WIA Talks: Geeta Gouri, former Commissioner of the Competition Commission of India
To celebrate Women's month, WIA prepared an interview with Geeta Gouri, former Commissioner of the Competition Commission of India and first woman to integrate the authority. In this inspiring exchange, Gouri discuss the challenges that Indian competition law faces nowadays, analyses the possibilites of regulatory cooperation among the BRICS and, sharing her experience and obstacles as a woman in India, gives advices to young women entering the competition law field.
The interview was conducted by Julia Marssola, our Director of Partnerships and Engagement.
·CAN YOU TELL US A LITTLE BIT OF YOUR STORY AND HOW YOU INTEGRATED THE COMPETITION COMMISSION OF INDIA?
This is an interesting question: integrating the progress of regulatory institutions with my story as a regulator. I guess having been involved with two important regulatory Commissions on the history of regulation in India is almost a personal brief. As the only female regulator and perhaps the only professional economist to be associated with the beginning of two Commissions, I feel privileged to share my thoughts with Women in Antirust (WIA).
Whether being a regulator was natural choice or was it just another career option among other options for a working woman has been asked by several young women entering the profession. On hindsight, I find that my vast and diverse experience which combined academics, teaching, banking finance to later becoming Director (Tariff) at the Andhra Pradesh Electricity Regulatory Commission and finally becoming Member (Commissioner) Economics of CCI was a natural culmination of my research and career changes.
My PhD in economics was on international trade. It examined the options available to a small economy through the benefits of trade and opening of an economy. This was followed by research into welfare implications of administered pricing policies with specific reference to petroleum products. This research provided insights into the instruments of government, as a pioneering work on state owned enterprises and privatisation. It addressed the underlying concerns of efficiency versus equity, market and competition versus state control, which remain my continuing concerns in my research and also in my role as a regulator.
A brief digress into the history of regulation in India is insightful as there are shared concerns that traverse competition authorities in BRICS countries. In 1991, India shifted to an industrial policy of de-licensing and market orientation coming under the rubric ‘economic liberalization’. As the policy was of de-licensing and involving private participation, distancing of the government from economic activities was vested with regulatory commissions.
The first sets of regulators established were the Telecom and the Electricity Sector. These sectors prior to 1991 were bundled as public utilities on two ways. Firstly, the presence of natural monopoly status in fixed telephony lines and transmission lines. Secondly, both these sectors provide essential services, so a bundled utility under public sector ownership was considered appropriate. Public ownership also facilitated the use of tariffs as a poverty reducing instrument.
The Competition Commission of India (CCI) was created in 2009, seven years after the Competition Act, 2002 was enacted. The Monopolies and Restrictive Trade Practices Commission (MRTP) preceded CCI, whose agenda was to prevent concentration of monopoly and unfair trade practices. It was not a market regulator appropriate for market oriented economic policies, unlike CCI. MRTP was replaced by CCI, a pro market regulator whose area of operation and effect is wider than of the sector regulators. In fact, as natural monopolies are limited in number and competition can be introduced through the bidding route, CCI has an expanded role to play in competitive markets in the telecom and electricity sectors.
Competition law is an economics-based law while the focus of sector regulator is also on economics in the calculation of tariffs. The emphasis of sector regulators and of CCI is on competition and market reforms in the economy. Economists, therefore, play a major role to play in developing jurisprudence and economic regulation. As a Member (Economics) of the first Competition Commission of India, my priority was on developing jurisprudence at the Commission based on robust economic analysis, focusing on the dynamics of market functioning and market innovation that are so critical to a market regulator. Several Orders of the Commission carry my imprint of economic analysis in translating the dynamics of market functioning in the contours of the Competition Act. My experience as a regulator with an academic background prompted me to look at competition and markets by posing the counterfactual, be it cases of monopoly in Section 4 of the Competition Act, ‘Abuse of Dominance’ cases and in merger controls, Section 5 ; or in 'cartels and vertical restraints' of Section 3.
● WHAT WOULD YOU SAY ARE THE BIGGEST CHALLENGES FOR COMPETITION LAW IN INDIA NOWADAYS?
Currently competition authorities worldwide are facing the challenge of identifying antitrust abuse that stem from high-tech, digital technology and platform markets. CCI is no exception. Coming under the broad heading of Technology and Emergent Markets, the challenge for antitrust authorities is whether to intervene, as platform markets tend to be large and monopolistic, or to wait and let the market develop as consumers gain from these digital markets.
In India, competition law has been framed in the classical model of product markets of producer/seller and buyer/consumer. There is growing widespread use of smartphones in both rural and urban areas in India, with banks in digital markets. Consumers use the digital platform for purchases, for financial payments and for social media. CCI is faced with the dilemma of whether to maximize total welfare or to maximize consumer welfare. Convergence of competition policy, competition law and public interest is gaining importance, suggesting that consumer welfare should include citizen’s welfare. This perception is most acute in the ICT (Information and Communications Technology) sector where SPE (standard essential patent) owned by large firms are required to provide the steppingstone for digital expansion and use of artificial intelligence.
Consumer welfare has been looked at from the aggregate point of view without gender disaggregation. Antitrust law which has so far remained indifferent to gender needs a rethink. In the emergent platform markets, like the e-commerce segment in India, data points to online competition mainly generated by female consumption, growing also in Tier II cities. Several women entrepreneurs have also set up their own portals on different social media, thus creating viable competition to mainstream producers.
The argument that platform markets that are digital and algorithms which enable positive feedback loops tips the scale in favor of large incumbents has not been borne out by evidence on antitrust abuse. It also does not suggest that the incumbent always remains on top. Technological developments and changing consumer fancies has seen a high rate of turnover of firms on the digital platform. This is the dilemma alluded to in the previous paragraph. The costs of intervention can be high in the face of gains accruing to consumers.
