This article is written by Millia Dasgupta, from Jindal Global Law School. This article examines opportunities under competition law.
Table of Contents
Introduction
Due to the leaps and bounds in which firms are advancing with regards to capital and asset turnover, there is an increasing demand for lawyers who are well versed in the nitty gritty’s of competition law. In this article, we shall discuss what is competition law and the increasing demand for it
Competition laws in India
Some enterprises may resort to practices which could manipulate the market in their favour and reduce competition in the market as conditions for smaller and beginning enterprises becomes unfavourable. Thus, it is important that competition laws are enacted to regulate the market. In India, competition is regulated by the Competition Act 2002. The Competition Act 2002 replaced the Monopolistic and Restrictive Trade Practice under MRTP Act,1969. The Competition Act is enforced by the Competition Commission of India.
There was a departure from the MRTP act due to the fact that the former e act was seen as draconian in an economy which was opening up its gates to international markets. The MRTP act had no provisions of the CCI to impose penalties on defaulting firms. They could only pass ‘cease and desist orders’ and could not impose fines. The new act also did not discriminate against non-government enterprises as the former act did. The new act oversaw the following realms.
Anti-competitive Agreements
The Act states that enterprises, as well as people (this includes cartels), can not enter into agreements which would have an appreciable adverse effect on the economy. If such an agreement would affect the market then it will be held to be a void agreement. Examples of such agreements are:
- Directly or indirectly determining the sale prices of products.
- Control, supply, market and production.
- Share the market by allotting ‘inter alia geographical area of the market’, number of customers, nature of goods, or any other way.
- Directly or indirectly result in bid-rigging.
Abuse of Dominant Position
If a firm is in a position of power where it can influence the market, it is expected to not carry out activities which abuse its position of power. The Competition Act seeks to regulate activities of this sort. Abuses of a dominant position are mentioned below:
- Imposing discriminatory conditions in the purchase or sale of goods.
- Limiting the production of goods or limiting technical and scientific development, prejudicing consumers in the process.
- Performing activities which result in denial of market access.
- Making contracts where other parties with supplementary obligations must accept when they have no connection to the contract.
- Using their dominant position to aid and protect other relevant markets.
Merger Control
Merger is when two companies join together in order to create a new entity. The act reviews mergers or transactions that may cause adverse effects on the market due to the size and power the new entity will amass. Under the Competition Act, thresholds or limits are placed on mergers. If it is seen that a merger is surpassing these thresholds then the companies involved must notify the CCi before entering the transaction. The CCI can either reject, accept or modify the transaction.
Competition laws in other countries
USA
With regards to enforcement, unlike India which has a single legislation and agency, the USA competition framework comprises multiple laws and agencies. With regards to antitrust, the Antitrust Division of the US Department of Justice (“DoJ”) and the Federal Trade Commission (“FTC”) help with the implementation of antitrust law. The former is an executive branch and the latter is an independent agency. With regards to legislature, the Sherman Act, 1890 is the oldest antitrust law enacted. The Clayton Act, 1941 was enacted to regulate mergers, price discrimination, excessive supply etc. Both of these entities enact the two aforementioned laws, but if criminal proceedings are involved then the DOJ gets more preference.
EU
EU competition law is regulated by the Treaty on the Functioning of European Union (TFEU). It is mainly Articles 101 and 102 which regulate competition law. It is applicable within member states. The member states also have their separate national competition commissions and agencies. The European Commission oversees the enforcement of these laws. The Indian structure of competition law is very similar to the European model.
Need for efficient lawyers dealing in competition laws
Globalization has not only changed our everyday interactions but also our legal sectors. Due to the onset of globalization, business and the onset of capital has increased in leaps and bounds. Due to multiple big players entering the Indian market, it has become even more important than the market is regulated to encourage competition. Thus, the presence of efficient competition lawyers has become even more pressing.
Ever since India opened the doors of its economy in 1991, the legal sector has been increasing in leaps and bounds. There are a lot of cross border transactions taking place. Because of transactions of this nature, it has become even more pressing that there are lawyers who are not only educated in the realm of statutes and legislation but also have a good understanding of business and commerce. Firms such as Amarchand Managaldas and Luthra and Luthra are making their name international. These firms first started collaborating with international firms and now they are able to compete with them at a global level. And because of their increasing presence in the global market, lawyers with business acumen are in demand and are being paid very well.
This is similar for competition law. Big firms are entering the Indian market looking for a business. These foreign companies are most likely unaware of the competition policies of India. It is because of this that there is an increasing demand for lawyers aware of the competition framework. We are also seeing an increase of the CCI file cases against big firms such as Amazon, Facebook and Ola. When such big litigations are becoming commonplace, efficient lawyers are going to become more in demand, not only to aid the CCI but to also defend these companies and guide them through the procedure.
