Competition is as old as the evolution of civilization.

Competition in a marketplace process of

rivalry between business enterprises for customers – is a fundamental feature of a flexible and
dynamic market economy. In order to respond to the demand for better products at lower
prices, competing producers, suppliers, or service providers are encouraged to innovate, lower
their costs by reducing slack, and increase productivity. Though the motivation of economic
agents is driven by self-interest, the benefits accrue to the society at large.

Competition is beneficial to all, be it the consumers, the businesses, and the economy. It
benefits consumers as they can choose from a wide array of quality products at affordable
prices. Businesses benefit from lower prices as consumers of raw materials or intermediate
products, which augment their competitiveness. The economy benefits through the efficient
allocation of scarce resources which fosters innovation leading to dynamic efficiency. This in
turn increases productivity and leads to a high economic growth rate. Competitive markets by
securing efficient use of resources, maximize output, and contribute towards improving the
standard of living of the 3 masses. Contrary to this, when there is a lack of competition, whether
it is a price-fixing cartel or abuse of market power by a dominant business, both the economy
and consumers suffer long-term.

The process of competition is, however, not automatic. In a laissez-faire economy, the invisible
hands of the market forces are basically able to address the distortions, if any. However, modern
economies are not laissez-faire economies and therefore, distortions in the market are more
often not a result of the interaction of competitive forces, but a well-planned strategy of market
players who are able to exercise control. In such a scenario, it is important for the state to
monitor the markets with a view to keep an eye on any type of impediments and distortions
and correct them. The law which takes cognizance of such situations is the competition (or anti-
trust) law and the institution that oversees the functioning of the markets is the competition
regulator.

Competition Law is the codification of rules designed to promote and sustain market
competition. Across the globe, these laws are prevalent with active enforcement & advocacy
functions. Today, over 100 countries have competition law regimes and competition law
enforcement agencies. Though the practice of competition law varies from jurisdiction to
jurisdiction, the substance of these laws is primarily the same. World over, it prohibits practices
that restrict competition between businesses and prohibits behaviour which is most prejudiced
to the interest of the consumer. Businesses have certain obligations under competition law and
it is important for them to understand and abide by these laws.

INTERSECTION OF COMPETITION AND CONSTITUTION

Competition Law and Constitutional principles intersect in their shared objective of promoting
economic justice and ensuring a fair marketplace. While Competition Law primarily regulates
anti-competitive practices, prevents monopolies, and safeguards consumer interests, its
underlying philosophy is deeply rooted in the Directive Principles of State Policy (DPSP)
enshrined in the Indian Constitution. Articles 39(b) and (c) explicitly advocate for the equitable
distribution of resources and the prevention of wealth concentration, principles that resonate
with the objectives of the Competition Act, 2002. By curbing abusive market dominance,
cartelization, and unfair trade practices, Competition Law operationalizes the constitutional
mandate of economic democracy, fostering an inclusive economy where small enterprises can
compete on a level playing field. This synergy underscores the broader goal of achieving social
justice, where regulatory interventions serve not merely as economic correctives but as
constitutional imperatives aimed at dismantling structural inequalities in the market.

Articles 39(b) and 39(c) of the Indian Constitution, embedded within the Directive Principles of
State Policy (DPSP), are pivotal in guiding the state towards establishing a welfare society and
promoting an egalitarian social order. Article 39(b) mandates the state to ensure that the
ownership and control of material resources are distributed to serve the common good, aiming
to prevent the concentration of wealth in a few hands. Article 39(c) directs the state to prevent
the concentration of wealth and means of production, ensuring that economic power does not
result in the common detriment. These provisions collectively aim to reduce economic
inequalities and promote social justice.

The judiciary has played a significant role in interpreting these clauses. In the landmark case of
Kesavananda Bharati v. State of Kerala (1973), the Supreme Court underscored that
development in any field—social, economic, or political—must not contravene an individual's
right to dignity. This interpretation aligns with the essence of Articles 39(b) and 39(c),
emphasizing the state's responsibility to promote an equitable society.

Furthermore, the 25th Amendment to the Constitution introduced Article 31C, which granted
primacy to laws enacted to implement the principles laid out in Articles 39(b) and 39(c) over
certain fundamental rights, specifically Articles 14 and 19. This amendment aimed to empower
the state to prioritize social welfare objectives without being constrained by challenges related
to equality before the law and protection of certain freedoms. However, the judiciary imposed
limitations on this provision to maintain a balance between directive principles and
fundamental rights.

In essence, Articles 39(b) and 39(c) serve as constitutional mandates for the state to actively
pursue policies that ensure equitable distribution of resources and prevent economic
disparities, thereby laying the foundation for a just and inclusive society.

LINK BETWEEN THE ARTICLES 39(B) AND (C) AND COMPETITION LAW
The relationship between Competition Law and the Indian Constitution, particularly Articles
39(b) and (c), is rooted in the idea of economic justice. While Competition Law focuses on
ensuring a fair and competitive market by preventing monopolies, cartels, and unfair trade
practices, Articles 39(b) and (c) aim to prevent wealth concentration and promote the equitable
distribution of resources. Essentially, both work towards a common goal—creating a market
structure that benefits not just big businesses but also small players and consumers.

1. Preventing Monopolistic Market Structures

 Article 39(b) talks about ensuring that material resources are used for the common
good. In a market economy, this means preventing dominant firms from hoarding
resources or using their position to crush competition.

 Competition Law plays a direct role here by curbing monopolistic behavior and ensuring
fair access to resources.

