MODULE 09

Competition
Commission of India
OVERVIEW

Contents
1 Establishment 2 Membership
Historical evolution and constitutional basis Composition, qualifications and appointments

3 Resignation, Removal and Suspension 4 Duties, Powers and Functions

Procedural framework under Section 11 Regulatory and adjudicatory mandate

5 Procedures for Enquiry 6 Orders and Notices

Investigation framework and DG's role Commission's adjudicatory powers

7 Duties of Director General 8 Penalties Under the Act

Investigation powers and procedures Sanctions for anti-competitive conduct

9 COMPAT & NCLAT 10 Competition Advocacy

Appellate mechanism in competition law Promoting competition culture
 CHAPTER 1

Establishment
of CCI
Historical evolution from MRTP Act to Competition Act 2002
1. ESTABLISHMENT

Establishment of the Competition Commission

Historical Evolution Evolution Timeline
MRTP Act, 1969: Enacted during economic protectionism era to prevent concentration of 1969 MRTP Act Enacted
economic power. Required government approval for business expansion, acting as industrial Focus on preventing concentration of economic power
policy extension rather than market conduct regulation.
1991 Economic Liberalization
Post-1991 Liberalization: MRTP Act amendments eliminated licensing requirements but MRTP Act amendments; realization of inadequacy
framework remained inadequate. Did not address cartels, mergers, anti-competitive agreements,
or abuse of dominance systematically. 2000 Raghavan Committee Report
Recommendation for modern competition law

2002 Competition Act Passed

Raghavan Committee & Competition Act, 2002 Establishment of CCI under Section 7
High Level Committee under Mr. Raghavan constituted in 1999 submitted report on May 22,
2009 CCI Becomes Operational
2000 recommending replacement of MRTP Act with modern competition law.
Supreme Court validates constitutionality

Competition Bill, 2001 introduced in Parliament, became Competition Act, 2002 with
preamble stating purpose: "to prevent practices having adverse effect on competition, promote
and sustain competition, protect consumer interests and ensure freedom of trade." Constitutional Basis
Section 7 of Competition Act, 2002 establishes CCI as statutory body. Section
18 mandates duties to eliminate anti-competitive practices, promote
Key Shift: From regulating market structures (MRTP Act) to regulating market conduct based on
competition, protect consumers and ensure freedom of trade.
economic principles (Competition Act)
 CHAPTER 2

Membership
of CCI
Composition, qualifications and appointment procedures
2. MEMBERSHIP

Composition and Qualifications

Composition of the Commission (Section 8) Appointment Process
1 Selection Committee
1 Chairperson 2-6 Members Recommendations made by committee headed by Cabinet Secretary

Whole-time appointment by Central Minimum 2, maximum 6 whole-time 2 Central Government Approval

Appointments made by Central Government based on committee recommendations
Government members
3 Whole-time Appointment
Chairperson and Members serve on whole-time basis

Qualifications Required
Chairperson and Members must possess at least 15 years of professional experience in Current Composition
any of the following fields:
Chairperson 1
Law Economics
Members 2-6
Business Public Administration
Total Strength 3-7

Competition Matters / International Trade

Administrative Powers (Section 13)

Chairperson has administrative powers including:
Term of Office: Chairperson and Members hold office for 5 years or until attaining 65
• Distribution of business among members
years of age, whichever is earlier. Eligible for reappointment for another term of 5 years.
• Constitution of benches
• Allocation of cases to benches
 CHAPTER 3

Resignation,
Removal and
Suspension
Procedural framework under Section 11
3. RESIGNATION, REMOVAL AND SUSPENSION

Resignation and Removal Procedures

Resignation Process (Section 11(1)) Special Removal Procedure

Chairperson or Member may resign by written notice addressed to Central Government. Section 11(3) - Supreme Court Inquiry

Important: Unless permitted by Central Government to relinquish office sooner, must continue For removal on grounds of financial interest (d) or abuse of position (e), no removal permitted
until: unless:

• Expiry of 3 months from receipt of notice, OR Central Government makes reference to Supreme Court
• Successor enters office, OR Supreme Court conducts inquiry as per prescribed procedure
• Expiry of term of office Supreme Court reports that Member ought to be removed
Whichever is earliest

Safeguard: This provision ensures judicial scrutiny before removal on subjective grounds, protecting
independence of Commission members.

