The Interplay Between Competition Act And Consumer Protection Act

1. Introduction

The Competition Act, 2002 ("CA") and the Consumer Protection Act, 2019 ("CPA") operate in distinct yet complementary spheres of market regulation in India. Both laws seek to create market conditions that offer consumers better choices, improved quality, and competitive prices. Enhancing consumer welfare is at the heart of both consumer protection and competition regulation.

While the primary objective of CA is to examine activities that may hinder competition or reduce consumer welfare in the market. Its aim is to protect the interests of consumers and to ensure freedom of trade. It deals with complaints involving abuse of dominant position, anti-competitive agreements, and similar practices. CA is market-competition centric in contrast to CPA which is specifically in place for the welfare of the consumers. CPA aims to safeguard consumers from unfair business practices, defective goods, and deficient services. However, an overlap between CPA and CA can be observed in areas concerning unfair trade practices, price manipulation, and the quality of goods and services.

2. Jurisdictional challenge due to the sectorial overlap

Despite these overlaps, jurisdictional conflict arises when an unfair trade practice also affects the competitive dynamics of the market. In such cases, the conduct may simultaneously amount to a deficiency in service under consumer law and an abuse of dominant position under competition law. A key example is a tie-in arrangement, which restricts a consumer's freedom of choice while also granting the enterprise an unfair competitive advantage, thereby potentially constituting an abuse of dominance.

Section 62 of the CA expressly recognizes such a scenario and calls for the coexistence of both statutes. It provides that the provisions of the CA shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force. This clearly indicates that both the CA and CPA can operate concurrently without one ousting the other, however often resulting in overlap in jurisdiction.

In a recent case of XYZ vs. Woodman Electronics, allegations were raised that the company had violated both the CA and the CPA by engaging in misleading advertisements and unfair trade practices. The Competition Commission of India ("CCI") clarified that the authority to act against false or misleading advertisements rests exclusively with the Central Consumer Protection Authority under Section 21(2) of CPA. The case illustrates how a single course of conduct can trigger concerns under both laws namely unfair trade practices harming consumers and punishable under

the CPA, and potential abuse of dominance or anti-competitive behaviour impacting market competition governed by the CA.

In Mr. Gajinder Singh Kohli vs. Genius Propbuild Private Limited, 2016, the Informant alleged that the builder had abused its dominant position by delaying possession of a residential apartment and imposing unfair contractual terms, and therefore sought action under Section 4 of the Competition Act. The CCI clarified that although issues such as delay and unfair contract terms may fall within the Consumer Protection framework, allegations of abuse of dominance fall squarely within its jurisdiction. After defining the relevant market as the "provision of services for development and sale of residential apartments/flats in Bhiwadi and its nearby areas," the CCI examined whether the builder held a dominant position. Noting the presence of several comparable developers and competitive choices for buyers, the CCI held that the Opposite Party was not dominant.

In Shivang Agarwal & Ors. vs. Supertech Ltd. Noida, 2012, the CCI laid down that UTPs are adopted by many enterprises whether dominant or not. However, every UTP or abuse by an enterprise is not covered under the CA. In the present case, the informants alleged that Supertech engaged in unfair practices by arbitrarily imposing preferential location charges, inflating prices, and cancelling their flat bookings. The CCI held that the case did not involve abuse of dominant position because Supertech was not a dominant player in the relevant real-estate market, which comprised of many competing developers. The Commission noted that although the builder's conduct may amount to UTP or breach of contract, such grievance would fall squarely within the domain of the consumer protection law, not competition law. This case thus illustrates the boundary between the two statutes: consumer unfairness but an absent market dominance does not trigger competition law scrutiny.

A holistic reading of various judicial pronouncements on this issue highlights that both these laws operate with different priorities, creating some points of friction. Consumer laws typically focus on providing immediate, individual remedies, whereas competition law adopts a long-term, market-wide perspective aimed at preserving fair competition. For instance, extremely low prices may benefit consumers in the short run but could eliminate competitors and ultimately harm consumer welfare, an issue addressed under competition law rather than consumer law. Similarly, innovation-driven conduct encouraged under competition law may conflict with strict safety or quality standards enforced under consumer law. As a result, the same business practice, such as deceptive advertising, may simultaneously raise concerns under both regimes, resulting in potential overlaps.

3. Way Forward

It is quite evident that tensions have become even more pronounced in the digital economy, where concerns around online marketplaces, data privacy, and algorithmic behavior are increasingly contested especially with the advent of Digital Personal

Data Protection Act, 2023 ("DPDP Act"), and the rise of mergers involving data transfer clauses. The "take it or leave it" nature of such clauses often leave consumers with virtually no bargaining power, forcing them to accept intrusive data-processing practices in exchange for essential digital services. In such an environment, freedom of choice and privacy protection cannot coexist under rigid, non-negotiable, policies. Unilateral privacy policies effectively lock users in, offering no real opportunity to dissent or negotiate the use of their personal data. Hence, ensuring consumer privacy while maintaining a competitive environment often requires striking a delicate balance. Yet, unlike many competition law enforcement agencies around the world, that have taken cognizance of privacy and data protection as relevant factors in determining anti-competitive effects, CCI has been extremely late to the party. Until recently, CCI has been extremely reluctant to treat privacy and data as important considerations in competition law analysis.

CCI's transition towards a more integrative path came only after the case of Vinod Kumar Gupta Vs. Whatsapp Inc. This evolution can be tracked back to the 2019 Report of the Competition Law Review Committee, which strongly recommended recognising data as a relevant factor in assessing market power, especially in zero-price digital markets. The Committee's Market Study further emphasised that, in the context of data collection by dominant entities, competition analysis must account for whether users have genuinely provided free and informed consent.

Incidentally, within just two months of the release of the Market Study, the CCI initiated its investigation into WhatsApp's 2021 Privacy Policy, issuing a prima facie order relying heavily on anti-competitive effects arising from data and privacy factors. This eventually culminated in the CCI's final order establishing abuse of dominance by Meta based on excessive data collection and lowering privacy standards. With this, India has unmistakably moved toward an integrated framework where competition law explicitly incorporates data protection and privacy considerations.

Hence, the overlap between CA and CPA in India is substantial and is steadily expanding, particularly in areas like – exploitative pricing practices, unfair trade practices and misleading advertisements, data protection and privacy concerns discriminatory terms and conditions, quality degradation and tie-in arrangements.

4. Conclusion and Remedies

Although the Consumer Forum and the CCI operate within distinct statutory frameworks and pursue separate objectives, the substantial backlog of consumer disputes demonstrates the need for integrating a limited degree of market-regulatory oversight into the consumer protection system. This may be achieved through the formulation of uniform best-practice standards or by conferring suo motu regulatory powers upon consumer forum. The proposed establishment of the Central Consumer Protection Authority ("CCPA") under the Consumer Protection (Amendment) Bill, 2015 reflects a move toward this enhanced framework, with functions such as

investigating consumer-rights violations, directing recall of defective goods or withdrawal of deficient services, issuing safety notices, regulating misleading advertisements, and declaring unfair contractual terms void.

Ultimately, while both competition law and consumer protection law seek to promote consumer welfare, they do so through different mechanisms and with differing scopes. Competition law remains principally concerned with preventing distortions of market competition, whereas consumer protection law adopts a broader mandate aimed at safeguarding consumers from unfair trade practices. Extending competition law to address purely exploitative conduct unconnected to competitive harm would require competition authorities to assume a regulatory role beyond their institutional design. Therefore, policy formulation must recognise the distinct yet complementary nature of these legal regimes to ensure coherent, effective protection of consumer interests.

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