Why in News ?

Recently CCI approves the acquisition of shares by of JB Chemical by Tau Investment and acquisition of Lightstone Fund S.A. of some companies. CCI role in acquiring shares made for tackling any unfair practice in the society. 

About Competition Commission of India

• Competition Commission of India is a statutory body of the Government of India
• It is responsible for enforcing The Competition Act, 2002 to ensure fair advertisement there by promoting consumer interest. 
• CCI aims to create and sustain fair competition in the economy to the producers and make the markets work for the welfare of the consumers.
• The Act prohibits anti competitive agreements, abuse of dominant position by enterprises and regulates combinations which causes or likely to cause an appreciable adverse effect on competition within India.
• Members of the body
  • CCI consists of a Chairperson and 6 Members appointed by the Central Government.
  • Commission also undertake competition advocacy, create public awareness and impart training on competition issues.

Importance and regulations by CCI in India

• Competition Commission of India (CCI) has ordered penalties totalling about Rs 14,000 crore for unfair marketing tactics.
• A foreign company seeking entry into India through an acquisition or merger will have to abide by the country’s competition laws.
• Action against unfair activity :
  • Rs. 10 million fine upon Google in 2014 for failure to comply with the directions given by the Director General seeking information and documents.
  • Recently initiate a probe against e-commerce firms, including Amazon and Flipkart for giving deep discounts on online sales of smartphones and other gadgets.
• CCI role in acquiring shares
  • Section 2(a) of the Act specifically defines acquisition to mean  directly or indirectly acquiring or agreeing to acquire
    • shares, voting rights or assets of any enterprises; or
    • control over management or control over assets of any enterprises.
  • According to the Section 5 of the Act any acquisition of one or more enterprises by one or more persons, or merger or amalgamation of enterprises, shall be a ‘combination’ of such enterprises and person or enterprises if the threshold prescribed under the Section are met.

Source : PIB

Topic 

GS II : Statutory, regulatory and various quasi-judicial bodies.

Current Affairs Compilation : 27 August 2020