Removal by Central Government (Section 11(2))

Central Government may remove Chairperson or Member by order on following grounds: Post-Employment Restrictions (Section 12)
a Insolvency b Paid Employment Chairperson and Members cannot accept certain employments after demitting office:
Adjudged as insolvent at any time Engaged in paid employment during term
Employment with enterprise involved in proceedings before CCI
c Moral Turpitude d Conflict of Interest
Employment with enterprise against which CCI has passed orders
Convicted of offence involving moral turpitude Financial interest affecting functions

e Abuse of Position f Incapacity

Abused position prejudicial to public interest Physically or mentally incapable
 CHAPTER 4

Duties, Powers
and Functions
Regulatory and adjudicatory mandate under the Act
4. DUTIES, POWERS AND FUNCTIONS

Duties and Powers of the Commission

Duties of the Commission (Section 18) Additional Powers
CCI mandated to:
Section 21 - Opinion on Reference
Give opinion on competition issues when referred by statutory authority
Eliminate Anti-Competitive Practices Promote Competition
Promote and sustain competition in markets
Prevent practices having adverse effect on competition
Section 21A - Reference to Authority
Make reference to statutory authority when issue arises before CCI

Protect Consumer Interests Ensure Freedom of Trade

Safeguard interests of consumers Ensure freedom of trade for market participants Section 32 - Extra-Territorial Jurisdiction
Power to inquire into agreements outside India having effect in India

Powers of Inquiry (Section 19) Section 36 - Civil Court Powers

Same powers as Civil Court under CPC: summon witnesses, examine on oath, discovery of
CCI empowered to inquire into: documents, receive evidence on affidavit

3 Anti-Competitive Agreements
Agreements causing appreciable adverse effect on competition
Quasi-Judicial Nature
4 Abuse of Dominant Position CCI functions as quasi-judicial body with power to investigate, adjudicate and impose
Enterprises abusing dominant position in relevant market civil penalties. Guided by principles of natural justice and bound by own procedures
while discharging functions.
5-7 Combinations
Mergers, acquisitions, amalgamations exceeding thresholds
Meetings (Section 22)
Commission meetings held at regular intervals. Decisions taken by majority of members
present. Chairperson has casting vote in case of tie.
 CHAPTER 5

Procedures
for Enquiry
Investigation framework and DG's role
5. PROCEDURES FOR ENQUIRY

Enquiry Procedures Under Section 19

Modes of Initiating Enquiry Enquiry Process Flow
CCI may initiate enquiry through three modes under Section 19(1): 1 Receipt of Information/Reference
CCI receives complaint or reference
Information
1 2 Prima Facie Assessment
From any person, consumer, consumer association, or trade association
CCI examines if case exists

3 Direction to DG or Closure
Reference
2 DG investigates OR case closed
From Central Government, State Government, or statutory authority
4 DG Investigation
Evidence collection, witness examination
Suo Motu
3
On its own knowledge or information (CCI-initiated) 5 DG Report Submission
Report submitted to CCI (non-binding)

6 Further Proceedings
Prima Facie Determination (Section 26) Show-cause notice, hearing, final order

Section 26(1) - Direction to DG

If CCI finds prima facie case, directs Director General to investigate Clubbing of Information
If subject matter substantially same as previous information, CCI may club new information with
Section 26(2) - Closure previous one (Proviso to Section 26(1))
If no prima facie case, matter closed after recording reasons

Time Limit for Information

Key Ruling:CCI v. Steel Authority of India Ltd. (2010) - No notice or hearing required at prima
facie stage; direction to DG is administrative, not quasi-judicial Information must be filed within 2 years from date of cause of action. CCI may condone delay if
sufficient cause shown (Proviso to Section 19(1))
 CHAPTER 6

