2011

December


  • Cartelisation in water transport sector

    By Pradeep S Mehta

    India’s inland water transport system is also vulnerable to anticompetitive practices. The sector is, however, yet to be scanned through a competition lens, despite its importance in economic activity. Given the incidences of anticompetitive conduct that have been reported in other countries over the years, it is difficult to expect India to be an exception. Cartelisation in the sector would have bad consequences on the economy as well as on the public using the transport services, which would have an impact on poverty. Although Competition Commission of India (CCI) has over the years attempted to understand the nature of competition in several potentially vulnerable markets, the nature of competition prevailing in this sector is yet to be explored. This calls for a more detailed focus from CCI. More…

    Financial Express, December 29, 2011


  • Set Regulators Free

    By Pradeep S Mehta

    The demand to house the Central Bureau of Investigation (CBI) under the proposed constitutional authority of the Lokpal is indeed sensible in more ways than one. This will ensure its independence. Though the CBI is a credible institution, it often comes under the influence of the government to move, or not, on sensitive cases involving politicians. On the other hand, it is fortunate that the Lokpal will be a constitutional authority, otherwise the body would have also met the fate of several of our institutions that get suffocated under executive fiat. Hopefully, the debate should spur a larger discourse on ensuring independence of our regulatory institutions for better governance and growth. More…

    Economic Times, December 26, 2011


  • Consumers united

    The Kathmandu Post, Nepal, December 06, 2011

    Consumers unite and say ‘no more’ to being exploited by cartels

    Financial Express, Bangladesh, December 05, 2011

    Saying “no more” to cartels

    The News, Pakistan, December 04, 2011

    Consumers unite against exploitation by cartels

    l’ express Weekly [Friday 2 December 2011 • Insert N° 4 L’EXPRESS YOURSELF]

    By Pradeep S Mehta

    The World Competition Day being observed on December 5 in response to a global call by the Consumer Unity and Trust Society (CUTS) for this second year allows a scope for greater discussions and dissemination of the beneficial effects of competition on the average consumers – either directly or indirectly. In effect, it is expected to result in greater public understanding and support on the issue. This year’s events should allow stakeholders to say out loud ‘No More’ to the perpetrators of cartel activities. This article urges countries and competition agencies to stand up and protect their consumers, against the harmful effects of cartels. More…


  • Why We Need New Institutions

    By Pradeep S Mehta

    We have a genuine dislike of creating new institutions for various reasons. But as part of the creative destruction process, should we not address ourselves to shutting down useless organisations and creating new ones or strengthening existing ones where there is a critical need and a governance gap? This is not the first time that these questions have been raised, but if we want to grow, create jobs and posit India as a global power in the new century, we do need to address the issues squarely, and now. More…

    Economic Times, December 01, 2011

November


  • Should dominant companies be split?

    By Pradeep S Mehta

    The Supreme Court is rightly In my last column (Against abuse of pharma FDI, FE, October 31) on the hot issue of pharma takeovers, I had written that the Competition Commission of India also has the power under Section 28 of the Competition Act, 2002 (CA02), to ask a company to split up, if it is found to be abusing its dominance.

    Let us look at the history of our competition regime since the days of the MRTP Act. It also had a provision to split companies if they were found to be abusing their dominance, though they never used it. Other than this section, all other merger related sections were thrown out when the law was amended in 1991 as part of our reforms processes. The reforms also enabled the smoother entry of foreign companies, which was further facilitated by removing restrictions under FERA. Consequently, there were no competition checks on mergers and acquisitions triggered by a large number of MNCs. More…

    Financial Express, November 15, 2011

October


  • Against abuse of pharma FDI

    By Pradeep S Mehta

    The debate on pharma takeovers has been hitting headlines, with the Prime Minister too getting involved in it. The worry is whether the takeovers will lead to an increase in prices and affect the affordability of medicines for the aam aadmi. The high level committee headed by Arun Maira has rightly prescribed that CCI is the body to keep a watch on brownfield investments in the pharma sector, in order to avoid any dominance and other anticompetitive behaviour, but that the FDI policy should maintain status quo. More…

