IndiGo Crisis Shines Light on CCI's Passive Regulatory Approach
India's aviation regulator DGCA has faced significant criticism for its handling of last month's IndiGo crisis. However, another regulator's role has largely escaped public attention. The Competition Commission of India, established to promote market competition and curb anti-competitive practices, has remained relatively quiet during this unfolding situation.
CCI's Mandate and Powers
The Competition Commission of India possesses broad authority to investigate and adjudicate on competition matters. Its mandate includes holding dominant companies accountable when they misuse their market position to harm consumers. CCI can initiate investigations on its own initiative when it identifies suspicious activities that may violate competition laws.
IndiGo's apparent inability to comply with DGCA's updated flight duty time limitations raises legitimate concerns. Numerous pilots have reported being available for duty but receiving no assignments. This pattern suggests a possible deliberate attempt to create a crisis and demonstrate that the new FDTL norms cannot work effectively.
The Current Regulatory Vacuum
While poor planning and an overly optimized cost structure might explain the sudden cancellation of thousands of flights, DGCA's response has been questionable. The regulator formed a four-member committee to investigate the situation. This committee submitted its report more than two weeks ago, yet DGCA has taken no visible action and maintained silence on the matter.
This regulatory vacuum places responsibility squarely on CCI to uncover the truth behind IndiGo's operational crisis. The commission must determine whether market dominance is being misused in ways that harm both consumers and fair competition.
Misplaced Criticism and Legal Framework
Some critics have unfairly blamed CCI for allowing IndiGo to achieve approximately 60% market share and for the aviation sector's reduction to a duopoly. This criticism misunderstands both CCI's role and India's current competition law framework.
India's pre-liberalization era featured the Monopolistic and Restrictive Trade Practices Act, which actively prevented businesses from growing too large. That approach has been replaced by the Competition Act, a fundamentally different piece of legislation. The current law operates on neoliberal principles that accept bigness itself is not necessarily problematic. Dominance becomes an issue only when companies abuse their market position.
Therefore, criticism regarding market concentration should be directed at the legislature that created this legal framework, not at CCI for implementing it.
CCI's Reactive Tendencies
Despite this legal context, CCI appears to have forgotten its responsibility to intervene at the earliest signs of dominant companies misusing their position. The commission should function as a proactive market regulator rather than a quasi-judicial tribunal that merely resolves disputes brought before it.
CCI possesses the authority to recognize anti-competitive practices independently. It can and should respond to evolving market dynamics without waiting for formal complaints. Yet the commission demonstrates proactive initiative primarily in cases involving Big Tech companies like WhatsApp and Amazon. Other sectors receive attention only when public-spirited informants or aggrieved competitors approach CCI seeking intervention.
The Need for Proactive Regulation
This passive approach must change. No other major regulator maintains such a hands-off stance or depends so heavily on third parties to trigger action. Information asymmetry cannot serve as a valid excuse when potential dominance abuse involves corporate giants whose actions often play out publicly, as with the current IndiGo situation.
CCI should at minimum investigate these visible potential violations. Ideally, it would more actively seek out anti-competitive practices that remain hidden from public view. Internal discussions within the commission are insufficient. CCI must issue notices, form preliminary views, and launch investigations when circumstances appear suspicious.
Investigation Delays and Procedural Errors
Even when complaints are filed and investigations begin, progress often stalls. Most CCI investigations drag on for years, frequently concluding only after market structures have suffered irreversible damage. These delays partly result from procedural errors that prompt appellate authorities to impose strictures on the commission.
The investigation into Apple stalled because CCI mistakenly included confidential company data in a non-confidential report. The Swiggy probe faced similar issues when CCI erroneously granted an informant access to confidential business information. These repeated mistakes suggest either carelessness or inadequate staffing within the regulatory body.
Restoring Regulatory Credibility
Given these challenges, it's unsurprising that dominant companies show little fear of the competition watchdog. Many operate as if they exist beyond legal reach. CCI must improve its performance significantly. The commission needs to proactively address market distortions while effectively managing pending investigations.
Only through decisive action can CCI fulfill its mandate to protect competition and consumer interests in India's evolving economic landscape.
