How many of you have rushed to grocery stores after government?s announcement that customs duties on food products have been reduced, only to find out that retailers seemed to be completely oblivious to the budgetary announcements?

You?ll find that there is a reason for this; if retailers decide amongst themselves not to reduce the prices of any commodity, there is no law that prevents them from doing so. This is also why after the value of the rupee has risen, chances are, you might not find it reflected in the prices of imported goods even though it should have been.

This was one of minister for Commerce Rajesh Jeetah?s main arguments when he proposed that government controlled prices on some basic commodities, like milk. ?In an ideal market, prices shouldn?t be controlled but we don?t have a real market because it is made up of monopolies and collusive agreements?, said the minister to justify his much opposed measure.

This situation is just about to be resolved; government has announced in the budget that the long-awaited competition commission will finally be set up in December this year. The ?rare bird? that will reign over private businesses ? the commissioner of the Competition Commission and its Executive Director have yet to be appointed. According to Rajesh Jeetah, speaking in Parliament last Tuesday, ?a few people have been identified but the final decision is up to the Prime minister.? So, no names, yet.

Below is an explanation of how things will change- concretely ? for you, the average citizen ? once the Competition Bill is proclaimed and the Competition Commission is set in motion.

■ <B>How this will affect you</B>

If you feel that as a consumer, your right to a fair deal is being violated through unfair practices by businesses, you may get in touch with the Competition Commission. It will be up to its Executive Director to open an investigation if he is satisfied that there has been a breach in business practices, as provided by the Competition Bill, soon to become Act. It should be noted that the Executive Director can on his own initiative open an investigation.

■ <B>Can the government or a minister influence decisions? </B>

The law provides that, in the execution of his duties, the Executive Director ?shall not be subject to the direction, or control of, any other person or authority? . The minister (Commerce), however, may give ?written instructions? of a ?general character? to the commission relating to any additional public policy factors to which he wishes the Commission to have regard in reaching its determination. The commissioner may then issue a written reply to the minister. To be noted that the directions that the minister gives to the commission and the reply of the commission shall be published in the Government Gazette. This is to ensure that there is no direct communication between government and the Commission to ensure the independence of the latter.

■ <B>What this will change for businesses</B>

An agreement will be deemed to be collusive if it can be established that there exists between enterprises that supply goods or services of the same description or acquire goods of the same description ? and which will reflect in the fixing of selling prices or the restricting of the supply of those goods that eventually leads to preventing or restricting or distorting competition. Those agreements are prohibited. Agreements between enterprises (suppliers and retailers) regarding the resale price will also be prohibited.

On a larger scale, sometimes businesses agree between themselves that one party should not submit a bid or tender or agree upon the price, terms and conditions of a bid. This will also be expressly prohibited by the Competition Act.

■ <B>Monopolies</B>

If an individual company supplies or acquires 30% or more of goods and services and if three or fewer companies supply or acquire 70% or more of goods and services, a monopoly situation will be deemed to exist. Monopolies in themselves will not be deemed negative (because of the size of the market) unless they prevent, restrict and distort competition. This will be reflected in the prices of those goods and services and on the availability or non-availability of substitutable goods or services to consumers in the short term. In all cases, the interest of the consumers will determine the actions of the Commission.

■ <B>What happens if you are in breach?</B>

The Commission will summon you for a hearing and will demand that you produce whatever documents they may require. The Commissioners can also hear the views of any person they consider to have a relevant interest in the case. The commission can either give directions to ensure that restrictive practices are ended, or impose a financial penalty, that does not exceed 10% of the turnover of the enterprise, up to a period of 5 years. Any party who is dissatisfied with an order or direction of the commission may appeal to the Supreme Court.