The Financial Express, March 11, 2006

By Manish Agarwal

A Bill to amend Competition Act, 2002, has been introduced. Unfortunately, while the amendments have been pending for a long time, the government chose to bypass public consultation, in sharp contrast to the case when the Competition Act was itself drafted.

Among the key proposals is one to split the competition authority into two; Compet-ition Commission of India (CCI) as an expert body, and Competition Appellate Tribunal (CAT) to carry out adjudicatory functions. By providing the option to appeal against CCI’s orders, this step would keep a check on CCI’s functioning. Anyhow, empowering CCI to pass ‘cease and desist’ orders and impose monetary penalties will lead to confusion, as these are adjudicatory functions! This requires more clarity.

A selection committee headed by the chief justice of India or his nominee has been proposed. The selection procedure has, however, been left at the discretion of the panel. This will lead to selection of retired bureaucrats and judges, as the age limit is beyond 60 years.

One wonders why the government has not consid-ered the proposal of the Raghavan committee to have a collegium, comprising high-level government functionaries, as the selection committee. The collegium could not have been easily influenced. The selection procedure needs to be transparent.

The proposal to transfer the staff of the MRTP Commission to the CCI would seriously hamper the working of a new body, which needs to be totally distinctive from the MRTPC.

The Bill allows sectoral regulators to make a suo motu reference to the CCI. Unfortu- nately, such references continue to be voluntary and at the discretion of regulatory authorities. This will create conflicts between the two bodies and lead to inconsistent decisions and forum shopping. Instead, jurisdictions of CCI and sectoral regulators should be clearly demarcated. A good model is to entrust the CCI with powers to deal with behavioural issues and sectoral regulators to deal with structural issues. Another suggestion is to make the CAT a common appellate tribunal for all regulators. This would ensure convergence in the application of regulatory laws and is a model worth considering.

The proposal to do away with benches of the CCI is another setback. Considering the size of our country, implementing the Act from Delhi will not ensure proper check on local concerns. The CCI can, instead, have regional offices.

The amendments proposed seem to address concerns arising in the apex court’s order. One only hopes that lawmakers would consider this an opportunity to set the house right, rather than wait for another crisis to appear.

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