The recent two day International Conference on Competition Law that concluded in New Delhi found that governments that work too close to big business protect old technology and prolong recession. In times of recession businesses plead for protective measures to cushion them from aggressive competition. Receding demand forces them to cut jobs and add to the burgeoning unemployed figures. Protectionist measures create entry barriers, starve new technology start ups and prevent job creation, thus setting in motion a vicious cycle that prolongs recession. Free and open competition helps radicals to lead the charge to creative destruction in which only the best survive.
The experts advocated development of a National Competition Policy to precede industrial policy providing clarity, cohesiveness and direction to the competition laws. It would help create a buy-in among various sectors and define roles and expectations of state and non-state actors, thus making enforcement of competition law easier and more effective. The experts that had come from all over the world, including chairmen of competition authorities, found Indian Competition Act 2002 a perfect ideal for inclusive growth, but rusting because of non-use. They were surprised that while the Indian Competition Act provided the toughest penalties for cartels, India has the lowest capture rate because of inadequately trained staff, lack of training in modern investigation techniques and lack of political will. The conference concluded
cartels are a conspiracy against the common man and its pernicious effect is visiting on rising food prices. There needs to be a national campaign against cartels. In regard to detection, today’s technology can be a great ally. Best way to catch is dawn raids not for discovering sacks of gold but grabbing all computer equipment. The hard disc will tell all. What is needed is the will to carry out search and seizure.
In his inaugural address Dr Veerappa Moily, the Law Minister of India called for vigorous application of competition laws. He advocated national legislation to extend the scope of the completion law to prevent anti-competitive conduct in professions, farmers, and rural cooperatives. He said the law should be used not just to promote free competition but also to protect small players and cottage industries to bring about a truly level playing field.
In his keynote address Mr Salman Khurshid, Minister for Corporate Affairs, asserted that the competition policy and law should aim to provide socio economic justice. It should harmonise the twin objectives of protection and free enterprise. Competition policy should promote good corporate governance and bring about boardroom reform.
Madhav Mehra
In his theme address Dr Madhav Mehra the founder president International Academy of Law and the driving force behind the event warned,
India’s growth narrative is linked to the dreams and hopes of its youth. With average age of an Indian under 26 years, India is one of world’s most aspirational economies. This has potentially catastrophic consequences . If Indian youth does not find jobs, it becomes an easy target for terror groups. Terror from within is far more lethal than terror from outside. By protecting intellectual property, regulating mergers, curbing cartels and abuse of dominance widens the economic base and unleashes corporate energy triggering an explosion of innovations that enables new technology radicals to overthrow incumbents and drive inclusive growth. History of modern industrialization has revealed that no real innovation has come from dominant industry. It has always been from the outside. The upstarts and radicals have succeeded after protracted battles. He said closeness of the businesses with government militates against innovation and inclusive growth. What we need is fast, fearless and furious enforcement for fair and open competition regime with proactive participation from executive, legislative and judiciary.
Earlier Justice Pasayat, chairman competition appellate tribunal said “An overriding aim of competition law is to promote economic justice. Justice is the only weapon that can secure stability to society and provide sustainability to business. As Pope Paul VI said “If you want peace, work for justice.” Competition law is essentially an instrument that helps us achieve that elusive goal.”
The valedictory address was delivered by Justice Altamash Kabir of Supreme Court of India. He said competition law in India is a public policy challenge and not just a legal argument. It needed understanding of both law and the socio-economic context. “We need to use competition law to remove entry barriers to allow innovators and free enterprise to succeed and redeem the aspirations and dreams of our youth.”
The Conference was organized jointly by the International Academy of Law and the UK based World Council for Corporate Governance in association with the Law Society of UK and the Competition Appellate Tribunal of India. Eminent speakers included several cabinet ministers such as Dr M Veerappa Moily, Minister of Law & Justice, Shri Salman Khurshid, Minister for Corporate Affairs, Prof K V Thomas, Minister for Consumer Affairs , other luminaries such as Mr Arun Maira Member Planning Commission, Justice Altamas Kabir, Judge Supreme Court of India, Mr. Fali S. Nariman, an international authority on jurisprudence and Justice Pasayat Competition Appellate Tribunal of India who was also the chairman of the steering committee. Overseas experts and law firms included Sir Christopher Bellamy of Linklaters, Chairman of UK’s Competition Appeal Tribunal and judge EU General Court, William Blumenthal of Clifford Chance and a former General Counsel, Fair Trade Commission of USA and several Chairmen of Competition authorities worldwide.
The publisher of CorpGov.net will be in Kolkata, India in mid to late December and may have some availability for meetings. Contact James McRitchie.
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