Sunday, August 16, 2020

Muzzle Law of Poland: An attack on the Independence of Judiciary

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Syed Ahmed Uzair

Article Title

Muzzle Law of Poland: An attack on the Independence of Judiciary

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Global Views 360

Publication Date

August 16, 2020

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Andrzej Duda, the President of Poland

Andrzej Duda, the President of Poland | Source: Wojciech Grabowski via Wikimedia

On February 4, 2020 the president of Poland, Andrzej Duda signed a law that prohibits the country’s judiciary to question the appointment of judges by the President and bars them from being involved in political activities. The law also prohibits judges to seek guidance from the EU Court of Justice on appointments by the National Council of Judiciary (NCJ) of Poland.

Supreme court President Malgorzata Gersdorf | Source: Adrian Grycuk via Wikimedia

Opposition parties condemned the law and Supreme Court president Malgorzata Gersdorf termed it as “Muzzle Law”.

In December 2019, the Sejm, the lower house of the Polish parliament passed the bill that would penalize judges who criticize the judicial reforms of the ruling Law and Justice party. It was sent back by the upper house for further discussion and a vote. However Sejm, using its superior power, enacted the bill, which the president signed on February 4, 2020, making it a law in the country.

The SC of Poland had earlier ruled on December 5, 2019 that the NCJ is not an independent body. Again on January 23, 2020 the SC in a ruling termed the appointment of the judges by the NCJ as illegal stating their apprehension that they may not be free from political influence. The Justice Ministry, quite predictably termed the SC verdict as a “serious violation of the law”.

people rallying on road near buildings
Protests against Poland’s judicial reform | Source: Külli Kittus via Unsplash

The law has drawn criticism from lawmakers as well as legal scholars across Europe and the European Union. On 11th January 2020, hundreds of judges from across Europe marched in Warsaw to protest against the enacting of the controversial law. Thousands of lawyers and residents joined in with many waving Polish and EU flags as they marched from the SC to the parliament. "We have come here to support the Polish judges but we are not politicians. We are here about the rule of law, not about politics." John MacMenamin, an Irish Supreme Court judge, told reporters.

In February 2020, a group of 44 ICJ Commissioners and Honorary Members along with senior judges, lawyers and legal scholars from across the world released a statement in which they said, “it is clear that the separation of powers, the independence of the judiciary, and the capacity of Polish judges to uphold the rule of law are now severely compromised. Judges’ freedom of expression, association and assembly are under immediate threat.”

Ever since it came to power in 2015, The Law and Justice Party of Poland, has been working towards dismantling the independence of the judiciary, terming it  judicial reforms. There has been opposition to these actions by the opposition parties, judicial bodies as well as European Union.

EU flags at the European Commission Berlaymont building Brussels, Belgium | Source: Guillaume Périgois via Unsplash

Late in 2017, the European Union had initiated what it called “unprecedented proceedings” against Poland. The move was a response to the worrying reforms in the judiciary that were being enforced by the government. The EU had stated back then that these “systematic threats” could see Poland losing its EU voting rights.

On 29th April, 2020, The EU started a new legal case against the nationalist Polish government in response to the adoption of the “muzzle law”. The EU further added that it was giving Poland two months to address the issues pertaining to the law. “This is a European issue because Polish courts apply European law. Judges from other countries must trust that Polish judges act independently. This mutual trust is the foundation of our single market,” said Vera Jourova, the Czech member of the executive Commission who is responsible for upholding the EU’s democratic values at a news conference.

A few European legal scholars have warned that the developments in Poland are a threat to the entire legal system of the EU. Despite all the criticism and pressure from the EU, the Polish government is yet to respond meaningfully to the growing concerns over the assault on Poland’s judicial system and its potential EU exit.

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April 13, 2021 7:47 AM

Are India's Antitrust laws effective at controlling monopolies?

On 15th of July 2020, Reliance Industries Ltd (RIL) held its annual general meeting of the shareholders. The chairman and managing director Mukesh Ambani, announced that global tech giant Google would be investing $4.5 billion in Jio Platforms. Facebook also has acquired a 9.99% stake in Jio Platforms. This is the first time in the world that both the global tech giants have invested in the same entity. These investments have boosted the confidence for Jio Platforms and also for India’s growth but there have been questions and speculations about the potential anti-competitive makeup of these deals.

The objective of this article is to explore the interpretation and the effectuality of Antitrust laws in India.

Anti-competitive practices are those business practices which firms engage in to emerge as the or one of the few dominant firms, who will then be able to restrict inter firm competition in the industry in a bid to preserve their dominant status. The Collins English dictionary defines antitrust laws as those laws that are intended to stop large firms taking over their competitors by fixing prices with their competitors, or interfering with free competition in any way. These laws focus on protecting consumer interests and promoting a competitive market. The word ‘Antitrust’ is derived from the word ‘trust’. A trust was an agreement by which stakeholders in several companies transferred their shares to a single set of trustees.

In present-day India, talking about market dominance Reliance Industries Ltd (RIL), resembles American company—John D Rockefeller's Standard Oil Company—of the early 20th century. Mukesh Ambani holds the highest ability to influence markets and policy in every sector in which RIL is present—petrochemicals, oil, telecom, and retail. Many industry experts and critics suggest that Ambani has used his political clout to twist the regulatory framework in his favor.

