The Hindu Business Line : Competition Commission and cricket!

"The Competition Commission is not an in-market regulator but sits off-market, while keeping a watchful eye on the goings-on, in case there is any anti-competitive activity."

MR VINOD KUMAR DHALL

Chennai March 20 Both cricket and Competition Commission are very much in the news. Beyond this similarity, other parallels can be drawn between the Commission and the competitive game of cricket, says Mr Vinod Kumar Dhall, Member, Competition Commission of India, in a recent interaction with Business Line.

"This is World Cup season! Think of cricket," he urges. "The teams and players are free to compete aggressively and play hard in any manner they please. No umpire can dictate his tactics or strategies. But no team can resort to unfair or prohibited means like say drugs, and if any declared rule of the game is breached, the umpire has the right to intervene, and in fact must do so to maintain fair play and healthy competition, where the winner is the best team, not the roughest or trickiest team!"

Analogy

A catchy and sporty analogy, that is, to emphatically bring out the essence of the Competition Commission's work. For, the Commission's role is different from that of a sector regulator like the SEBI (Securities and Exchange Board of India), the TRAI (Telecom Regulatory Authority of India), or the Electricity Regulatory Commission, explains Mr Dhall.

"The Competition Commission is not an in-market regulator but sits off-market, while keeping a watchful eye on the goings-on, in case there is any anti-competitive activity," he differentiates. "The Competition Commission does not intervene ex-ante in business decisions and it has no power to direct enterprises about how they should conduct their business or set prices. Its role is mainly ex-post; if an enterprise violates any provision of the Competition Act, the Commission has the power to step in and take remedial action."

When the Competition Bill was being first considered in Parliament in 2002, there was mighty opposition from the business community, reminisces Mr Dhall. "It apprehended that this heralded yet another inspectorate with the power to intervene in business processes and decisions."

Four years later, attitudes had changed. During 2006, when the Parliamentary Standing Committee was considering the Competition (Amendment) Bill, there was little or no opposition from the business community to the basic premise of having a Competition Commission, recalls Mr Dhall. "A welcome shift in perception," he observes.

According to media reports, the Minister for Company Affairs, Mr Prem Chand Gupta, has indicated that the Cabinet is likely to consider the amendments to the competition law, and that the Bill will be introduced in Parliament in the second half of the Budget session.

Though the Competition Commission is mostly driven by complaints from aggrieved parties, there is nothing to prevent the Commission from taking suo moto notice of violations, one learns. "Only in the case of mergers, the Commission has an ex-ante role and it could stop a merger, if the deal is likely to have an appreciable adverse effect on competition in the relevant market."

Therefore, when we have the new Competition law in place, the M&A (merger and acquisition) scenario may perceive the impact. Also, price for violations can be stiff and deterrent in nature, it is anticipated.

The Competition Commission has been undertaking competition advocacy and public awareness programmes over the last couple of years, says Mr Dhall. These initiatives have been in the form of seminars, workshops and interactions with the industry chambers and associations explaining the benefits of the Competition Act and the role of the Competition Commission.

He asks rhetorically: "Who would say that the World Cup needs no umpire, and cricket would be better off without one?" Similarly, who would say that the market needs no Competition Commission?

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