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CCI and Sectoral Regulator: The take on Conflicting Jurisdiction

The Competition Act, 2002 was sanctioned to meet the necessities of evolving time. A committee laid by S.V.S. Raghavan recommended a law on Competition in line with the anti-trust laws around the globe. 1 The act establishes a Competition Commission whose duty is to “eliminate practices having 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

After adoption of policy of Liberalisation, Privatization and Globalization in 1991 there were various sectoral developments in India as well which led to the creation of various sectoral regulators like SEBI, TRAI, CERC, etc. and henceforth, given the powers to manage issues relating to competition. Subsequently, there has been a conflict of jurisdiction between Competition commission of India (hereinafter, "CCI") and different sectoral controllers over competition related issue. The sectors have the benefit of having competence in their field however it is CCI which can consider economy wide point of view, limiting business sector distortion and to keep up uniform utilization of laws over all the sectors. 3

Conflict of Jurisdiction

The contention pertaining to the CCI and sector specific regulators has been a perpetual source of litigation between the respective parties which have time and again engaged judicial intervention. The link between the CCI and sectoral regulators is judicial. The basic target of these sectoral regulators and competition authorities is to safeguard the interests of the consumer and promote their welfare. 4

The fundamental proposition that is to be understood here is that the sectoral regulators have domain prowess in their pertinent sectors. Whereas the Commission has a wide ambit to deal with competition for which certain distinct parameters are set down under the Act. A cemented system which promotes the coordination between CCI and the sectoral regulators is of umpteen importance. While sectoral regulators employ ex-ante regulation in a pro-active manner, competition authorities largely use ex-post assessment in a reactive manner. 5 Certain provisions in the Competition Act, 2002 further illustrates the conceivable strain. The stub of the interface between the competition authority and sector specific regulators in India lies on the four branches of Sections 18, 21, 60 and 62 of the Act.

The conflicts between CCI and the sectoral regulators could be caused by legislative ambiguity or jurisdictional overlap or legislative omission. 6 The difference in interpretation of regulatory jurisprudence by the administration could also heighten conflicts.

For example, The Electricity Act, 2003 is a fragrant of the problem brought about by overlapping jurisdictions of regulatory authorities in India. One of the aims underlying the Electricity Act is that of furtherance of competition. 7

This is analogous to the language utilized in segment 3 8 and 4 9 of the Competition Act, 2002 which relate to anti-competitive agreements, abuse of dominant position and regulation of combinations. The Ministry of Finance in Financial Sector Legislative Reforms Committee Report 10 , recognizes similar complexity due to the multiple regulators in India. CCI has more extensive jurisdiction as it can inquest any combination 11 which occurred outside India but has an apparent unfavourable impact on competition in the suited market in India. 12 In essence, the competition law intents to secure competition by examining practice which perhaps be anti-competitive in spirit but sectoral regulation intents to protect competition by introducing skeletal changes.

The take of Indian Courts on overlapping of jurisdiction

In the context of India, the courts and CCI have taken some startling stances to address the problem of jurisdictional duplicity. Serious jurisdictional issues have risen because of the scuffle between the Competition Commission of India and TRAI or other sector-specific regulatory sectors. The Apex Court of India has tended the same in the case of Competition Commission of India v Bharti Airtel. On 5 th December 2018, the Supreme Court of India ruled on the respective roles of the CCI and TRAI and the juggling of their specific responsibilities. 13

As the matter fell outside the purview of the telecom controller, TRAI, the Bombay High Court quashed the CCI's investigation into cartelization by telecom organisation. 14 Interpreting the scope of its own jurisdiction, the CCI has held that despite the existence of competition mandate within sectoral laws, the power to investigate allegations of anti-competitive conduct continues to rest with the

CCI. 15 In the past there have been examples of overlap of the use of various enactments in specific circumstances where both the enactments had a 'non- obstante clause' in it. Different principles have been applied by the courts in India including when specific legislation prevails over general legislation 16 , recent enactments prevails over the old ones. 17 The principle behind Lex specialis is that generally the recent legislation prevail over older ones is because law making body is expected to mindful of the existence of the laws and thus, a 'non-obstante clause' in the latter enactment implies an intention. 18

