Thursday, 7 September 2017

INTERPLAY BETWEEN CONSUMER WELFARE AND COMPETITION LAWS

“A world class legal system is absolutely essential to support an economy that aims world class”.
P. Chidambaram

The constitution of India, under its Article 38 and 39, mandates for setting up a social order for the promotion and welfare of its citizens. Article 39 (c) strives to prevent the concentration of wealth and means of production to the common detriment. Economic justice and fundamental right to freedom of trade to the citizens are also guaranteed. Over years, India has taken a number of progressive steps to promote these ideals. The Monopolistic and Restrictive Trade Practice Act, 1969 was one such act. It was enacted with the objective of controlling monopolies and preventing economic concentration.

After the 1991economic reforms of liberalization, privitisation and globlisation, the Indian market witnessed a spurt in the competition. The competition became rife not only within the country but also from international players who started venturing into the local and national market.  The Monopolistic and Restrictive Trade Practice Act, 1969 has by now become obsolete as it was not able to prevent the needed defenses for the market and the society. There was also a gradual shift in focus from curbing monopolies to promoting competition in the market. The term ‘Competition in the market’ means competing for the quality, price and resources, fair trade and efficient resource allocation. More and more competition in the market eliminates the poor performing products or services as they will be unable to compete with quality goods.

The sharp rise in unfair practices and unhealthy competitionpaved way for the Competition Act of 2002. It was enacted to encourage free and open market economy and regulate competition for economic growth. As a socio-economic legislation it strives toprevent anti-competitive practices, protect and maximize the consumer interest and welfare, greater efficiency in resource allocation, ensure freedom of tradeand setting up of a regulatory body of the Competition Commission of India.

In regard to the ‘Consumer welfare’ under competition laws the efficient transactions, cost-savings, safety and health of consumers, greater accountability and transparency, reducing corruption, participation opportunities to all, sharing the benefits of economic growth, adoption of new technologies and improvement in innovations are some of the key aspects. The competition Act seeks to ensure fair competitionin the Indian market by prohibiting adverse trade practices and restrictions which cause appreciable adverse effect (AAE) on competition. It protects consumers against anti-competitive agreements, cartels, tying agreements and predatory pricing. Ideally, the Competition Laws regulates the business culture in India by creating a level playing field wherein effective competition and consumer welfare is promoted by providing quality products and services at affordable priceswith wide variety of choices.

Thus the primary role of competition laws is to ensure consumer welfare standards by outlining the legal framework for competition law enforcements. It is trying to ensure higher efficiency, greater innovation and enhancement of consumer welfare. We can safely conclude that the competition laws in India are a success storyhowever wrt consumer protection; it still has grey areas and impediments. Every aspect of consumer interest are notdealt with for example, safety, health, environment and privacy need special considerations. These can be dealt with the help of new and specialized laws or by inserting additional provisions under the existing act so that the consumers are completely protected against unfair business practices and other forma of malpractices. If dealt, a consumer friendly competition culture will develop that will provide consumers with the various choices in a product at cheaper rates. It will surely help in establishing a progressed market with justified competition in the market.

Dr. Neelam Tyagi
(Associate Professor)
JIMS School of Law- JEMTEC


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