February 25, 2006, New Delhi, Press Release

The government should establish a Common Appellate Tribunal for the Competition Commission of India (CCI) and sectoral regulators, instead of establishing another appellate body for the CCI, and add to the already existing list of appellate bodies in the country, to ensure coherence in the interpretation of regulatory laws and competition law. This view emerged from a seminar organized by CUTS International in the capital on “Amendments to Competition Act 2002: The Way Forward”.

The seminar was organized on the eve of the Parliament discussing the Competition (Amendment) Bill in the ongoing budget session of the Parliament. Among the key amendments proposed by the government is splitting the functions of the CCI, and creating an appellate body to hear appeals against the orders of the CCI and adjudicate compensation claims.

The seminar was attended by parliamentarians, academicians, lawyers, representatives of consumer organisations, business, government officials and other experts and practitioners.

Commenting on the amendments proposed, Sharad Joshi, MP (Rajya Sabha) said “the government is creating a plethora of appellate bodies, without there being adequate work for them to do. This is an unnecessary burden on the exchequer.”

On the issue of interface between the CCI and sector regulators, the emerging view was that the consultations between these market-regulatory agencies should be made mandatory and reciprocal.

On selection rules, another contentious issue that led to the writ petition in the Supreme Court and the proposed amendments, there was a consensus on following a transparent procedure and advertising the posts
rather than follow an opaque administrative search mechanism. It is important to have in place clear selection procedures, otherwise quality of persons appointed through an ad-hoc mechanism could be severely compromised.

TCA Anant, Professor, Delhi School of Economics, raised a concern that the present structure of the Competition Act does not facilitate accessibility and reach for addressing local level competition abuses owing to the absence of a provision for regional benches. Referring to collusive practices that take place in price determination of foodgrains in local mandies, he opined that it would be difficult to implement the Act from Delhi, and there is need for regional offices/branches of the CCI.

On providing leniency for prosecuting cartels, Aditya Bhattacharjea, Associate Professor, Delhi School of Economics opined that the proposed amendments of extending leniency to more than one parties, and until the time the Director General submits his report to the CCI is welcome. However, to avoid any clandestine deals in the office of the DG, there should be a provision to make public, the reasons for granting leniency. Further, leniency should be awarded on a declining scale graded according to the sequence of cooperation by parties.

Prof Sriram Khanna, VOICE, was critical of the expertise that the CCI would acquire. “We cannot expect retired civil servants to analyse issues as technically and analytically as would be desirable. This requires experts should be appointed as full-time members.”