurisdiction as it can inquest any combination 11 which
occurred outside India but has an apparent unfavourable impact on competition
in the suited market in India. 12 In essence, the competition law intents to secure
competition by examining practice which perhaps be anti-competitive in spirit
but sectoral regulation intents to protect competition by introducing skeletal
changes.
The take of Indian Courts on overlapping of jurisdiction
In the context of India, the courts and CCI have taken some startling stances to
address the problem of jurisdictional duplicity. Serious jurisdictional issues have
risen because of the scuffle between the Competition Commission of India and
TRAI or other sector-specific regulatory sectors. The Apex Court of India has
tended the same in the case of Competition Commission of India v Bharti Airtel.
On 5 th December 2018, the Supreme Court of India ruled on the respective roles
of the CCI and TRAI and the juggling of their specific responsibilities. 13
As the
matter fell outside the purview of the telecom controller, TRAI, the Bombay
High Court quashed the CCI's investigation into cartelization by telecom
organisation. 14 Interpreting the scope of its own jurisdiction, the CCI has held
that despite the existence of competition mandate within sectoral laws, the power
to investigate allegations of anti-competitive conduct continues to rest with the
CCI. 15 In the past there have been examples of overlap of the use of various
enactments in specific circumstances where both the enactments had a 'non- obstante clause' in it. Different principles have been applied by the courts in
India including when specific legislation prevails over general legislation 16 ,
recent enactments prevails over the old ones. 17 The principle behind Lex
specialis is that generally the recent legislation prevail over older ones is
because law making body is expected to mindful of the existence of the laws and
thus, a 'non-obstante clause' in the latter enactment implies an intention. 18
Approaches by different countries/jurisdictions
Anti-trust regulators in other jurisdictions have been able to resolve similar
conflicts between sectoral regulators and competition authorities by crafting
specific exemptions in areas of conflict or concurrent jurisdiction between
sectoral regulators and competition authorities. 19
In the United Kingdom, different sectoral regulators have the ability to uphold
EU and UK competition law in consonance with the Competition and Markets
Authority ('CMA'), the national competition organisation. Under this
concurrency model, both the authorities under the concurrency model, appreciate
competency and arrive at a result on the exercise of the same through a
consultative procedure. A comparable framework is followed by South Africa
established on the concurrency model. Australia uses the position that particular
rules were desirable over dependence on general competition rules. Some
jurisdictions have exclusivity model where some of the sectors are excluded
from competition authorities. 20 Whereas in still other cases, both competition and
regulatory laws are silent on the possible overlaps. 21
Conclusion
In order to enhance the minimum iota of friction between the sectoral regulators
and CCI, a system of deliberation appears to be the best recourse. By resolving
the issue of ambiguity and conflict in the legislations and by conducting and
exhaustive review of the ordinance of sectoral regulators and CCI, India could
progress in terms of the smooth functioning of the sectoral regulators and CCI.
The CCI is permitted to direct an investigation into apparent anti-competitive
conduct upon reference being made by a legal authority. Henceforth, sectoral
controllers would not have the ambit to step upon the enforcement jurisdiction of
the CCI by establishing new guidelines. This would likewise be in accordance with the approach of the Supreme Court to follow an amicable way to deal with settle disputes between regulators.
End-Notes:
- Kritika Sethi & Akshita Amit, Overlapping Jurisdiction of Regulators in
India: A Never-Ending Battle, Indian Competition Law Review, Vol. 1 2019,
http://iclr.in/wp-content/uploads/2019/08/Vol.1-OVERLAPPING-JURISDICTION-OF-REGULATORS-IN-INDIA-A-NEVER-ENDING-BATTLE.pdf
- The Competition Act, §18 (2002).
- Maher M. Dabbah, The Relationship between Competition Authorities and
Sector Regulators 70 CLJ 113, 118 (2011).
- id. At 113, 116.
- id. At 115.
- Geeta Gouri, Interface between Competition Commission of India and
Sectoral Regulators, Competition Commission of India (Feb. 27, 2012)
https://www.cci.gov.in/sites/default/files/speeches/interface.pdf?download=1
- The Competition Act, §3 (2002).
- The Competition Act, §4 (2002).
- id.
- Financial Sector Legislative Reform Commission, Analysis and
Recommendations, vol. 1 (2013) https://dea.gov.in/sites/default/files/fslrc_report_vol1_1.pdf.
- The Competition Act, §5 (2002).
- The Competition Act, §32 (2002).; Dhanraj Pillay v M/s. Hockey India,
CompLR 0543 (CCI
2013).
- C.C.I. v. Bharti Airtel, AIR 113 (SC 2019).
- Vodafone India Ltd v Competition Commission of India, CompLR 965 (Bomay
2017).
- Consumer Online Foundation v Tata Sky Ltd, Case No. 2/2009 (CCI 2011).
- Allahabad Bank v. Canara Bank, 2 SCR 110 (2000).
- KSL and Industries Ltd. v Arihant Threads Ltd, 9 SCC 763 (2008)
- Bank of India v Ketan Parekh, AIR 2361 (SC 2008).
- Inter Alia, Role of CCI in Regulated Sectors: Overlapping Jurisdictions,
AZB & Partners (Dec., 2018) https://www.azbpartners.com/wp-content/uploads/Inter-Alia-Special-Edition-Competition-Law-December-2018.pdf
- United Nations Conference on Trade and Development, The Importance of
Coherence Between Competition Policies and Government Policies, TD/B/C.I/CLP/9,
(May, 2011)https://unctad.org/en/Docs/ciclpd9_en.pdf
- id.
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