July 2014 – Indian Competition and Anti-Trust Blog

With the C.C.I. expanding it’s informal Pre-Notification consultation to include substantive issues regarding filing of notice with the C.C.I., we are now looking at a scenario in competition regulation where there will be a significant growth in the level of interaction between the Regulator and the Practitioner. This growth of informal interaction leads to what I like to call the “Harvey Two-Face” concern (Batman enthusiasts will understand why I choose him for this particular post. Others, maybe not so much.):

1. “Clean face” Harvey: The amendment to the Regulation and the consequent expansion in effective communication Simplifies procedures and most importantly, will result in clearances being granted smoothly within a shorter span of time, thus aiding business growth and consolidation wherever it may be necessary. Plus, it gives a chance for the Commission to be “prepared” for what will be coming and think up replies and make quick decisions to any complications which may be part of the merger proposal.

2. “Burnt face” Harvey: It threatens the impartiality of the entire combination procedure and may probably raise corridor gossip about lobbying to clear combination proposals. As it is, the present lack of “effective combination research”, i.e., effectively assessing complicated market dynamics in complicated mergers(The Jet-Etihad Combination is one such example) at the Commission has created some disquiet among a few (myself included) at the heavy reliance which is being placed on the submissions of parties rather than individual independent research. Handling conflict of interest is not one of the strong suits of the Indian Executive (or to be frank, of Indians in general) and this raises concerns as to overt reliance on the proponent of the Combination to understand it in the first place.

Here’s an interesting bit of news from Africa. As per a well known Blog on African Competition Law, the Swaziland Competition Commission has all but shuttered it’s doors since the formation of C.O.M.E.S.A.

For the uninitiated, the Common Market for Eastern and Southern Africa (C.O.M.E.S.A.) is a Free Trade Agreement/Free Trade Area similar to the Schengen Area/Schengen Agreement in Europe. It comprises of twenty Member States and is considered one of the pillars of the African Economic Community. The COMESA Competition Commission was formed under Article 6 of the Regulations and is based in Lilongwe, Malawi and commenced work on 14th January, 2013.

According to the post, since the creation of its competition-law authority in 2007, C.O.M.E.S.A. member state Swaziland has seen only two enforcement matters, according to a report by the Observer. Even by C.O.M.E.S.A.’s statistical standards, two matters in seven years amounts to a record low.

This is the first time I have ever heard of a State Competition Authority being over board by a Multi-State Organisation. European Member States are in fact quite particular about asserting their individual sovereignty under the T.F.E.U. (E.U. Community Law is applicable only when trade between the E.U. Member States is affected.)