CCI not to review decisions of statutory regulators, Delhi HC

Decisions taken by regulators in the course of carrying out their regulatory functions under their statutory powers are not subject to review by the Competition Commission of India, the Delhi High Court has recently held.

In doing so, the court set aside an investigation initiated by the competition watchdog issued against the Institute of Chartered Accountants of India.

In 2014, the CCI had initiated an investigation against the ICAI to say that its Continuing Professional Education programme translated into an abuse of dominant position as the institute does not allow other players in the market to conduct similar courses.

The CPE programme enables ICAI members to maintain requisite professional competence and ensures high quality and standards of the professional services that they render. According to the programme requirements, a Chartered Accountant needs to devote certain hours in a rolling period of three years to attend the CPE seminars and workshops to stay updated with the developments in their field.

An informant contended before the commission that the institute should allow its members to obtain CPE credits by attending seminars of their choice and interests, which may be organized by other associations or bodies.

This prompted the commission to form a prima facie opinion that by conducting the CPE programme, directly or through its organs, the ICAI was creating an entry barrier for other market players.

However, the high court was not inclined to accept this logic.

It said that the CPE programme is an education course run by ICAI and that it is not interchangeable with any of the services provided by any other agency.

The CPE programme is not unsupervised and the ICAI determines the content and manner in which the courses are to be organised and conducted, the court said.

The court highlighted that ICAI is a statutory body and charged with necessary powers to take decisions regarding the conduct of the CPE programme for maintaining the standards of the profession and its decisions in this regard cannot be a subject matter of review by the CCI.

This decision comes in the wake of the Supreme Court having ruled in favour of the telecom regulator, TRAI, stating though CCI’s jurisdiction was not ousted, the CCI had to defer to sectoral regulators and await completion of proceedings where a question of jurisdiction arose, Nisha Kaur Uberoi, partner at Trilegal, told BQ Prime.

CCI’s scope of examination must be confined to only those areas of economic activities, which have a bearing on the market that engages entities involved in trade and commerce, the court said.

Interestingly, the High Court said that the CCI is a ‘market regulator’ and not a ‘market creator’, which means that the CCI can only examine economic functions that have an ‘actual’ effect on the market and not a hypothetical market created only to examine such economic functions, Ravisekhar Nair, partner at ELP, told BQ Prime.

However, Nair said that if a statutory regulator is found to be an ‘enterprise’ engaged in economic functions that do not emanate from its regulatory functions, its behaviour might be amenable to the CCI’s scrutiny, without necessarily being held anti-competitive upon inquiry. Bloomberg