TAMIL NADU NATIONAL LAW UNIVERSITY

TIRUCHIRAPPALLI
A State University Established by Act No.9 of 2012
Navalurkottapattu, Srirangam (TK), Tiruchirappalli - 620 009 Tamil Nadu

PROJECT TITLED
“INTERFACE BETWEEN CCI AND SECTORAL REGULATORS”
SUBMITTED TO
PROF. Mr.MOHAMMAD AZAAD
In Fulfilment of the Requirements for Internal Component in

COMPETITION LAW

SUBMITTED BY
S.SHINY SREE
(BC0150023)
 TABLE OF CONTENTS

INTRODUCTION ..................................................................................................................... 3

THE AUTHORITY OF CCI....................................................................................................... 4

COINCIDENCE BETWEEN CCI AND SECTORAL REGULATORS ................................... 5

AUTHORITY OF COMPETITION IN VARIOUS SECTOR REGULATION ........................ 8

1. Petroleum And Natural Gas Regulatory Board Act, 2006 .......................................... 8.

Telecom Regulatory Authrority Of India Act, 1997 .................................................... 9

3. RBI Act, 1934 ........................................................................................................... 100

4. Securities And Exchange Board Of India Act, 1992 ................................................ 111

POSSIBILE WAYS OF REDUCTION OF CONFLICT BETWEEN SECTORAL

REGULATORS AND CCI ..................................................................................................... 111

1. Clarification of Jurisdictional Roles ......................................................................... 122

2. Competition Authority seen as a Subordinate for Sectoral Regulators .................... 133

3 Simultaenous Existence Of Competition Authority And Sectoral Regulator ........... 133

4. A Mandatory Cooperative Framework .................................................................... 144

CONCLUSION ......................................................................................................................... 15

BIBLIOGRAPHY ..................................................................................................................... 16

Books .................................................................................................................................... 16

Articles .................................................................................................................................. 16

Websites ................................................................................................................................ 16

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INTRODUCTION

Business regulation is perhaps as old as the businesses themselves. While modern, liberalized
economies have increasingly relied upon markets for allocation of resources, markets can also
fail and lead to undesirable upshots.1 These extreme possibilities with the market has ensured
that governments oscillate between the limbs of regulation and competition in order to ensure
that when market fails, it doesn‟t crash land but is provided with a suitable parachute.
Regulation, implemented through sector specific regulators and competition regulation, through
the competition authority, differ in their approach to regulating business in the market.

Competition law seeks to promote efficient allocation and utilization of resources, which are
usually scarce in developing countries. A good competition law lowers the entry barriers in the
market and makes the environment conducive to promoting entrepreneurship whereas,
regulations are public constraints on market behavior or structure. They usually refer to a diverse
set of instruments by which governments set requirements on businesses and citizens.
Regulations can be categorized as under:

 Economic Regulations – Those which intervene in market decisions such as pricing,

competition and entry/exit.
 Technical Regulations: Those which regulates the technical aspects which are distinct
and unique to the sector
 Social regulations – Those which protect public interest such as health, safety,
environment.
 Administrative regulations – administrative formalities through which government
collects information and intervenes in individual economic decisions.

The objective of a sectoral regulator is to provide good quality service at affordable rates, but the
promotion of competition and prevention of anticompetitive behaviour may not be high on its
agenda or the laws governing the regulator may be silent on this aspect. It is not uncommon for
sectoral regulators to be more closely aligned with the interest of the firms being regulated,
which is also known as „regulatory capture‟. Besides, a sectoral regulator may not have an

1
Cass R. Sunstein, Free Markets and Social Justice, Oxford University Press, Oxford, 1997, p.3.

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overall view of the economy as a whole and may tend to apply yardsticks which are different
from the ones used by the other sectoral regulators. In other words, there is a possibility of the
lack of consistency across sectors.

