Origin and Mandate
- Establishment: Statutory body established under the Competition Act, 2002. It became fully functional in May 2009.
- Background: Replaced the obsolete Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, following the recommendations of the S.V.S. Raghavan Committee.
- Objective: To prevent practices having an Appreciable Adverse Effect on Competition (AAEC) in India, promote healthy competition, protect consumer interests, and ensure freedom of trade.
Structure and Composition
- Ministry: Functions under the Ministry of Corporate Affairs.
- Members: Consists of a Chairperson and not less than 2 and not more than 6 members (Total 7 max).
- Appointment: Appointed by the Central Government based on recommendations from a Selection Committee.
- Qualifications: Minimum 15 years of experience in fields like economics, law, international trade, or business.
- Status: It is a quasi-judicial body. Appeals against CCI orders go to the National Company Law Appellate Tribunal (NCLAT) and then to the Supreme Court.
Powers and Functions
- Advisory: It is mandatory for statutory authorities to refer competition-related issues to CCI for opinion.
- Investigative: Can initiate inquiries suo motu, upon a complaint, or a reference from Central/State Govt. It directs its Director General (DG) to carry out detailed investigations.
- Regulatory:
- Prohibition of Anti-competitive Agreements: (Section 3) Bans cartels, price-fixing, and bid-rigging.
- Abuse of Dominant Position: (Section 4) Prevents large firms from exploiting their market power to harm competitors or consumers.
- Regulation of Combinations: (Sections 5 & 6) Reviews Mergers & Acquisitions (M&A) to ensure they don’t create monopolies.
- Extra-Territorial Jurisdiction: Can pass orders even if the anti-competitive act took place outside India, provided it affects the Indian market.
Recent Key Updates (Competition Amendment Act, 2023)
- Deal Value Threshold (DVT): Mandatory CCI approval for any M&A deal worth more than ₹2,000 crore, especially targeting “Big Tech” where asset/turnover values might be low but deal values are massive.
- Reduced Timelines: The time limit for CCI to pass an order on a combination was reduced from 210 days to 150 days.
- Global Turnover Clause: Penalties for antitrust violations can now be calculated based on the Global Turnover of the company from all products/services, not just “relevant” (specific product) turnover.
- Leniency Plus: Allows a company under investigation for a cartel to get an additional penalty waiver if it discloses the existence of a second separate cartel.
- Settlement and Commitment: Introduces a framework to settle cases and commitments early to avoid lengthy litigation.
- Appeals: To file an appeal against a CCI penalty in NCLAT, a mandatory pre-deposit of 25% of the penalty is now required.
Q. With reference to the 'Competition Commission of India (CCI)', which of the following statements is/are correct?
1. It is a constitutional body established to replace the MRTP Act.
2. It has the power to penalize companies based on their global turnover rather than just relevant turnover.
3. Appeals against its orders are heard by the National Company Law Appellate Tribunal (NCLAT).
Select the correct answer:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3
Answer: (b) 2 and 3 only.
Statement 1: CCI is a Statutory Body (Not Constitutional)
-It was created by an Act of Parliament (Competition Act, 2002) to replace the old MRTP Act, not by a provision in the Constitution.
Statement 2: Penalties are based on Global Turnover
-The 2023 Amendment explicitly allows CCI to penalize firms based on their total global turnover from all products and services.
Statement 3: Appeals are heard by the NCLAT
-Since 2017, the National Company Law Appellate Tribunal (NCLAT) is the designated body for hearing appeals against CCI orders.
