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CMA Final · Corporate and Economic Laws · The Competition Act, 2002

The CCI gives an opinion under Section 49 to a State Government that had asked how a proposed licensing policy would affect competition. What is the legal effect of that opinion?

The opinion is not binding. Section 49(2) states that the Commission's opinion does not bind the Central or State Government in formulating the policy, so the government remains free to accept, modify or ignore it after receiving it.

  1. AIt binds the State Government, which must incorporate it in the policy
  2. BIt binds the State Government only if the policy affects more than one State
  3. CIt does not bind the State Government in formulating the policyCorrect
  4. DIt binds the State Government unless the Central Government overrules it

Explanation

Section 49(2) says the opinion given by the Commission shall not be binding upon the Central Government or the State Government in formulating such policy. The government may take further action as it deems fit. The other options invent conditions not found in the Act.

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