Turf wars

The overlapping scope of authority concerning India’s antitrust and sector regulators raises the question as to which government body businesses should turn to on competition-related matters. Mihir Rale explores the issue

The recent skirmish on the issue of “predatory pricing” in the telecom space brought into focus a larger issue which had so far escaped scrutiny – that of a jurisdictional intersection between India’s central competition regulator and various sector regulators. This article focuses on the authority of the Telecom Regulatory Authority of India (TRAI) insofar as the subject of competition is concerned and examines why it is imperative for all sector regulators and nodal ministries to confer with the Competition Commission of India (CCI) on matters of competition and deal with such matters in conformity with the Competition Act, 2002.

Competition act

As a starting point, it is important to set context as to what competition law entails. Simply put, competition policy means regulatory measures that directly affect the behaviour of any enterprise and/or the structure of an industry. Quoting from the Raghavan Committee report which preceded the framing of the act, “There are two elements of such a policy. The first involves putting in place a set of policies that enhance competition in local and national markets. These would include a liberalized trade policy, relaxed foreign investment and ownership requirements and economic deregulation. The second is legislation designed to prevent anti-competitive business practices and unnecessary government intervention – competition law. An effective competition policy promotes the creation of a business environment which improves static and dynamic efficiencies and leads to efficient resource allocation, and in which the abuse of market power is prevented mainly through competition.”

The report analysed parallel legislations globally including reasons for their enactment and in keeping with such legislation, recommended three areas to be covered under the act i.e. anti-competitive agreements, abuse of dominance and the assessment of combinations.

Mihir Rale is the senior vice president and strategy counsel at Star India. The views expressed are personal and do not represent the views of any organization.