Thursday, March 4, 2021

Are India's Antitrust laws effective at controlling monopolies?

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Vaishnavi Krishna Mohan

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Are India's Antitrust laws effective at controlling monopolies?

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Global Views 360

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March 4, 2021

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Representative Image for rise of Monopolies

Representative Image for rise of Monopolies

On 15th of July 2020, Reliance Industries Ltd (RIL) held its annual general meeting of the shareholders. The chairman and managing director Mukesh Ambani, announced that global tech giant Google would be investing $4.5 billion in Jio Platforms. Facebook also has acquired a 9.99% stake in Jio Platforms. This is the first time in the world that both the global tech giants have invested in the same entity. These investments have boosted the confidence for Jio Platforms and also for India’s growth but there have been questions and speculations about the potential anti-competitive makeup of these deals.

The objective of this article is to explore the interpretation and the effectuality of Antitrust laws in India.

Anti-competitive practices are those business practices which firms engage in to emerge as the or one of the few dominant firms, who will then be able to restrict inter firm competition in the industry in a bid to preserve their dominant status. The Collins English dictionary defines antitrust laws as those laws that are intended to stop large firms taking over their competitors by fixing prices with their competitors, or interfering with free competition in any way. These laws focus on protecting consumer interests and promoting a competitive market. The word ‘Antitrust’ is derived from the word ‘trust’. A trust was an agreement by which stakeholders in several companies transferred their shares to a single set of trustees.

In present-day India, talking about market dominance Reliance Industries Ltd (RIL), resembles American company—John D Rockefeller's Standard Oil Company—of the early 20th century. Mukesh Ambani holds the highest ability to influence markets and policy in every sector in which RIL is present—petrochemicals, oil, telecom, and retail. Many industry experts and critics suggest that Ambani has used his political clout to twist the regulatory framework in his favor.

Gautam Adani, founder of Adani Group | Source: Twitter

Furthermore, economic power in aviation infrastructure is clustering into a few hands as well. In 2019, the Adani Group bagged the 50-year concession to operate all the six Airports Authority of India-operated airports—Lucknow, Jaipur, Guwahati, Ahmedabad, Trivandrum, and Mangaluru—which were put up for auction. The company also obtained a controlling stake in ‘The Chhatrapati Shivaji Maharaj International Airport, Mumbai’ from GVK Airports. Moreover, Adani Group is now set to construct the Navi Mumbai International Airport. The group is now eyeing Indian Railways while they have already established an alarming monopoly in green energy and sea ports. While Airports are natural monopolies, one private company controlling more than 8 important airports is not good news to airlines.

India has established antitrust laws to promote competition. For 40 years, India followed the Monopolies and Restrictive Trade Practices Act 1969 (MRTP). This act was based on principles of import substitution and a command-and-control economy. However, over time several amendments had to be made to the act. In 2002, the Indian approved a new comprehensive competition legislation. This is called the Competition Act 2002. The act focused on regulating business practices in order to prevent practices having an appreciable adverse effect on competition (AAEC) in India. The act primarily regulates three types of conduct: anti-competitive agreements (vertical and horizontal agreements), abuse of a dominant position, and combinations such as mergers and acquisitions. The act lists out the cartel agreements that it intends to prevent. This list includes price-fixing agreements, agreements between competitors seeking to limit or control production, market-sharing agreements between competitors and bid-rigging agreements. These agreements are called “cartel” arrangements.

The competition Act is enacted by the Competition Commission of India (CCI), which is exclusively responsible for the administration and enforcement of the Act. It comprises a team of 2 to 6 people appointed by the government of India. The CCI has previously handled high-profile cases. In 2018, CCI imposed a fine of Rs135.86 crore on Google on the grounds that Google misused its dominant position and powers to create a search bias. In another important case, the CCI, ordered a probe into Idea, Vodafone and Airtel when Reliance Jio owner Mukesh Ambani lodged a complaint against the three for forming a cartel and denying Jio the POI required for network connection, causing multiple call failures. The Cellular Operator Association of India was also probed for encouraging the same.

