12734965691manoj pandey competition and consumer protection practice in india

8/8/2019 12734965691Manoj Pandey Competition and Consumer Protection Practice in India

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A presentation by Manoj Pandey, Additional Director General,Competition Commission of India

26th April,2010 , Istanbul


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y Relationship between competition and consumer protection hasalways been subject matter of intense discussion among the experts

and practitioners of competition and consumer laws.

y Issues of consumer protection and competition in the market place

find mention as early as 3rd century BC in Kautilyas Arthashastra in

India.y To understand the issue of relationship between competition and

consumer protection at present in India, it is necessary to first discuss

the legislative framework that governs competition and consumer

protection in India.


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y Monopolies and Restrictive Trade Practices Act, 1969 was the first anti-competitive legislation enacted in India. The broad objectives sought tobe achieved through MRTP Act were prevention of concentration ofeconomic power, control of monopolies, prohibition of monopolistic,restrictive and unfair trade practices.

y Keeping pace with the changes in economic policies ushered in 1991; aforward looking Competition Act, 2002 was enacted in January 2003. Itwas later on amended by the Competition (Amendment) Act, 2007.

y Although the Indian Competition Act had come into existence in the year2002, because of cases filed in the Court challenging the enactment ofnew Act, the Competition Commission of India (CCI) could only be dulyconstituted in March 2009. It now consists of one Chairperson and Sixmembers.


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` In order to hear and dispose of appeals against any direction ororder of the Commission, Competition Appellate Tribunal (CAT) hasbeen established. It consists of one Chairperson who is retiredJudge of the Apex Court of India and two other members who areexperts in competition matters.

` The Competition Act, 2002 has two broad elements; one,enforcement of competition laws and second, competition advocacy.

` The enforcement provisions of the Competition Act, 2002 relating toanti-competitive agreements and abuse of dominance (Section 3and Section 4) were notified and brought into force in May 2009.


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` The Commission has so far has received and initiated inquiries inabout three dozen cases. The information in these cases relate tothe alleged anti-competitive agreements and abuse of dominantposition.

` However, all these cases not only focus on need for enhancedcompetition in the market, but also protection of the interest ofconsumers eventually at the end.

`

In order to educate and inform consumers at all levels, along withenforcement of competition laws, the Commission is also engagedin work of competition advocacy. Seminars, conferences andworkshops are being organised to sensitize all stakeholders.


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` In order to protect and save the consumers from exploitation, from

adulterated, substandard goods and deficient services, Consumer

Protection Act, 1986 was enacted which had come into force in May

1987.

` COPRA was enacted following adoption of the Guidelines for

Consumer Protection in 1985 by the United Nations recognizing the

rights of consumers, namely, safety, information, choice,

representation, redressal, and consumer education.

` India was one among the 185 odd countries who agreed to adopt

the UN Guidelines for consumer protection.


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` The Consumer Protection Act, 1986 seeks to provide for the

protection of consumers interests.

` It makes provisions for the establishment of consumer councils and

other authorities to settle consumers disputes and connectedmatters.

` The Act has envisaged the setting up of consumer protection

councils at the central and state levels, namely, the Central

Consumer Protection Councils (CCPC) and State Consumer

Protection Councils. In the amendment in 2003, the Act also

recommended setting up of district consumer protection councils.


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y The COPRA 1986 aims to ;

i) protect consumers against marketing of goods and services hazardousto life and property

ii) provide access to goods and services at competitive prices

iii) award compensation to dissatisfied consumers.

y Under the COPRA, 1986, an elaborate 3-tier redressal mechanism has beenestablished. The apex body, the National Commission, is at New Delhi, while StateCommissions are at State Capitals and District Forum is at the district level. The finalappeal lies with the Supreme Court. The consumer Commissions have beenentrusted with jurisdiction over cases of fixed monetary value.

[The district level courts look into cases involving amount upto Rs.2Million; State Commissions look into cases upto Rs.10 Million and National

Commission look into cases involving amount more than Rs.10Million.[y A National Consumer Policy has also been adopted, the basic premise of which is to

ensure that goods and services are available to consumers at reasonable prices andacceptable standards of quality.


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y Competition Act, 2002 and Consumer Protection Act, 1986 are twodifferent sets of acts in India; the Consumer Protection Act lookingprimarily at the instances of unfair trade practices, while the Competition

Act has wider mandate investigating all actions that may lessencompetition and reduce consumer welfare at the market place.

y

However, it is not that the objective of Competition Act, 2002 is topromote only competition leaving the interest of consumers to be lookedafter by the Consumer Protection Act, 1986.

y As per preamble and duties of the Commission prescribed in theCompetition Act, 2002, it is the duty of the Competition Commission notonly to eliminate practices having adverse effect on competition,promote and sustain competition, ensure freedom of trade carried on byother participants in markets in India, but also to protect the interestof consumers.


