Competition Commission of India (CCI)

The Central Government, by notification in the official gazette, has appointed a Commission for the purpose of this Act, which is known as Competition Commission of India.

The Competition Commission of India is an organisation with the perpetual succession and common seal and shall have the powers which may be specified in the Act.

The head office of the Commission is in Delhi and has offices at many other places.

Establishment of CCI

The composition of the Competition Commission of India shall be as follows:

• It shall consist of a Chairperson and not less than two (2) members and not more than ten (10) members, who shall be appointed by the Central government.
  
  
• The Chairperson and other members act as full-time members of the Commission.
  
  
• The chairperson and other members shall hold the office for the term of five years and shall be eligible for the re-appointment. Further, it’s important to understand that no Chairperson shall hold office after attaining the age of 67 years and, no members shall hold office after attaining the age of 65 years.
  
  
• The Chairperson or the other members shall be a person of ability, integrity, and standing who shall be a judge of a high court or shall have special knowledge and experience of not less than 15 years in international business, economics, business, commerce, law, and finance which, in the opinion of the central government, may be useful for the Commission.
  
  
• If a vacancy is caused by the death of the Chairperson or by resignation, the senior-most member shall act as the Chairperson until and unless the new Chairperson is appointed.
  
  
• If there is a vacancy of Chairperson due to the removal, then a fresh appointment of Chairperson shall take place as per the method specified.
  
  
• If the Chairperson is not able to continue his/her services as may be required, the senior-most member of the CCI shall discharge his/her duties.

Powers of CCI Members

The Central Government may designate any member as member administration who shall exercise such financial and administrative power as may be vested with him and as prescribed in him under the rules of the Central Government

It is further provided that the member administration has the authority to delegate the financial and administrative powers as thought appropriate by the member administration to any officer of the Commission. The officer to whom such powers are delegated still works under the supervision, direction, and control of the member administration.

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Inquiry Into Certain Agreements and Dominant Positions of Enterprises

The Commission has a right to inquire into alleged contraventions of the provisions contained in sub-section (1) of section 3 or sub-section (1) of sub-section 4 of the Act either on its own motion or on receipt of a complaint, accompanied by such fee as may be determined under the regulations.

The Commission while determining whether an agreement has an adverse effect on competition shall consider certain factors. These factors are shown in Figure:

While evaluating whether an enterprise has a dominant position or not, the following factors shall be considered:

• Market share of the enterprise
  
• Size of the enterprise
  
• Resources of the enterprise
  
• The economic power of the enterprise
  
• Dependence of consumers on the enterprise
  
• Market structure
  
• Market size
  
• Entry barriers including regulatory barriers, financial risk, the capital cost of entry, and marketing entry barriers
  
• Relative advantage

Hence, these are the provisions related to the inquiry into the dominant position.

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Inquiry Into Combination by Commission

The Commission may upon its own knowledge or any information related to the acquiring of control, or of merger or amalgamation, conduct an inquiry if it thinks it will have an appreciable adverse effect on competition in India. Further, the Commission shall not start any inquiry under this section after the expiry of one year from the date when the combination has taken place.

The Commission on becoming aware or on receipt of information, may enquire whether the combination referred to in that notice has caused or it is likely to cause an appreciable adverse effect on competition in India.

For determining whether the combination would have an effect or is likely to have an effect on competition in the relevant market, the Commission shall consider the following factors:

• Real or the likely level of competition through imports;
  
• The extent of barriers to entry into the market;
  
• The level of the combination in the market;
  
• The degree of countervailing power in the market;
  
• The level of effective competition which is likely to sustain in the market;
  
• The extent to which substitutes are available in the market or are likely to be available in the market;
  
• The nature and extent of vertical integration;
  
• Possibility of the business failing;
  
• Nature and extent of innovation;
  
• Whether the good effects of the combination exceeds the adverse effect of the combination.

Hence, these are the relevant points of consideration for inquiry into a combination by the Commission.

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Procedure for Enquiry of the Complaints (Section 19)

Once a complaint is received or when a reference is made by the state government or the Central Government, and if the Commission forms the opinion that there is a prima facie case, it can order the director general to start an investigation into the subject. The figure shows the power of the CCI

The Director General, upon the receipt of direction, shall submit a report on the findings within such period as may be specified by the Commission.