    Financial Express, October 31, 2011


  • Implementation of policies more important than drafting laws

    By Pradeep S Mehta

    The debate on corruption triggered by the Anna Hazare movement, the apex court and the country’s auditor and vacuous political noises, along with silent demonstrations by citizens, has set in motion a process of addressing the morass in our country. The debate and unravelling of scams itself has downsides of policy paralysis, investor scepticism and general insouciance, which we can ill-afford. Therefore, catharsis must begin from confession. More…

    Economic Times, October 31, 2011


  • Enough room for CCI in regulated sectors

    By Pradeep S Mehta

    An interim stay by the Delhi High Court, to the effect that the Competition Commission of India (CCI) does not have jurisdiction in cases relating to petroleum and gas, because of the existence of the Petroleum and Natural Gas Regulatory Board (PNGRB), not only stirred a hornet’s nest but also ignited a debate on the interface of CCI and sector regulators in India. The stay is out of sync as it totally ignored the inadequacy of the provisions of the PNGRB Act, 2006, in dealing with the alleged cartel conduct against public sector oil companies in the supply of aviation turbine fuel. The complaint was brought forward by Air India, another PSU. More…

    Financial Express, October 29, 2011


  • A win-win trade for India & Pakistan

    By Rijit Sengupta

    Both Pakistan and India are members of the World Trade Organisation and also of the South Asia Free Trade Agreement. The WTO agreement requires each member state to grant Most Favoured Nation status to all other members to facilitate smooth trade flows. SAFTA takes up closer economic cooperation among all member states of SAARC. Alas, in the case of Pakistan and India there are several bottlenecks in achieving a harmonious trade relationship in spite of both the agreements. Why should the status remain status quo, when both will gain hugely. More…

    Financial Express, October 18, 2011


  • Trade associations as cartels

    By Fredrick Njehu

    CCI can demand access to the minutes of meetings that the associations have been holding, with a view to assessing whether price issues were also discussed by their members. One would not be surprised to see prices being among the issues discussed and minuted by these associations, especially in those cases where the meetings are often followed by increased prices or market allocation. Some associations would be discussing pricing issues due to ignorance, as found in the Pakistan Jute Mills Association case referred to earlier. However, ignorance of the law is no defence, and the sooner the practice is nipped the better. More…

    Financial Express, October 13, 2011

September


  • Public Procurement Woe

    By Pradeep S Mehta

    Every new policy proposal is greeted by apprehension coupled with ignorance and turf issues. The proposed National Competition Policy (NCP) formulated by the Ministry of Corporate Affairs too may become a victim of this phenomenon. The Department of Industrial Policy and Promotion (DIPP) has reportedly picked holes in the draft policy when it should, in fact, be the strongest supporter. Looking at our dismal economic scenario, one of the contemporary and important policy prescriptions by the government is to adopt competition reforms through an NCP. The NCP, when implemented, will usher in the second big wave of economic reforms after 1991. In the medium term, it will also curb inflation that is currently a big issue in India. More…

    Economic Times, September 26, 2011


  • How competition reform can check inflation

    By Pradeep S Mehta

    The Rio+20 summit was a disappointment for many, but it is pertinent to keep repeating its larger sustainable development agenda for the safe future of humankind. Nation states need to continue taking steps to mitigate adverse environmental effects, and learn about successes and failures from each other, from different fields. One such learning is from the recent grant of a compulsory licence to a cancer drug in India. One of the three grounds on which compulsory licence was granted to Natco for the drug Nexavar was that Bayer, the patentee, had failed to ‘work the patent’ in India. This provision has the potential to facilitate unused patents, covering Environmentally Sound Technologies, as well as provide a way forward for their transfer, dissemination and diffusion. More…

    Business Standard, September 22, 2011


  • Highway robbery by state transport companies

    By Pradeep S Mehta

    Every new policy proposal is greeted by apprehension coupled with ignorance and turf issues. The proposed National Competition Policy (NCP) formulated by the Ministry of Corporate Affairs too may become a victim of this phenomenon. The Department of Industrial Policy and Promotion (DIPP) has reportedly picked holes in the draft policy when it should, in fact, be the strongest supporter. Looking at our dismal economic scenario, one of the contemporary and important policy prescriptions by the government is to adopt competition reforms through an NCP. The NCP, when implemented, will usher in the second big wave of economic reforms after 1991. In the medium term, it will also curb inflation that is currently a big issue in India. More…

