As a competition lawyer, one will have the opportunity to do both representational and advisory work for various multi-national companies, public sector undertakings and trade associations. Read on to know more
Competition is indisputably advantageous for every market participant, especially the consumer. A competitive market motivates the sellers to reduce their costs through innovation and productivity enhancing techniques, enabling consumers to avail wider choices for a lower price.
The US Supreme Court aptly noted its landmark judgment of United States V. Topco Associates Inc.;
“Anti-trust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedom. And the freedom guaranteed each and every business, no matter how small is the freedom to compete- to assert with vigor, imagination, devotion, and ingenuity whatever economic muscle it can muster”
Realizing the importance of globalisation, India opened its doors for foreign companies by removing controls and resorting to liberalization. As a consequence to this, the Indian players and market were required to compete with much bigger foreigncompanies within the country and outside. The then existing MRTP Act was grossly inadequate to regulate the players in the market and a strong need was felt for an economics-based legislation which would suit the needs of changing market and also maximize consumer welfare.
Therefore, the Indian Parliament passed the Competition Act in 2002; but, the Act was not brought into force as certain provisions were challenged before the Hon’ble Supreme Court and the Hon’ble Madras High Court. In response, the government suggested certain amendments to the Act, which was introduced in Parliament in 2006 and was adopted in 2007.However, the operative parts of the Act, Section 3 (Anticompetitive agreements) and Section 4 (Abuse of Dominance) were brought into force vide government notification only in May 2009.
The objective of the Act was to promote competition in the market in order enhance growth through innovation and economic efficiencies, thus maximizing consumer welfare by offering better products at lower prices. It wanted to achieve its objectives in three ways:
This said notification led to the creation of specialized competition law practices in the country and inspired a number law students and young lawyers to take up specialized LLM programmes on competition law. Now with the provisions relating to Combinations brought into effect, there is a dearth of qualified competition lawyers in India. The demand and developments in this rapidly emerging practice area has not only attracted foreign qualified competition lawyers; but also has brought competition economist into the Indian legal market.
What according to you makes competition law one of the most lucrative practice areas for young lawyers?
The fact that the Competition Act, 2002 (the Act) has an all pervasive presence across all sectors and covers the entire range of business functions as well as consumers’ welfare at a macro level makes it one of the most lucrative practice area attracting attention of all legal practitioners . In 1996, only 37 Nations had a modern competition law and now over 120 Countries in the World have enacted competition law. This is a testimony to its increasing importance across the globe. As the awareness of the vast reach of the Act grows amongst professionals, this demand for competition lawyers is going to increase in times to come. Further, the enforcement of the merger control provisions of the Act w.e.f. 1st June, 2011 has brought a sense of urgency to this demand for competition law practitioners, both in the advisory capacity as well as in the litigation arena.
What should be the focus area for the youngsters to develop their skill set to make most of this practice area?
Competition law is essentially concerned with the study of markets. The objection of competition law is, inter alia, to ensure that there is competition between the suppliers in any market and that this competition benefits consumers. At the day-to-day level, applying competition law involves identifying markets and assessing whether or not competition is working well in those markets. It involves assessing how the actions of firms will affect competition and consumers. Competition law is about economics and economic behavior. It has been aptly stated by the US Supreme Court J. Brandeis, “A lawyer who has not studied economics is very apt to become a public enemy.”
In the above context, it is , therefore, important for young lawyers to first try to develop understanding of basic economic concepts like demand & supply, elasticity of markets, marginal costs and then study case law/legal jurisprudence which has evolved over a period of hundred years in the USA and since 1970s’ in the EU. In particular, the young lawyers should try understanding elementary definitions/key concepts like “agreements”, rule of reason”, “relevant market’, meaning of “dominance”, “entry barriers”, cartels, enterprise etc used in the Act besides analyzing how these economic concepts are to be used in determining the “appreciable adverse effect on competition”, the key phrase used repeatedly in the Act in context of both regulation of anti competitive agreements and mergers & acquisitions.
In less than two years of its operation, the Competition Commission of India (CCI) has decided more than 100 cases including penalties to the tune of INR 634 crores on DLF and INR 55 crores on NSE were imposed.
The CCI, based in New Delhi, is the authority with the exclusive jurisdiction for enforcing the Act. The CCI can launch an inquiry on the basis of information (complaint) filed before it, or a reference made by government/statutory authority or even suomoto i.e. on its own motion. The CCI is vested with wide ranging powers to obtain information concerning practices, which it believes may infringe the Competition Act. The CCI and its investigative arm, the Director General (“DG”) , has the powers of a civil court to summon/examine witnesses on oath, require production of documents, receive evidence on affidavit, and issue commissions for examination of witnesses. Once the CCI issatisfied that a prima facie exists, it can order the DG to carry out a time-bound investigation. With permission of the Chief Metropolitan Magistrate, Delhi, the DG may also undertake a “search and seizure’ operation during which he can access all relevant records e.g. files, personal diaries and notebooks, computer systems etc.
The CCI can punish contravention of its orders (e.g. failure to furnish documents or be present for investigation) with heavy fines and in extreme cases, it may choose to file a criminal complaint against such contravention where further fines and even imprisonment can be ordered. An infringement of the Act is a serious offence and may be punished with severe penalties in addition to the harm caused to a business’ reputation and the payment of damages, litigation costs, public disclosure of confidential information, etc.
The sanctions that the CCI can impose include:
The orders of the CCI can be directed at enterprises and even at individuals. Directors, managers and other functionaries of the violating company can be held personally liable and punished accordingly.
As an incentive for parties to report cartels, the CCI may award lenient treatment to any “whistleblower” i.e. an enterprise that alerts the CCI to a cartel in which it may have been participating, makes a full, true and vital disclosure, and cooperates with the CCI on an on-going basis. This leniency policy is of great significance and in order to benefit from it, any suspected violation of the Competition Act must be immediately brought to the notice of RIL’s Legal Department for timely corrective action and for a decision about whether a leniency application should be filed before the CCI. Only the first three applicants who blow the whistle are eligible for lenient treatment by the CCI. The Competition Act and the implementing Leniency Regulations contain adequate provisions to safeguard the confidentiality of all information received from enterprises
Violations of the law may also give rise to claims for compensation. A party injured by any anti-competitive behaviour (e.g. a disadvantaged competitor or distributor, or even a customer that has paid too much) may apply to the Competition Appellate Tribunal for compensation following a finding of infringement by the CCI, based, for example, on the profits lost, or amount paid in excess, as a result of such behaviour. Class action for compensation is also permissible.
As a Competition Lawyer, one will have the opportunity to do both representational and advisory work for various multinational companies, public sector undertakings and trade associations. The nature of work would include the following:
Kings College London enjoys repute throughout the world for its comprehensive Competition Law Program and the enriched teaching expertise. With Prof Richard Whish heading the program, it is considered to be one of the top programmes. University College London offers a brilliant tailored program that offers great learning experiences through the various events organized by the Competition Law Center. College of Europe proves to be a good choice keeping in view the renowned professors and practitioners associated with it. In the US, University of Chicago is considered to be another esteemed institution in this field due to the exceptional economic theory courses, which lie at the juncture with competition law.
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