YEAR END REVIEW-2013 COMPETITION COMMISSION OF INDIA

3rd BRICS International Competition Conference, 2013 hosted by CCI

The year 2013 saw Competition Commission of India(CCI) organizing two major events. CCI hosted the 3rd BRICS International Competition Conference, 2013 in New Delhi in which the BRICS Competition Authorities from Brazil, Russia, India, China and South Africa participated. The Heads of the Competition Authorities of the BRICS nations signed a Joint Accord namely ‘DELHI ACCORD’ on November, 22, 2013 during this conference. The event also saw signing of MoU between Competition Commission of India and DG, Competition, European Union in the field of Competition Laws.

Competition Commission of India also institutionalized the celebration of Annual Day by hosting the First Inaugural Lecture that was delivered by Finance Minister Shri P.Chidambaram. Four significant developments marked the celebration of the 4th Annual Day as below:

1.   Delivery of the “Annual Day Inaugural Lecture”.

2.   Release of a book entitled “Competition Commission of India”.

3.   Unveiling of “Vision” and “Mission 2020” of CCI.

4.   Release of the “Special Cover” on CCI issued by the Department of Posts.

The Annual Day Book

The Competition Act creates a framework for competition regulation in India and one of the most significant pillars of this framework is “competition advocacy”. This endows a responsibility on CCI to sensitize the stakeholders about the benefits of competitive markets and need to be competition compliant. The 4th annual day of CCI marked the release of a book on CCI, which explains in a lucid way the nitty-gritty of competition law and policy in India.

Vision and Mission of CCI

Vision and Mission of an organisation is a communication window, through which it can make the world know as to why it exists and for whom. Minister of State of Corporate Affairs Mr. Sachin Pilot unveiled “Vision” and “Mission 2020” statements of CCI during his presidential address on 20th May, 2013.

Vision: To promote and sustain an enabling competition culture through engagement, and enforcement that would inspire businesses to be fair, competitive and innovative; enhance consumer welfare; and support economic growth.

Mission 2020: Competition Commission of India aims to establish a robust, competitive environment through:

• Proactive engagement with all stakeholders, including consumers, industry, government and international jurisdictions;
• Being a knowledge intensive organization with high competence levels;
• Professionalism, transparency, resolve and wisdom in enforcement.

Release of Special Cover

In order to mark four successful years of competition enforcement in India, the Department of Posts issued a special cover on CCI in limited numbers, which has similar significance as a memorabilia. The special cover carries symbolic imprints of features of the Act and depicts vision statement of CCI.

Section 3 & 4 Orders

Some major orders under Section 3&4 of the Competition Act issued during the year are listed below:

(i)   CCI Imposes Penalty of Rs.1773.05 crores on CIL: The Competition Commission of India(CCI) imposed a penalty of Rs.1773.05 crores on Coal India Limited for abusing its dominant position.

(ii) NIMPA Found Guilty of Anti-competitive Conduct: The Commission found North Indian Motion Pictures Association (NIMPA) guilty of anti-competitive conduct of imposing compulsory registration and refusing to register films. Information was filed by Shri Ashtavinayak Cine Vision Limited (the informant), Mumbai against PVR Picture Limited, New Delhi and 17 other opposite parties including NIMPA.

(iii) Hockey India Exonerated with a Caution by CCI: CCI has begun scrutinizing sports leagues in India for their anti-competitive conduct. Although scrutiny of hockey leagues has resulted in exoneration of Hockey India(HI) in the Dhanraj Pillay & Ors vs. M/s Hockey India, the Commission has cautioned HI to streamline its regulatory powers so that anti-competitive practices do not creep into Hockey, the national game of India.

(iv) 11 Shoe Companies Penalised for Bid Rigging: In the case of Ministry of Commerce vs. M/s Puja Enterprises & Ord., with respect to a tender enquiry dated June 14, 2011 for conclusion of new rate contracts for polyester blended duck ankle boots rubber sole, CCI held that the bidder-suppliers by quoting identical/near identical rates had indirectly determined prices/ rates in the Rate Contracts and indulged in bid rigging/ collusive bidding in contravention of the provisions of Competition Act.

