Competition Commission cautions businesses against unfair practices amid coronavirus pandemic

India’s competition regulator has cautioned companies from taking advantage of the Covid-19 situation and engaging in anti-competitive practices, but allowed for greater coordination in the critical sectors of healthcare and essential commodities and services.

The anti-trust watchdog said companies, even competitors, can share resources including distribution network and infrastructure, transport logistics and production without fear of adverse action or scrutiny as long as it results in increasing efficiency and consumer welfare.

“Section 3 (3) of the Act presumes certain concerted actions between competitors to cause an appreciable adverse effect on competition. This presumption is not applicable to joint ventures, if such agreements increase efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services,” the Competition Commission of India said in an advisory to businesses on Sunday.

The commission said that while assessing competition, it will consider the accrual of benefits to consumers, improvement in production or distribution of goods or provision of services and the promotion of technical, scientific and economic development, under Section 19(3) of the Act.

“Businesses are, however, cautioned not to take advantage of Covid-19 to contravene any of the provisions of the Act,” the watchdog added, noting that business conduct should be ‘necessary and proportionate’ to address concerns arising from the disease.

Experts said that while medical and healthcare products such as ventilators, face masks, gloves, vaccines and essential commodities and services such as logistics and testing were mentioned in the advisory, there was ample ambiguity.

“An exhaustive list with more detailing would be useful… companies may be wary of undertaking coordinated efforts as the CCI’s advisory, while relaxing the rules, issues a warning of not taking advantage of the situation,” said Kanika Chaudhary Nayar, a partner at L&L Partners.

On the other hand, Pavan Kumar Vijay, founder of Corporate Professionals, said the advisory was clear enough.

“The advisory has made the definition wide enough to cover companies that are involved in sectors related to essential or medical products such as packaging and others. But if additional clarification is required, they can go to the CCI for approval,” he said.

Experts added that the advisory was in line with statements issued by other jurisdictions, including the US Federal Trade Commission, Department of Justice, and the European Competition Network

Source Article

Lois C. Ferrara

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