What CCI has to do with economic opportunity?

Source: LiveMint

Synopsis: The CCI wants to monitor monopolistic, restrictive, exploitative, and exclusionary trade practices. It ordered a probe into huge digital corporations like Google, Amazon, and WhatsApp’s new privacy policy, as well as sectors like cars.

What is CCI? Why was it introduced?

India’s antitrust regulator, the CCI, was established in 2003. It is governed by the 2002 Competition Act, which aims to provide a stable competitive environment. The competition law safeguards trade from the whims of unjust commercial activities like price-fixing and ensures that fair competition prevails.

• This Act, which focuses on increasing competition and business freedom, replaced the Monopolies and Restrictive Trade Practices (MRTP) Act of 1969, which was aimed at preventing monopolies and restricting enterprises with assets of over 100 crores from expanding. It is similar to antitrust legislation in nations such as the United States.
• The CCI Act was created with the goal of stimulating market competition, preserving consumer interests, and ensuring trade freedom while keeping the country’s economic progress in mind. The prior system of regulating firms with assets worth more than 25 crores (relaxed to 100 crore in1985) was unscientific before the MRTP Act of 1969.

What is the role of CCI in promoting equitable opportunity across the economy?

• The Competition Act aims to prevent huge businesses from entering into anti-competitive agreements and abusing their dominating position. It governs mergers and acquisitions that may have an anti-competitive effect. It prohibits price-fixing, market allocation, predatory pricing, and tied selling, as well as other horizontal and vertical constraints.
•  The economy can reduce its deadweight loss, which is a cost caused by market inefficiencies, by boosting competition and supporting free trade.
• It aims to defend customers’ interests in terms of price, quality, and availability of a diverse range of products by limiting the scope for monopoly advantage exploitation. 
• This will also contribute to India’s tale of being a desirable investment destination for both global and domestic investors by fostering a competitive and efficient market system. CCI is known to have intervened in situations of cement and steel cartelization.

Conclusion

• Google, Amazon, and Flipkart have been accused of abusing their dominating positions in the smart TV industry and of evading foreign investment e-commerce restrictions. In the information technology sector, 11 and five companies were issued notices for breaking regulations in 2018-19 and 2019-20, respectively.
• The scope of anti-competitive agreements should not be restricted to horizontal and vertical limitations, according to a government-appointed commission in 2019. It also stated that high-value deals involving technological corporations may go unnoticed, necessitating a re-examination.