Private Enompetition Law: Call For Amendment in Competition Act 2002

There are two types of enforcement of competition law: public and private enforcement. Public enforcement can be defined in simple words where the competition authority does not enforce that private rights and duties but it controls the macro structure and behavior of firms in an economy. In private enforcement parties can enforce their rights and get damages for the anti-competitive conduct of other parties.

The key deciding factor is the damages to private parties. Competition Act 2002 of India does not provide for damages to the parties. For a country like India which has started enforcing competition, how private enforcement can help.

Actually private enforcement can increase the deterrence against anti-competitive activities. the firms will take pro-active role in filing cases to CCI. The victims of anti-competitive activity will be compensated. In a new competition authority which is not adequately resourceful, private enforcement may help in maintaining competitive environment in country. The litigation cost can be recovered from the complainant in case of unsuccessful probe.

CCI is doing public enforcement but it is lacking in true spirit of public enforcement. In public enforcement, the authority is supposed to take suo-moto actions which CCI has done only in four cases out of more than hundred cases. Even in the cases brought to knowledge of commission by the private parties. Commission is rejecting the cases just because the informant does not provide sufficient information. In public enforcement the authority is supposed to collect evidence itself not rely on the informant(complainant). 

The investigation wing Director General should be empowered further to conduct efficient investigation and collect evidence. Dawn raid should be used where-ever required.

Competition Law and Consumer Protection: A Phenomena Wrongly Understood

Consumer protection is the main objective of competition law all around the world including Indian competition law. However, consumer is not only as, commonly, we perceive. We perceive it as consumer and producer or manufacturer two separate classes. In real Producer and manufacturer are the consumers in most of the cases.

The concept of consumer is about the role a person is playing in the particular situation or business transaction. As the purchase for commercial purpose is also included in the definition of consumer which was not in the definition of consumer under Monopolistic and Restrictive Trade Practices Act 1969.

The bigger issue in this is the objective of competition law we determine. The first impression comes that it is anti-corporates and pro-poor or aam admi. But competition law in real gives equal opportunity to MNCs against local companies and vice-versa provided  domestic companies are able to compete.

Indian Competition Law: Patent Drug Price Control and Effect on Competitio...

Indian Competition Law: Patent Drug Price Control and Effect on Competitio...: Ministry of Chemical and Fertilizers is planning to control t he prices of patented drug s. A panel was constituted to study this in 20...

Patent Drug Price Control and Effect on Competition

Ministry of Chemical and Fertilizers is planning to control the prices of patented drugs. A panel was constituted to study this in 2007. On 25th February 2013, the panel has submitted its report. The panel report is available here.  Indian patented domestic drug market is US $ 5 million out of total domestic market turnover of US $ 12 billion. So patented drug market forms just 4% of whole domestic market. I wonder why there is need to control the prices of such a small fraction of market share. Patented drugs are new drugs with high R&D cost. Companies especially in the case biotech based drugs have very high R&D cost. It can be US $ 50 million to US $ 2 billion. Companies need to recover R&D cost by high prices.

Out of 96 percent market of drugs the government  is decreasing the list of essential drugs in National List of Essential Medicines (NLEM). Then why there is need to control the prices of only patented drugs. 

Pharmaceutical sector is the one where patent protection is must for the growth of R&D intensity in contrast with internet industry, ICT industry. In such sector, it is not advisable to control patented drug prices. The consequences of price control would be that MNCs will not introduce innovator drugs in India and even Indian compnies will also introduce new drugs first outside India. 

The panel committee report suggests a novel price control mechanism. It is weighted reference pricing. Since per capita income in India is less in comparison with even many developing countries. So simple reference pricing will not work for India. Therefore, committee report suggest standardizing the price of drug in other countries by dividing with ratio of per-capita income in India and other countries. So in a way it will be effective measure to control price. But there are concerns on the innovation and availability by the control of prices of patented drugs.