competition law
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This article is written by Vandita Bansal, from Symbiosis Law School, Noida. The article discusses the recent MoC signed between India and Japan.

Introduction

The Memorandum of Cooperation (MoC) between the Competition Commission of India (CCI) and Japan’s competition body, the Japan Fair Trade Commission, was ratified by the Union Cabinet of India on July 8, 2021. (JFTC). The MoC’s goal is to encourage and improve cooperation in competition law and policy. According to an official statement published by the Ministry of Corporate Affairs,(MCA), the MoC would allow the CCI to imitate and learn from JFTC’s lessons and experiences.

According to the MCA, the MoC would strengthen the CCI’s implementation of the Competition Act, 2002 (Act), benefiting consumers by enhancing equity and equality. The MoC intends to strengthen cooperation through a variety of means, including the exchange of information and capacity-building activities in areas such as technical cooperation, group discussions, and enforcement cooperation.

Competition Commission of India (CCI) 

The most effective way by which we can ensure that a common man gets access to the spectrum of choices for different products and services at the most reasonable rates is known as competition. Producers will have a greater motivation to innovate and specialize as competition grows. Consumers would benefit from lower prices and a broader range of options as a result of this. To attain this goal, there must be fair competition in the market. The objective is to establish and maintain fair competition in the economy, which will give producers a “level playing field” and make markets operate for the benefit of consumers.

The Competitions Act (2002)

The concept of current competition policies is followed by the Competition Act, 2002, as revised by the Competition (Amendment) Act, 2007. The Act bans anti-competitive agreements, enterprise abuse of dominant position, and combinations (acquisition, gaining control, and M&A) that create or are likely to produce a substantial adverse effect on competition inside India. Section 18 of the Competition Act of 2002 allows CCI to engage in any agreement or arrangement with any foreign agency to carry out its responsibilities or execute its powers under the Act.

Objective

The goals of the Act are supposed to be fulfilled by the Competition Commission of India.The CCI is composed of a Chairperson and six members nominated by the central government. It is the commission’s responsibility to remove anti-competitive activities, encourage and sustain competition, defend consumer interests, and ensure free trade in Indian markets. The commission is also expected to provide a view on competition problems in response to a complaint from a statutory entity created under any statute, as well as to engage in competition advocacy, raise public awareness, and provide competition training.

Japan Fair Trade Commission

The Japan Fair Trade Commission is the competition regulator of Japan handling all trade concerns. It is a Japanese government body in charge of regulating economic competition and enforcing the Antimonopoly Act (1947). When implementing the AMA (Anti-Monopoly Act), the JFTC (Japan Fair Trade Commission) considers the elements of digital markets in relation to other industries; anti-competitive agreements between rivals in digital markets are not entitled to any special regulations or exemptions.

The Federal Trade Commission’s International Antitrust Program

The Federal Trade Commission takes the lead in encouraging international collaboration and agreement on good antitrust practices and policies. To maintain the commission’s competition mandate in a global economy, the FTC has long promoted its foreign antitrust programs.

Objectives of the programme

Global competition authorities are constantly challenged with cross-border transactions, shared policy issues, and multinational monopolies. In the past, the CCI has dealt with several Japanese corporations in both enforcement and merger-related concerns. For example, the CCI decreased the penalty issued on two Japanese businesses in 2019 in response to a leniency appeal exposing pricing coordination, market allocation, and bid-rigging in the electrical power steering systems market. Considering this, coordination between regulatory bodies from various nations is necessary. MoCs have emerged as a key method for enhancing cooperation and the implementation of competition rules.

Agreements on international cooperation help both competition authorities and the corporations under antitrust inspection. They minimize the number of tasks and save regulatory bodies both personnel and economic resources. Such arrangements also decrease the potential of substantive or procedural disputes in competing audits for corporations. Legal differences and geographical restrictions, however, may reduce the scope of such cooperation. The International Competition Network (ICN), a dedicated but informal forum for competition law to keep constant interactions and handle practical competition problems, is an ideal example of international antitrust cooperation.

International antitrust cooperation and the Competition Commission of India

Section 18 of the Act allows the CCI to sign such agreements with foreign antitrust organizations in order to give logical meaning to the “effects doctrine” stated in Section 32 of the Act.

The CCI has signed Memorandums of Understanding (MoUs) with competition authorities in different jurisdictions, including Europe, the United States, China, Canada, Australia, Russia, Brazil, and South Africa. In addition, the CCI has cooperated with international antitrust agencies on international deals such as the Dow Chemical-Dupont, Holcim-Lafarge, Bayer-Monsanto, and Linde-Praxair mergers.

The CCI has also recognized the importance and benefits of international cooperation on several occasions. In a 2020 ICN conference, the CCI’s Chairperson acknowledged the importance of international cooperation and information exchange with other authorities to deal with both enforcement and merger issues, particularly in cases involving digital marketplaces. The Chairperson stated that the CCI will aim to collaborate with its international counterparts through venues such as ICN in order to exchange best practices.

Outline of the MoC

On August 6, 2021, the Japan fair trade commission (JFTC) signed a Memorandum of Cooperation (MoC) with the Competition Commission of India (CCI), India’s competition authority held online. The MoC was signed by Mr. Kazuyuki Furuya, Chairman of JTFC, and Mr. Ashok Kumar Gupta, Chairperson of CCI. It intends to develop and strengthen collaboration in the areas of competition law and policy through information exchange as well as different capacity development efforts in technical cooperation, experience sharing, and enforcement cooperation.

Purpose and principle of cooperation

JFTC and CCI recognize the value of cooperation and communication in the domain of better enforcement of each country’s competition policies and guidelines through the expansion of cooperative relationships for the efficient functioning of markets and the economic wealth of their respective citizens.

Notification

Each competition authority will inform the other competent authority of its enforcement operations that the informing competition authority believes may have an impact on the other competition authority’s strategic interests.

Exchange of information

The competition authorities would exchange information to the extent that it was consistent with each country’s laws and regulations, as well as the significant concerns of each competition authority, and within its reasonable resources available.

Technical cooperation

The competition authorities might cooperate on technical cooperation projects.

Coordination of enforcement activities

When examining competition issues that are linked to one another, the competition authorities can consider cooperating with their enforcement operations.

Communication

Under this MoC, periodic working meetings can be held as per the commission authorities.

Why is Competition Law imperative

Significantly, the CCIs have the goal of ensuring that the merger and misuse of entities and domination that apply to all investments in India, including foreign investors, do not have a negative impact on competition in India’s market. Foreign investors are not permitted to enter into anti-competitive agreements or to misuse their power.

The provisions of the Competition Act of 2002 do not restrict foreign direct investment inflows to the nation, but rather offer an incentive to these imports. As a result, India’s policy reflects broader research of a beneficial relationship between competition rules and foreign investments.

Conclusion

With this MoC, the CCI has improved its capability to effectively analyze international mergers and identify and ban global monopolies. Ironically, the MoC follows the CCI’s recent expansion of analysis of digital market concerns, which mainly comprise cross-border difficulties. The agreement is intended to improve India-Japan ties and enable the nations’ antitrust agencies to work more effectively together to create good competition law adjudication.

References 

  1. CCI Enters Memorandum On Co-Operation With Japanese Antitrust Regulator – Anti-trust/Competition Law – India
  2. Cabinet approves MoC between Competition Commision of India & Japan Fair Trade Commission
  3. The Japan Fair Trade Commission Concluded Memorandum on Cooperation with the Competition Commission of India : Japan Fair Trade Commission

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