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Authors

Dorothy Shapiro

Abstract

In 2002, India unveiled its new Competition Act. The Act substantially improves upon the previous competition regime, which regulated and condemned dominance even absent culpable conduct. Despite improvements, provisions of the Act have proven difficult for the fledgling Competition Commission ("the Commission') to implement. For one, the Act overwhelmingly prefers rule of reason analysis to per se illegality for horizontal and vertical agreements. While this approach gives the Commission the flexibility to conduct a nuanced inquiry, the economic analysis required is challenging. So far, the Commission has struggled when applying basic antitrust economics in the hundred or so orders that it has issued. Going forward, the Commission should develop systematic approaches grounded in economic principles in order to create clear rules and precedents that will support a competitive market place and promote economic growth. It may be necessary to train the Commission members or replace them with individuals who have a background in antitrust economics. After the Commission has addressed limitations on resources and staff expertise, it should develop enforcement priorities and interpret its guiding statute in a way that is congruent with India's unique economic situation. Most importantly, the Commission should focus on cartel abuses, which would beneficially affect a broad base of consumers.

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