The Competition Act, 2002
CHAPTER VII: COMPETITION ADVOCACY
Section 49: Competition Advocacy
Bare Act
(1) The Central Government may, in formulating a policy on competition (including review of laws related to competition) or any other matter, and a State Government may, in formulating a policy on competition or on any other matter, as the case may be, make a reference to the Commission for its opinion on possible effect of such policy on competition and on the receipt of such a reference, the Commission shall, within sixty days of making such reference, give its opinion to the Central Government, or the State Government, as the case may be, which may thereafter take further action as it deems fit.
(2) The opinion given by the Commission under sub-section (1) shall not be binding upon the Central Government or the State Government, as the case may be, in formulating such policy.
(3) The Commission shall take suitable measures for the promotion of competition advocacy, creating awareness and imparting training about competition issues.
Simplified Act
(1) The national government (referred to as the Central Government) and state governments can ask the Competition Commission for advice when they're making policies related to competition or reviewing competition laws. When they ask for this advice, the Commission has to provide its opinion within 60 days. After getting the Commission's opinion, the government can then decide what to do n… Read the complete text with KanoonGPT Pro.
Explanation using examples
Imagine the Central Government is considering a new policy that aims to regulate the pricing of essential drugs to make them more affordable. Before finalizing the policy, the government wants to ensure that the policy will not adversely affect market competition. They make a reference to the Competition Commission of India (CCI) asking for an opinion on the potential impact of this policy on competition within the pharmaceutical industry.
The CCI analyzes the proposed policy and observes that while it intends to make drugs more affordable, it may also discourage pharmaceutical companies from investing in research and development due to reduced profit margins. This could reduce competition in the long run as fewer companies might be willing to innovate. Within 60 days, the CCI sends its opinion back to the government, suggesting modifications to the policy to balance affordability with competitive practices.
The government reviews the CCI's opinion, which is advisory and not mandatory to follow, and decides to adjust the policy to maintain healthy competition while achieving the goal of drug affordability. Additionally, the CCI continues to promote competition advocacy by holding workshops and publishing materials to educate stakeholders about the importance of competition in the pharmaceutical sector.