Approaches by different countries/jurisdictions Anti-trust regulators in other jurisdictions have been able to resolve similar conflicts between sectoral regulators and competition authorities by crafting specific exemptions in areas of conflict or concurrent jurisdiction between sectoral regulators and competition authorities. 19

In the United Kingdom, different sectoral regulators have the ability to uphold EU and UK competition law in consonance with the Competition and Markets Authority ('CMA'), the national competition organisation. Under this concurrency model, both the authorities under the concurrency model, appreciate competency and arrive at a result on the exercise of the same through a consultative procedure. A comparable framework is followed by South Africa established on the concurrency model. Australia uses the position that particular rules were desirable over dependence on general competition rules. Some jurisdictions have exclusivity model where some of the sectors are excluded from competition authorities. 20 Whereas in still other cases, both competition and regulatory laws are silent on the possible overlaps. 21

Conclusion
In order to enhance the minimum iota of friction between the sectoral regulators and CCI, a system of deliberation appears to be the best recourse. By resolving the issue of ambiguity and conflict in the legislations and by conducting and exhaustive review of the ordinance of sectoral regulators and CCI, India could progress in terms of the smooth functioning of the sectoral regulators and CCI. The CCI is permitted to direct an investigation into apparent anti-competitive conduct upon reference being made by a legal authority. Henceforth, sectoral controllers would not have the ambit to step upon the enforcement jurisdiction of the CCI by establishing new guidelines. This would likewise be in accordance with the approach of the Supreme Court to follow an amicable way to deal with settle disputes between regulators.

End-Notes:
  1. Kritika Sethi & Akshita Amit, Overlapping Jurisdiction of Regulators in India: A Never-Ending Battle, Indian Competition Law Review, Vol. 1 2019, http://iclr.in/wp-content/uploads/2019/08/Vol.1-OVERLAPPING-JURISDICTION-OF-REGULATORS-IN-INDIA-A-NEVER-ENDING-BATTLE.pdf
  2. The Competition Act, §18 (2002).
  3. Maher M. Dabbah, The Relationship between Competition Authorities and Sector Regulators 70 CLJ 113, 118 (2011).
  4. id. At 113, 116.
  5. id. At 115.
  6. Geeta Gouri, Interface between Competition Commission of India and Sectoral Regulators, Competition Commission of India (Feb. 27, 2012) https://www.cci.gov.in/sites/default/files/speeches/interface.pdf?download=1
  7. The Competition Act, §3 (2002).
  8. The Competition Act, §4 (2002).
  9. id.
  10. Financial Sector Legislative Reform Commission, Analysis and Recommendations, vol. 1 (2013) https://dea.gov.in/sites/default/files/fslrc_report_vol1_1.pdf.
  11. The Competition Act, §5 (2002).
  12. The Competition Act, §32 (2002).; Dhanraj Pillay v M/s. Hockey India, CompLR 0543 (CCI
    2013).
  13. C.C.I. v. Bharti Airtel, AIR 113 (SC 2019).
  14. Vodafone India Ltd v Competition Commission of India, CompLR 965 (Bomay 2017).
  15. Consumer Online Foundation v Tata Sky Ltd, Case No. 2/2009 (CCI 2011).
  16. Allahabad Bank v. Canara Bank, 2 SCR 110 (2000).
  17. KSL and Industries Ltd. v Arihant Threads Ltd, 9 SCC 763 (2008)
  18. Bank of India v Ketan Parekh, AIR 2361 (SC 2008).
  19. Inter Alia, Role of CCI in Regulated Sectors: Overlapping Jurisdictions, AZB & Partners (Dec., 2018) https://www.azbpartners.com/wp-content/uploads/Inter-Alia-Special-Edition-Competition-Law-December-2018.pdf
  20. United Nations Conference on Trade and Development, The Importance of Coherence Between Competition Policies and Government Policies, TD/B/C.I/CLP/9, (May, 2011)https://unctad.org/en/Docs/ciclpd9_en.pdf
  21. id.

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