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Raj Kumar Makkad (Adv P & H High Court Chandigarh)     26 November 2009

Competition Act may include imprisionment provision

With the ever-increasing market ushering in new players, competition issues among companies will bring to the fore the indispensable role of the Competition Commission Act(CCA) 2002 in arbitrating and settling, R Prasad, member of the Competition Commission of India(CCI) said at the sidelines of a seminar.

While the CCA is currently envisaged to protect and forbid any blatant abuse of healthy competition in business among competing corporations, with the changing times the law may be amended to incorporate a maximum penal provision like imprisoning the offenders indulging in anti-competition practice like cartel formation, currently punishable by only a fine, he added.

Prasad extols the vibrancy of section-4 of CCA act dealing with the instances of abuse of dominance in the increasingly liberalised market economy by referring to computer chip-makers AMD-Intel’s legal row. The debate raged over the latter’s anti-competitive end-users discount pricing practice before the European competition commission pronouncing a penalty of 1.25 billion euros to the aggrieved AMD. “Besides the hefty fine, jail sentences were awarded to companies found violating the clauses of the competition law in Europe. While in India the maximum penalty ends with a fine, it might not be surprising that an imprisionment provision will be incorporated to add more teeth to the present CCA”, he said.

Quoting the possible infractions of CCA in one of the fastest sectors of economy – the media and entertainment industry – the member of the CCI said section-3 of the CCA will come in to play in the wake of the growing advertisement market, which now stands at $15 billion a year. “The section-3 of the act states that any agreement having adverse impact on competition is void in law”, he said.



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