Review of Indian Competition Law – Pointers

The Government of India has appointed a committee to review the Competition Act, 2002 to review the law and come up with recommendations to strengthen and re-calibrate the law.  The Committee is expected to finish its work within three months of its first meeting.

I wrote a column in the Business Standard  earlier this week pointing out a few areas of low-hanging fruit that need attention.  Although the Act was passed nearly a decade and half ago, it was partly brought into effect only in 2009 and fully in 2011.  A rich body of case law has emerged and it is time to codify some of the settled principles that have now been laid down by the Supreme Court and the Competition Appellate Tribunal (now merged into the National Company Law Appellate Tribunal).

Clearer principles for determination of “appreciable adverse effect on competition” (“AAEC“) – the concept that lies at the core of enforcement actions – are required to be codified into the law.  The ability to hold an actionee’s conduct as causing AAEC or not causing AAEC is quite plastic and open-ended currently, and the deeming presumption in the law of AAEC having been caused is in principle a rebuttable one, and that needs to get embedded into the law.  Likewise, the principles to be borne in mind for potential abuse of dominance arising out of a combination and the principles to be borne in mind to arrive at a finding of actual market abuse, while conceptually similar, can never be identical in their application.

In my column, I also speak of some other core but less-discussed areas of legal reform necessary – strangely, the Competition Act interchangeably uses the term “penalty” and “fine” disturbing the wider fabric of Indian law, which distinguishes between the two, with the former being a civil sanction and the latter being a criminal sanction.

The the three-month deadline is a tight one and the Committee would have its hands full.