CCI confident it will get to police all sectors

No sector will be left out of the purview of the Competition Commission of India (CCI), the commission’s Chairman Ashok Chawla indicated to Firstpost.

Regulators like the Reserve Bank of India (RBI) and the Telecom Regulatory Authority of India (Trai) have been opposing the idea of CCI having a say in determining mergers and acquisitions in banking and telecom, but Chawla expressed his confidence that no sector will be kept out of the purview of the commission’s mandate of ensuring fairplay.

“This is an issue which has now become active - the sectoral regulator vis-a-vis the competition regulator,” Chawla told Firstpost, and added that “wishful requests” by certain sectoral regulators (for their regulated entities) to be kept out of the purview of the commission will not be entertained.

“Our expectation is that, based on what goes on in more mature and developed economies, it’s very unlikely that a sector will be allowed to be kept out of the Competition Commission’s mandate on wishful requests from those bodies or those regulators,” he said.

The Act as it stands today gives full mandate to the Competition Commission in matters relating to fairplay in the marketplace, but the Commission has locked horns with sector regulators recently.

In the aftermath of Trai recommending liberal norms for mergers and acquisitions last year, Chawla wrote a letter to the telecom regulator seeking to be consulted before finalising such norms so that there is no conflict with its own mandate. In May this year, Trai sought an exemption for the communications sector from the CCI’s purview.

The Reserve Bank has also asked for an exemption from CCI’s remit to review mergers in the banking sector. Not to be left out, the Insurance Regulatory and Development Authority (IRDA) has sought the same privilege .

However, in an interview to The Indian Express in June, Chawla had said that the CCI in fact complements sectoral regulators. “A market regulator like us is different from sectoral regulators because the latter are supposed to have domain knowledge and address economic issues like fixation of tariffs and issue of licences. The market regulator cuts across all sectors and looks at the behaviour of enterprise in the market. Our mandate is to foster competition and protect the markets from sundry anti-competitive practices. Therefore, the market regulator is an expert in its area with mostly ex-post functions, unlike sectoral regulators who are supposed to take ex-ante actions, in keeping with their objectives,” he had said.