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Merchants’ Chamber of Commerce & Industry Session on Anti-competitive Conduct and the Competition Act, 2002
Press Release
“Dominance is not illegal per se, but what is prohibited is its abuse. Dominance is the ability of an enterprise to behave independently of market forces,” Kumar said but “an exploitative or exclusionary conduct by a dominant entity is an abuse of dominance, Kumar said.
He said under the MRTP Act an enterprise could not be able to capture more than 25% of the market. Anything more than that would be considered as an abuse of dominace, he said.
Even if big enterprise captures entire market, there is no issue if there is no abuse of their dominant market position, Advisor, Competition Commission of India Shri Rakesh Kumar, said on Saturday at an interactive session of the Merchants’ Chamber of Commerce and Industry. On the issue of hostile takeover Shri Kumar said the CCI doesn’t consider hostile takeover within its ambit but in case of acquisition and mergers where market consolidation takes place a company may gain dominance over the market share.
CCI , he said, in order to prevent market monopoly could interfere in bid rigging, which mainly happened through collusive bidding, bid rotation, cover bidding, bid suppression ad customer allocation. While the CCI had penalty provisions, it was limited to market correction and restoring competition for enterprises as well as individuals. The commission has the same power as that of a Civil Court under the Code of Civil Procedure, Kumar said.
While welcoming, Dr. Jiban Chakraborty, Co-Chairman, Council on Legal & Corporate Governance, MCCI, highlighted that there was a requirement to analyze government policies and legal position from the perspectives of the Competition Act, 2002, with respect to cooperatives formed by MSMEs. This could promote their business interests, which were in no way close to the cartel behavior of the bigger corporates.
He opined the impact of the data market by amassing huge amounts of data and creating monopolies making it tough for new players to enter the market. The emergence of data as an asset for firms in this digital era has raised several issues before competition enforcement authority, Dr. Chakraborty said.
The Session concluded with hearty vote of thanks proposed by Shri Tushar Basu, Chairman, Council on Human Resource Development, MCCI.
