In the rapidly evolving economic landscape, regulatory bodies like the Competition Commission of India (CCI) play a critical role. Tasked with ensuring fair competition and protecting consumer interests, the CCI operates within a robust statutory framework established under the Competition Act, 2002. However, frequent interventions by High Courts in ongoing probes at initial or intermediate stages raise significant concerns about potential disruptions to regulatory processes.

Limited scope of judicial review

The principle of judicial review is integral to the Indian constitutional framework. However, its role is fundamentally limited to instances of manifest illegality, procedural irregularity, or perverse decisions that defy reason and logic. This restraint ensures that the judiciary does not encroach upon the domain of specialised regulatory bodies. Yet, an increasing trend of judicial interference in the CCI’s probes often results in stalling inquiries and delaying much-needed market corrections.

Courts must allow the regulatory process to proceed unhindered, as the statutory remedies available to aggrieved parties—appeals before the National Company Law Appellate Tribunal (NCLAT) and the Supreme Court—provide a robust mechanism to address grievances post-regulatory action. Premature interference disrupts the regulatory process, undermines the CCI’s effectiveness, and delays justice in dynamic markets.

• Also read: CCI focuses on antitrust cases in digital markets amid new challenges

The Amazon-Flipkart saga

The prolonged litigation involving e-commerce giants Amazon and Flipkart exemplifies the impact of judicial interference on regulatory efficacy. When the CCI ordered a probe into alleged anti-competitive practices in the e-commerce sector, Amazon and Flipkart challenged the investigation in the Karnataka High Court. The resulting stay stalled the probe for months, hindering the CCI’s ability to address competitive concerns in a time-sensitive market. Ultimately, the challenge was dismissed.

The fresh bout of challenges to the CCI probe in the same matter, this time by resellers allied with these e-commerce giants, has once again put the regulatory action on hold. These fragmented challenges across multiple High Courts have forced the CCI to approach the Supreme Court, seeking the consolidation of cases to streamline the process.

The Delhi High Court’s Forech ruling

Amid this backdrop, the recent decision of the Delhi High Court in the Forech case serves as a much-needed reminder of the judiciary’s restrained role in regulatory inquiries. The court held that the CCI possesses independent and plenary powers to shape the investigation methodology and timeline and chided the petitioner for attempting to secure a judicial review of the investigation methodology through the back door, which, the court ruled, cannot be entertained. The court also imposed costs on the petitioner for using delaying tactics and attempting to stall the ongoing investigation.

• Also read: Supreme Court dismisses CCI’s appeal against Delhi High Court’s ruling in JCB case

The cost of delay in digital markets

The digital economy operates at an unparalleled pace, where delays can irreparably harm competition and consumer welfare. Regulatory interventions often address market distortions that, if left unchecked, could entrench monopolistic practices. Judicial delays, therefore, not only stall investigations but also risk rendering regulatory actions moot in rapidly changing digital markets.

Way forward

The Amazon-Flipkart saga and the Delhi High Court’s Forech ruling highlight the contrasting impacts of judicial intervention and restraint on regulatory processes. While High Courts have the power to review regulatory actions, this authority should be exercised sparingly. Courts must acknowledge that the CCI’s statutory mandate and expertise enable it to address complex market dynamics effectively.

Regulatory bodies like the CCI play a crucial role in upholding the principles of fair competition and protecting consumer welfare. By adhering to the boundaries of judicial review, courts can ensure that regulatory processes remain undisturbed, facilitating timely and effective resolutions that benefit the economy as a whole.

The need of the hour is for constitutional courts to exercise greater restraint, allowing the CCI to carry out its investigations without unwarranted interruptions. This approach will not only strengthen the regulatory framework but also promote a competitive and dynamic market economy that serves the interests of all stakeholders.

At the same time, it is imperative for the CCI to adhere to due process, follow established regulations, and respect the rights of all parties involved to maintain its credibility as a fair and transparent regulatory authority. Upholding these principles ensures procedural fairness, protects stakeholders from arbitrary decisions, and fosters trust in its enforcement mechanisms. By balancing robust action against anti-competitive practices with a commitment to procedural justice, the CCI not only upholds the rule of law but also encourages voluntary compliance and enhances the overall effectiveness of competition law in India.