Therefore, it is evident that the role of sector specific regulators is overlapping but quite distinct.
Unlike the sector specific regulators, competition authority takes a holistic view of the economy
and addresses behavioral issues after the problem arises. The competition authority also
addresses the unfair transfer of wealth that may take place between the consumers and firms
wielding market power.

THE AUTHORITY OF CCI

The CCI is under duty to eliminate practices having an adverse effect on competition, promote
and sustain competition, protect the interests of consumers and ensure freedom of trade carried
on by other participants, in markets in India.2 Undoubtedly, this mandate is extraordinarily wide.
It is also agnostic about sector specific regulators. A similar language has been used in the
preamble of the Act and is also covered in S. 18.3

The Act stipulates co-operation between the CCI and the statutory authority by way of Section
21 and 21A. Section 21 stipulates that the statutory authority may refer an issue to the CCI, if
there exists any conflict between the Act and the sector-specific regulations. In such a case,
while the CCI is bound to deliver its opinion within a stipulated period of 60 days, it is not
necessary for the statutory authority to abide by such opinion.4 Similarly, the CCI may make a
non-binding reference to the statutory authority in case there is any conflict between the
provisions of the Act and statutory regulations.5

While the CCI in the past has sought advice from sector-specific regulators in various instances6
and has also provided its expertise to other regulators7, given that cross-referencing is not

2
Section 18, Competition Act, 2002
3
Section 18, Competition Act, 2002
4
Section 21, Competition Act, 2002
5
Section 21A, Competition Act, 2002
6
In Shri Neeraj Malhotra, Advocate vs. North Delhi Power Ltd. &Ors (Case No. 6/2009), the CCI sought an opinion
of the Delhi Electricity Regulatory Commission ("DERC"); the CCI took an opinion of Airports Economic

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compulsory and the CCI and the statutory authority are not bound by the findings of each other,
concerns have been raised in relation to effectiveness of these provisions.

Specific provisions contained within the legislation demonstrate the probable tension. Section 60
of the Competition Act, 2002 is the usual non obstante provision asserting the supremacy of
competition legislation within the domain of competition enforcement.8 However, Section 62 of
the Competition Act, 2002 encouragingly declares that competition legislation ought to work
along with other enactments.9 Both sections 60 and 62, ironically, are couched in mandatory
language.

Therefore, the Act vests ultimate responsibility on the CCI to adjudicate upon competition-
related issues, across all sectors. However, similar powers have been bestowed on a number of
independent regulators such as Telecom Regulatory Authority of India ("TRAI"), Central
Electricity Regulatory Commission ("CERC"), Insurance Regulatory Development Authority
("IRDA"),Petroleum and Natural Gas Regulatory Board ("PNGRB"), the Reserve Bank of India
(“RBI”), Securities Exchange Board of India (“SEBI”), to regulate and promote competition in
the relevant sector. This power tussle between CCI and sectoral regulators will be discussed
below in detail.

COINCIDENCE BETWEEN CCI AND SECTORAL REGULATORS

The interface of CCI vis-à-vis sectoral regulators is critical. The basic premise to be recognized
is that sectoral regulators have domain expertise in their relevant sectors. The Commission, on
the other hand, has been constituted with a broad mandate to deal with competition for which
certain very specific parameters are laid down under the Act. A formal mechanism for
coordination between CCI and the sectoral regulators is of key importance. As such, there exists
overlapping jurisdiction between the CCI and sector-specific regulators, which has been
challenged many times before the courts of law. It is interesting to see how such overlapping
jurisdiction has been dealt with in the past by the court of law.

