Competition & Consumer Protection Policy under CETA

Chapter 16 of the India-UK CETA is not enforced yet. It addresses competition and consumer protection policies within the broader trade relationship between the two countries. The Chapter includes commitments from both nations to maintain their respective competition and consumer protection systems.

Both the countries have agreed to ensure that competition laws are applied and enforced fairly and without discrimination by independent authorities. The chapter ensures both the nations will maintain procedural rights for people and businesses under investigation by competition authorities. They must be treated fairly and should be given a chance to defend themselves. 

The given rules matter to the fashion industry too, as they will guide the working of brands, and ensure consumer rights within the fashion industry while complying and competing. The aim of the chapter is to prevent anti-competitive practices. It also promotes fair conditions for businesses as well as consumers in both the countries. The stakeholders in the fashion industry need to align their structure according to the CETA compliance and meet the standards given out in this chapter with respect to competition and consumer protection policies.

Competition Law Implications for the Fashion Business 

The CETA requires both India and the UK to uphold and enforce their respective competition laws in a transparent and non-discriminatory manner. The chapter 16 outlines procedural rights for businesses under investigation. It ensures that they are informed of allegations, allowed to access evidence while respecting confidentiality, and provided opportunities to present their case, or seek judicial review.

Fashion businesses in India and the UK are engaging in cross-border trade, collaborations, and platform-based selling, understanding. Therefore, complying with these fair competition practices will help them operate their business under the agreement.

1. Anti- competitive agreements- Businesses in both India and the UK must prohibit entering into exclusive distribution agreements, franchise arrangements, and supply contracts that may restrict competition unfairly. Anti-competitive practices can face scrutiny under the competition laws maintained by both parties.

Under Article 16.1, following practices will be considered as anti-competitive:

1. Price-fixing between competitors,

2. Resale price maintenance (fixing the price at which distributors must sell),

3. Market allocation (dividing territories or customers),

4. Bid rigging in procurement.

2. Abuse of dominance- Article 16.1 also covers prevention of abuse of dominant positions. Large brands and online marketplace operators in both countries must avoid misuse of market dominance. Practices like predatory pricing, supply restrictions, or discriminatory conditions that harm fair competition and smaller businesses in the fashion industry may amount to abuse of dominance.

These practices can potentially harm smaller businesses, restrict competition, and reduce consumer choice in the market. Large e-commerce platforms and well-established brands in India and the UK must be cautious about their business practices. For example, a dominant online fashion marketplace must avoid creating conditions that unfairly prioritise certain sellers over others. 

3. E-Commerce and marketplace- Fashion e-commerce activities between India and the UK are also covered under these commitments as many fashion businesses use online platforms to sell across borders. Both countries will ensure, under Articles 16.2 and 16.3, that online selling practices, exclusive arrangements with marketplaces, and discounting policies align with fair competition rules. Cooperation between authorities under Article 16.3 will help to address if cross-border anti-competitive practices arise.

4. Enforcement and procedural rights- Article 16.4 of Chapter provides procedural rights during competition law enforcement. If a fashion business in India or the UK is investigated for potential anti-competitive practices, it will have the right to be informed of the allegations, access evidence while confidentiality is protected, and present its case during the investigation. The business can also seek judicial review or other remedies if needed. This ensures fairness and transparency in how competition laws are enforced under the agreement.

Thus, the agreement requires both India and UK to:

1. Provide persons or businesses under investigation the right to be heard.

2. Allow access to evidence (while protecting confidential information).

3. Enable businesses to present their defence during proceedings.

4. Ensure that businesses have a right to review or appeal.

Consumer Protection under CETA

Chapter 16 also confirms that both India and the UK will maintain and enforce their respective consumer protection laws. These laws aim to protect consumers against unfair trade practices, ensure access to accurate product information, and provide clear channels for dispute resolution. The chapter encourages cooperation between authorities of both countries to strengthen consumer protection within the trade relationship.

Fashion businesses in India and the UK are engaging in cross-border e-commerce and export activities, making it important for the businesses to align with the consumer protection commitments under the agreement

1. Consumer protection measures- Under Article 16.4, the parties are required to maintain laws addressing misleading or unfair commercial practices. For the fashion businesses, this means, they must ensure that their marketing, advertising, and sales practices are truthful and do not mislead consumers. 

For instance, claims related to fabric quality, sustainability, sizing, and country of origin should be accurate and clear to avoid any deceptive practices in both markets.

Consumers should receive products that match their descriptions and are of satisfactory quality, providing them with confidence when purchasing from cross-border sellers.

2. Co-operation between authorities- This cooperation includes technical assistance, experience sharing, and discussions on best practices to improve consumer protection enforcement in both countries. If issues arise in cross-border transactions, consumer protection authorities may work together to address them efficiently. 

3. Transparency- Both India and the UK are required to make their consumer protection laws, guidelines, and procedures publicly available. This includes information on how consumers can pursue remedies and how businesses can comply with the laws.

Fashion businesses must adopt transparent practices. They must provide clear terms and conditions, accurate product descriptions, pricing details, and information about customer rights. This is beneficial for online sales, where clear and accessible information can enhance consumers’ trust in cross-border transactions. 

By Sharvari S. Markandeya