Coal India versus CCI

Why in news?

• The Supreme Court of India has recently dismissed Coal India Ltd (CIL)’s appeal, which affirmed the Competition Commission of India (CCI)’s authority to examine CIL’s conduct under the Competition Act, 2002.
• The court found no merit in excluding CIL from the purview of the Competition Act, which was earlier accused of engaging in abusive practices.

More about the News:

• In 2017, the CCI imposed a penalty of Rs. 591 crores on CIL for imposing unfair and discriminatory conditions in fuel supply agreements (FSAs) with power producers.
• The company was found to be supplying lower quality coal at higher prices and placing opaque conditions in the contract regarding supply parameters and quality.
• The CCI argued that Coal India and its subsidiaries operated independent of market forces and enjoyed market dominance in the production and supply of non-coking coal in India.

About Coal India Ltd (CIL):

• Coal India Ltd (CIL) is a public sector undertaking that is the largest coal producer and supplier in India.
• It operates under the Coal Mines (Nationalisation) Act, of 1973, which gives it a monopoly over coal mining and distribution in the country.
• CIL was a fully government-owned entity until it's disinvestment in 2010. Currently, the government holds a majority shareholding with a share percentage of 67%.

About Competition Commission of India:

• CCI is a statutory body responsible for enforcing the Competition Act, 2002.
• It was established in 2009, replacing the Monopolies and Restrictive Trade Practices Act, of 1969.
• CCI is a Quasi-judicial body giving opinions and dealing with cases.
• Composition:
  • One Chairperson and six members appointed by the Central Government.
• Functions and Role of CCI:
  • Eliminating practices with adverse effects on competition and protecting consumer interests.
  • Giving opinions on competition issues referred by statutory authorities.
  • Undertaking competition advocacy, creating public awareness, and providing training on competition issues.
  • Ensuring consumer welfare and fair competition for economic growth and development.
  • Implementing competition policies for efficient utilization of economic resources.

PRACTICE QUESTION

Consider the following statements:

1. Public Sector Enterprises doesn’t comes under the purview of Competition Act, 2002

2. The Competition Act, 2002 prohibits anti-competitive agreements which cause an appreciable adverse effect on competition within India.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer