Public Interest in Cartelization: A Factor to Develop in Regulating Anti-Competitive Practices in India

Abstract

Owing to the extensive harm that cartels could potentially cause and create to the economies at national and international levels as well as to the consumers, they become concerns that need to be addressed extensively in relation to the interest of the public. There are multiple factors that have to be taken into account in the study of public interest surrounding cartels, which include, recognition of a target base of consumers, the impact of enforcement action on them in the surrounding legal scenario, and the extent of corrigibility of the actions against the cartel operators, alleged in cases of violation of the aforesaid legal scenario. In determining each of the aforementioned factors prior to the setting up or institutionalization of a cartel, it is imperative to keep the nature of practice within the limits of what is legally construed as a competitive practice, and in exercise of legal due diligence, look into the potential level of consumer detriment, the existing market scenario as well as the priority of the prevailing nature of market, and the actual resources present for investigation of the cartel. Analysing the aforementioned issues in India, this paper, through a critical analysis of the relevant provisions of the Competition Act, 2002 (hereinafter “the Act”), covers issues that arise in light of public interest and its consideration, in the process of cartelization. The authors base their comment on insufficiency of the provisions of the Act to meet the issues of public interest through a detailed analysis of the interplay between consumer benefits and high level of competition between market participants operating on the same relevant market. In doing so, the authors look into adherence to competition policies and the welfare of the consumers. In addition to this, the authors attempt to explore the issue of emergency cartelisation, and bring out the need for its statutory inclusivity.