Health & Pharma Sector Tops CCI Investigations: FM Nirmala Sitharaman (image: x.com/nsitharamanoffc)
New Delhi: The Competition Commission of India (CCI) has investigated a total of 35 cartel cases during the last five financial years till March 13 this year, Finance and Corporate Affairs Minister Nirmala Sitharaman said in Lok Sabha. In a written reply to the question raised by BJP MP Mukesh Dalal, Minister revealed that among the highest number of cartel charges, the health and pharma sector accounted for the greater number of cases – 5.
Following Health and Pharma sector, Railways came second with four investigations. Other industries came under CCI’s scrutiny are Iron and Steel, Financial Services, Coal, Power and Civil Aviation.
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To address cross-border cartelization issues, CCI has signed bilateral and, multilateral Memorandum of Understanding (MoU) with several countries and entities such as Egypt, Mauritius, Japan, Brazil, BRICS (Brazil, the Russian Federation, People’s Republic of China and the Republic of South Africa), Canada, European Commission, Australia and United States Department of Justice (DOJ). Sitharaman held that these MOUs include provision for enforcement cooperation between CCI and its MoU partners, subject to their respective legal framework, constraints, enforcement interests and available resources.
Apart from this, India has signed 14 Free Trade Agreements (FTAs) with its trading partners, some of which contain dedicated Chapter on Competition and according to which, Minister said, “each Party shall, in accordance with its laws and regulations, take measures which it considers appropriate against anticompetitive activities, in order to facilitate trade and investment flows between the Parties and the efficient functioning of its market.”
In order to protect small businesses and startups from the adverse effects of cartelization by dominant market players, the CCI has introduced the concept of “lesser penalty plus” within the framework of Section 46 of the Competition (Amendment) Act, 2023, Minister said. On February 20, 2024 the CCI (Lesser Penalty) Regulations, 2024 were notified, replacing the 2009 regulations. The Less Penalty Plus (LPP) mechanism was introduced to incentivize an existing lesser penalty applicant in respect of a cartel to give full, true, and vital disclosures about another cartel, hitherto not in the knowledge of the CCI, Minister added.
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Furthermore, the scope of cartel investigation, Hub & Spoke mechanism has been incorporated by introducing the Proviso in Section 3(3) of the Competition Act, 2002 through the Amendment Act 2023. As per the new mechanism, an enterprise or association of enterprises or a person or association of persons though not engaged in identical or similar trade shall also be presumed to be part of the agreement under this sub-section if it participates or intends to participate in the furtherance of such agreement.
When the MP is asked whether the Government is proposing or taking efficient steps to increase awareness about cartelization and its negative impacts on businesses, consumers and trade associations, Minister said CCI, through its enforcement efforts and advocacy mandate, has been promoting and sustaining competition in the markets by conducting market studies and advocacy events, imparting training about competition issues besides carrying out market corrections to eliminate distortions. The CCI has conducted 1446 advocacy programmes during the last five financial years till March 19 this year, Minister added.
