An unnecessary Governing Board leaves much to be desired in the Amendment Bill: CUTS

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New Delhi, March 11, 2020

Following the recommendations of the Competition Law Review Committee, the Ministry of Corporate Affairs (MCA) recently released a Draft Competition (Amendment) Bill, 2020 (Draft Bill) for public comments. Responding to the call, CUTS International, a global public policy research and advocacy organisation, has submitted its comments.

“The scrapping of the Competition Appellate Tribunal was a puzzling decision which is not being sought to be corrected even in this Amendment” said Pradeep S Mehta, Secretary General, CUTS International. Reinstating the COMPAT is necessary for effectively addressing the appeals from orders of the Competition Commission of India (CCI) and ensuring efficient resolution of cases.

On the note of creating a new Governing Board for administrative and rule-making functions of CCI, CUTS has commented against it. “The objective of bringing in an external perspective, objectivity and transparency in regulation making by means of a Governing Board can be achieved through the provisions on Expert Advisory Committees in the current design of CCI without bestowing superintendence over CCI upon the Governing Board” stated Mehta.

“The addition of a Governing Board with four Part-Time Members and two ex-officio Members appointed by the Central Government will likely dilute the independence of CCI due to unwarranted government supervision over affairs of the CCI which more often than not does not have all six Members in place” emphasised Mehta.

One of the issues that CUTS has been advocating vehemently for is addition of a provision on prohibiting collective abuse of dominance which has yet not been included in the Draft Bill. Collective abuse of dominance takes place when two or more connected firms collude to abuse their collective dominant position in a market.

Arguing for CUTS’ long standing demand for transparency, cost-benefit analysis and stakeholder consultation before a statutory authority frames any regulations, Mehta also emphasised that such structures should be institutionalised in the Competition Act to ensure greater transparency in CCI’s operations.

Other areas of concern that have been highlighted by CUTS in its comments include the need for the Central Government to come up with a National Competition Policy with assistance from CCI and strengthening the coordination between CCI and other regulators.

A robust mechanism for coordination between CCI and other sectoral regulators is required to avoid grotesque turf wars in the future like the one exhibited by TRAI and CCI a few years ago” said Mehta.

The Draft Bill provides for a new system for settlements and commitments, which is welcome and a much needed move.

For more information, please contact:

Prakash Vaibhav at prv@cuts.org

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