Regulatory Authority and PNGRB on certain issues arising in the Mumbai International Airport Private
Limited/Indian Oil Corporation Limited/Bharat Petroleum Corporation Limited/Hindustan Petroleum Corporation
Limited/Mumbai Aviation Fuel Farm Facility Limited, Combination Registration No. C-2014/04/164
7
Opinion was sought by Maharashtra Electricity Regulatory Commission under proviso to Section 21(1) of the Act,
from the CCI in relation to competition law issues arising in Case No. 13 of 2010, dated 14 March 2018
8
Section 60, Competition Act, 2002
9
Section 62, Competition Act, 2002

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The Act empowers the CCI to enforce provisions relating to anti-competitive agreements10,
abuse of dominance11 and combinations12. While exercising its powers, the jurisdiction of the
CCI has been challenged in various instances, wherein the CCI has emphasized its exclusive
jurisdiction over competition related matters. In one of the earlier cases filed with the CCI in
Consumer Online Foundation v. Tata Sky Ltd. & Other Parties13, the jurisdiction of the CCI was
challenged by Dish TV operators on the basis that TRAI had exclusive jurisdiction over issues
arising in the telecommunication industry. The CCI, clarifying its stand in unequivocal terms,
held that competition-related matters shall squarely fall within the purview of the Act.
Subsequently, in Shri Neeraj Malhotra, Advocate vs. North Delhi Power Ltd. &Ors,14 which
alleged anti-competitive behaviour of the electricity distribution companies, the Discoms alleged
exclusive jurisdiction of the DERC on issues relating to anti-competitive behaviour of electricity
distribution companies. However, the DERC, in the said case, categorically stated in its
communication to the CCI that although all matters pertaining to electricity tariff have to be
decided under the provisions of the Electricity Act and DERC Regulations, allegations of anti-
competitive behaviour, including abuse of dominant position by the Discoms fell within the
jurisdiction of the CCI, thus upholding the jurisdiction of the CCI on competition-related issues.

Recently, the CCI in M/s HT Media Limited v. M/s Super Cassettes Industries Limited15, while
deciding on its jurisdiction, held that the powers of the CCI and the Copyright Board are
different and the Copyright Board cannot serve as an effective instrument for promotion of
competition. The CCI while recognizing the role and importance of sector-specific regulators,
held that the CCI being the market regulator, had jurisdiction to look at all issues affecting
competition in the market.

Although competition law is sector-agnostic and is applicable across sectors, the CCI has not
garnered supremacy in all the proceedings. The High Court in certain cases has stayed the
proceedings before the CCI. For instance, the proceedings before the CCI against public sector
10
Section 3, Competition Act, 2002
11
Section 4, Competition Act, 2002
12
Section 5 and 6, Competition Act, 2002
13
Case No. 2/2009, Available at: < http://www.cci.gov.in/sites/default/files/MainOrderConsumer250411_0.pdf >,
Last accessed on April21, 2019
14
Case No. 6/2009, Available at: <http://www.cci.gov.in/sites/default/files/R.DissentingOrder300511_0.pdf>, Last
accessed on April 21, 2019
15
Case No. 40/2011, Available at: <http://www.cci.gov.in/sites/default/files/C-2011-40_0.pdf>, Last accessed on
April 22,2019

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undertakings in the oil sector alleging cartelization in the supply of aviation turbine fuel to Air
India, was stayed by the Delhi High Court,16 since the PNGRB had already passed an order in
relation to restrictive and unfair trade and marketing practices and cartelisation in respect of
marketing and sale of petroleum and petroleum products by public sector undertakings.17

In another instance, Ericsson had initiated legal action against Micromax for enforcing its
intellectual property rights before the Delhi High Court.18Micromax, during the pendency of the
proceedings before the Delhi High Court, filed a complaint before the CCI, accusing Ericsson of
abusing its dominant position by imposing exorbitant royalty rates for standard essential patents
and not licensing it on fair, reasonable and non-discriminatory terms. The CCI passed a prima
facie order directing investigation. Ericsson filed a separate writ petition before the Delhi High
Court challenging the CCI's jurisdiction, since the Patent Act itself provides adequate mechanism
to balance the rights of the patentee and other stakeholders. At the interim stage, the Delhi High
Court directed Ericsson to provide information to the Director General of investigation ("DG"),
however, restricted the ability of the CCI to pass any final order.