Gautam Adani, founder of Adani Group | Source: Twitter

Furthermore, economic power in aviation infrastructure is clustering into a few hands as well. In 2019, the Adani Group bagged the 50-year concession to operate all the six Airports Authority of India-operated airports—Lucknow, Jaipur, Guwahati, Ahmedabad, Trivandrum, and Mangaluru—which were put up for auction. The company also obtained a controlling stake in ‘The Chhatrapati Shivaji Maharaj International Airport, Mumbai’ from GVK Airports. Moreover, Adani Group is now set to construct the Navi Mumbai International Airport. The group is now eyeing Indian Railways while they have already established an alarming monopoly in green energy and sea ports. While Airports are natural monopolies, one private company controlling more than 8 important airports is not good news to airlines.

India has established antitrust laws to promote competition. For 40 years, India followed the Monopolies and Restrictive Trade Practices Act 1969 (MRTP). This act was based on principles of import substitution and a command-and-control economy. However, over time several amendments had to be made to the act. In 2002, the Indian approved a new comprehensive competition legislation. This is called the Competition Act 2002. The act focused on regulating business practices in order to prevent practices having an appreciable adverse effect on competition (AAEC) in India. The act primarily regulates three types of conduct: anti-competitive agreements (vertical and horizontal agreements), abuse of a dominant position, and combinations such as mergers and acquisitions. The act lists out the cartel agreements that it intends to prevent. This list includes price-fixing agreements, agreements between competitors seeking to limit or control production, market-sharing agreements between competitors and bid-rigging agreements. These agreements are called “cartel” arrangements.

The competition Act is enacted by the Competition Commission of India (CCI), which is exclusively responsible for the administration and enforcement of the Act. It comprises a team of 2 to 6 people appointed by the government of India. The CCI has previously handled high-profile cases. In 2018, CCI imposed a fine of Rs135.86 crore on Google on the grounds that Google misused its dominant position and powers to create a search bias. In another important case, the CCI, ordered a probe into Idea, Vodafone and Airtel when Reliance Jio owner Mukesh Ambani lodged a complaint against the three for forming a cartel and denying Jio the POI required for network connection, causing multiple call failures. The Cellular Operator Association of India was also probed for encouraging the same.

In some cases, the Competition Commission has been successful in tackling activities that are against the free competitive market. However, critics and economists believe that the act is now unable to adapt to the changing business environment in e-commerce, telecom, technology and the government’s role in distorting competition. Demonetization and GST drove the formalization of the economy. One consequence of them was that bigger, better organized players gained at the cost of smaller ones with lesser resources. The Insolvency and Bankruptcy Code (IBC) was designed to solve the problem of non-performing assets (NPAs) of banks. But consequentially, it has also led to a consolidation in many sectors.  

However, CCI has expressed inability to consistently adjudicate punitive measures due to obligation in several cases. This points to the loopholes in the very provisions of the Competition Act 2002. In an Economic and Political Weekly (EPW) article, Aditya Bhattacharjea—an Economist—argues that even though the 2002 Act represents an improvement from the MRTP Act which was extremely restrictive, the present act also remains riddled with loopholes and ambiguities. According to Bhattacharjea, this creates unnecessary legal uncertainty, which acts in advantage of lawyers and law firms. For instance, the act allows the CCI to leave some scope of flexibility for “relative advantage, by way of contribution to the economic development.” Bhattacharjea argues that this may allow large firms to justify their anti-competitive practices in the name of development.

Mark Zuckerberg and Mukesh Ambani having online interaction after Facebook invested in Jio Platforms | Source: NDTV

Data portability plays a significant role in determining market power of certain firms. In 2017, the CCI closed cases against both WhatsApp and Jio involving allegations of predatory pricing and privacy violations. In both these decisions, the regulator did not consider the restrictions around data portability as a competitive advantage. The possible data leveraging advantage for the attempted monopolization could be the ‘portfolio effect’. Portfolio effect refers to increasing the range of brands, by bundling of telecom or messaging service and other service offerings or illegal vertical restraints, even predatory pricing. This in turn may lead to greater ability of further leveraging, deterring innovation and results in degradation of quality. Another possible advantage is explained as the theory of leveraging. The best example of leveraging is when Microsoft entered the media-player market by extending its quasi-monopoly on the operating systems market by taking advantage of the indirect network effects. In case of Facebook acquiring 10% of Jio’s shares, it is a concern that both entities could potentially use WhatsApp’s market dominance in telecom and social networking services and establish dominance in e-commerce market through anticompetitive acts.

There was a consensus among Indian policymakers at the time of the 1991 economic reforms that economic liberalization would eliminate the nexus between the business elites and the policymakers. On the contrary, the relationship between these two groups got further strengthened.

On the other hand, few critics and industrialists argue that extreme restrictions on growing companies hampers the progressive growth of the national economy. While RIL’s Jio looks like a cause for concern, the company has also saved Rs. 60,000 crores for annual savings in India. In addition to that, the entry of Jio to the telecom industry has led to a rise in data consumption and improved accessibility and affordability of the internet across the nation.

However, the concern still lingers as the question of whether this growth is a result of actual innovation or crony capitalism remains unsolved.

However, the fact that telecom, organized retail, ports and airports have two or three players controlling the bulk of the sector needs to be addressed. A healthy competition is quintessential for long-term growth and innovation. Harmful trade practices and cartelization does not only affect small manufacturers but also the general public.

The government, CCI and other lawmakers must closely examine the present laws and provisions and need to see if they are required to amend the act.

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