(v) Central Bureau of Narcotics and Narcotics Control Bureau are not ‘Enterprises’ : In the Om Prakash vs. Central Bureau of Narcotics, Ministry of Finance & Ors., CCI held that Central Bureau of Narcotics (CBN) and Narcotics Control Bureau(NCB) are not ‘enterprises’ or group as defined under the Act and therefore, the provision of Section 4 relating to abuse of dominant position is not applicable against him

Amendment of Combination Regulations

CCI has amended the Combination Regulations on April 4, 2013 with a view to simplify the filing requirements and bring out greater certainty in the application of the Act and the Regulations.

The provisions relating to regulation of combinations in the Competition Act, 2002 were enforced w.e.f. 1st June, 2011. In the calendar year 2013, till 17.12.2013, forty combination notices under Section 6(2) of the Competition Act 2002 were received in the Combination Division. The Commission has passed its final order in respect of all except four notices which are under consideration.

Section 5 & 6 Orders

Some major orders under Section 5 & 6 of the Competition Act issued during the year are listed below:

1. Approval given to ETIHAD Airways and JET Airways under Section 6 of Competition Act.
2. Commission Approved Acquisition of Agila India by Mylan.
3. Titan International Penalised for Delayed Notification: CCI imposed a penalty of INR One crore on Titan International for its failure to give notice to the Commission in accordance with Section 6(2) of the Act. This was the second instance in which the Commission has imposed penalty for filing the notice within the stipulated time.
4. Temasek (Holdings) Pvt Ltd. and its Subsidiaries Penalised for Delay in Filing the Notice: CCI imposed a penalty of INR Five million on Temasek (Holdings) Pvt. Ltd. and its two subsidiaries namely Zulia Investments Pte. Limited and Kinder Investments Pte.Limited for failure to give notice to CCI under Section 6(2) of the Competition Act.
5. CCI Approves CIE’s Acquisition of Majority Stake and Control in Mahindra Systech Companies.
6. Penalty of Rs. 1 crore imposed to ETIHAD Airways: CCI imposed a penalty of Rs.1 crore on ETIHAD Airways for operationalising some parts of the deal with JET Airways without prior approval of CCI.

Advocacy Initiatives

Advocacy with Central Government: The Commission under its advocacy mandate is making definitive forays in advocating competition assessment of Central Government’s rules, regulations and policies so as to inhibit the potential harm they may cause to competition and overall economic interest of the country. During the year, CCI organized preliminary meetings with key policy makers of Ministry of Surface Transport & Highways, Department of Pharmaceuticals, Defence Research and Development Organisation, Department of Higher Education and Ministry of Health & Family Welfare.

Advocacy with Trade Associations: CCI continued the initiatives with trade associations to generate awareness among trade associations and their members to adopt competition compliance programme (CCP). This will not only help to avoid penalties and damage to reputation, but also inculcate good governance in their associations and respective constituents. During the year, CCI conducted workshops for the executive committee of four trade associations viz., All India Organisation of Chemist & Druggist (AIOCD), Automotive Component Manufacturers Association of India (ACMA), All India Glass Manufacturers Federation (AIGMF) and Automotive Tyre Manufacturers’ Association (ATMA).

Advocacy with States: CCI aims to engage with the States to generate awareness among their key policymakers about the provisions of the Act. During the year, two workshops were organized for the key functionaries of Government of NCT of Delhi to sensitize them about the need to adopt competition friendly policies and comply with the provisions of the Act as the Act is applicable to all enterprises irrespective of their ownership.

Advocacy meetings with Investigative Agencies: With a view to build synergy, CCI organized an interactive meeting with investigative agencies, viz., Directorate General of Income Tax(Investigation), Directorate General(Central Excise), Financial Intelligence Unit, Directorate General(International Taxation) and Directorate General (Serious Fraud Investigation).

Advocacy programmes in Academic Institutions: The Competition Law being a relatively new Law, advocacy programmes were conducted in various institutions including judicial academies to create awareness about the Competition Act, role and functions of CCI.

The Commission decided to initiate an Economic Research Programme. Under the ambit of the Programme, the Commission entrusts to the India Development Foundation(IDF) , Gurgaon, Haryana, to set up a Dedicated Research Unit. An agreement has been executed between CCI and IDF to set up the Dedicated Research Unit (DRU) at IDF on 22.10.2012. The DRU, has prepared 3 Primer so far and another 3 are expected to be submitted by the end of current financial year.

Five Seminars/talks/Conferences etc. were conducted by the Economic Division during the year.

Interactions with public/experts/policymakers/regulatory bodies on Competition Advocacy and for creating awareness of competition issues: 11 such interactions were organized during the year.

Capacity building of stakeholders to participate in competition regulatory process: 14 Talks/lectures were delivered by Members/Officers of CCI.

Competition related Sectoral/Regulatory impact assessment; Market Studies and research projects carried out by the Commission: In pursuance of the mandate under Section 49, sub-section 3 of the Competition Act, 2002, the Competition Commission of India(CCI) continued to undertake projects and programmes for the promotion of competition advocacy, creating awareness and imparting training on the competition related issues. Since the inception of the research study programme in 2003-04, 21 studies were commissioned and completed.

Consultation papers published/placed on website of the Commission:

           Following Concept Papers/ Notes have been placed on CCI Intranet during the year:

1. Presentation on “Competition Issues in the Indian Pharmaceutical Industry” by Kensuke Kubo, ISI;
2. Indian Pharmaceutical Industry: Competition issues;
3. Presentation on “Use of econometric tools for merger analysis: Case Studies from the UK and EU” by Dr. Jozsef Molnar, European Commission, DG-Competition, Chief Economist Team
4. Procurement by Food Corporation of India and the Competition issues;
5. Some Economics of Abuse of Dominance;
6. Comments on Telecom Regulatory Authority (TRAI), Consultation Paper on Monopoly/Market dominance in Cable TV services;
7. Presentation on Impact of cartels on poor Competition Law, Poverty Reduction and India” by Payal Malik, Advisor (Economics) made at Intergovernmental Group of Experts on Competition Law and Policy Thirteenth session, Geneva, 8–12 July 2013
8. Excessive Pricing
9. Primer on “Assessment of Market Power in case of High-Technology Industries” prepared by DRU.
10. Primer on “Role of Intellectual Property Rights in Antitrust Analysis”.
11. Conceptual notes on the aspects of dominance in general and competition assessment in sports industry.
12. Shri Vipul Puri, Dy. Director (FA) had contributed an article for CIRC Policy Document & Souvenir on the theme - The Interface between Business Strategy & Competition Law.

Events:

National

• Dr. Ashok Gulati delivered the Eighth “Distinguished Visitor Knowledge Sharing Series” Lecture on “Building Competitive Agriculture in India” on 26th July, 2013 at CCI. Dr. Gulati is a globally distinguished agricultural economis and presently Chairman of the Commission for Agricultural Costs and Prices.
• Mr. Nayan Chanda delivered the Ninth “Distinguished Visitor Knowledge Sharing Series” Lecture on “Globalisation: Riding the Wave of Competition” on 6th August, 2013 at CCI. Mr. Chanda is Director of Publications, Yale Center for the Study of Globalisation, Yale University.
• CCI organized a workshop on the pharmaceutical sector on 19th July, 2013 for the officers of CCI with the objective to generate understanding of competition issues in the sectors with the help of experts in the area.
• CCI organized a workshop at CCI on “Antitrust/ Merger Issues” in collaboration with the US FTC during July 30-August 1, 2013.

International:

·         Signing of MOU with Australia: Memorandum of Understanding (MOU) was signed between Competition Commission of India(CCI) and Australian Competition & Consumer Commission(ACCC) at Canberra, Australia on June 3, 2013. The MOU was signed by CCI Chairperson Mr. Ashok Chawla and ACCC Chairman Mr. Rod Sims in the presence of Hon’ble Minister of State(IC) of Corporate Affairs Mr. Sachin Pilot.

·         CCI Participation in ICN Annual Conference: A CCI delegation led by CCI Chairperson Mr. Ashok Chawla participated in the 12th Annual Conference of the International Competition Network (ICN) during April 23-26, 2013 in Warsaw, Poland. Mr. Chawla moderated the plenary session of the Merger Working Group and CCI officials made presentations in some of the sessions.

·         CCI hosted BRICS International Competition Conference: The theme of the Conference was “Competition Enforcement in BRICS Countries: Issues and Challenges”. The participants discussed various issues and challenges in competition enforcement in BRICS countries. The Conference provided opportunity for wide ranging discussions among the representatives from the BRICS countries as well as from other enforcement agencies, multilateral institutions and academia and civil society institutions.

·         Participation in 2013 Fordham Competition Law Institute Annual Conference: CCI Chairperson Mr. Ashok Chawla participated in the 2013 Fordham Competition Law Institute Annual Conference and Seventh Workshop for Heads of Competition Authorities during September 25-27, 2013 in New York, USA.