    Financial Express, September 12, 2011


  • Market dynamism & productivity growth

    By Aradhna Aggarwal

    The Rio+20 summit was a disappointment for many, but it is pertinent to keep repeating its larger sustainable development agenda for the safe future of humankind. Nation states need to continue taking steps to mitigate adverse environmental effects, and learn about successes and failures from each other, from different fields. One such learning is from the recent grant of a compulsory licence to a cancer drug in India. One of the three grounds on which compulsory licence was granted to Natco for the drug Nexavar was that Bayer, the patentee, had failed to ‘work the patent’ in India. This provision has the potential to facilitate unused patents, covering Environmentally Sound Technologies, as well as provide a way forward for their transfer, dissemination and diffusion. More…

    Financial Express, September 03, 2011

August


  • Arresting the pandemic of corruption

    By Pradeep S Mehta

    Corruption has now become a part of our DNA and is now a pandemic. The Lokpal Bills will now be debated before the Parliamentary Standing Committee on Law and Justice. A refreshing and welcome change is that their proceedings will be public…With the movement now on the Lokpal Bill that has already had a salutary impact on our economy and the governance system, we need to start a similar movement at the level of the states and our districts. Only then can we hope to arrest the pandemic of corruption. More…

    Economic Times, August 29, 2011


  • Housing comes under heat

    By Pradeep S Mehta

    Even while the case where the Competition Commission of India (CCI) imposed a penalty on NSE for abuse of dominance was still under public debate, CCI has followed up with yet another crackdown on abuse of dominance, this time by India’s largest real estate company, DLF. DLF Limited was slapped with a record Rs 630 crore fine for abuse of dominance of an exploitative nature. DLF Limited was found guilty by CCI of imposing arbitrary, unfair and unreasonable conditions on apartment allottees of one of its numerous housing complexes, the Belaire situated in Gurgaon. More…

    Financial Express, August 24, 2011


  • Competitive neutrality in public policy

    By Pradeep S Mehta

    The Government of India has launched discussions on a draft national competition policy. Such a policy is needed to promote healthy competition in the Indian economy, so that growth is assured, inflation is controlled and more jobs are created. As it is, a number of competition distortions or impediments arise owing to our policy framework in different areas of economic governance. As part of work on a competition policy, the government has undertaken an exercise to unravel the huge range of competition distortions, which may be over 3,000 if we consider the number of policies, laws, regulations and praxis at the level of the Central, state and local governments. More…

    Business Standard, August 22, 2011


  • An abuse of dominance

    By Pradeep S Mehta

    The order by the Competition Commission of India in the case of set top boxes has not endeared it to consumers, leading to the questioning of its capacity to deal with the rampant anti-competitive practices in the country. The issue is quite simple. DTH operators get set top boxes made to their own specifications, which are not usable on a competitor’s service. This means that interoperability is lacking, thus tying down a consumer to one provider. This, in turn, creates disincentives to shift to another provider. This also affects innovation adversely as such dominant practices dampen the desire to innovate by offering better quality, lower prices and so on, and thus be ahead of rivals. In competition jargon it is defined as an abuse of dominance as the supplier ties you down to their own products. More…

    Financial Express, August 08, 2011


  • Uganda oil revenues can spur EAC growth

    By Fredrick Njehu

    There has been a lot of debate surrounding the oil and petroleum sector in Uganda in since the discovery of this vital natural resource. First and foremost, it is important to appreciate the concept of international law which grants every country sovereign over its natural resources and in this case, Uganda has all the powers to extract, explore and sell any natural resource within its jurisdiction in accordance with its national laws. More…

    Business Daily Africa, August 04, 2011

July


  • Making food subsidies work better

    Business Standard, July 31, 2011

    The ADB study showed that the deserving poor in India received only 10 percent of the benefits from the system. The million dollar question is whether the system can be reformed at all. In my opinion, it is a Herculean task and well nigh impossible. Given that the system functions with many vested interests, efforts to reform it will be countered with ‘logical’ arguments by the polity, because the system feeds on political patronage, and hence all parties are unanimous in supporting it, like caste reservations in India. More…

