Introduction:
In COVID-19 outbreak, the pathogen which is causing the coronavirus has been widely spread throughout the world and still, the world is suffering from the consequences caused by it. Across the world, this pandemics’ effect is being seen in every sector of life especially in the marketing and business sector (the sector where the competition law plays a vital role).
Competition law is ruled by Competition Act, 2002 which was enacted by the Indian Parliament in the fifty-third year of the Republic of India, overruling the earlier act “The Monopolies and Restrictive Trade Practices Act, 1969”. The Competition Commission of India (CCI) was established under chapter3 of this Competition Act, 2002 for preventing adverse effects of competition in India. Subsequently, this Act was amended in 2007 & 2009 called by the Competition Act, 2007 and the Competition Act, 2009 respectively.
This Act is used as a tool by the judiciary to prevent and to punish persons and business organizations those who are practicing anti-competitive (anti-trust) business practices and to avoid unnecessary interference by the government in the market.
Position of Competition Law in Current Situation
There are many aspects in deciding the prices of goods or services in the market by the providers. We can see a very high probability, in the businesses which are dealing with essential commodities like masks and sanitizers in current situations which are in huge demand, that the business corporations may indulge in various ways, in order to earn more profits, like fixing of high prices, limiting the production or supply, marketing low-quality products, etc. Such activities in the market should be looked after by the respective authorities and take up necessary actions as per law; as such practices are strictly prohibited by law according to this act even during these pandemic situations. Above mentioned aspects are some of the un-lawful activities under section 3 (3) of this Act.
The Competition Commission of India cautioned companies against unfair practices during COVID pandemic to contravene any of the provisions of the Act. The commission said it would consider accruing benefits to customers, improving the production or distribution of products or the provision of services, and promoting technological, scientific and economic growth, pursuant to section 19 (3) of the Act, while assessing completion.
Notifications by Competition Commission of India
The Competition Commission of India (CCI) Chairperson Ashok Kumar Gupta said the regulator is adopting a multi-pronged approach to ensure that the law is not infringed. On 23rd March 2020, the CCI had issued a notification as a preventive measure, which notifies that-
- It adjourned all matters listed before it till 31st March 2020.
- It suspended all filings in reference to Section 3 and 4 of the Act, all notification in relation to combination under Section 6 and 20 of the Act, all other filing, submissions and proceeding under the Act and regulation made thereunder including those before the Director general and pre-filing consultations.- till 31st March 2020.
Subsequently, CCI on 13th April 2020 allowed e-filling of combination notices, continuing the suspension of all other activities. Vide order dated 20th April 2020, CCI continued with the suspension of hearing of matters till 3rd May 2020 but the commission allowed submission of information under section 3 and 4 as well as Combination notices electronically at the addresses mentioned in the notice.
Gupta said a dedicated helpline was systematized to attend to the queries and problems of stakeholders during the pandemic and all urgent receipts from government /statutory bodies as also representations were given inputs efficiently and they were processed electronically.
To deal with significant changes in the supply and demand patterns arising out of the “extraordinary situation” due to the pandemic, Gupta said Competition Commission of India issued an advisory for the guidance of businesses.
Competition (Amendment) Bill, 2020
Though the Competition Act, 2002 is implementing effectively with timely amendments in 2007 & 2009, due to the dynamic structure of Indian markets a need was felt to review the Act again. The Government then constituted the Competition Law Review Committee in 2018 to study the current trends and examine the Competition Act. The bills proposed amendments are an array of structural, administrative and substantive changes.
Keeping in view of the precedents by the Supreme Court and the Delhi High Court – Brahm Dutt vs Union Of India (AIR 2005 SC)and Mahindra Electric Mobility Ltd. vs CCI, respectively the committee also recommended the establishment of a governing body and also recommended to convert the existing office of DG (section 16 of the Act) into an investigative branch of CCI.
The proposals of the bill widen the scope of the Act by bringing digital marketing within its fold. The Bill seeks to widen the section 3 to mitigate the effects arising from horizontal or vertical agreements while considering the orders passed by CCI in Hyundai Motors case, Uber case and Ramakant Kini vs Dr L. H. Hiranandani Hospital.
Bill also considered the practices prevailing in the UK, US, Brazil and recommended to adapt their practices in some areas of Competition law.
Measures Taken by Different Jurisdictions
Companies should be mindful that the competition law applies to them even in times of crises like these, any partnership, however well deliberated, entails the competition law risks. Companies in the market need to be alert. Different jurisdictions have different commissions and these commissions should be alert and be focused on crises issues and make companies aware of the consequences. Authorities have responded in the previous Hurricane Katrina crises, the US. Federal Trade Commission took over and investigated before and after the crises and stated that several refiners, wholesalers and retailers changed the prices to a high level.
Recently, the US Attorney General stated that antitrust compliance is of crucial priority in the midst of these crises.
In addition, on 23rd march 2020, European Union Authorities issued guidelines on the implementation of competition laws in COVID19, in which they loosened competition laws for crises, but it is also quite clearly stated that companies taking benefit of this crisis to boost the prices or deceive customers should not expect the authorities to show mercy.
The world is coming together to discover the vaccine to stop the spread of the coronavirus and to help save many lives in the world. Governments have procured the support of private corporations to manage these operations (discovery of vaccine) jointly.
Conclusion
As time passes new challenges and new marketing areas will come up as part of competitiveness. In order to meet and to include new areas of marketing, the relevant acts need to be amended and to establish new bodies to implement the Act effectively for the benefit of all concerned.
References:
www.mondaq.com
economictimes.indiatimes.com
en.wikipedia.org
www.ssconline.com
indiankanoon.org
indialawjournal.org
BY
K.Geetha vaishnavi
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