This article is written by Millia Dasgupta, a student studying BA LLB at Jindal Global Law School. This article talks about why competition law is increasing in popularity and why it is viable to specialize as a litigator focusing on company law.
In this article, we shall be discussing why competition law is increasing in popularity and why it is viable to specialize as a litigator focusing on company law.
The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was India’s legislation through which competition was regulated for 40 years. It was socialistic in nature and was placed in order to ensure players of the market did not make the market volatile and so that competition of the market would persist. But after the liberalization of the Indian economy, it had become more important than laws regulating competition would be more responsive to the various changes happening to the economy. Thus a new Competition Act was enacted in 2002 to prevent adverse effects on competition (AAEC). The Act was later amended by the Competition (Amendment) Act, 2007 where the government added a provision to regulate anti-competition agreements and abuse of dominant positions. A merger control provision would be added in 2011.
The Competition Act is enforced by The Competition Commission of India (CCI). The CCI is made up of a chairperson and 2-6 members chosen by the government of India. It is the CCI who usually initiate an inquiry with regards to an anti-competition agreement or the abuse of a dominant position. They can also initiate an inquiry based on proof of information, a receipt from an authority or from a filed complaint. In relation to combinations, the CCI initiates an inquiry on the notification or on their own. The CCI’s investigative wing is the Office of the Director-General (DG). The office has the power to investigate companies who abuse the Competition Act, this includes summoning people for investigation and receiving evidence on affidavit. If the CCI on a vare look at the company, feels that there is a case against the, they shall direct the DG to investigate the matter. There is also the provision under the Company Act to appeal against the decisions of the CCI. one can appeal to the Competition Appellate Tribunal. The Competition Act regulates anti-competition agreements, abuse of dominant position, merger control and competition advocacy.
Competition law in other countries
Due to globalization and the role of Multinational companies in the economies of so many nations, competition law has become an extremely important tool used by the government to regulate the economy. By 2008, more than 50% of countries had enacted some form of competition law in their country. Many of these countries collaborate with other countries to ensure that the international market is not adversely affected. They collaborate not only through collaborative enforcement efforts but also by sharing information and evidence. In countries with a developing economy, competitions laws are seen as stimulants for economic growth. In Japan and Korea, competition law prevents conglomerates. Competition law in China and Indonesia promotes fairness and has promoted international integration in Vietnam. The countries who are leading in the establishment of international law are the USA and Europe. We shall see how the law functions in these countries.
The USA has multiple agencies which enforce Competition Law, unlike India which has a central authority that is the CCI. The Antitrust Division of the US Department of Justice (“DoJ”) and the Federal Trade Commission (“FTC”) help enforce antitrust law in the USA. The Antitrust Division of the US Department of Justice is an executive branch and the Federal Trade Commission is an independent agency. The Sherman Act, 1890 is the oldest antitrust law enacted and is one of the oldest antitrust legislatures. The Clayton Act, 1941 was enacted to regulate mergers, price discrimination, excessive supply etc. Both the Antitrust Division of the US Department of Justice and The Federal Trade Commission enforce the two laws, but if criminal proceedings are involved then the DOJ gets more preference.
Treaty on the Functioning of European Union (TFEU) is the law which regulates competition in the EU. It is mainly Articles 101 and 102 which regulate competition law. The TFEU applies to all member states of the EU. The member states also have their separate national competition commissions and agencies. The European Commission oversees the enforcement of these laws.
Litigation under Competition Law
Appeals can also be made against the orders of the CCI to the tribunal. There is also the scope of private enforcement of competition law in India despite there being no judicial case on private enforcement to date. The Central Government, State Government, local authorities or any person or enterprise can make an application for compensation of loss that results from the violation of the Competition Act. They can also file for compensation resulting from order from the Competition Appellate Tribunal. These claims can be brought in front of the Competition Appellate Tribunal under Section 53 of the Competition Act. The loss must have been based on a finding from the CCI or the tribunal. Claims for compensation must follow the procedure laid down by the tribunal. Claims for compensation are limited within cases in India.
For compensation claims, there is a limitation period of 1 year. For filing an appeal against an order of the CCI, Section 53B of the Competition Act, 2002 states that anyone aggrieved by an order of the CCI must file an application of appeal before the tribunal within 60 days of the issuance of the order.
Appeals can be made against the orders of the CCI before the tribunal. Appeals can also be made against the tribunal. Appeals against the tribunal lie before the Supreme Court.
Specializing as a litigator focusing on Competition Law
Competition law becoming a high demand area of law
Nowadays it seems we can not have a conversation without talking about how globalization had affected that subject. This is also the same for competition law. Globalization has not only changed our daily interaction but also the legal sphere. With globalization, business and the generation of capital has increased in leaps and bounds. Many MNCs are entering the market and are becoming massive players. Thus, it has become even more important we have laws in place in order to regulate the changes happening in the economy.
Ever since our economy has been liberalized in 1991, the legal sector has been evolving and the workload it is taking on is becoming greater with each and every day. There are also a lot of cross border transactions taking place. Because of these transactions that are taking place, it has become even more important that we have lawyers who are not only well versed in the law but also have a good commercial and business acumen. Firms such as ‘Amarchand Mangaldas’ and ‘Luthra and Luthra’ started off by collaborating with international law firms and now they are competing with them. Because of their increasing global presence, lawyers who understand business are in demand and are being paid very well.
This is similar to 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.
It seems that recently a lot of high stakes cases are with regards to competition law. The Competition Commission of India had investigated OYO and MakeMyTrip over confidential commercial agreements. Companies like Amazon, Flipkart and Facebook faced massive antitrust investigations and Google was slapped with an Rs136 crore fine. More and more companies are searching for not only legal advice but more importantly for legal protection. Law firms have a separate hiring process for competition law teams. Independent practitioners are also entering the market. Practitioners such as Ms. Nandini Singh and Mr. Chanakya Basa represented All India Online Vendors association in their appeal against CCI and Flipkart. There will be many more opportunities for litigation after the pandemic is over because the CCI has given a few exemptions and thus there will be companies who will take advantage of these new exemptions.
With the growth of companies due to globalization and the evolution of technology, it seems that company law is a niche of law that shall become extremely popular in the future. Thus it is important that one takes advantage of this future surge by learning the necessary skills. Law Sikho provides courses for Competition Law.
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