Skills need to become a highly proficient lawyer in competition law
- Competition lawyers would first and foremost have a good understanding of the Competition Act, the various amendments and the guidelines issued by the CCI.
- Competition lawyers must also have a business and commercial acumen. This is because they would need to advise their clients on how they should enter legally valid deals. These alternative deals should not only be legally sound but should also appeal to the clients’ interests, thus they should have business acumen.
- They should have good analytical skills. This is because you would have to advise your client on which best possible deal or transaction to enter in. For this, a lawyer should be skilled in finding the legal strengths and weaknesses in every transaction and action.
- Competition Lawyers should have good researching skills in order to know about transactions entered to and the nature of the market.
- They should have good negotiation and communication skills as commercial activities require communicating with other companies and representatives. Lawyers must be able to communicate what their client wants, protect their clients’ interest as well as make sure both parties are satisfied in the agreement entered into.
Emerging job opportunities
Tier one and Tier two Law firms
The most preferred career path is that in a firm due to the payment. Competition lawyers in firms usually work on merger, acquisition and amalgamations. They must see if these deals shall be approved by the CCI or not. The job of the team is to also convince the CCI that the transactions will not have an adverse effect on the market.
Lawyers are also involved in filing complaints against delinquent parties and defending parties against such complaints.
Independent Practitioner
Due to the amount of work, independent practitioners usually do not enter into this field of work. This is however changing as we see independent practitioners represent huge companies in CCI litigations. These independent practitioners usually have a small team themselves. While independent practitioners do not take up big transactions, they do take up CCI litigations. There is also the plus side of working in a small team where one gets more work experience.
Working with senior advocates
There is a benefit of working with the topmost senior advocates. One’s job in this scenario would be to conduct research on the propositions raised by the senior advocate and identify loopholes in the drafting. Competition law teams also circulate their preliminary draft to senior advocates to seek advice. Junior advocates would go through such drafts.
Policy researcher
Competition law is going through many amendments and changes. The nature of the market is continuously changing so there is a growing need to amend the law to fit the new market. Thus, policy researchers who work for think tanks are becoming more and more important.
Research Associates for the CCI
Working for the CCI helps lawyers understand the workings of the CCI better. Lawyers who apply would be expected to conduct research and assist in grafting orders. Lawyers would receive a great advantage for working for the CCI and law firms would want to hire lawyers who have previously worked with the CCI because they would understand their guidelines better.
In house departments for new-age companies
Due to the increasing litigation against tech companies, new-age companies are investing in legal teams which are knowledgeable to competition and privacy laws.
Faculty in Law Colleges
There is a dearth of competition law training in India as this area of law is not explored. Lawyers who have expertise in this area would be in much demand in law colleges.
Top industries dealing in competition laws
Big Tech Firms
Due to globalization and the evolution of technology, tech firms are becoming one of the biggest players in the market. Because of their dominance in the market, they are getting into a lot of trouble in the law, especially for violating antitrust laws. The CCI has filed cases against Google, Facebook and Ola for violating Competition Laws. The new Competition Amendment Bill, 2020 has also been drafted in such a way to regulate digital markets. Thus, big digital firms will require legal advice to navigate competition guidelines.
Manufacturing and Engineering Industries
The manufacturing and the engineering industry is becoming one of the fastest-growing industries due to pushes from the government through various campaigns such as ‘Make In India’. They are also becoming more international in nature due to shipping to various other countries and collaborating with other countries. Because of their global nature and their increasing size, it is important that they conduct themselves with legal diligence and are able to enter into legally binding transactions under competition law. Thus such companies would require advice from lawyers who specialize in competition law.
Online Retailers
Due to the increasing number of people in India who are getting access to the internet, the online retail industry is growing. Technology has made it increasingly easy to order and buy things online. While these entities start to grow in size, they will require advice in order to navigate the competition framework.
Conclusion
Competition Law was previously a field that had not been explored. But now because of globalization and the development of technology, competition law is becoming a very sought after area of law. With big cases such as the Rs 136 crore fine slapped onto Google by the CCI, it seems that the popularity of competition law will only grow.
References
- https://www.mondaq.com/india/antitrust-eu-competition-/33971/indian-competition-act-an-overview
- http://www.nishithdesai.com/fileadmin/user_upload/pdfs/New_Competition_Law_in_India_vs_USA_and_EU.pdf
- https://blog.ipleaders.in/competition-law-career-opportunities/
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