Competition Law and COVID-19

The COVID-19 epidemic has proved to be one of the greatest health emergencies in India and across the globe. The epidemic which resulted into lockdown from mid-march, the citizens along with the companies has faced a backlash as everything has come to a halt. The concerns regarding the functioning of the big business houses and the closure of the e-commerce marketplaces is one of them which has came to halt. Competition Commission of India[1] needs to see that during these difficult times when the e-marketplaces have suspended their operations for an indefinite time, the concerns relating to the competition law are well addressed and properly managed. Although the Central Govt. has time and again notified the importance of the Essential Commodities Act, 1955 during these times, the chances of the companies surpassing the set limits and violating the set rules is high enough.[2] Especially in times like these, where the economic environment is degrading day by day, the possibilities that entities with strong market power exploit the situation in hand are increasing. Due to this situation, the prospects of companies to make restrictive and exclusive vertical agreements with their suppliers or distributors are also very high. As a result of which, the pain has to be bear by end consumers because they are the end consumers in the hierarchical chain. The outcome of such practices would be acute shortages in the essential commodities in the market, which would be a failure on the part of the Government along with the existing regulations and Competition Laws.

Filings under the Act:

Sections 3 and 4 of the Competition Act, 2002 has to come to action, where Section 3[3] talks about the anti-competitive agreements and Section 4[4] deals with the abuse of dominion position. Most of the litigation in India dealing with competition and competitive matters is based upon the aforementioned sections only. Recently, a notice was issued vide which all filings related to Section 3 and 4 of the Act were suspended for the time being and has been done time and again. At first, the matters were adjourned for hearing post 31st march, but then were taken to 14th April.[5] As per the latest notice, the matters had been told to be taken up for hearing on 3rd May. This step was taken as a precautionary measure to tackle the risks attributed to COVID. Further, the Combination and regulation of combination as given under Section 5, 6 of the Competition Act, 2002 were also suspended till 12th April,[6] and vide notice dated 13th April, e-filing of all combinations were allowed by the CCI.[7]

CCI Advisory:

On 19th April, an advisory was issued by the Competition Commission of India (CCI) for the running of businesses. The advisory was released keeping in mind the negative effects that can be caused big businesses to the smaller firms and entities in the market due to the COVID pandemic and amidst lockdown.[8] The CCI stated in the advisory that ‘Although it agreed on the point that there have been numerous fluctuations in the market since the pandemic, and the curve has been declining down the line, therefore, sharing information and coordination are two very important factors that the market needs to take care of’ despite this epidemic. Under Section 3 of the Competition Act, the coordination amongst the competitors in the market is presumed to have caused an appreciable adverse effect on the competition, and the CCI has to take into consideration the pro-competitive effects, such as improvement in production or distribution of goods or provision of services and promotion of technical, accrual of benefit to the consumer, scientific and economic development by production or distribution of goods.[9] Where the Competition Act is following these rules and regulations for preventing unfair practices, the entities also have to take an extra degree of care while exercising their right to business. The Competition Commission of India, further, specifically pointed out that it will only take into consideration those businesses which are necessary and essential in these tough times. Thus, the business which falls under the ambit of the Essential Services Act, 1955 would only be permitted and regulated by the CCI.[10] Moreover, CCI had made it very clear that businesses falling under the Essential commodities must not take advantage of the crisis to exploit the small entities and should work as per its standards. It was made clear in the end that on the account of any such violations under the Competition Act, 2002, the Commission will assess cases on an individual basis.

Competition Law and Essential Services:

The Essential Commodities Act had been put in front, as far as the lockdown is considered, by the Central Government and only those businesses which fall under the Act were allowed to run. This overlaps with the Competition law and the CCI needs to interfere herein and make sure that no entity is benefitted unduly during these difficult times. The Essential Services Act talks about essential commodities such as medicines, masks, sanitizers, and other such services.[11] The Commission has to ensure herein that the collaboration agreements align with that of Competition law. Therefore, limited collaboration amongst competitors may be allowed so far so it does not violate the laws in place to tackle the current situation. Further, the collaborations which includes most of the essential goods, like sanitizers, masks, ventilators which are used for Govt. procurement, thus as per the public demand, may be allowed. This, further, helps the Government in research and development work.

Comparative Analysis:

Collaborations of business producing or supplying essential commodities are extremely necessary and can be made during these times; some countries seem to have followed it. In the United States, according to a joint statement issued by the Justice and Federal Trade Commission on Covid-19, which said that ‘we could follow that collaboration in the field of research and development, sharing of technical know-how and joint purchase agreements among healthcare providers are allowed’.[12] In the European Union, the European Commission has exempted cooperation in the health sector to ensure adequate production and distribution of essential products.[13] In the United Kingdom, the Competition and Markets Authority (CMA) has propounded that it is not going to take any stringent action against any entity in the essential commodity market.[14] In Australia, the Australian Competition commission has ensured limited cooperation between essential things, like wholesalers of gas, electricity, supermarkets, medical technology, and private hospitals.[15] In Norway, transportation companies have been exempted from the prohibition of anticompetitive agreements and practices to tackle the current epidemic situation.[16] In Iceland, exemptions have been provided by the pharmaceutical industry, travel agencies, and banks.[17] In India, this power rests with the Central Government vide Section 54 of the Competition Act, 2002 in the interest of the State or public interest. [18]

