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Competition Law must protect the consumer, says US expert

The proposed Competition Law must ensure successful completion of the ongoing liberalisation and reformed policy measures of Indian government, says a leading authority on competition policy in the USA.

Addressing a business meeting in New Delhi on Wednesday, Dr Russell Pittman, the visiting expert from the United States Department of Justice, said that the Competition Law, now being drafted by an expert committee, should not be a replacement of any existing laws but be a critical facilitator to enhance the level of economy through fair competition.

The law must aim at protecting the consumers at large and indigenous small and medium scale industries in particular from the harmful dominance of any firm (be it) in marketing, distribution, manufacturing and servicing.

A good competition law would create the capability for any agencies to fight against the unfair competition even against the government, he observed.

Dr Pittman was in Delhi to hold discussions on framing the Indian Competition Law with the committee concerned. He said competition laws in several countries have common provisions based on three basic components: agreements to abide by the rules, merger and acquisition norms, and abuse of laws.

The law must extend its arm to extra territorial application so that any foreign company should not disturb healthy atmosphere in the domestic market through its policies and joint ventures in foreign lands. In the USA, there is a law that forbids international cartels harmful to domestic economy.

Economist D R Pendse said that the committee on drafting the Competition Law could do a marvellous job for the Indian economy and trade if they just eliminate the existing laws that hindered the growth of Indian productivity. Indian laws are restrictive in nature and counter-productive to growth, he said.

There were laws a few years ago that used to prevent companies to enhance the productivity and sales under the Monopolies and Restrictive Trade Practices Act. Even today, the counter-guarantee by the government to fast-track power project mainly promoted by foreign companies, is not available to domestic power generation companies.

The exit laws for labour are not available for the domestic companies to trim their labour force and make themselves competitive against the foreign firms.

UNI

Business