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` The scope of definition of term Consumer under the Competition

Act, 2002 is wider one.

` It covers not only the end consumers who purchases goods for

personal purpose, but also the intermediate consumers whopurchase goods for resale or for any commercial purpose.

` This is a major difference as far interpretation of the term

consumer is concerned.


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` Since the competition commission is a relatively young agency, it is

still to be tested how the interactions take place eventually in future

between the bodies established under the two Acts, namely,

CompetitionAct, 2002 and Consumer Protection Act, 1986.

` However, existence of the two agencies may not be seen as

mutually exclusive since both are ultimately having similar goals i.e.

protection of the interest of consumers.

` If the market remains non-competitive, the interest of consumers is

bound to get harmed.

` The Competition in the market leads to innovations, better choice

and lower price for consumers and mandate of the Competition

Commission is to ensure that consumers ultimately are benefited

out of competition in the market.


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` The objectives of the consumer policy and competition are mutually

complementary aimed at ensuring responsive policies in

accordance with the needs of common man and end consumers,

with goals of wider participation in the market place.

` CCI aim at the promotion of the development of market conditions

which provide consumers with appropriate choices at low prices and

better quality. COPRA also has similar objectives.


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` Promotion of Consumer welfare is the common goal of consumer

protection and competition law.

` At the root of both Consumer Protection and Competition is the

recognition of the fact that consumers need protection from the

abusive position of producers at the market place.

` The objectives of competition are met by ensuring that there are

sufficient numbers of players in the market so that no one player can

attain a position of dominance, which can be abused.

` Competition seeks to check market failure leading to collective

pricing, collective and coordinated actions to reduce supply and

division of markets with adverse and detrimental impact onconsumers.


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y There are elements of commonality between the goals ofCompetition law and Consumer law.

y An effective competition regime by lowering entry and exit barriersand by ensuring level playing field for all in the market, makes

environment conducive to conduct business and promote a culture ofcompetition.

y Competition Law aims at regulating the process of competitionbetween enterprises in order to establish effective competition inmarket.

y The result of competition in the market place is higher economicefficiency, greater innovation and enhancement of consumer welfare.Consequently, the consumer experiences wider choice and greateravailability of goods at affordable prices.

y

y

y

y

y


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y Consumer Protection Policy and law are primarily concerned with theprotection of interest of consumers by improving market conditionsfor effective consumer choice.

y The two disciplines of competition and consumer protection, mayfocus on different remedies, but are having similar aims i.e.maintaining well functioning, competitive markets that promote

consumer welfare.y Competition Act and Consumer Protection Act both aim at protection

of the consumers in a complex market place in the era ofliberalization, wherein there may be demand for lesser interventionfrom state.

y In order that the competition regime in any developing country gains

wider acceptance and support among consumers, it is required thatthose cases are taken up which would bring immediate andmeasurable benefits to the consumers. Competition Commission ofIndia is also aiming at that while deciding its priorities.


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` The Competition Commission of India seeks to promote competition and

accelerate economy through better efficiency, better management practicesand technology which would ensure wider choice and ultimately lower

prices at the market place, benefiting the common man and woman.

` Consumer Protection Policy creates a regime whereby consumers receive

satisfaction from the delivery of goods and services needed by them.

` Cases under investigation with Competition Commission of India indeed

suggest that lack of competition reduces choice and leads to higher pricesfor the consumers. Positive effects of competition are well illustrated by the

recent experiences of in India in several sectors such as tele-

communication and consumer electronics, where there has been a fall in

real prices and remarkable improvement in quality of goods/services.

` The cases decided by the CCI would usher a regime wherein with more and

intense competition, consumer and common man will be the ultimate

beneficiary.


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` CCI aims to provide effective deterrence against all sorts of anti-competitive practices

` A sort of visible hand for corrections at the market place.

` Consumers need protection and are looking at the CCI with greatexpectations.

` CCI aware of these expectations is committed to take actions againstall practices which lessen competition and reduce consumer welfare.

` Recent order of the Court upholding the decisions of CCI to conduct

inquiries against anti-competitive practices of some corporate bodiesharming the interests of consumers is quite encouraging.


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` Consumers are looking at both CCI and Consumer Courts in orderto get their grievances redressed.

` Cases are being filed at both the forums by the consumers CCI is

getting cases against certain unfair trade practices filed by individual

consumers and the Consumer Courts are receiving cases whichprimarily contain competition concerns.

` Since unlike many other jurisdictions, consumer form in India at

present is different from that of competition, some sort of co-

ordination would be required while dealing with cases.

` This would gradually bring clarity in the minds of two bodies as well

as that of the consumers.


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` Consumer remains and if not, should be the king

at the Market place.

Thanks

12734965691manoj pandey competition and consumer protection practice in india

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