[Model Answer QP2023 GS2]Discuss the role of the competition commission of India in containing the abuse of dominant position by the Multi-National Corporations in India. Refer to the recent decisions.
The Competition Commission of India (CCI) is a statutory body established under the Competition Act, 2002. Its primary objective is to prevent practices having an adverse effect on competition, promote and sustain competition, protect the interests of consumers, and ensure freedom of trade in India.
Role in Containing Abuse of Dominant Position:
1. Regulatory Oversight: CCI keeps a constant watch on market behaviors and can suo-motu initiate inquiries into anti-competitive practices.
2. Investigation: Upon receiving information or complaints, CCI’s Director-General can investigate any enterprise’s behavior, including MNCs, to determine if they’re abusing their dominant position.
3. Penalties: Post-investigation, if an MNC is found guilty of abusing its dominant position, CCI has the authority to impose hefty fines. The penalty can be up to 10% of the average turnover of the enterprise for the last three financial years.
4. Cease and Desist Orders: The CCI can issue orders directing enterprises to discontinue any anti-competitive practice and can even order the division of an enterprise in extreme cases.
Recent Decisions Involving MNCs:
1. Google Case (2021): The tech giant faced multiple probes by the CCI. One major case was related to Google’s payment system where it was alleged that Google was abusing its dominant position by promoting its payments app, Google Pay, over others in the Play Store.
2. Hyundai Motor India Case: CCI imposed a fine on Hyundai Motor India for anti-competitive conduct in providing discounts for cars, essentially fixing the discount rates and limiting competition.
3. Apple’s App Store Case (2022): CCI initiated a study into Apple’s App Store practices in India, following global concerns about Apple’s potentially anti-competitive behavior in favoring its own apps and imposing its payment system on app developers.
Conclusion:
The Competition Commission of India plays an instrumental role in ensuring a level playing field, particularly in the era of globalization, where MNCs have a significant market presence. By actively intervening and penalizing dominant enterprises for anti-competitive practices, CCI preserves the principles of fair competition, thereby benefiting both consumers and other market players.
