Column: Competition law versus IP rights

Apr 15 2014, 02:53 IST
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SummaryThe courts and other authorities should allow the CCI to deliver on its mandate

India was one of the last major economies to introduce a competition law. Its enforcement was further delayed by legal challenges, legislative processes and, if one might venture to say, the lack of ‘competitive appetite’ in the government. The Competition Act came into force in January 2003, the Competition Commission was established in October that year, but the enforcement could commence only in May 2009! After a hesitant start, the Commission has recently been enforcing the law vigorously, though pragmatically. The road, however, continues to be mined with obstacles. The newest kid on the block is not exactly a welcome member of the regulatory family. The challenges to its jurisdiction have been multiple.

Ironically, an initial limitation on the Commission’s jurisdiction came from the government itself, when in a move to mollify opposition from industry bodies it exempted smaller M&As from the Commission’s ambit. However, a drafting devil in the notification has resulted in removing even major transactions, especially overseas ones, from the Commission’s remit. Till date, the government has been unable to correct the defective notification.

In a scenario where multiple regulators exist, there have been several instances where sector regulators seem to resist any intervention by the Commission in their regulated sectors, failing to appreciate that the competition watchdog’s oversight can actually be beneficial for their sector.

The Competition Appellate Tribunal, in a contentious decision, had sought to expand its appellate jurisdiction well beyond the intent of the law, which would have reduced the Commission to almost a front office. It took the Supreme Court to set aside the Tribunal’s order in a finely crafted judgment in the Competition Commission of India vs Steel Authority of India, which has been acclaimed by competition experts. But the message from the judgment seems to have got lost on some high courts.

It has been common for parties to proceedings before the Commission to seek judicial intervention on issues of due process. An important case awaiting final decision by the Commission, of deep interest to consumers of cars and auto parts, has been held up for over a year following a stay order given by the Madras High Court. A final disposal of the case still seems distant.

The Delhi High Court recently issued a directive to the Commission and its director general that has the effect of prolonging or stalling the Commission’s investigation in a case relating to abuse of patent power by an IT

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