    The Economic Times, July 30, 2012


  • Preventing failure of Doha Development Agenda

    Shanghai Daily, August 02, 2011

    Doha Round: the best tool

    The News, Pakistan, July 31, 2011

    Doha Round is best aid for trade tool

    The Financial Express, Bangladesh, July 25, 2011

    Doha Round is best aid for trade tool; Pascal Lamy must mobilise members to negotiation table

    Economic times, July 25, 2011

    By Pradeep S Mehta

    One of the critical issues in the international trading system is the Aid-for-Trade (AFT) programme which is to help poor countries to enable them to access gains from trade liberalisation through financial and technical assistance as a standalone programme without mixing it with other aid programmes. The elaborate third review conference on AFT was organised at Geneva. What was sadly not mentioned in the meeting was that the Doha Development Agenda which is the best way forward to assist the poor to trade their way out of poverty More…


  • Who Killed Tariffs? Modern Trade

    By Pradeep S Mehta

    Although tariffs are trade-distorting, they are part-and-parcel of the international trading system. But do they matter much in today’s emerging regime of international trade where global and regional value chains and associated factors determining trade costs are gaining more importance Trade is about relative competitiveness of competing products produced by different firms. More…

    Economic times, July 23, 2011


  • Making the case for NSE

    By Pradeep S Mehta

    CCI grabbed headlines and spurred numerous editorials in the financial press when it levied a penalty of R55mn on NSE for abuse of dominance. NSE was charged with leveraging its dominance in one market to gain or protect its position of strength in the other by way of fee waivers and exclusionary denial of integrated market watch facility. Many have welcomed the order as a good lesson for the largest bourse in the country to deter it from engaging in anti-competitive practices, while many have also argued that NSE did not enjoy a position of dominance in the currency derivatives market and the zero pricing model adopted by it was not indicative of predatory pricing. More…

    The Financial Express, July 14, 2011

June


  • Optimal regulation to push industry growth

    By Pradeep S Mehta

    One of the biggest challenges that we in India face is creation of jobs, and reduction of poverty and inequality. One priority is to facilitate business as an engine of growth in a way that it is sustainable and inclusive. Facilitating private sector to contribute significantly to such a model of growth would be critical – and can be done by reviewing the role played by the government. More…

    The Economic Times, June 27, 2011


  • Africa’s development needs strong institutions

    By Fredrick Njehu

    The emergence of new powers in global economics has changed how institutions of global governance are shaping the political economy. New institutions are being formed while the old ones have been revitalised in a rejuvenation of the South-South co-operation. More…

    Business Daily Africa, June 21, 2011


  • The foreign M&A domino effect

    By Pradeep S Mehta

    As the Competition Commission of India (CCI) gears up to implement merger regulations from June 01, 2011 it should also take a close look at international mergers that can have a potential impact on the Indian market. These mergers may not be happening in India but as a consequence their subsidiaries in India would need to merge because their parents have already married. India is a huge growing economy and thus many international mergers are bound to have an impact on the country. More…

    Business Standard, June 03, 2011

May


  • Watch Out For Collective Abuse

    By Pradeep S Mehta The basic parameters for healthy competition in the market require large number of players and large number of buyers to promote the necessary rivalry. Alas, rivals also know how to defeat the purpose by colluding through an implicit or an explicit cartel or by abusing their dominance singly or jointly. Tackling the abuse of dominance needs clear guidelines, so as to capture the conduct of the whole sector that may be prevailing in the market place. More…

    The Financial Express, May 31, 2011


  • Get Plan B Working for Doha

    By Pradeep S Mehta Osama bin Laden’s death is an opportunity to close the Doha deal, argued the hugely optimistic Jagdish Bhagwati in the Financial Times. In fact, the Doha Round was launched soon after the 9/11 tragedy to send a message to the world, that we are together and will not be fazed by the horrendous attack on the symbolic World Trade Center in New York about 10 years ago. “By a strange irony, Bin Laden’s assassination nearly 10 years later presents an opportunity to close the Round, again in affirmation of the same values. More…

