The competition law framework has in-built flexibility to account for sustainable development and climate change, and ‘environmental friendliness’ may be considered a ‘quality’ dimension in competition assessment, says Jyoti Jindgar Bhanot, Secretary, Competition Commission of India (CCI).

“Innovation and competition are two of the most important pillars which support and foster economic growth, and there is nothing better than having these pillars supported by sustainable development for a safe, secure and liveable future,” Bhanot said at an event focused on ‘Competition Policy and Climate Change’.

The event was organised in the Capital by Consumer Unity & Trust Society and Institute for Studies in Industrial Development, on the occasion of World Competition Day on December 5.

“Realising that sustainability, including managing climate change, is one of the highest priorities of our times, given the graveness of the problem and the challenge involved, businesses are adopting technologies which are environment-friendly. The trend towards adopting market-based instruments for environmental protection, in addition to command-and-control regulations, has intensified the relationship between economics and the environment,” Bhanot said.

“In the backdrop of these developments, competition is set to play an important role in fighting climate change,” she noted. “Competition supports environmental goals and produces the most efficient results when consumers are willing to pay for more sustainable products, encouraging companies to invest in green product,” she said.

Law and the environment

Highlighting the interdependence of competition law and environmental protection, Bhanot said this particularly accentuates when anti-competitive harm and environmental damage occur at the same time. 

Examples include the greenwashing cartel, in which corporates collectively overcharge consumers in the name of environmental protection, or corporates deliberately and jointly reduce competition over product differentiation parameters relating to sustainable products. 

Anti-competitive practices may also take place when corporates collude to delay market introduction of green technologies, or agree not to promote the environmental performance of their products. On the other hand, achieving sustainability goals may require industry-wide agreements, technological collaborations and significant investments, said Bhanot. 

Measuring sustainability

She, however, cautioned that the challenges in accounting for sustainability aspects in competition assessment would remain as it may be difficult to measure the benefits consumers receive and gains such as improvement of the living environment. 

The benefits may be long-term and not immediate, and they may not be restricted to the buyers or users of the goods or service but to entire society, spurring the entire consumer welfare debate, Bhanot added.

While the legal framework permits economic gains and costs while assessing appreciable adverse effect on competition, the core problem of measuring and claiming non-economic dimensions remains, added Bhanot.

She expressed confidence that the jurisprudence that has developed in other matured jurisdictions could provide guiding principles, which could be adopted for domestic specificities.