Such perceived over-lap of jurisdiction may occasionally result in situations where both CCI and
respective sector regulators may feel that they have jurisdiction to deal with an anti-competitive
conduct in the sector. Recognising the expertise of the CCI in dealing with broad competition
issues in various sectors of the economy and the expertise of different sector regulators in
matters of details such as setting of tariffs and the operating conditions, the legislature has wisely
included Sections 21 and 21A in the Competition Act 2002 (the Act). The expectation was to
clearly demarcate the jurisdiction of the CCI and various sector regulators. The CCI is expected
to deal with overall competition issues and any matter needing competition analysis irrespective
of the sector involved and refer the technical issues involved, if any, to the respective sector
regulators under Section 21 A of the Act. Similarly, the sector regulators are expected to refer

16
Delhi HC stays CCI proceedings against IOCL, HPCL and BPCL, Available at: <
http://www.businesstoday.in/current/corporate/delhi-hc-stays-cci-proceedings-against-iocl-hpcl-and
bpcl/story/200813.html>, Last Accessed on April 22,2019.
17
Reliance Industries Limited &Ors. v. Indian Oil Corporation Ltd. &Ors., Complaint No. 4 of 2008, order dated 12
July 2012, Available at: <http://www.pngrb.gov.in/pdf/orders/order02july.pdf >, Last accessed on April 22, 2019
18
Elefonaktiebolaget Lm Ericsson (Publ) V. Mercury Electronics AndAnr. CS(OS) 442/2013, Available at: <
http://delhihighcourt.nic.in/dhcqrydisp_o.asp?pn=46519&yr=2013>, Last accessed on April 22, 2019

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competition issues before them to CCI under Section 21 of the Act if the competition issues are
involved.19

AUTHORITY OF COMPETITION IN VARIOUS SECTOR REGULATION

Various sector specific regulations also appear to provide the regulators constituted there under
with the power to decide on or regulate the aspect of maintaining or promoting competition in
the relevant sector.

1. TELECOM REGULATORY AUTHRORITY OF INDIA ACT, 1997

Among its objectives, TRAI seeks to provide a “fair and transparent policy environment which
promotes a level playing field and facilitates fair competition”. In fulfilling its objectives, the
work of TRAI overlaps with that of the CCI.

However, despite sharing a common goal, it is also true that sector regulators and competition
authorities differ in their mandates and approach. Sectoral regulators co-exist and provide
specialized regulation for their respective sectors as they possess extensive domain knowledge
for the same. Competition laws seek to protect competition in the market, not the participants in
the market, and aim to prevent anti-competitive activities in the same. Their goal is to maximise
productive and allocative efficiency. The chief point of divergence between regulation of a sector
and competition is that the approach of the sector regulator is direct while that of the CCI is
indirect. In case of TRAI, its activities seek to pre-empt the possibility of market failure by
instructing telecom service providers the actions that must be taken; the CCI on the other hand
emphasises the need to inform market players about actions that should not or cannot be taken
with a view of preserving competitive conditions, only intervening to remedy possible market
failure (except in the case of merger review).

When TRAI regulates the tariff rates set by telecom service providers, one of the principal aims
is to keep the tariffs reasonable for the consumer and prevent monopolistic practices. However,
the same issue, when under the purview of the CCI, would have different implications. The CCI
will look into the long-term effects of low tariffs which may become a restriction on the entry of
19
K.K. Sharma,„Necessary and Sufficient‟ Test: Healthy Inter Regulatory Relationship – Part I, Competition Law
Reports,June 2014

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new firms in the market who do not possess the same economies of scale as the current service
providers, leading to inhibition of competition in the market. In order to protect competitive
practices, the CCI would be in favour of keeping the tariffs at a rate higher than what could be
provided to the consumers in the short run.