    Economic Times, May 30, 2011


  • Aspirations still trail behind grievances

    By Pradeep S Mehta Until the advent of the British Raj, India had a healthy trade surplus with the rest of the world. Its trade openness was commensurate with its share in global trade. Today, India is witnessing a revival of this phenomenon, as shown by the huge growth from a less than one percent share of international trade in the early 1990s to more than three percent. More…

    Financial Times, May 19, 2011


  • Intimations of Insecurity

    By Pradeep S Mehta In the latest soap opera of cartel busting, both Procter & Gamble and Unilever were fined US$457.3mn by the European Commission in April 2011. The case was settled after another conspirator, Henkel, spilled the beans and claimed leniency. In such cases, it is the leniency provision that enables the competition authority to nail the perpetrators with little effort. Alas, despite having such a provision in our competition law, the Competition Commission of India, in force since 2009, has not yet been able to bust a single cartel. More…

    Financial Express, May 10, 2011


  • Competition enforcement weak

    By Pradeep S Mehta Unprecedented interest and zeal on competition law issues has been noted in African countries over the last decade or so. A number of countries have adopted laws and some have also established a competition enforcement agency. However, when it comes to competition enforcement, most African countries still have a long way to go. More…

    Business Daily, May 03, 2011

April


  • Civil society bodies vital to development

    By Frederick Njehu

    Civil society organisations have been very instrumental in changing the face of the world. As much as they may not be as well resourced as their counterparts in the state and private sector, they have been known to utilise the few resources at their disposal to make a significant contribution to the society. More…

    Trade law centre for southern africa, April 29, 2011


  • Merger Norms – Way to Economic Democracy

    Business Standard, April 29, 2011

    Merger regulations under the Competition Act, 2002 have always been controversial. Now that the government in its wisdom has announced June 01, 2011 as the date for operationalising them, Indian business has again voiced concerns over whether these norms would be a boon or a bane. Some concerns are valid while many are not. One of the principal aims of a competition law is to promote economic democracy by regulating anti-competitive practices and concentration, to ensure consumer and business welfare. More…

    The Financial Express, April 27, 2012


  • We’re part of participatory democracy

    By Pradeep S Mehta

    Much has been written about the successful campaign by Anna Hazare in raising the ante on corruption and getting the government to agree on the participation of the civil society in drafting the Lokpal Bill. Cynics and sceptics questioned the process on various grounds, including defining civil society advocates as self-appointed guardians of public interest and so on. More…

    The Economic Times, April 25, 2011


  • Resolving regulatory turf wars

    By Pradeep S Mehta

    The Joint Parliamentary Committee and Public Accounts Committee are heading towards a collision on who will have the primacy to enquire into the 2G scam. The Speaker will settle the issue, and we wait with bated breath as to how she will do it. This is but symptomatic of turf wars that we have been witnessing among our regulatory authorities, which are more knotty than political. We, therefore, need to settle the framework to ensure that such conflicts on overlapping issues do not occur, as they are inefficient and invite unnecessary policy arbitrage. More…

    The Financial Express, April 22, 2011


  • A regulator for the fertiliser sector?

    The Economic Times, April 13, 2011

    Nowhere in the world does one have a ‘fertiliser regulator’ . Many, including civil servants, think that this is a ploy of manipulative civil servants to create post-retirement jobs for themselves. There is no doubt about such motives, but the idea is as ludicrous as the earlier proposals to set up regulators for steel, coal and so on. If there was an integrated regulator for the energy sector, one could understand that coal should also be handled by the energy regulator. More…

    TThe Financial Express, April 10, 2012


  • Should the CCI be abolished?

