Business
Trade bodies seek changes
By Our Special Correspondent
NEW DELHI
FEB. 11.
The Competition Bill 2001 in its present form is likely to severely stifle business activities and growth as it cannot be flexible, dynamic and responsive to the needs of an emerging competitive market scenario.
Conveying this view to the Government, the trade bodies and chambers of industries have pointed out several anomalies and cautioned the Government that not much would be achieved unless and until the pitfalls are removed to facilitate competition.
In a note detailing the drawbacks, Associated Chamber of Commerce and Industry has claimed that the Bill, far from facilitating competition, vest excessive discretion in the Competition Commission of India (CCI) which is likely to impede business activities by creating a "bureaucratic Leviathan" similar to the MRTP. The Bill is replete with `loosely worded' or undefined terms and evaluation criteria which are further likely to bolster the powers of the CCI.
However, if Parliament decides to enact legislation on the basis of the Bill which already stands introduced, the Government would urgently need to address certain anomalies. It would need to provide for a cooling off period of 15 to 18 months before the Act comes into force.
Dwelling further on the issue, the note says that the Act can become operational with the establishment of CCI under it. All cases relating to restrictive trade practices pending before the MRTP Commission could be transferred to CCI and those involving unfair trade practices could be entrusted to the National Consumers Commission.
But the joint ventures should not be subjected to scrutiny of the CCI. The law in such cases should step in only when JVs misuse their dominant position. Mergers and amalgamations should be left to be examined by the courts which, as it is, do so under the Companies Act.
The note says that it should be clarified that the shareholding of only those enterprises which act in concert should be aggregated for the purposes of determining whether they constitute a group or not. The power to divide a dominant enterprise should be deleted from the Bill as it is inappropriate in the Indian context.
Further, the Bill should clearly define `dominance', `abuse of dominance', `consumer interest' and `relevant market' and an enterprise should also have an option to avail of alternate dispute resolution process like arbitration and reconciliation. No agreement should be deemed to be per se illegal or anti-competitive unless it is proved to be detrimental to consumers.
Power to issue directions to the Commission or to supercede it being vested in the Central Government would be destructive of the autonomy of the body and should be deleted from the Bill. Also, the monetary limit with regard to turnover and assets, however high, is always artificial and get outdated and stipulation of such limits should be avoided, the Assocham note said.
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