The difference in the approach of the CCI and TRAI towards the same issues and the fact that
their jurisdictions overlap due to legislative oversight leads to cases of jurisdictional conflicts.
This overlapping jurisdiction predates the current Competition Act and existed even in the era of
the MRTP regime. In Star India Pvt. Ltd vs Sea T.V. Network Ltd. & Another,20 TDSAT made a
ruling in an attempt to clarify the jurisdictional challenges between the MRTP Commission and
TRAI. It observed that the MRTP commission had no jurisdiction over a dispute based on
violation of a regulation made under the TRAI Act, even though the Regulation pertains to the
subject of monopoly and restrictive trade practice. However, it also acknowledged that as given
under the TRAI Act, anti-competitive practices would remain under the jurisdiction of the MRTP
Commission.

More recently, in the Consumer Online Foundation v. Tata Sky Ltd. & Other Parties, Dish TV
submitted that the CCI could not claim jurisdiction over this matter as TRAI and TDSAT were
already vested with the “jurisdiction and responsibility to govern and regulate the
telecommunication industry covering telecom, broadcasting and cable TV services…” The CCI
held that any matter that raises competition concerns would fall within the purview of the
Competition Act, thereby enabling CCI to exercise its jurisdiction. Here, it is pertinent to note
that the Competition Act limits the jurisdiction of the CCI to issues pertaining to competition
alone. Therefore, TRAI is the sole regulating authority in the technical and economic matters of
the telecommunication industry.

2. INSURANCE REGULATION AND DEVELOPMENT AUTHORITY ACT, 1999

IRDA was established in 1999 under the Insurance Regulation and Development Authority Act,
1999. The regulator was established to regulate, promote and ensure the proper growth and
development of the insurance and re-insurance sector. As provided for under section 14(2) of the
IRDA Act, 1999, duties of IRDA do not have much overlaps with those of CCI, although it is

20
(2006) 2 CompLJ 487 TelecomDSAT

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important that the regulator be conscious of competition provisions in pursuing some of its
functions. For example, when the regulator modifies, suspends or cancels registration for an
entity, it is important that the effect on competition be factored into the decision.

In addition, when the regulator devises methods for promoting efficiency in the conduct of
insurance business as well as when adjudicating disputes between insurers, it is also important to
ensure that such decisions are not competition distorting. IRDA„s recently produced regulations
on amalgamations and transfer of business also has the potential to overlap with CCI„s mandate
to regulate combinations. Under the IRDA (Scheme of Amalgamation and Transfer of General
Insurance Business) Regulations, 2011, IRDA now has the authority to regulate combinations in
the insurance sector, which would also have to pass through the scrutiny of CCI.

3. RBI ACT, 1934

The RBI, which started operating on April 01, 1935, in line with the RBI Act of 1934, has a
myriad of objectives. These include ensuring monetary stability; operating the currency and
credit system of the country; foreign exchange and reserves management, government debt
management, financial regulation and supervision and acting as banker to the banks and to the
government (RBI, not dated). In that regard, its legislation bestows upon it powers to design and
implement the policy framework for banking and non-banking financial institutions, which
generally serve to provide people access to the banking system, protect depositors‟ interest and
maintain the overall health of the financial system.

Recently, in “pre-payment penalty case”21 CCI notices to banks asking them to explain the
imposition of penalty on borrowers for pre-payment of home loan. CCI „s notices is based on
premise the pre-payment penalty acts as a barrier by preventing customers to shift their loans
from one bank to another which offer better interest rates. Pre- payment penalties have been in
existence for a long time. However, its impact on the Banking sector was never detected or
analyzed by RBI, primarily because RBI officials haves not been trained to do so. In fact just
after CCI‟s intervention a senior RBI official gave following statement to medial” We will direct
banks to do away with the pre-payment penalty in case of loan disbursed in Future.” It is clear
that a regulatory loophole existed which need to be filled by CCI. This is the first case where

21
Neeraj Malhotra v Deustche Post Bank Home Finance Ltd. &Ors., Decided on 23.5.2011(relating to charging of
foreclosure charges on prepayment of mortgage loan)

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CCI has issued its final order after DG has investigated the matter). The majority order of CCI
exempts banks from any liability under the Competition Act. However, Mr. Parashar and Mr
Prasad in their separate dissenting order have found banks violation provisions of Section 3 of
the Act.

4. SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

SEBI was established in terms of the Securities and Exchange Board of India Act, 1992, to
promote the development of the securities market as well as protecting the interests of the
investors in the sector. An appellate body, the Securities Appellate Tribunal, was also established
in terms of Section 15K of the SEBI, Act. Among the functions of SEBI, as outlined under
Section 11(2) (e)28 and (h)29 of the Securities and Exchange Board of India Act, 1992, are the
functions with a possible overlap with the Competition authority. The Sections mandate SEBI to
prohibit fraudulent and unfair trade practices relating to securities markets and regulate
substantial acquisition of shares and takeover of companies in the sector. In that regard SEBI
came up with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (the
Takeover Code). This outlines procedures which SEBI expects stock exchange-listed firms to
observe when merging. These mergers thus pass through the scrutiny of the SEBI, which also
brings in a possible overlap with CCI.

In NSE-MCX case22, CCI in this case imposed penalty of Rs 55.5 crores upon NSE for it abuse of
Dominant position in the Stock exchange market by indulging into the practice of predatory
pricing and also abusing its dominant position to protecting other relevant market.

POSSIBILE WAYS FOR REDUCTION OF CONFLICT BETWEEN SECTORAL

REGULATORS AND CCI

Having settled for some sort of framework overseeing business conduct, the Indian policy
makers are faced with the dilemma of choice between sectoral regulation and competition law. In
order to organize the division of labor between sectoral regulators and competition authorities,
there are three board options available:

22
National Stock Exchange Vs Multi Stock Exchange decided on 25.5 2011

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 1. CLARIFICATION OF JURISDICTIONAL ROLES
Sectoral regulator may be vested with powers of ex ante control and the competition authority
may be given the ex post authority. E.g. fixation of electricity tariffs may be left to the electricity
authority constituted under the Electricity Act unless the prices are claimed to be excessive or
predatory which then may require an ex post review by the competition authority.

Competition agencies are best suited to examine behavioral issues while sectoral regulators are
better equipped for structural matters. Therefore, giving primacy to one over the other as some
jurisdictions have done is not sound judgment. All sector regulators have the duty to promote
competition in their respective sectors as drafted in their preamble. However, this is not to be
interpreted in a manner that they are also required to check anticompetitive practices in their
sector and preclude the CCI from performing its legitimate duties. This was argued recently in
the clash between PNGRB and CCI. The CCI has been set up with a specific mandate and is best
suited to look into matters concerning competition such as mergers, abuse of dominance etc. that
are detrimental to economic democracy and consumer interests.

Furthermore, the preamble and section 18 of the Competition Act entrusts the CCI with the duty
of sustaining competition in whole economy of India. Notwithstanding this reasoning, regulators
such as RBI and Department of Telecommunications (DoT, which oversees mergers in the
telecom sector as against the regulator: TRAI) have been pushing for exemptions from the CCI
over mergers in their domain.

Furthermore, a discrepancy is clearly visible in some of the statutes that have been drafted with a
clear legislative intent to vest consumer related issues within the jurisdiction of the Consumer
Protection Act but do not have the same treatment to the Competition Act or its predecessor
MRTP Act. For example, the Electricity Act, while giving overriding powers to the Consumer
Protection Act in matters of conflicts between the two statutes under Section 173, has kept core
competition issues of market dominance which also serves to protect consumer welfare, within
the ambit of the sector regulator under Section 60 of the Electricity Act. We have already seen
how the statutory application has varied in interpretation.

