In IndiGo Crisis, DGCA Slept And CCI Didn’t Bark

Amid all the flak aviation regulator DGCA has drawn for its handling of last month’s IndiGo crisis, the role of another regulator – Competition Commission of India – has gone relatively unnoticed.

CCI was set up to promote and sustain competition in markets, and is tasked with curbing anti-competitive practices across sectors. It is CCI’s job to hold dominant companies accountable when they choose to misuse that dominance in a way that is detrimental to consumers. To that end, it has been endowed with sweeping powers of enquiry and adjudication, including the power to suo motu investigate any activity it finds suspicious.

The seeming inability of IndiGo, India’s dominant carrier, to adhere to DGCA’s updated FDTL – flight duty time limitations – norms is certainly suspicious. Numerous pilots have claimed they were not assigned any duty when they were available to fly – a possibly deliberate attempt to manufacture a crisis and show the world that the new FDTL norms are unworkable.

While it is possible that the sudden cancellation of thousands of flights resulted from poor planning and an overly optimised cost structure with no redundancies built in, DGCA’s response raises doubts. The four-member committee it formed to investigate the case submitted its report over a fortnight ago, yet it has remained quiet and not taken any action. So, it falls to CCI to get to the truth.

In all fairness, condemning CCI for allowing IndiGo to become too big to fail – for allowing it to achieve a 60% market share and for letting a once-competitive airline sector reduce to a duopoly – is misguided. That criticism – being made widely and trenchantly in the backdrop of an obvious market failure – lacks an appreciation of the nature of CCI as a body and the law underpinning it.

The days of pre-liberalisation India, when Monopolistic and Restrictive Trade Practices Act served as a real check on big businesses getting bigger, are long gone.

Post liberalisation, India has the Competition Act, a fundamentally neoliberal legislation which has accepted that big isn’t necessarily bad, and that dominance is only really a problem when abused. Critics, therefore, should lay the blame for IndiGo’s dominance on the legislature, rather than CCI.

That said, CCI does seem to have forgotten that it is meant to step in at the first sign of a dominant company misusing its dominance. It must remember that it is intended to function as a proactive market regulator, not a quasi-judicial tribunal for resolving disputes brought before it. CCI can take cognisance of anti-competitive practices on its own; it can and should respond to changing market dynamics without waiting for a complaint to be lodged before it. Yet, the only time it demonstrates any appetite for doing so is when it comes to Big Tech – with WhatsApp and with Amazon. Other markets are ignored unless a public-spirited informant or a competitor with a bone to pick approaches CCI and requests its intervention.

This needs to change. No other regulator takes such a hands-off approach, or is nearly as reliant on third parties to take action. Information asymmetry can hardly be an excuse when in possible cases of abuse of dominance, such as the present IndiGo crisis, the perpetrators are corporate behemoths whose sins often play out

publicly. CCI must, at the very least, look to act on these potential infractions, if not more actively seek out those hidden from the public eye. Mere internal conversations are not enough – it must send a notice, take a prima facie view, and initiate an investigation when something seems wrong.

Unfortunately, not much happens even when a complaint is lodged and CCI does investigate a matter. The vast majority of its investigations lie stalled, with probes lasting several years and often concluding only when market structures have already been damaged beyond belief. These delays are in part often CCI’s fault – the result of strictures imposed by appellate authorities in response to procedural errors of various stripes committed

by it. The investigation into Apple stalled because CCI erroneously included Apple’s confidential data in a non-confidential report; the investigation into Swiggy stalled because CCI erroneously gave the informant access to Swiggy’s confidential data. The list of mistakes goes on and on, showing a regulator that is either careless or improperly staffed.

It is little surprise, then, that fear of the competition watchdog is not deterring dominant companies from acting as if they’re beyond the reach of the law. CCI needs to get its act together, and start both proactively remedying market distortions, and effectively investigating cases pending before it.

The writer is an advocate at Supreme Court and Delhi HC