<div>The Competition Commission of India (CCI), the competition watchdog established under the Competition Act, 2002 (as amended), commenced its journey on 20 May 2009 to establish a level-playing field for all participants in markets. Last month, the Commission celebrated its 4th anniversary which was widely covered in the press and media. In this four year period, the Commission has passed about 230 orders in respect of breaches arising out of Sections 3 and 4 of the Competition Act. The Commission imposed penalties in 19 cases upon defaulting companies. Barring a few minor penalty cases against companies, most of the cases involving large penalties are awaiting the final decision of the Competition Appellate Tribunal (COMPAT), the first statutory appellate authority.<br /><br />In view of the aforesaid backdrop, it would be interesting to examine a few important provisions of the Competition Act and assess the growth of trade-related competition in India. The preamble of the Act inter alia aims at protecting the interests of the consumers besides ensuring freedom of trade carried on by other participants in markets in India. <br /><br />Therefore, protection of consumer interest is one of the main objectives of the legislation. Presuming all orders of the CCI imposing penalties against various companies are upheld by the appellate authorities, even then the consumers in India are unlikely to be benefitted. In terms of Section 47 of the Competition Act, the penalties shall be deposited with the Consolidated Fund of India (CFI). However, the Competition Act does not state the mechanism or process of what would happen to such penalties once deposited with the CFI. It is also unclear as to how the custodian of the CFI would plough back the same in the market, thereby enhancing consumer welfare. The Government of India may have some concrete plan in this behalf but nothing is available in the public domain which will enable consumers in India to expect reduction of excessive charges on goods and services and thereby result in betterment of their livelihoods.<br /><br />Though the law provides for claims of compensation before COMPAT, including class actions subsequent to a final order of the authority, yet in the absence of procedural regulations /guidelines in this behalf, such right of follow-on actions by consumers seems to be a statutory right in vacuum. The challenges a consumer in India may face while claiming damages out of class action would be multifaceted. Very rarely do wholesalers and retailers in India issue formal cash memos to a buyer of any product and over the years such a malpractice has become customary. Consumers also avoid taking a formal cash memo thereby aiding and abetting distortion in the statutory process of collection of taxes by authorities in India. Suffice to say that in the absence of proper documentation of sale and purchase, no claim howsoever serious can be admitted before the authority much less payment made by the defaulting company to the consumers. <br /><br />The chronological analyses raise serious doubt in the minds of consumers as to whether or not this state-of-art enactment (as the Organisation for Economic Co-operation and Development pointed out in March 2008) would really benefit the general consumers and enhance the economic and market efficiencies in India. It is not out of place to highlight that the Commission has found a breach of the provisions of the Competition Act resulting in imposition of penalties in less than 8 per cent of the total cases filed before it.<br /><br /> It may be argued by competition experts or micro-economists that the Commission has been overwhelmingly pro-industry and that the markets in India are already highly competitive. If this argument is held to be correct then India may not require rigorous implementation of competition law and the consumers are not affected by any business misconduct or market failure arising out of anti-competitive practices by companies. Is that really so? Or does the fault lie elsewhere which has not been properly scrutinised or attempted to be remedied in the first four years of the existence of this authority. It is a food for thought for all of us.<br /><br /><em>The authors are members of the Competition/Antitrust Law Team of Khaitan & Co - national level full service Law Firm of India</em></div>