On the other hand, a good statutory application of this principle can be witnessed in the Airport
Economic Regulatory Authority (AERA) Act which has not discriminated between the

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Consumer Protection Act and the Competition Act in granting exemptions from the purview of
the jurisdiction of the AERA Act.

Drawing inspiration from countries such as South Africa and Brazil, India needs to make
attempts at attacking the roots of the overlap conflict problem by addressing the existing
legislative ambiguities.

2. COMPETITION AUTHORITY CAN BE SEEN AS A SUBORDINATE FOR SECTORAL

REGULATORS
Another option is to make competition authority responsible for both sector specific regulation as
well as overarching competition enforcement. This approach is advantageous as this reduces the
problem of multiplicity of regulators and accumulates sectoral expertise. Indeed, Australia has
taken this approach to settle for an economy-wide economic regulator that integrates technical
and competition regulation.23

However, experts have expressed their concern that this may lead to complex bureaucratic
structure. There is also a lingering danger that the regulator may prefer using direct regulatory
power over indirect competition enforcement powers.24

3. SIMULTANEOUS EXISTENCE OF COMPETITION AUTHORITY AND SECTORAL

REGULATOR

Institution-building is a complex, time-consuming exercise. At a pragmatic level, sector specific

regulators are here to stay as it would be practically impossible to abolish the authorities that
have already come into existence.25 Further, experiences of other countries aren‟t of much
assistance. There is a wide diversity in models that are available. While Australia on one hand,
privileges competition authority, the UK grants explicit concurrent powers to sectoral regulators.

23
Subgroup 3: Interrelations Between Antitrust And Regulatory Authorities, Antitrust Enforcement in Regulated
Sectors Working Group, International Competition Network, Report to the Third ICN Annual Conference, Seoul,
April 2004, pp. 20-23
24
Antitrust Enforcement in Regulated Sectors Working Group, International Competition Network, Report to the
Third ICN Annual Conference, Seoul, April 2004, p. 5.
25
Subgroup 2: Interrelations Between Antitrust And Regulatory Authorities, Antitrust Enforcement in Regulated
Sectors Working Group, International Competition Network, Report to the Fourth ICN Annual Conference, Bonn,
June 2004, p. 9.

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The optimal, sui generis model must be rooted in contextual legal milieu. To be sure, both sector
specific regulator and competition authority have unique core competencies to offer.
Nevertheless, there are pragmatic, descriptive as well as normative justifications why Indian
competition authority ought to trump sectoral regulators.26

Descriptively, the compelling justification behind primacy of competition authority is that unlike
legislations governing sector specific regulators, competition legislation grants private right of
action along with provision of damages. The twin rubrics of private enforcement and damages
ensure a qualitatively higher standard of consumer welfare which is unavailable under the
legislative framework of any sector specific regulator.27

4. A MANDATORY COOPERATIVE FRAMEWORK

The importance of coordination between the competition authorities and sectoral regulators has
been highlighted by a Working Group on Competition Policy established by the Planning
Commission of the Government of India in 2006 and its recommendations were inserted in the
Policy Document on the Five Year Plan: Inclusive Growth under Chapter 11: Consumer
Protection and Competition Policy. This was adopted by the National Development Council in
December, 2007. Para: 11.33 recommends:

“The interface between the Competition Commission vis-à-vis sectoral regulators is critical. The
basic premise to be recognized is that sectoral regulators have domain expertise in their relevant
sectors. The Competition Commission, established under the Competition Act, 2002 on the other
hand, has been constituted with a broad mandate to deal with competition for which certain very
specific parameters are laid down under the Act. A formal mechanism for coordination between
the Competition Commission and the sectoral regulators is, therefore, of key importance.
Coordination between sectoral regulators and Competition Commission should be made
mandatory through suitable provisions in the Competition Act, 2002 and sectoral laws”.