In some cases, the Competition Commission has been successful in tackling activities that are against the free competitive market. However, critics and economists believe that the act is now unable to adapt to the changing business environment in e-commerce, telecom, technology and the government’s role in distorting competition. Demonetization and GST drove the formalization of the economy. One consequence of them was that bigger, better organized players gained at the cost of smaller ones with lesser resources. The Insolvency and Bankruptcy Code (IBC) was designed to solve the problem of non-performing assets (NPAs) of banks. But consequentially, it has also led to a consolidation in many sectors.  

However, CCI has expressed inability to consistently adjudicate punitive measures due to obligation in several cases. This points to the loopholes in the very provisions of the Competition Act 2002. In an Economic and Political Weekly (EPW) article, Aditya Bhattacharjea—an Economist—argues that even though the 2002 Act represents an improvement from the MRTP Act which was extremely restrictive, the present act also remains riddled with loopholes and ambiguities. According to Bhattacharjea, this creates unnecessary legal uncertainty, which acts in advantage of lawyers and law firms. For instance, the act allows the CCI to leave some scope of flexibility for “relative advantage, by way of contribution to the economic development.” Bhattacharjea argues that this may allow large firms to justify their anti-competitive practices in the name of development.

Mark Zuckerberg and Mukesh Ambani having online interaction after Facebook invested in Jio Platforms | Source: NDTV

Data portability plays a significant role in determining market power of certain firms. In 2017, the CCI closed cases against both WhatsApp and Jio involving allegations of predatory pricing and privacy violations. In both these decisions, the regulator did not consider the restrictions around data portability as a competitive advantage. The possible data leveraging advantage for the attempted monopolization could be the ‘portfolio effect’. Portfolio effect refers to increasing the range of brands, by bundling of telecom or messaging service and other service offerings or illegal vertical restraints, even predatory pricing. This in turn may lead to greater ability of further leveraging, deterring innovation and results in degradation of quality. Another possible advantage is explained as the theory of leveraging. The best example of leveraging is when Microsoft entered the media-player market by extending its quasi-monopoly on the operating systems market by taking advantage of the indirect network effects. In case of Facebook acquiring 10% of Jio’s shares, it is a concern that both entities could potentially use WhatsApp’s market dominance in telecom and social networking services and establish dominance in e-commerce market through anticompetitive acts.

There was a consensus among Indian policymakers at the time of the 1991 economic reforms that economic liberalization would eliminate the nexus between the business elites and the policymakers. On the contrary, the relationship between these two groups got further strengthened.

On the other hand, few critics and industrialists argue that extreme restrictions on growing companies hampers the progressive growth of the national economy. While RIL’s Jio looks like a cause for concern, the company has also saved Rs. 60,000 crores for annual savings in India. In addition to that, the entry of Jio to the telecom industry has led to a rise in data consumption and improved accessibility and affordability of the internet across the nation.

However, the concern still lingers as the question of whether this growth is a result of actual innovation or crony capitalism remains unsolved.

However, the fact that telecom, organized retail, ports and airports have two or three players controlling the bulk of the sector needs to be addressed. A healthy competition is quintessential for long-term growth and innovation. Harmful trade practices and cartelization does not only affect small manufacturers but also the general public.

The government, CCI and other lawmakers must closely examine the present laws and provisions and need to see if they are required to amend the act.

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March 11, 2021 12:22 PM

The Blasphemy Law of Pakistan and its Implications

In Pakistan, Blasphemy results in a capital punishment in majority of cases. It is perhaps considered a crime worse than terrorism. A crucial case in point is the fact that the Pakistan’s Anti-Terrorism Court gave around 15 years jail term to two close aides of Hafiz Saeed—chief of the terrorist organization—Lashkar-e-Taiba—and mastermind behind 2008 Mumbai terrorist attacks—where at least 150 innocent people lost their lives.