    By Pradeep S Mehta

    First, the procedure for selecting the chairman and members of the Commission needs to be re-examined. It should be ensured that it does not create parking lots for retirees from the government but attracts people who have the capability, competence and commitment to discharge the role that is envisaged for the Commission — which is to promote a healthy culture of competition in the country. Experiences from around the world tell us that one needs “champions” to take forward such regulatory bodies. Alas, this is not the case currently. More…

    Business Standard, April 06, 2011


  • Not exempt from trouble

    By Pradeep S Mehta and Abid Suleri

    In spite of strong business opposition, the government has notified the merger regulations under the Competition Act, 2002, to be effective from June 01, 2011. In its wake, many have started clamouring for exemptions from this cover. Should exemptions be granted to any sectors? Once an exemption is given to one sector, there is nothing that can stop every industry from seeking the same exemption, which defeats the whole purpose behind the enactment of the Competition Act. This article lays out the pros and cons. More…

    The Financial Express, India, April 01, 2011

March


  • Hit Fertiliser Cartels with Alliances

    By Pradeep S Mehta

    Fertilisers contribute a large part of the cost of agriculture and the exchequer’s subsidy burden, yet, there is little thought being given to why the prices of imported fertilisers are scrambling up. It is well known that the artificially high prices of fertilisers are maintained by handful of companies operating as a cartel, which is not illegal under their home country laws. Especially as India is a very large consumer, the government could bargain for lower prices rather than asking the taxpayer to be a party to more subsidies that end up unjustly enriching foreign companies. More…

    The Economic Times, March 28, 2011


  • CCI needs to think out of the box

    By Pradeep S Mehta

    Finally, the Competition Commission of India (CCI) will become a full competition regulator after the notification of the merger regulations. But it is not the only news about CCI that has been bothering many. The CCI’s first full judgement on the issue of charges towards the prepayment of home loans to be borne by the consumer borrower, is creating ripples. While the judgement itself was divided, the majority felt that such charges are valid and not anti-competitive. But was the judgement fair and properly reasoned? More…

    The Financial Express, India, March 21, 2011

February


  • Learning from the onion crisis

    By Pradeep S Mehta and Vikas Kathuriya

    Food price inflation in India is not an isolated conundrum. The same can be witnessed in many other countries as part of a global phenomenon. Without going deeper into this phenomenon, let us review the simple case of the recent onion price rise crisis. It is a sensitive issue as the onion is a staple food item for Indians. In the past, the issue has led to downfall of governments. More…

    The Financial Express, India, February 17, 2011


  • Why countries want Doha trade talks concluded

    By Frederick Njehu

    The trade debate on the Doha round of negotiations has resumed on a high gear in the 2011 calendar. There is optimism among African and other developing countries that the mantle of the negotiations remains a development round. Various complementary efforts both formal and informal have been set up by most of the parties involved and the matter has shifted from when to how the Doha round of negotiations would be concluded. More…

    Business Daily Africa, February 02, 2011

January


  • Engaging Communities for Better Health Care Services

    By George Cheriyan and Om Prakash Arya

    It has been now two days, since seven year Ravi is down with fever. His mother, Sita, a poor landless labor’s wife, must wind up her day’s chores before she can attend to him. The fever is high and he badly needs medical assistance. But the nearest Primary Health Centre (PHC) at Barbaas is 23 Kilometers from SitaramPura in Tadarsingh block in Tonk district of Rajasthan. She will have to spend three hundred rupees just to get there, but she doesn’t have a choice. Sita and Ravi are unfortunately symbols of glossily deficient medical services in the world’s largest democracy. More…

    Economic Times, January 30, 2012


  • History repeated itself at Cancun

    By Pradeep S Mehta

    Global negotiations are not an easy task. For that matter, every negotiation requires maturity of understanding of what one party will give and what the other party is able to accept. In negotiations that involve many parties and contentious international issues such as trade or climate change, things become much more complex and need to be approached on an incremental basis. More…

    The Economic Times, January 17, 2011


  • Stop road transport cartels, go competition

    By Pradeep S Mehta

    Curbing cartels in the transport sector is also an opportunity that can work to the advantage of the competition authority. This is one of the best ways for the authority to endear itself to the general public as the decisions concerned will yield immediate results and these will be easy for all to see. More…

    The Financial Express, India, January 10, 2011


  • EA region needs effective competition policy

    By Samson Awino

    The recent happenings in Kenya’s telecommunication sector have given the Tenth Parliament a new food for thought in the ongoing quest for a level playground. It is now widely appreciated in the country that competition benefits consumers through lower prices, better quality and improved choice of products, and indirectly, through its impact on economic growth. More…

    Business Daily Africa, January 05, 2011