Emerging from the discussions held in this paper, a concurrent framework is probably the most
desirable approach for India to follow. Such a framework should however provide for mandatory
mutual consultations on overlapping issues.

26
Interface between Competition and Sector Regulators, Project Report, CCI, July, 2012
27
Competition and Regulatory Overlaps: The Case of India, Available at: <http://www.cuts
ccier.org/IICA/pdf/Country_Paper_India.pdf>, Last accessed on April 21, 2019

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CONCLUSION

The role of sectoral regulators and the CCI may be overlapping, but neither can substitute the
other. Each has its own area of specialisation and expertise. Since both these bodies must co-
exist, it is important that clarity in their mandate be brought sooner.

The current cooperation framework envisaged under the Act cannot be regarded as an adequate
framework for the two sets of regulators to harness their expertise. While Sections 21 and 21A of
the Act provide for consultations between both CCI and the sector regulators, these consultations
are not mandatory. In addition, the wording of the Section also implies that the decision to seek
the opinion is not something that can be forced upon either of the parties, which brings loopholes
into the system. Going by some recently observed problems, it is important that a framework
governing coexistence between CCI and the regulators be mapped soon. A cooperation approach
appears easier, as it does not entail much change in the legislation and regulation system. A
cooperation framework requiring memoranda of understanding with different regulators would
do better than the current system.

However, it is important to note that such a cooperation framework will not be likely if CCI and
the sector regulators still prefer exclusive jurisdiction. Whilst memoranda of understanding and
other cooperation agreements between the regulators would be in good faith, problems could also
arise in the implementation if the regulators do not fully subscribe to such a framework.

A concurrent jurisdiction approach is what is likely to work in India. Such an approach would
call for amendments to the current Competition Act, 2002, as well as the respective sector
regulation, to ensure that the need for cooperation becomes binding. The amendment would give
some powers to sector regulators to enforce the provisions of the Competition Act, 2002, in their
respective sectors, but in collaboration with CCI. In addition, a platform for referring
disagreements on the best-placed regulator to deal with the case would also have to be created;
such disagreements are bound to happen.

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BIBLIOGRAPHY

BOOKS
 Abir Roy &Jayant Kumar, Competition Law in India, 2008, Eastern Law House
 VinodDhall, Competition Law Today - Concepts, Issues, and the Law in Practice, 2008,
Oxford University Publication India
 T. Ramappa, Competition Law in India - Policy, Issues and Development, 2nd Edition,
2009, Oxford University Publication India

ARTICLES
 Samir R. Gandhi, Interface between competition law and sectoral regulators, Economic
Laws Practice
 Suhail A. Nathani&GauriChhabra, CCI and Sector-Specific Regulators, 27 November
2014
 Singh, Hemant and Naruka, Radha, Telecom Regulatory Authority of India &
Competition Commission of India: Jurisdictional Conflicts, April 17, 2013
 Interface between Competition and Sector Regulators, Project Report, CCI, July, 2012
 K.K. Sharma, „Necessary and Sufficient‟ Test: Healthy Inter Regulatory Relationship –
Part I, Competition Law Reports,June 2014

WEBSITES
 http://oldwebsite.iica.in/images/Mr_Samir_Ghandhi_MELP.pdf
 http://www.legalera.in/legal-articles/item/15235-cci-and-sector-specific-regulators.html
 https://nujssitc.wordpress.com/2013/11/06/interface-between-the-jurisdiction-of-the
competition-commission-of-india-cci-and-the-telecom-regulatory-authority-of-india-trai/
 https://papers.ssrn.com/sol3/Data_Integrity_Notice.cfm?abid=2252530
 http://www.cci.gov.in/
 http://www.businesstoday.in/current/corporate/delhi-hc-stays-cci-proceedings-against-
iocl-hpcl-and bpcl/story/200813.html
 http://www.manupatra.co.in/newsline/articles/Upload/754A93CA-D611-418C-8311-
0B9A328EC6F9.pdf

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