Insights
Towards new horizons – developments in Indian competition law 2018-19
April 9, 2019Since the enforcement provisions of the Competition Act, 2002 came into effect ten years ago, a large body of case law has developed and, of course, institutional understanding of competition law and policy has evolved. More than ever, enterprises must comply with competition laws. Assessing this context, the report reviews the developments in Indian competition law in 2018-19, while attempting to highlight what more can be expected in the near future.
Competition law & policy in India 2018-19: an outline
We look first at policy and institutional changes and then focus on developments in relation to horizontal and vertical agreements, abuse of dominant position, jurisdictional issues, due process, merger control, as well as major advocacy and outreach measures.
Reviewing the Competition Act
The Competition Law Review Committee
In September 2018, the Indian Government set up the Competition Law Review Committee to review the Competition Act, 2002 (Competition Act) “in view of changing business environment and to bring necessary changes if required”. The Committee is expected to study international best practices with a focus on antitrust law, merger guidelines and handling cross-border competition issues.
The nine-member Committee is headed by the Secretary of the Ministry of Corporate Affairs and includes the Chairpersons of the Competition Commission of India (CCI) and of the Insolvency and Bankruptcy Board of India (IBBI). Our Managing Partner, Pallavi Shroff, is also a member. The Committee is expected to make its report in early 2019 and this may result in significant changes being made to the legislation in the future.
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Institutional developments
New CCI chairperson and members
There have been significant changes at the CCI which has been revamped from a seven-member to a leaner four-member bench. Mr. Ashok Kumar Gupta was appointed as Chairperson in November 2018 and will remain in office until October 2022. In December 2018. Ms. Sangeeta Verma, a retired Indian Economic Service Officer, was appointed as a Member. Mr. P.K. Singh has replaced Mrs. Smita Jhingran as Secretary.
Cartels
Supreme Court allows LPG cylinder appeal
The Supreme Court allowed an appeal by 45 LPG cylinder manufacturers found guilty of bid-rigging by the CCI and the COMPAT. It found that the CCI should not have inferred collusion from parallel pricing, trade association meetings and general market conditions; it should rather have considered whether parallel pricing resulted from the fact that the market was controlled by a small number of powerful buyers.
NCLAT decides on the cement cartel case
The National Company Law Appellate Tribunal (NCLAT) upheld the CCI’s 2016 order in the Cement Cartel Case,2 finding that a number of cement producers and the Cement Manufacturers Association had colluded to hike cement prices and create an artificial scarcity of cement. The NCLAT maintained the INR 6,300 crore (approx. USD 915 m) penalty imposed by the CCI stating it was the “mere minimum penalty”.
Leniency
The CCI decided a number of cases involving leniency applications, awarding reductions in penalties to applicant enterprises and individuals involved in the cartel. In the Dry Cell Batteries3 and the Essel Shyam/Globecast cases,4 the CCI awarded 100% reductions in penalty to first-in-line leniency applicants who had approached the CCI at the outset and whose evidence enabled the CCI to form a prima facie opinion on the existence of the cartel. Applicants who applied later, during the investigation by the Director General (DG), received less than the maximum possible reduction.
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Disclaimer
This is intended for general information purposes only. The views and opinions expressed in this article are those of the author/authors and does not necessarily reflect the views of the firm.
