1.1. OECD’s Influence: Guidelines and Peer Review Impacting India’s Competition Law
The OECD has been instrumental in building India’s competition policy through its guidelines and peer reviews, which have played an important role in shaping merger control policies, cartel enforcement, and other areas of competition regulation. The OECD guidelines to multinational enterprises highlight the need to comply with competition laws in jurisdictions where they operate, such that companies avoid anti-competitive behaviour like price-fixing and market division.[1] These tenets have played a crucial role in shaping India’s regulatory strategy, especially with regards to cross-border deals and world market integration.
1.1.1. Influence on Marger Control Policies
India’s competition regime under the Competition Act, 2002, incorporates the OECD suggestions regarding ensuring that mergers and acquisitions do not have a material adverse effect on competition. The CCI’s review of mergers considers determining whether the proposed merger would cause an appreciable adverse effect on competition (AAEC) in India. The practice supports OECD guidelines that call for a comprehensive review of market concentration and entry barriers.[2] The CCI’s recent harmonization of merger control rules by the introduction of thresholds based on deal value into notification requirements likewise follows international best practice advocated through the OECD.[3]
The OECD peer reviews have also had an impact on India’s merger control policies by promoting transparency and efficiency in the review process. For example, the OECD Competition Law and Policy Reviews have underscored the value of clear guidelines and timelines for the approval of mergers, which India has adopted in its regulatory environment. This has added to the predictability for firms and made easier the integration of Indian firms into global market.
1.1.2. Impact on Cartel Enforcement
The guidelines of the OECD have also influenced India in its cartel enforcement approach. The CCI has pursued cases under the anti-competitive agreements aggressively, frequently using international best practices to detect and sanction cartelization. The OECD’s focus on collaboration with investigation authorities and on companies’ prompt responses to information requests has been mirrored in India’s enforcement. For instance, the CCI has imposed large penalties on companies that have been found to be guilty of cartelization, consistent with OECD principles that recommend effective deterrence through strong enforcement.[4]
Furthermore, the OECD suggestions regarding leniency programs have shaped India’s strategy for urging cartel members to cooperate with an investigation. Lesser penalty provisions in the Competition Act, which grant reduced penalties to cartel members extending significant cooperation, reflect OECD practices in encouraging compliance through incentives[3]. Such a strategy has worked in revealing and dismantling cartels operating in industries such as cement and steel, where international cooperation has been essential in combating cross-border anti-competitive conduct.
1.1.3. Other Areas of Competition Regulation
Aside from merger review and cartel enforcement, the OECD guidelines have also impacted other areas of India’s competition regulation. The OECD’s push for competitive neutrality, which implies that State-Owned Enterprises (SOEs) and private firms play on an even level playing field, has struck a chord in India’s policy debate. The CCI has highlighted the necessity of SOEs adhering to competition laws, in support of OECD principles that ensure level playing field competition and minimize distortions from state bias.[5]
In addition, the OECD focus on competition advocacy and assessment has prompted India to examine its regulatory framework for potential competition barriers. The CCI has made advocacy efforts to enhance pro-competitive policies in sectors, mirroring the OECD’s suggestion to pursue policy goals without unnecessarily limiting competition.[6] This approach has been instrumental in promoting a culture of competition within India’s regulatory environment, ensuring that domestic policies align with global best practices while addressing local market realities.
1.1.4. Judicial and Legislative Developments
Indian judicial rulings have also shown the impact of OECD guidelines. Indian courts have used international principles to interpret domestic competition law in cases relating to cross-border mergers and anti-competitive agreements. For example, the Supreme Court’s focus on balancing global norms with national priorities highlights the judiciary’s role in mediating the impact of international organizations such as the OECD on India’s competition policy.[7]
Legislative changes, including the Competition Amendment Act, 2023, reinforce further India’s alignment with OECD guidelines. The Act provides tighter merger control measures and strengthens enforcement powers, responding to OECD suggestions on sound competition enforcement. These changes mirror India’s intentions to align its competition law regime with international best practices while maintaining regulatory sovereignty.
However, the OECD’s peer reviews and guidelines have significantly impacted India’s competition law in sectors like merger control, cartel enforcement, and competitive neutrality. Through applying global best practices and adopting them to suit domestic contexts, India has evolved an effective competition policy regime balancing integration into the world economy and domestic welfare goals. As India continues to develop its regulatory framework, the OECD’s continued guidance will continue to be important in influencing India’s strategy for tackling emerging issues in digital markets and cross-border anti-competitive conduct.
[1]Tarullo, D. K. (2000). Norms and institutions in global competition policy. American Journal of International Law, 94(3), 478-504.
[2]Ring, D. (2009). Who is making international tax policy: International organizations as power players in a high stakes world. Fordham Int’l LJ, 33, 649.
[3]Hoekman, B., &Mavroidis, P. C. (2003). Economic development, competition policy and the World Trade Organization. J. World Trade, 37, 1.
[4]Budzinski, O. (2008). The governance of global competition: competence allocation in international competition policy. In The Governance of Global Competition. Edward Elgar Publishing.
[5]Singh, A. (2002). Competition and competition policy in emerging markets: international and developmental dimensions. Growth and Economic Development: Essays in Honour of AP Thirlwall.
[6]Tarullo, D. K. (2000). Norms and institutions in global competition policy. American Journal of International Law, 94(3), 478-504.
[7]Tarullo, D. K. (2000). Norms and institutions in global competition policy. American Journal of International Law, 94(3), 478-504.