Competition Advocacy

Author : V S Warrier

Advocacy is often referred to as compliance without enforcement. In many countries, the competition law or the government policy, assigns an active advocacy role to the competition authority. In India, an important advocacy mandate is given to the competition commission under Section 49 of the Competition Act, 2002.

The Competition Act, 2002 extends the mandate of the Competition Commission of India beyond merely enforcing the law. Competition advocacy creates a culture of competition. There are many possible valuable roles for competition advocacy, depending on a country’s legal and economic circumstances.

Competition Commission of India, the Regulatory Authority, in terms of the advocacy provisions in the Act, is enabled to participate in the formulation of the country’s economic policies and to participate in the reviewing of laws related to competition at the instance of the Central Government. Section 49 under Chapter VII of the Act, deals with competition advocacy.

The Central Government, in formulating a policy on competition including review of laws related to competition, may make a reference to the Commission for its opinion on possible effect of such policy on competition and on receipt of such a reference, the Commission shall, within sixty days of making such reference, give its opinion to the Central Government, which may hereafter formulate the policy as it deems fit.

The opinion given by the Commission under sub-section (1) of Section 49, shall not be binding upon the Central Government in formulating such policy. The Commission shall take suitable measures, as may be prescribed, for the promotion of competition advocacy, creating awareness and imparting training about competition issues.

The primary objective of the Competition Advocacy is to strengthen the competition awareness and culture among the market players, thereby encouraging self-compliance and reducing the need for direct action against erring enterprises.

However, the Commission has not received any reference so far from a ministry under section 49, but it has on its own offered its opinion in certain cases to the concerned authorities in the hope that this will help the authorities in designing more market oriented policies that, if these restrict competition, will do so only to the extent necessary for meeting the policies’ objectives.

The Competition Commission faces a formidable task in building awareness and support for competition policy among the citizens and the business community. The Commission, after its establishment, has been undertaking work relating to competition advocacy and institutional building.

A useful but technically difficult educational tool for competition agencies is the promulgation of guidelines on specific substantive competition policy areas. Most competition laws are written in sparse, general terms, and such enforcement guidelines can help businesses to conform to the law. The Commission must draw up such guidelines carefully so that it may not fall within the ambit of advance ruling.

In the advocacy work, the Commission has undertaken awareness programs with industry chambers and other bodies and has interacted or intervened with the Central and State Governments relating to competition issues in the Government’s policies and laws.
The Commission can also organize conferences, seminars and workshops to promote;

  • understanding of the role of competition in a market economy and to show how its enforcement activities further such goals;
  • how competition benefits both consumers and businesses by ensuring the supply of goods and services at the lowest possible price and highest possible quality;
  • how producers in competitive markets are forced to respond to the demands of their customers; and,
  • how competitive markets result in the most efficient allocation of resources, to the benefit of the entire economy.

The Commission has also brought out competition advocacy literature for wide distribution. It has initiated competition assessment studies through reputed institutions in various areas of the economy. The Commission has arranged training programs for its staff and other stakeholders within and outside the country. It has been interacting with academic institutions for inclusion of study of competition policy and law in the curriculum for law, economics, and management courses.

In a country where the competition culture is relatively weak, competition advocacy acquires a great significance in creating general awareness about the benefits of competition and the role of competition law, as well as in influencing government policy in a more pro-competition direction.

The Commission will therefore be assuming the role of competition advocate, acting pro-actively to bring about Government policies that lower barriers to entry, that promote deregulation and trade liberalisation and that promote competition in the market place.

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