Contains guidelines for corporates
CII Releases Competition Law Compliance Manual for Corporates in the wake of Covid 19. The Manual contains Guidelines for corporates to keep in mind while collaborating to ensure continued compliance with the Competition Law in the current crisis situation.
“The current COVID-19 crisis has created unprecedented challenges in India and across the world. This impact of COVID-19 on the functioning of the economy may prompt companies to collaborate with their competitors to tackle the uncertainty and hardship faced. However, companies must note that antitrust laws continue to apply and all business decisions undertaken by companies must not fall foul of the provisions of Competition Act 2002,” said Confederation of Indian Industry (CII).
Currently, Competition Act restricts various kinds of collaborative actions by corporates. Businesses have been coming together to face the Covid situation and ensure unabated supplies of essentials. Competition Commission of India has issued an Advisory to Businesses that clarifies that only such conduct of businesses which is necessary and proportionate to address concerns arising from COVID-19 will be considered. Businesses are cautioned not to take advantage of COVID-19 to contravene any of the provisions of the Act.
Against the backdrop of the Competition Law and the CCI Business Advisory, CII has listed few Guidelines for compliance by companies to ensure they are on the right side of the law. Some of these include:
- For co-operation with competitors, principles to keep in mind for companies is to understand what companies can do and cannot to deal with the current crisis from a competition law perspective, Scope of the collaborations, Detailed documentation, Firewalling to prevent exchange of CSI, Ex ante review by legal counsel.
- Dominant enterprises which enjoy market power in particular must ensure that their business activities do not in any way lead to an abuse or market exploitation. They must accordingly refrain from (i) limiting production, services or technical development, (ii) excessive pricing and (ii) bundling non-essential products / services with essential services.
- Companies having market power in the manufacture and sale of essential commodities must avoid entering into any exclusive distribution agreements.
- Companies must carefully evaluate their business operations during the COVID-19 period, especially if their business operations might require close collaboration with its competitors.