Similarly, Zakiur Rehman Lakhvi—Lashkar-e-Taiba’s operation commander and another important figure involved in the 2008 Mumbai attack—was sentenced to 15 years in jail period. Not to mention—this happened amidst the international pressure on Pakistan for letting terrorists to function and roam freely within their country.

While something as violent as terrorism is dealt with lenient punishments, there are draconian laws for blasphemy in the country. Moreover, one can be accused of committing blasphemy—doesn’t matter if they did it or not—and might not even face a fair trial.

This article discusses what are the blasphemy laws and what are their implications while looking at some specific cases.

What are Pakistan’s Blasphemy laws?

What's called Blasphemy law today has its origins in the colonial era. The “offences relating to religion” were introduced by British in 1860, and were later expanded in 1927. These were sections 295 and 295-A from the Indian Penal Code. The laws were made to avoid religious disturbances, insult religious beliefs, or intentionally destroy or desecrate a place or an object of worship. Under the 295 and 295-A, the convicted were to be given a jail term from one year to ten years—with or without a fine.

Pakistan ended up inheriting these laws after the partition of India in 1947.

The laws were amended in 1982 and another clause was added which prescribed life imprisonment for desecration of the Quran intentionally. Another clause was added in 1986 to punish blasphemy against the Prophet Muhammad through imprisonment for life or death. These clauses, were added under General Zia-ul-Haq’s military regime, in an order to make the laws more “pro-Islam.”

Since then, this law has often been used to persecute people from minority communities—such as the Ahmadiyas, Shias, Christians, and Hindus—they have been accused of blasphemy without much evidence.

Infamous cases and implications of blasphemy in Pakistan

One of the famous cases was of Asia Bibi, which grabbed international attention as well. Asia Noreen—known as Asia Bibi—was a Pakistani Christan and a farm laborer in Punjab province. Her husband, Ashiq Masih, was a brick laborer. A dispute with her Muslim neighbours turned into an accusation of blasphemy—leading to her arrest and imprisoned. There were a lot of protests in Pakistan, demanding death penalty for Asia Bibi.

Two politicians—Salman Taseer and Shahbaz Bhatti—who supported and tried to help Asia Bibi, were murdered. Taseer was shot by his own bodyguard named Malik Mumtaz Hussain Qadri in broad daylight. Qadri was tried and sentenced to death. He was executed in 2016. Mumtaz Qadri became a hero for millions and hardliners praised him as a martyr. He is regarded as a saint and a mausoleum has been built over his grave in his village near Islamabad, where even devotees come to offer prayers.

Asia Bibi was first sentenced to death by a trial court in 2010, however was later acquitted by the Supreme Court in a historic judgement of 2018. In 2019, Pakistan’s Supreme Court ruled that she was free to leave Pakistan and was given asylum in Canada where she moved along with her family.

Although after a long struggle, Asia Bibi still got justice and was able to start a new life—unfortunately many others didn’t. Many met with Mob Justice.

In 2017, a journalism student at a Pakistani University was lynched to death by fellow students in Mardan—in the province of Khyber Pakhtunkhwa. The student—Mashal Khan—was a Shia Muslim and was falsely accused of blasphemy. The mob was enraged by a rumour according to which he had promoted the Ahmadi faith on Facebook. In a similar instance, a man named Tahrir Ahmad Naseem was killed by vigilantes in July last year for blasphemy. He was a former Ahmadi, and was in Peshawar Central Jail since 2018 for claiming to be a prophet. He was shot dead inside the courtroom during trial in the Peshawar Judicial Complex.

Furthermore, in a case similar to that of Asia Bibi, a Christian couple—Shahzad and Shama Maseeh—were accused of blasphemy as well. They were then beaten and burned alive by a mob in 2014. Shama was four months pregnant. The mob, which also included a local cleric, believed that the couple had burned some pages of the Quran along with some rubbish, although the couple’s family still denies this. Five people including the cleric were sentenced to death, while the eight others were given two years imprisonment.

