Keeping up with Competition - September 2024

A monthly newsletter by Axiom5

Greetings and welcome to the twelfth edition of our monthly newsletter, Keeping up with Competition. In this issue, we comprehensively recap the key events that shaped the Indian competition law and policy landscape in August 2024.

Detailed summaries of orders passed by the Competition Commission of India (CCI) can be accessed here.

The CCI proposes to update its recruitment rules for the first time since 2009

The CCI has proposed to introduce the CCI (Salary, Allowances, Other Terms and Conditions of Service of the Secretary and Officers and Other Employees of the Commission and the number of such Officers and Other Employees) Rules, 2024 (Draft Recruitment Rules) to replace its 2009 rules on recruitment. The Draft Recruitment Rules seek to bolster the CCI’s capacity to manage its expanding workload efficiently. If the Draft Recruitment Rules are adopted, the CCI’s cadre base is likely to expand by 45%. The Draft Recruitment Rules also prioritise the direct recruitment of young professionals for entry-level positions to enhance its talent pool, and provide for a 2:1 ratio for promotion and deputation for cadres with three or more posts. The CCI has invited stakeholders to submit comments on the draft recruitment rules by September 23, 2024.

The Delhi High Court quashes the CCI’s order initiating an investigation against JCB

In a landmark ruling, the Delhi High Court (DHC) quashed the CCI’s proceedings against JCB India Ltd., underscoring the significance of upholding settlements. The Court likened the CCI's potential intervention to a "Sword of Damocles," arguing that continuing the CCI's investigation would erode the sanctity of the settlement process. The DHC's decision was based on two key findings: firstly, vexatious litigation cannot establish the CCI's jurisdiction until the court overseeing the challenged lawsuit deems it frivolous; and secondly, while the CCI's powers are ‘in rem’, it must recognise and assess the impact of settlements reached between parties, considering whether any public concerns remain despite such resolutions.

The Gauhati High Court sets aside the CCI’s penalty on Star Cement Limited 

The Gauhati High Court (GHC) quashed the CCI’s prima facie order under Section 26(1) of the Competition Act against Star Cement Limited (Star). The GHC also set aside a subsequent order imposing a penalty on Star for non-compliance during an investigation.

The GHC emphasised that for the CCI to issue an order under Section 26(1), it must establish that the available evidence prima facie suggests a contravention of Sections 3 or 4 of the Act. The GHC analysed the reasons relied upon by the CCI to issue its order under Section 26(1) and concluded that they did not demonstrate that the allegations against Star were prima facie made out. The GHC found no evidence of uniform price increases or price discrimination in the northeast region. It also did not consider the non-transfer of subsidy benefits as a parameter to assess anti-competitive agreements or abuse of dominant position.

Merger control - a snapshot

The CCI approved 12 combinations and published 6 detailed combination approval orders in August 2024. The CCI also passed an order under Section 43A in a notification given by India Business Excellence Fund - IV, imposing an INR 10,00,000 penalty for a wrongful filing under the Green Channel route. The summaries of these orders are available here. The CCI received 10 new notices, of which 1 notice was under the Green Channel route.

Behavioural cases

The CCI issued 3 closure orders in August. In Rajiv Rai Sachdev, despite finding a high market share, it identified the comparable market share of a second key player and held that the opposite party was not in a dominant position. In Vijay Halder and Chetan and Ors.,  the CCI noted that there was insufficient evidence to form a prima facie view on the formation of any cartel arrangement. In Extreme Infocom Pvt. Ltd., the CCI dismissed predatory pricing allegations by observing that the opposing party did not hold a dominant position. The CCI also reaffirmed its authority to address anti-competitive behaviour, emphasising its role in competition enforcement even in industries with specialised regulators.

The NCLAT also issued a detailed order in M/s Yash Solutions And Others vs. Competition Commission of India, in which it upheld an order by the CCI finding that the appellants had indulged in collusion and bid rigging in the soil testing tenders floated by the Uttar Pradesh government.

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