Section 49 of CA, 2002 : Section 49: Competition Advocacy

Explanation using Example

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.