Competition Commission of India UPSC NOTE

 What is Competition Commission of India (CCI)

  • The CCI is a statutory body established under the Competition Act, 2002

  • It is responsible for promoting and sustaining competition in the Indian market.

  • Also protecting the interests of consumers and ensuring freedom of trade.

  • Investigate anti-competitive agreements and practices

  • Inquire into the abuse of dominant position by enterprises

  • Regulate mergers and acquisitions

  • Impose penalties on enterprises that violate the Competition Act

  • The CCI has played a significant role in promoting competition in the Indian economy.

  • It has investigated and penalized several enterprises for anti-competitive practices, and has also cleared a number of mergers and acquisitions. 

  • The CCI's work has helped to create a more level playing field for businesses and has benefited consumers by promoting lower prices and better quality goods and services.

  • In 2023, the CCI imposed a fine of ₹2,423 crore on Google for abusing its dominant position in the online search market.

What are the Functions and Role of CCI?

  1. Anti-competitive agreements:

  • Investigates and prohibits agreements between enterprises that restrict competition, such as price-fixing, bid-rigging, and market allocation.

  • Ensures that businesses compete fairly and consumers have choices.

2. Abuse of dominant position:

  • Prohibits enterprises with a dominant position in the market from abusing their power to harm competition or consumers.

  • Prevents practices like predatory pricing, discriminatory pricing, and refusal to deal.

  1. Regulation of combinations:

  • Reviews and approves or prohibits mergers, acquisitions, and amalgamations that could have an appreciable adverse effect on competition.

  • Ensures that mergers and acquisitions don't lead to monopolies or decreased competition.

4. Advocacy and awareness:

  • Creates awareness about competition law and its benefits among businesses, consumers, and government agencies.

  • Conducts training programs and workshops to educate stakeholders.

  1. International cooperation:

  • Collaborates with other competition authorities around the world to promote competition and consumer welfare globally.

  • Works with international organizations like the OECD and UNCTAD.

  • Advising the government: Provides advice to the Central Government on competition issues relating to policy formulation and legislation

  • Regulatory coherence: Works to ensure that sectoral regulatory laws are consistent with the principles of competition law

  • Consumer protection: Protects the interests of consumers by ensuring that they have access to competitive markets.

  • Market research: Conducts market studies and research to identify potential competition issues and assess the impact of its interventions.

  • Enforcement: Has the power to conduct search and seizure operations, impose penalties, and pass cease-and-desist orders to ensure compliance with competition law.

What were the allegations on PVR

  • PVR denied the allegations. 

  • It said that the allegations were not backed by evidence

  • The chain argued that the purpose of the complaint was to “pressurise” it to exhibit his film, in the absence of any legal obligation to do so. 

  • PVR clarified that it has no special tie-ups or recurring/long-term arrangements

  • Further, the terms of agreement, including those of promotion, agreed upon with independent film makers were similar to those with larger production houses. 

  • More importantly, the multiplex chain said that it was not in their interest to accord preferential treatment to a specific producer or distributor, and that it does not offer any preferential treatment to its own films. 

  • It argued that a majority of its exhibition revenue is earned from films produced and distributed by third parties. PVR clarified that screen allocation

is determined on “mutually objective criterion” — this primarily entails the revenue generation potential of the movie.

What does the CCI’s order say?

  • After examining the submissions of the multiplex chain, CCI concluded that there existed no perceptible concern about competition. 

  • Its order held that the commercial wisdom of the exhibitors is largely driven by consumer demand.

  • Unless harm to competition was apparent, any intervention on its part would only lead to “undesirable consequences,”.

  • This would amount to taking away the autonomy of the entities and substituting that with the decisions of the regulator

  • About vertical integration, the order held that it was not per se prohibited under the provisions of the Competition Act

  • Further, the complainant had not submitted any evidence to substantiate these allegations

  • It held that most of the agreed terms for both independent filmmakers and larger production houses were largely the same — including revenue sharing terms. 

  • Finally, upholding autonomy in screen allocation, the regulator concluded that the guiding factor for selection and allocation was maximisation of revenue. 

  • The specific criteria include the revenue generating potential of the movie, the buzz around the film, marketing, advertising and promotions done etc.



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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Competition Commission of India UPSC NOTE
Competition Commission of India UPSC NOTE
Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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