NEW DELHI, Dec 23: Wielding its powers for fairness, the Competition Commission of India (CCI) clamped down on violators and slapped penalties worth about Rs 2,700 crore this year, with its ruling in the USD 4 billion Sun-Ranbaxy deal becoming a watershed moment.
Stamping its presence in the economic arena, the fair trade watchdog is now probing possible anti-competitive practices in sectors as diverse as real estate and e-commerce, with many big names including DLF and Flipkart coming under its scanner and decisions in these cases are keenly awaited in the new year.
However, it faces an uphill task ahead in the new year for showing improvement in its performance with regard to recovery of penalties imposed by it, as most of its orders got challenged in the appellate tribunal and courts.
The year passing-by also saw the regulator using its rarely-used powers — ranging from a forced public scrutiny of mega deals that raise anti-competition concerns to fines on top executives and other individuals for violations of fair trade norms.
Even as a perception persists about the CCI being yet another hurdle for doing business, the regulator cleared nearly 70 merger and acquisition deals this year.
In a reflection of its regulatory prowess, CCI imposed penalties of Rs 2,675 crore on 169 entities in the first 10 months of this year. Also, the number of penalised entities is the highest ever in more than four years.
Embracing a carrot and stick policy, the regulator has embarked on sensitising people and departments about the competition rules, apart from penalising individuals involved with entities at the time of violations. The orders passed against a number of chemist associations and some of their office bearers are cases in point.
Completing a prolonged probe into anti-competitive practices in the auto spare parts and after services market, the watchdog in August imposed a fine of Rs 2,545 crore on 14 car makers.
The ruling, though challenged by many auto players, was yet another assertion of the Commission’s efforts to ensure “greater choice and freedom to the consumers”.
Not just the private sector, CCI again directed state-run mining behemoth Coal India and its subsidiaries to “cease and desist” from unfair business practices in at least five separate orders this year.
While deciding not to impose additional fine, as Coal India was already slapped with Rs 1,773 crore penalty in December 2013, this year’s rulings highlighted the need to do away with the monopoly enjoyed by the miner.
Showing its face as the hawkish scrutiniser of business activities that may lead to anti-competitive trends in the future, the Commission ordered Sun Pharma and Ranbaxy to sell off some of their assets as a condition for approval.
In an unprecedented order on the proposed USD 4 billion Sun Pharma-Ranbaxy deal, the Commission — after subjecting it to public scrutiny — has directed both companies to divest as many as 7 products between them to address monopoly concerns.
The transaction, once consummated, would create India’s largest and world’s fifth largest drug manufacturer.
After minutely scanning the Sun-Ranbaxy deal, the CCI is now in the process of combing a mega transaction in the cement sector — between Holcim and Lafarge.
This is the second deal ever to be subjected to public scrutiny amid concerns of unfair business practices.
At the same time, the regulator cleared many a merger and acquisition transactions this year. Deals spread across diverse areas including power, financial services, aviation, steel, fertilisers, stock exchanges, pharmaceuticals and infrastructure, received its green signal.
The prominent ones include Adani Power’s Rs 6,000 crore deal to snap up the 1,200 MW Udupi thermal plant from Lanco Infratech, and BSE’s acquisition of United Stock Exchange.
All said and done, the Commission continues to stare at a poor recovery of penalties imposed on violators as many of the orders have been challenged in appellate tribunal and courts.
Even though it has so far imposed more than Rs 12,000 crore penalty, less than one-tenth of that amount has come to it and it may require greater efforts in 2015 to improve its performance on this front. (AGENCIES)
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