‘CCI is also protecting consumer rights’

Maulik Tewari

The Competition Commission of India (CCI) has been making headlines with its orders against companies indulging in anti-competitive behaviour.

In an email interview with BusinessLine , Subodh Prasad Deo, Partner, Saikrishna & Associates and former Additional Director General, CCI, explains what the CCI means to consumers and the challenges the regulator faces. Edited excerpts:

The CCI is turning out to be the de facto protector of consumer rights in the country in the absence of any other specific regulator. Your comment on this.

It is true that the CCI has addressed the issue of protecting consumer rights in various orders. It seems that while it adopts the classical competition standard in most cases (examining whether the conduct restricts competition), it is, at the same time, not averse to adopting the consumer welfare standard (examining whether the conduct harms consumer interest by, say, higher prices or reduced choices).

The CCI’s orders in the DLF case or the Hiranandani Hospital case are predicated on the notion of consumer harm, rather than on harm to the process of competition.

The legal architecture of the Competition Act 2002 limits the scope for the CCI to address the concerns of consumers directly. Accordingly, it has closed several complaints by home buyers against builders, despite holding in general, and not determinatively, in such cases that the conduct of the builders was unfair and exploitative.

How is the role of the CCI different from that of Consumer Courts?

Competition concerns arise in the context of business to business (B2B) dealings rather than in business to consumer (B2C) dealings, even though consumers are generally the ultimate victims of anti-competitive conduct. The CCI is mandated to address competition concerns by regulating the conduct in B2B dealings, which thereby benefit consumers. In contrast, consumer courts address consumer issues directly by settling disputes between business and consumer. The two also differ in terms of the process, procedures and evidentiary standards; the former is a regulator whereas the latter is a judicial body.

What challenges are faced by the CCI in investigating cartel cases?

Cartel cases involve unravelling of the ‘agreement’ between the parties that have allegedly indulged in anti-competitive conduct. Cartel conduct is obviously very secretive and the parties take care not to leave behind any evidence.

Meeting the legal threshold even for the ‘preponderance of probability’ standard (that is, given the facts of the case a cartel is more likely than not) is many a time difficult for want of coherent circumstantial evidence. A dogged pursuit of the suspected parties for a longer period of time may be a way out.

The use of leniency provisions (where one of the cartel members provides information in return for full or partial immunity from fines) could also yield results. But such provisions would work only if there is a credible possibility of detection, prosecution and penalties.

An investigation into a case starts with defining the ‘relevant market’. In the DLF case, the CCI has been criticised for defining the relevant market too narrowly. What are your views on that?

Defining the relevant market properly is indeed the key in many cases.

While the CCI is actively engaged in developing capacities of its officials, all investigators are drawn from various government departments for a specified period. There is a need to provide for permanency for a certain percentage of investigators. Non-availability or non-reliability of market data too impinges on the definition of the relevant market.

How long does a typical investigation take? Does the CCI have the resources to handle all cases?

Typically, an investigation takes nine to 12 months but this could vary depending upon the complexity of cases. While the CCI is trying its best to ensure timely completion of investigation, more skilled personnel would definitely help.