Orders
and Notices
Commission's adjudicatory powers
6. ORDERS AND NOTICES

Orders and Notices Under the Act

Orders After Inquiry (Section 27) Interim Orders (Section 33)
After inquiry, if CCI finds contravention, may pass orders including:
During pending proceedings, CCI may issue interim orders restraining parties from
Cease and Desist Modify Agreements continuing anti-competitive practices if:
Modify agreements to comply with Act • Necessary to prevent irreparable damage
Direct parties to discontinue anti-competitive practices
• In interest of competition, consumers, or market

Void Agreements Impose Penalties

Nature: Interim orders are temporary measures pending final adjudication. Provide
Declare anti-competitive agreements void Monetary penalties as per Section 27(b)
immediate relief while investigation continues.

Other Orders Compliance

Any other order deemed appropriate Direct compliance with CCI directions
Show-Cause Notices

Before Final Order

Division of Enterprise (Section 28)
Parties given opportunity to respond to allegations before final order passed
CCI may order division of enterprise enjoying dominant position to ensure market competition:
Principles of Natural Justice
Structural Remedy
Hearing provided to concerned parties before adverse order
Breaking up dominant enterprise into separate entities

Divestiture
Requiring enterprise to divest certain assets or business units Supreme Court Ruling
CCI v. Kerala Film Exhibitors Federation (2024) - CCI can impose both monetary
penalties and behavioural/structural remedies under Section 27. No mandate for second
show-cause notice for penalty.
 CHAPTER 7

Duties of
Director General
Investigation powers and procedures
7. DUTIES OF DIRECTOR GENERAL

Director General's Investigation Powers

Role of Director General (Section 41) Dawn Raid Powers

Section 41(3) - Search and Seizure

Director General appointed by Central Government to assist CCI in investigation of contraventions.
DG empowered to:

Primary Duty: • Enter premises of enterprise under investigation

• Conduct searches without prior notice
When directed by CCI, conduct investigation into alleged contraventions of Competition Act • Seize material/information relevant to investigation

Legal Basis: Powers derived from Sections 240 and 240A of Companies Act, 1956 (now Companies
Act, 2013)

Powers Equivalent to Civil Court (Section 41(2))

2023 Amendment: Proposed explicit provision for dawn raids under Section 41 to solidify DG's
DG has same powers as Civil Court under Code of Civil Procedure, 1908:
powers
Summon Witnesses Enforce Attendance

Examine on Oath Discovery of Documents Investigation Report

Receive Evidence on Affidavit Requisition Records Non-Binding Nature

DG report is recommendation; CCI makes final determination

Contents
Findings, evidence collected, documents, witness statements

Penalties for Non-Compliance (Section 43)

Failure to comply with DG directions: penalty up to ₹1 lakh per day of non-compliance, extending to ₹1
crore. 2023 Amendment proposes imprisonment up to 6 months or fine up to ₹1 crore, or both.
 CHAPTER 8

Penalties
Under the Act
Sanctions for anti-competitive conduct
8. PENALTIES UNDER THE ACT

Penalty Framework and Recent Amendments

Penalty for Anti-Competitive Agreements & Abuse (Section 27) Factors in Penalty Determination

Aggravating Mitigating
Standard Penalty:
• Repeat offences • First-time violation
Up to 10% of average turnover for three preceding financial years • Duration of violation • Cooperation with CCI
• Market impact • COVID-19 impact
• Intentional conduct • Remedial measures

Higher Penalty for Cartels:

Principle of Proportionality: Penalties must be proportionate to violation. Supreme Court
Up to 3 times profit for each year of cartel continuance OR 10% of turnover for each year, emphasized this in penalty-related cases.
whichever is higher

Other Penalties
2023 Amendment: Global Turnover Penalty
Section 42 - Non-Compliance
Up to ₹1 lakh/day (max ₹10 crore). Criminal sanctions: imprisonment up to 3 years or fine up to ₹25 crore, or
CCI now empowered to impose penalties based on global turnover derived from all products
both
and services, regardless of scope of infringing product/service.