Exemptions or Relaxation from Competition Act:

The Covid-19 epidemic has already brought down the market setup and the economy, which with the passage of time needs to be restarted again by keeping the aim of ‘Atmanirbhar Bharat and Overcoming Covid-19’.[19] India is the third largest technology start-ups with 9,300 start-ups have been employing around 4 lakh people globally. It has been estimated that around 70% of the start-ups will not able to survive after 3 months because of halted operations due to Covid.[20] While recent survey shows that only 16% of the start-ups have assets to survive for 3 to 6 months.[21]

With these conditions of the Indian Markets, where it is difficult even to re-establish their industry, creating a free and fair competition by strictly following the provisions established under Competition Act, 2002 is a very difficult task. It is obvious that the industries and companies should be exempted from following the provisions of Competition Act, 2002 but some relaxations should be given under the regulations of combination, i.e. under section 5 & 6 of The Competition Act, 2002. Relaxation can be given in the rules of combinations of acquisition of one or more enterprises or merger of enterprises. This can lead to a clash or controversy between financial growth and fair competition. In spite of this, the CCI will have to take care of the accrual of benefits to consumers, promotion of technical and economic development, productions and distribution of goods and services[22], etc as per the advisory issued by CCI.[23]

As at this time when companies, industries, start-ups don’t have assets to start again, these mergers and acquisition are way more going to help them stand again in the market which might seems putting an adverse effect on competition within the market as given under Section 6(1) of Competition Act, 2002. These kinds of steps will increase the chances of re-establishing the industries who had been the worst victim of the Covid.

Conclusion; Way Forward:

Although the Competition Commission of India have provided entities with some relaxation and exemptions but it should be kept in mind that these relaxations do not come inconsistently with the antitrust principles of competition law. The CCI is likely to keep a track record of all firms and companies, especially during this epidemic situation where markets and business are down, as it knows that the chances for the violation of the established principles of competition law would be at the very peak. Relaxations given have always been subject to some terms and conditions, and this should be respected by the entities also either any action can be taken under antitrust law.


[1] Statutory body of Government of India responsible for enforcing The Competition Act, 2002 throughout India.

[2] The Essential Commodities Act, 1955.

[3] Section 3, The Competition Act, 2002.

[4] Section 4, The Competition Act, 2002.

[5] Cyril Amarchand Mangaldas, COVID 19 and Competition Law Concerns, The Quint, April 18, 2020.

[6] Section 5 and 6, The Competition Act, 2002.

[7] Basu Chandola, How is Competition Commission of India functioning during the COVID-19 pandemic, Kluwer Competition Law Blog, April 21, 2020.

[8] Gurveen Aulakh, Gaurav Norona, Competition Commission cautions businesses against unfair practices amid coronavirus pandemic, April 20, 2020.

[9] Krushna Choudhary and Animesh Kumar, Competitor Coordination Amid COVID-19: Antitrust Implications in India Lawstreet India, April 14, 2020.

[10] Abhishek Gupta, Conundrums of the Consumers during COVID-19, Barandbench, April 12, 2020.

[11] ET Bureau, Government puts masks and hand sanitisers under Essential Commodities Act, the Economic Times, March 13, 2020.

[12] US Dept. of Justice, JOINT ANTITRUST STATEMENT REGARDING COVID-19, March 2020.

[13] Nishith Desai Associates, CCI’S ADVISORY FOR COVID-19 – A MUCH NEEDED BREATHER, May 5, 2020.

[14] Id.

[15] Thomas Jones and Jedd Tian, ACCC to the Rescue – Interim Authorisations Granted, Bird and Bird, April 2020.

[16] Norway allows cooperation between competitors in the transportation sector – exemptions creep back into competition law, Roschier, March 20, 2020.

[17] COVID-19: Application of competition rules and competition enforcement in crisis, Samkeppni, March 22, 2020.

[18] Vivek Agarwal, India: Cartels Comparative Guide, Mondaq, April 16, 2020.

[19] https://www.india.gov.in/spotlight/building-atmanirbhar-bharat-overcoming-covid-19.

[20] Sandeep Soni, 70% startups may not survive after 3 months as young tech firms become major casualties of Covid, 19th May, 2020. https://www.financialexpress.com/industry/sme/startups-to-shutdown-due-to-covid-impact-coronavirus-hurts-revenues-funding-zomato-swiggy-ola-paytm-oyo-cut-costs-to-survive-lockdown/1963817/ (Accessed on 19th June, 2020).

[21] Rajat Mishra, Only 16% Startups have cash to survive for 3 to 6 months: Survey, 15th June, 2020. https://www.outlookindia.com/outlookmoney/talking-money/only-16-startups-have-cash-to-survive-for-3-to-6-months-survey-4887 (Accessed on 19th June, 2020).

[22] Section 19(3) of the Competition Act, 2002.

[23] https://www.cci.gov.in/sites/default/files/whats_newdocument/Advisory.pdf


Abhishek Naharia from Rajiv Gandhi National University of Law, Punjab.

Future Lawyer and Lifelong Humanitarian, he has found interest in Criminal & Constitutional Law. He works with enthusiasm and wishes to graduate with a Criminal Law Specialization.

Raj Aryan from Lloyd Law College

An avid reader, researcher, and writer with many renowned publications on various platforms. He has also written a book published by Thomson Reuters.

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