Last year, former Foreign and Defense Minister Khawaja Asif as well was accused of blasphemy for merely stating that “all religions are equal.”

Why is this happening?

According to data by Pakistan’s Centre for Social Justice, there have been 1549 known cases of serious blasphemy in the years 1987-2017, out of which 720 were Muslims, 516 Ahmadis, 238 Christians, 31 Hindus, and the rest 44 are unknown. 75 out of the total cases ended in the person being murdered before their trial.

There are 13 countries in the world which punish blasphemy by death penalty and Pakistan happens to be one of them. But unlike countries like Iran and Saudi Arabia where they are executed judicially—as mentioned earlier—accused in Pakistan are often killed in mob violence or assassination. While Saudi Arabia and Iran continue to top in terms of the highest number of executions, most of them for sacrilege or crimes against Islam, Pakistan’s total ‘judiciary’ killings stand at zero.

The problem of this mob mentality in Pakistan, especially when it comes to religion, is actually deeply rooted in its constitution. The country’s aspiration to become a democracy as well as an Islamic state is in itself contradictory. The people want the right to freedom and expression and the hanging of a person committing blasphemy at the same time. The constitution denies criticism of Islam while claiming to allow freedom of speech and religion. The elevation of one religion over others in itself is principally undemocratic.

Another interesting point is the fact that the people supporting these ideas haven’t been aware of how things can backfire. Muhammad Din Taseer—father of Salman Taseer—supported Ilam Din, who murdered a Hindu publisher over blasphemy in 1929. An ancestor’s support for radicalism ended up in his own offspring being assassinated in the name of blasphemy.

Mental illness and blasphemy

In Pakistan, often some mentally ill people are punished to death by mobs for unknowingly ‘committing’ blasphemy. In 2012, a man widely reported by the media and police as ‘mentally unstable’ was arrested for blasphemy in Bahawalpur district, Punjab province. A mob gathered outside the police station, dragged him outside, and burned him to death. There have also been cases of misuse where such vulnerable individuals were subjected to sexual abuse and later accused of blasphemy by the abusers to cover up their crimes.

Such abuses towards mentally unsound people would have been a criminal case and the abusers would have been punished—unless they use the blasphemy law—as the mentally unstable victim cannot defend themselves.

Role of Anti-Terrorism courts

Pakistan’s Anti-Terrorism courts were set up to ensure quick justice in cases such as terrorism, sectarian violence, targeted political killings, hijacking, kidnapping, extortion and even arms trafficking. Earlier gang rape was also included in it—but removed later.

They are also key to controlling mob attacks on blasphemy accused as such trials are held here.

Yet, these courts have been facing several problems due to lack of basic resources and understaffing. The posts of judges often remain vacant for months, and the state prosecutors complain of poor working conditions—with no offices, stationery, clerical staff or legal resources. These problems may have risen due to the fact that there are not sufficient funds allotted for the ATC infrastructure, one of the major challenges in Pakistan’s legal system. Due to this, these courts are not able to fulfill their primary objective—to provide ‘quick’ justice.

Moreover, these courts lack independence and are vulnerable to political influence—the judges are held accountable to the executive. Sometimes the witnesses often refuse to testify against the accused, as they fear assassination by terrorist groups the accused belongs to. The judges, state prosecutors and others also have personal security concerns which also lead to delays in trials.

Also, these courts deny terrorism suspects the right to equality before the law. They are not even tried in a public place with full defense and are not presumed innocent. Peshawar High Court advocate Ghulam Nabi even challenged the Anti-Terrorism (Amendment) Ordinance 2009 under Article 199 of the constitution in December 2009, saying that it violated basic human rights.

The blasphemy laws of Pakistan need to be repealed in today's Global civic society. People are fighting for equality everywhere around the globe. And now it is up to Pakistan to choose—whether to become a democracy or continue with a pseudo-democratic authoritarian regime which is based on extremist interpretation of religion.

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