Q.7. Discuss the role of the Competition Commission of India in containing the abuse of dominant position by the Multi-National Corporations in India. Refer to the recent decisions. [UPSC 2023 GS P-2]

The Competition Commission of India (CCI) plays a pivotal role in maintaining competitive markets in India by preventing the abuse of dominant positions by businesses, including Multi-National Corporations (MNCs). Established under the Competition Act, 2002, the CCI is tasked with ensuring fair competition in the Indian market, protecting the interests of consumers, and promoting and sustaining competition.

Role of the CCI in Containing Abuse of Dominant Position

1. Regulatory Framework: The CCI enforces provisions under the Competition Act, 2002, specifically Sections 4 and 6, which deal with the abuse of dominant position and combinations (mergers and acquisitions), respectively. Section 4 prohibits practices by dominant enterprises that are detrimental to competition, such as unfair pricing, limiting production, and creating barriers to entry for other players.
2. Investigations and Orders: The CCI has the authority to investigate cases of abuse of dominance either on its own motion or based on complaints received. It can order the cessation of such practices, impose penalties, and direct modifications to business conduct.
3. Advisory Role: The CCI also advises the government on competition-related issues, helping shape policies that prevent anti-competitive practices.
4. Awareness and Advocacy: The CCI engages in competition advocacy to create awareness about the benefits of competition and the need to prevent dominance abuse, which indirectly helps in containing such practices by MNCs.

Recent Decisions

1. Google LLC (2022):
   • Case: Google was found to be abusing its dominant position in the mobile operating system (Android) market.
   • Decision: The CCI imposed a penalty of ₹1,337.76 crores on Google for forcing manufacturers to pre-install its apps and restricting their ability to use alternative versions of Android. Google was also directed to cease and desist from unfair business practices.
2. Amazon and Flipkart (2020):
   • Case: Allegations were made against Amazon and Flipkart for engaging in anti-competitive practices, including preferential treatment to select sellers and deep discounting.
   • Decision: The CCI ordered an investigation into the alleged violations, reflecting its proactive stance on addressing competition issues in the e-commerce sector.
3. Maruti Suzuki India Limited (2021):
   • Case: Maruti Suzuki was accused of enforcing a ‘Discount Control Policy’ that restricted dealers from offering discounts beyond those prescribed by the company.
   • Decision: The CCI imposed a penalty of ₹200 crores on Maruti Suzuki for indulging in resale price maintenance, which is a form of abuse of dominant position.
4. Intel Corporation (2019):
   • Case: Intel was accused of abusing its dominant position by employing restrictive and unfair business practices related to its warranty policy.
   • Decision: The CCI directed Intel to cease and desist from such practices, emphasizing the need for fair competition in the semiconductor market.
5. Facebook/WhatsApp (2021):
   • Case: The CCI initiated a probe into WhatsApp’s updated privacy policy, which was alleged to be an abuse of dominant position due to its implications on user data privacy and competition.
   • Decision: The investigation is ongoing, demonstrating the CCI’s vigilance in digital market practices.

Impact and Significance

• Level Playing Field: By curbing the abuse of dominance, the CCI ensures a level playing field, allowing smaller firms and new entrants to compete effectively.
• Consumer Welfare: Actions taken by the CCI against dominant firms help protect consumer interests by promoting choices, fair prices, and quality services.
• Market Efficiency: Ensuring that no single firm can distort market dynamics helps maintain overall market efficiency and innovation.

Conclusion

The Competition Commission of India is integral to the functioning of competitive markets in India. By actively investigating and taking action against the abuse of dominant positions by MNCs, the CCI not only protects the interests of consumers and smaller businesses but also fosters a healthy business environment that encourages innovation and fair competition. The recent decisions of the CCI highlight its proactive and robust approach in dealing with complex competition issues in various sectors, including technology, automotive, and e-commerce.