Section 43A - Gun-Jumping

Up to 1% of asset value or turnover for failure to notify combinations
Departure from Excel Crop: Supreme Court 2017 ruling restricted penalty to "relevant
turnover" (infringing product only). 2023 amendment overrides this for greater deterrence. Section 44 - False Statements
Up to ₹1 crore for making false statements/omissions

No Criminal Sanctions: Cartel activity itself not criminalized. Criminal penalties only for procedural
violations (non-compliance, false statements).
 CHAPTER 9

COMPAT
& NCLAT
Appellate mechanism in competition law
9. COMPETITION APPELLATE TRIBUNAL & NCLAT

Appellate Tribunal Framework

Historical Evolution Scope of Appellate Review

2009 COMPAT Established Powers of NCLAT

• Examine findings of fact and law

Competition Appellate Tribunal constituted under Competition Act, 2002 to hear appeals against CCI orders • Assess evidence and legal interpretations
• Affirm, modify, or set aside CCI orders
• Remand matters back to CCI for reconsideration

2017 Transition to NCLAT

Public Interest Principle
Finance Act, 2017 dissolved COMPAT; functions transferred to National Company Law Appellate Tribunal
"Doors for approaching CCI and appellate authority must be kept wide open in public interest" - ensuring high
(NCLAT) effective May 26, 2017
public purpose of Competition Act is subserved

NCLAT as Appellate Authority Performance Comparison

Sections 53A & 53B provide for appeals against CCI orders to NCLAT. COMPAT (2009-2017) ~12 months
Average disposal time - exclusive focus on competition law
Jurisdiction:
• Appeals against CCI orders on anti-competitive agreements
NCLAT (2017-present) ~18 months
• Appeals on abuse of dominant position
Average disposal time - multi-functional structure; some cases take 44+ months
• Appeals on combinations
• Appeals on penalties and other directions

Further Appeal
Appeal against NCLAT order lies to Supreme Court under Section 53T of Competition Act. Ensures
Multi-functional Tribunal: NCLAT also hears appeals from National Company Law Tribunal
two-tier appellate mechanism for competition matters.
(NCLT), Insolvency and Bankruptcy Code (IBC) matters, and Companies Act cases
 CHAPTER 10

Competition
Advocacy
Promoting competition culture
10. COMPETITION ADVOCACY

Competition Advocacy Under Section 49

Mandate Under Section 49 Policy Advocacy (Section 49(3))

CCI empowered to give opinion on competition-related issues when requested by Central or State
CCI mandated to "take suitable measures for the promotion of competition advocacy,
Government or statutory authority.
creating awareness and imparting training about competition issues"

Timeline:
Unlike enforcement actions that address violations after occurrence, advocacy aims to prevent
CCI must give opinion within 60 days of receiving reference
anti-competitive practices by creating awareness and promoting culture of competition.

Impact:
Awareness and Training Initiatives Government formulates policy taking CCI's suggestions and remedial measures into account

Workshops & Seminars Roadshows

Targeted at businesses, consumer groups, government Organized across India to reach stakeholders in different
Market Studies
officials regions

Sectoral Analysis
Capacity Building Publications
Conduct assessments of specific sectors to identify structural issues and competitive concerns
Training programs for regulators and government
Advocacy material, guidelines, and informative content
officials
Policy Recommendations
Suggest amendments to laws and regulations that may inadvertently restrict competition

Collaboration with Regulators

CCI enters into Memorandum of Understanding (MoUs) with other regulators (SEBI, TRAI, etc.) to
ensure coordinated approach and healthy competition across sectors.
 CONCLUSION

Evolution of Competition Law

in India
The Competition Commission of India has evolved into a robust regulator, transitioning from the MRTP Act's
structural control approach to the Competition Act's conduct-based regulation.

Recent amendments in 2023-2024 have further strengthened enforcement capabilities while introducing
business-friendly mechanisms like commitments and settlements.

As India's economy grows, CCI's role in maintaining competitive markets and protecting consumer welfare
becomes increasingly critical.

Fair Markets Consumer Protection Economic Growth