“Though the Competition Act, 2002 has a dual objective of ensuring consumer welfare and providing a level playing field for all competitors in the market, it tends to favour the former”- Do you agree? Explain with reasons

 Yes, the statement “Though the Competition Act, 2002 has a dual objective of ensuring consumer welfare and providing a level playing field for all competitors in the market, it tends to favour the former” in point-wise format.

✅ Title: Does the Competition Act, 2002 Tilt in Favour of Consumer Welfare?

✅ Introduction

The Competition Act, 2002 was enacted with the twin objectives of:

1. Promoting and sustaining competition in markets, and

2. Protecting the interests of consumers while ensuring freedom of trade among market participants.

However, many experts argue that in practice, the consumer welfare objective is prioritized, sometimes at the cost of ensuring a level playing field for businesses, especially small and medium enterprises.

✅ Point-wise Analysis

1. Definition and Objective of the Act

• Section 18 of the Act outlines the duties of the Competition Commission of India (CCI), which include:

  • Preventing practices having adverse effect on competition.

  • Promoting and sustaining competition.

  • Protecting the interests of consumers.

  • Ensuring freedom of trade.

➡️ Observation: While these objectives appear balanced, enforcement tends to emphasize consumer harm more than competitor disadvantage.

2. Pro-Consumer Interpretation of AAEC

• Appreciable Adverse Effect on Competition (AAEC) is the key test used in assessing anti-competitive practices.

• In several landmark cases, such as Haridas Exports v. All India Float Glass Manufacturers, the emphasis was on consumer pricing, availability, and choices, not necessarily on market fairness for smaller competitors.

➡️ Inference: Even if a dominant player suppresses smaller players, as long as prices remain low and consumer choice is unaffected, CCI may not intervene.

3. Lenient Approach to Big Tech and E-Commerce

• In cases involving Amazon, Flipkart, and Google, CCI has been cautious in penalizing tech giants unless there is direct consumer harm.

• Allegations by traders and smaller platforms about preferential treatment or deep discounting were not always found to breach the Act.

➡️ Example: Amazon was accused of hurting small retailers, but action was slow and limited, unless consumer exploitation was evident.

4. Merger Regulations and Consumer Focus

• Under Sections 5 and 6 of the Act, combinations/mergers are assessed primarily on their impact on consumers.

• Mergers that reduce the number of competitors are allowed if they do not hurt consumers directly.

➡️ Case: The merger of PVR and INOX raised concerns about competition in multiplexes, but was allowed due to presumed benefits to consumers like better services and innovation.

5. Neglect of SME Protection

• Startups and SMEs often allege predatory pricing and entry barriers by large corporations.

• Unless it can be shown that these practices directly harm consumers, relief under the Competition Act is hard to obtain.

➡️ Result: Level playing field for smaller competitors is undermined in favour of short-term consumer gains.

6. Global Influence and Economic Efficiency

• The Indian regime follows the Chicago School of thought, where consumer welfare is paramount, and economic efficiency outweighs fairness concerns.

• This results in a lower tolerance for complaints based solely on competitive harm.

➡️ Conclusion: This ideology inherently prioritizes consumer benefit over market fairness.

7. Judicial Pronouncements and CCI Orders

• Most judicial interpretations and CCI orders focus heavily on whether the consumer has been disadvantaged.

• Cases focusing purely on abuse of dominance or exclusionary conduct without direct consumer injury have a lower success rate.

✅ Conclusion

While the Competition Act, 2002 is designed with a balanced objective, in practice, it exhibits a consumer-centric bias.
This approach:

• Promotes short-term gains for consumers,

• But sometimes fails to protect long-term market competitiveness,

• And ignores structural harms that may reduce future innovation and choice.

Hence, YES, the Act tends to favour consumer welfare over market fairness, and a more balanced enforcement strategy may be necessary.