India’s competition watchdog may be the new kid on the block, but it has already been flexing its muscles. Is it up to the challenges it has set for itself?
Levelling the playing field in India was never going to be an easy task so there was little surprise when it took six years for the country’s competition watchdog, the Competition Commission of India (CCI), to be up and running.
That the CCI has to be taken seriously was driven home when it began imposing widely publicized penalties of previously unheard of amounts. These included a ₹6.3 billion (US$110 million) penalty against one of India’s top real estate companies, DLF, for abuse of dominance, and a ₹60 billion penalty against an 11-strong cartel of India’s top cement companies. Both DLF and the cement companies are appealing the orders against them before the Competition Appellate Tribunal (COMPAT).
Low hanging fruit?
These are early days for competition law jurisprudence in India. While sections 3 and 4 of the Competition Act, 2002, which deal with the prohibition of anti-competitive agreements and abuse of dominance respectively, came into force in June 2009, a mandatory merger control regime as provided for in sections 5 and 6 of the act has been in effect only since June 2011.