The earlier approaches to antitrust based on the classical economic models of product market may be inappropriate to understand the market structure and competitive outcomes of emergent markets of platform markets and market for ideas. Platform markets host multiple markets, making it difficult to identify the relevant market of antitrust abuse. Market of ideas refers to the trade in standard essential payment (SEPs). SEP consist of several patents put together to facilitate interoperability and compatibility of equipment in digital networks. These paradigm shifts have defied a common approach to antitrust analysis. CCI is in the process of evolving its own guidelines and assessment of anti-competitive effects.
It also raises the issue of jurisdictional cooperation among antitrust authorities.
● DO YOU BELIEVE IN A POTENTIAL REGULATORY COOPERATION AMONG THE BRICS? IS THERE A POSSIBILITY OF A JOINT ENFORCEMENT OR JOINT COMPETITION AUTHORITY?
Definitely as digital markets are neural and market boundaries do not match political boundaries. The potential for regulatory cooperation is high.
BRICS share a common heritage in terms of being late entrants to the competition scenario. It is an emergent bloc that in the last few years established good equation on sharing experiences in antitrust issues. There are regular meetings among BRIC countries. It started during my tenure with the Commission and I find they have gone from strength to strength.
The inevitable question would then be: is there an antitrust approach that is ‘BRICS’? I don’t think so. Each of the countries has their own historical and political experience but during meetings commonality of concerns was discernible between Brazil and India or South Africa and India. Issues pertaining to the appropriate form of intervention for market oriented economic development are being explored. As my presentation at the WTO public Forum emphasized, patents especially of SEPS (Standard Essential Patents) are the emergent areas of interaction and experience sharing. Institutional framework is another area where BRICS share their experience in terms of adopting a Bifurcated Judicial Model or a Bifurcated Agency Model or Integrated Agency Model.
A joint enforcement is a possibility. At present CCI refers to cases that have been assessed by other competition authorities of BRICS. A joint competition authority, however, maybe still a nascent concept.
● WHAT WERE THE CHALLENGES YOU, AS A WOMAN, FACED TO ACHIEVE AND ACCOMPLISH YOUR TECHNICAL LEVEL IN COMPETITION LAW AND PLAY A ROLE OF SUCH HIGH IMPORTANCE IN THE INDIAN LEGAL FRAMEWORK?
Technical economics and being a woman was a combination that called for a lot of grit and determination. I had to deal with micro aggression from colleagues all bureaucrats and not particularly inclined to modern economic theories and definitely not keen on knowing about it from a woman economist. In many ways, I had to stand my ground to ensure that my views would be heard.
As mentioned earlier, as Member (Economics) of the Competition Commission, my priority was on developing jurisprudence based on robust economic analysis and designing tariff models for the unbundled electricity sector in the Electricity Regulatory Commission. The Indian regulatory framework had to undergo a complete rethink on competition, in the presence of competitive constraints as possibly welfare enhancing and beneficial to consumers. My team at CCI was tasked with incorporating the dynamics of market functioning for each antitrust case. Major cases analyzed with the use of economic tools often varied with the analysis presented by lawyers, as their reference was only to case laws and decisions used in mature competition authorities. It was not a sufficiently vibrant understanding of market dynamics. It was challenging to persuade my other colleagues to appreciate the underlying economics of a case in the Indian context.
The challenge was not only the challenge of technical economics but also one of gender. Being the only woman member of an all-male Commission consisting of former bureaucrats was a gender challenge, especially as a professional economist who did not belong to the group of bureaucrats from the administrative service. Bureaucrats used to a regime of control and commands were not easily open to understand market functioning which required drawing a line between control and market facilitation. A combination of persistence in my arguments, perhaps reverse aggression to counter their micro aggression and lastly the writing of dissent Orders were the options I resorted to as a regulator.
I think it is important to maintain this distinction as regulation of markets as in the case of natural monopoly or facilitation of markets as in the case of CCI are largely based on economic analytical framework of market functioning.
● WHAT DO YOU THINK COULD BE DONE TO FURTHER PROMOTE THE AGENDA OF GENDER EQUALITY? DO YOU SEE HOW ANTITRUST LAW COULD COOPERATE FOR THIS PURPOSE?
Bearing in mind the idea that the market is changing with the internet and new platforms like Whatsapp, small scale women entrepreneurs are able to get a chance to compete with established large businesses.
I however see gender equality with reference to the number of women professionals in the Commission and those deposing before the Commission. Representation of women has been good and there has been no gender discrimination. After me there is again a lady Member of the Commission and the Commission is staffed with senior officers who are women. Two of the major law firms concentrating on competition law are headed by women.
Under the Competition Act of India, only lawyers and CAs are allowed to represent before the Commission, which is now being amended to include economists and other experts from commerce and international trade. With this amendment hopefully more women economists will join the profession.
● WHAT WOULD BE YOUR ADVICE FOR YOUNG FEMALE PROFESSIONALS WHO ARE JUST STARTING TO WORK IN THE COMPETITION LAW FIELD?
My advice for all woman who want to work in antitrust is to be technically sound and have faith in their ability. Stand up for things you believe in.
This is a very exciting field as it deals with functioning of markets and markets are never static. New business models, new strategies of growth widen the dimension of antitrust analysis. A quick survey of case analysis of US or of the EC shows how concepts of abuse or of adverse effect on competition keep changing with the dynamics of markets. There is no finality.
It is equally important for senior women in antitrust need to support younger women colleagues.