The Competition Commission of India order “strikes a blow” at the efforts to accelerate digital adoption in the country, Google said, adding that the order against Android could have far-reaching consequences. What is the issue?
A statutory body of the Indian government, the Competition Commission of India (CCI), is in charge of upholding the provisions of the Competition Act of 2002, which fosters and sustains market competition, safeguards the interests of consumers, and makes sure that no company abuses its dominant position.
The Central Government appoints the chairperson and six of the members who make up the Competition Commission of India (CCI). Its corporate headquarters are in New Delhi. The CCI investigates and enforces anti-competitive practices such as cartelization, abuse of dominant positions, and restrictive trade practices. Additionally, it has the authority to accept or reject mergers and acquisitions that might affect market competition.
Fact About CCI (Competition Commission of India)
- The CCI is a legal division of the Indian government.
- The Ministry of Corporate Affairs’ CCI is in charge of upholding the Competition Act 2002.
- Its primary duties include fostering and maintaining market competition, defending consumer interests, and preventing any company from abusing its dominant position.
- A Chairperson and six Members of the CCI are chosen by the Central Government.
- Its main office is in New Delhi.
- Anti-competitive practices, such as cartelization, abuse of dominant position, and restrictive trade practices, are subject to investigation by the CCI and enforcement by the CCI.
- Additionally, it has the authority to accept or reject mergers and acquisitions that might affect market competition.
Negative Impact of Big tech companies on fair competition
1. Market dominance: These businesses might hold a monopoly in their particular markets, which could give them an unfair edge over lesser rivals. New businesses may find it challenging to enter the market and compete fairly as a result.
2. Access to data: These businesses frequently have access to a lot of data, which they may utilise to their advantage in a variety of ways, such as by leveraging data to better their products and services or by more effectively targeting advertising. Their advantage over rivals who do not have access to such data can result from this.
3. Leveraging existing products: Major tech corporations may choose to push their own goods and services above those of rivals by utilising already-existing platforms and products. For instance, Google might favour its own search results above those of rival search engines.
4. Prospective competitor acquisition: To reduce competition and safeguard their monopolistic positions in the market, large tech giants may also buy smaller firms that are potential rivals.
Overall, it is important to ensure that there is fair competition in the market, as this helps to promote innovation, protect the interests of consumers, and ensure that the economy functions efficiently.
Some recent examples of the Competition Commission of India Works
The Competition Commission of India (CCI) has taken a number of actions in recent years to enforce competition laws and promote fair competition in the market.
Here are a few examples:
1. Google fined Rs 1,338 billion by CCI for “anti-competitive practises”: The Competition Commission of India (CCI) issued two orders against Google in October 2022 over the Play Store and Android ecosystem. Through these rulings, the competition panel ordered Google to change its rules in addition to penalising it for abusing its dominant position.
2. An investigation into claims that Google was abusing its dominating position in the Indian online search and advertising marketplaces was launched by the CCI in 2020. The CCI determined that Google had participated in a number of actions that were illegal under competition regulations, such as favoring its own goods and services in search results and putting unfavorable conditions on advertising.
3. The e-commerce behemoths Flipkart and Amazon were fined by the CCI in 2019 for breaking competition regulations by signing exclusive contracts with smartphone makers. The CCI discovered that the online retail industry had less competition as a result of these arrangements.
4. Accusations that the Indian Association of Tour Operators and its members were participating in cartelization and placing unfair conditions on tour operators prompted the CCI to conduct a probe in 2018. The CCI assessed a fine against the association and its members after concluding that they had engaged in anti-competitive behavior.
5. In 2017, the CCI issued an investigation request in response to claims that real estate developers in the National Capital Region had formed cartels and were subjecting customers to unfair terms. The CCI found that the developers had engaged in anti-competitive practices and imposed a fine on them.
The Competition Commission of India CCI is vigorously enforcing competition rules and pursuing legal action against businesses that engage in anti-competitive conduct, as seen by the examples shown above.
National Company Law Appellate Tribunal (NCLAT)
As the forum for considering appeals against orders and decisions of the Competition Commission of India, the National Company Law Appellate Tribunal (NCLAT) took the position of the Competition Appellate Tribunal (COMPAT) in India in 2017. (CCI).
The Companies Act of 2013 created the NCLAT, a specialist appellate court with its headquarters in New Delhi. It has the authority to consider appeals against any order or judgment of the CCI relating to mergers and acquisitions, anti-competitive practises, or any other matter under the Competition Act. Any such order or judgment may also be reviewed, changed, or revoked by it.
The NCLAT is made up of a Chairperson and whatever many more Members the Central Government deems necessary. It has the same authority and adheres to the same rules of procedure when considering matters as a civil court.
Overall, the NCLAT plays a crucial role in ensuring that India’s competition laws are applied fairly and consistently. It also ensures that businesses have the chance to challenge any orders or decisions issued by the Competition Commission of India CCI that could have a significant negative effect on their operations.
International Examples to ensure Fair Competition
European Union: Legislation 2022/1925, often known as the Digital Markets Act, is a regulation of the EU that intends to increase the fairness and contestability of the digital economy. The EU Council and European Parliament ratified the regulation that the European Commission had proposed in December 2020 in September 2022. In recent years, the European Union (EU) has taken a variety of measures against major digital firms, including fining Google for breaking antitrust laws and engaging in dishonest business practises. Other tech firms, including Amazon, have been targeted by the EU for breaking competition regulations.
United States: Both the Federal Trade Commission (FTC) and the US Department of Justice (DOJ) have recently taken a number of proceedings against major digital corporations. For instance, the DOJ sued Google in October 2020 on the grounds that it had maintained a monopoly in the search and search advertising sectors, in contravention of antitrust laws. The FTC has also penalised Google and Facebook for using misleading practises, taking legal action against both businesses.
China: To control the activity of large tech businesses there, the Chinese government has taken a number of measures. For instance, it requires local tech businesses to share their data with the government and places restrictions on the ability of foreign tech companies to participate in the Chinese market.
Australia: To combat the dominance of large IT firms and encourage fair competition in the market, the Australian government has recommended a variety of measures. For instance, it has suggested a code of conduct mandating that internet firms bargain in good faith with news organisations over the payment for new material. In order to settle conflicts between IT corporations and news organisations, it has also suggested a mandated arbitration process.
Conclusion
The Indian economy benefits from fair competition because it fosters productivity, creativity, and consumer welfare. Businesses that engage in fair and open competition with one another are compelled to enhance their goods and services in order to draw customers and stay ahead of rivals. As businesses work to create goods and services at the lowest possible cost, this may result in increased efficiency. As businesses try to set themselves apart from their rivals by providing fresh and inventive goods and services, it can also foster innovation.
Consumers also profit from fair competition since it gives them the opportunity to select from a variety of goods and services that best suit their requirements and preferences at the most affordable pricing. When customers can acquire goods and services that satisfy their needs at a fair price, consumer welfare may grow.
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