If the Commission is of the opinion that there is no prima facie case, it may reject the application and may pass such orders as it may deem fit, including the imposition of cost, if any

Procedure for Investigation of Combination

If the report of the Director General relates to a complaint and if such report recommends that there is no contravention of any provisions of this Act, the complainant shall be given an opportunity to rebut the findings of the Director General.

The CCI can carry out any investigation upon:

• Receipt of a complaint
• Own reference
• Reference made by the Central Government
• Reference made by the State Government

If after hearing the complainant, the Commission is satisfied with the recommendation of the Director General, it shall dismiss the complaint.

On entertaining the complainant, if the Commission forms the opinion that further inquiry is necessary, it directs the complainant to proceed with the complaint.

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Acts Taking Place Outside India but Having an Effect on Competition in India

Section 32 of the Competition Act, 2002 deals with acts taking place outside India having an effect on competition in India. In such a case, the Commission shall have a right to inquire into such an agreement or abuse of the dominant position or combination,

if such a dominant position or combination shall have an adverse effect on competition in India. The following shall come under the purview of the Commission with respect to the acts taking place outside India:

• An agreement referred to in Section 3
• Any party to such an agreement outside India
• Any enterprise abusing the dominant position outside India
• Any combination that has taken place outside India
• Any party which is part of a combination outside India
• Any such agreement or dominant position arising outside India

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Power to Grant Interim Relief

Section 33 of the Competition Commission Act, 2002 states that if it is proved to the satisfaction of the Commission, by affidavit or otherwise that there is a contravention of subsection (1) of section 3 or subsection (1) of section 4, in that case, the Commission may by order grant a temporary injunction restraining the party from carrying of such acts until such inquiry or further orders.

Where it is proved to the satisfaction of the Commission that the im- port of goods may contravene subsection (1) of section 3 or subsection (1) of section 4, by affidavit or otherwise, in that case, the Commission may by order grant a temporary injunction restraining the party from carrying of such acts until such inquiry or further orders.

The provisions of the Civil Procedure Act, of 1908 shall apply as far as the temporary injunction is granted by the Commission under this Act, and it shall be deemed to be applied in the same manner as given by any of the civil courts.

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Power to Award Compensation

Section 34 of the Competition Act, 2002 deals with the powers of the Commission to award Compensation. The relevant provisions of section 34 are as follows:

• Any person under this Act may make an application to the Commission, for an order to recover compensation from any enterprise, that proves that he has suffered a loss or damage as a result of any of contravention of the provisions of the Act, which has been committed by the enterprise.
  

• The Commission may after making an inquiry for the reward of compensation may direct the other party to pay the applicant an amount realizable from an enterprise as compensation for loss or damage which is caused to the applicant due to the contravention of the provisions of the Act.
  
  
• Where the loss occurs to numerous persons having the same interest in that case with the permission of the Commission, one person may represent the interest of all the persons whose interest is affected and can make a single application on behalf of all the persons.
  
  
• The complainant or the defendant may appear in person before the Commission. It may also authorize representatives or legal practitioners or any of its officers to make its case before the Commission.

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Power of the Commission

The Commission is not bound to follow the procedure as laid down by the Code of Civil Procedure Act, 1908, but the procedure followed should be guided by the principles of natural justice, subject to the other provisions of the Act or of any rules as made or prescribed by the Central Government from time to time.

The Commission can prescribe its own procedure including the places at which they shall have their own settings, the duration of hearings, etc.

The Commission in respect of the discharge of its duties shall have the same rights as prescribed under the Code of Civil Procedure Act, 1908 in respect of trying a suit.

• The Commission can summon or enforce the attendance of any person and examine him on oath.
  
  
• Further, the Commission is also authorized subject to the provisions of Sections 123 and 124 of the Indian Evidence Act, 1872 for obtaining any public record or document from any of the offices.
  
  
• The Commission further has the power of dismissing an application on default or deciding it ex parte.
  
  
• The Commission may call experts from different fields like accountancy, economics, international trade, or from any other discipline as may be deemed fit by the Commission for assisting it in carrying out the proceedings.