The Central Government has initiated steps towards formation of a Competition Commission of India (CCI) to prevent practices having adverse effect on competition in a liberalized world.

The CCI is to replace Monopolies & Restrictive Trade Practices Commission (MRTPC) and is to function as the competent authority to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets.

As the first step, the government is in the process of constituting a Committee for the selection of the Chairperson and other members of CCI, it is learnt.

The Committee is to consist of members like retired judge of the Supreme Court or a High Court, retired Chairperson of a Tribunal established or constituted under an Act of Parliament, distinguished jurist or a Senior Advocate for five years or more, a person who has special knowledge of, and professional experience of twenty five years or more in international trade, economics, business, commerce or industry, a person who has special knowledge of, and professional experience of twenty five years or more in accountancy, management, finance, public affairs or administration. The members are to be nominated by the centre, which will also ask one of them to act as the Chairperson of the committee.

The Joint Secretary in the Ministry of Finance and Company Affairs (Department of Company Affairs) dealing with the Competition Act, 2002 (12 of 2003) shall be the Convenor of the committee. The term of the committee will be for a period of 120 days from the date of its constitution.

In a recent notification, the Centre has said that the function of the committee would be to suggest the names of the chairman and members of CCI.

CCI is to play an important role in containing unhealthy competition within pharmaceutical industry both internal as well as global.

The Competition Bill, which called for the establishment of the commission, was passed by the parliament during the last session. With its passage, the Monopolies and Restrictive Trade Practices (MRTP) Act that governed the government's anti-trust agenda got scrapped and the MRTPC is to be replaced by CCI.

It should be noted that there has been several instances of MRTPC been involved in finding solutions to disputes between pharma companies and government agencies. The case related with misbranding by Reckitt Benckiser, and the "filgrastim" issue that saw Nicholas Piramal India Ltd (NPIL) pitted against Dr Reddy's Laboratories had all reached before MRTPC for dispute settlement in the recent past.