 Example: In the Reliance Jio case, concerns were raised about predatory pricing when
Jio entered the telecom market with extremely low tariffs, forcing smaller players out.
While no action was taken against Jio, the case highlighted how aggressive pricing
strategies can create monopolies, contradicting the spirit of Article 39(b).

2. Promoting Economic Democracy

 Article 39(c) aims to prevent wealth and economic power from accumulating in a few
hands, ensuring that the benefits of economic growth are widely shared.

 Competition Law helps achieve this by regulating anti-competitive agreements,

preventing large corporations from unfairly dominating markets, and encouraging a
diverse business ecosystem.

 Example: The Amazon-Future Group dispute highlighted concerns over market

dominance in e-commerce. The Competition Commission of India (CCI) has also
scrutinized Amazon and Flipkart for allegedly favoring certain sellers, raising questions
about fair competition.

3. Ensuring Consumer Welfare and Fair Pricing

 Articles 39(b) and (c) are fundamentally about economic justice, which also includes
protecting consumers from unfair pricing.

 The Competition Act, 2002, prevents price-fixing and collusive agreements, ensuring that
consumers get products at fair prices.
  Example: In the Cement Cartel case, top cement manufacturers were fined by the CCI
for artificially inflating prices. This kind of cartelization leads to higher costs for
consumers and unfair profits for a few, going against the principle of equitable resource
distribution under Article 39(b).

4. Controlling Market Power in Essential Sectors

 Certain industries—like coal, oil, pharmaceuticals, and agriculture—are critical for

national development and public welfare. If a handful of companies control these
sectors, it creates economic imbalances.

 The Competition Commission has intervened in cases where dominant firms exploit
their position to charge unfair prices or restrict supply.

 Example: In the Coal India Ltd. case, the CCI ruled against the company’s monopolistic
practices, reinforcing the idea that even public sector companies must follow
competition laws to ensure fair access to essential resources.

5. Digital Markets and the Challenge of New-Age Monopolies

 The rise of digital giants like Google, Amazon, and Facebook has created new forms of
market dominance that were not foreseen when the Constitution was drafted.

 While Article 39(b) was originally meant for physical resources, its principles can be
extended to ensure fair access to digital platforms and prevent tech monopolies from
controlling entire markets.

 Example: The Google Play Store billing case, where Google was accused of abusing its
dominance by forcing app developers to use its billing system, raised serious
competition concerns. The CCI fined Google for these practices, showing how
Competition Law continues to evolve in line with constitutional values.

Recent Developments and Judicial Interpretations of Article 39(b) & (c)

Articles 39(b) and (c) of the Indian Constitution, part of the Directive Principles of State Policy
(DPSP), reflect the state's commitment to economic justice. Article 39(b) focuses on ensuring
that material resources are distributed for the "common good," while Article 39(c) aims to
prevent wealth concentration and protect economic fairness. Over the years, courts have
interpreted these provisions in various ways, particularly regarding land reforms and economic
policies.

Recent Judicial Interpretation of Article 39(b)

A landmark case in November 2024 saw the Supreme Court examine whether privately owned
property could be considered “material resources of the community” under Article 39(b). The
case arose from Maharashtra's land acquisition policies, where the government sought to
redistribute certain privately owned lands for public welfare.

Key Question Before the Court:

 Can the state acquire private property by arguing that it serves the "common good"
under Article 39(b)?

Earlier Cases and Conflicting Views:

1. State of Karnataka v. Ranganatha Reddy (1977) – Justice Krishna Iyer (minority view)
suggested that private property could be considered material resources of the
community.

2. Sanjeev Coke Manufacturing v. Bharat Coking Coal Ltd. (1983) – A five-judge bench
upheld the idea that private property can be acquired under Article 39(b), if it serves
public interest.

Supreme Court’s 2024 Ruling:

 Not all private property qualifies as “material resources of the community.”

 The state cannot acquire private property simply by citing Article 39(b)—it must prove
that the acquisition serves the larger public good.

 Chief Justice D.Y. Chandrachud emphasized that expanding Article 39(b) too much
could allow excessive state control over private resources, which goes against
constitutional safeguards.

🔹 Impact: This judgment protects individual property rights while ensuring that state
acquisitions align with the true meaning of “common good.”

Article 39(c) and Economic Equity

Article 39(c) prevents the concentration of wealth and economic power in a few hands. While
this provision was not the focus of the 2024 case, it continues to shape competition law and
economic policies in India.

Examples of Article 39(c) in Action:

1. Competition Act, 2002 – Prevents monopolies and ensures fair market practices, in line
with Article 39(c).
 2. Recent CCI Cases (2023-24) – The Competition Commission of India (CCI) has taken
action against digital giants like Google and Amazon for anti-competitive practices,
ensuring fair opportunities for smaller businesses.

🔹 Impact: The government and courts continue to use Article 39(c) to promote economic
justice, ensuring that wealth and power do not get concentrated in a few corporations.

The relationship between competition law and Articles 39(b) and 39(c) of the Indian Constitution
underscores the state's responsibility to ensure economic justice while fostering a competitive
market environment. Article 39(b) focuses on the equitable distribution of resources for the
common good, while Article 39(c) seeks to prevent the concentration of wealth in a way that
harms society. Competition law serves as a key instrument in achieving these constitutional goals
by preventing monopolies, ensuring fair market practices, and protecting consumer interests.

Recent judicial interpretations, particularly the 2024 Supreme Court ruling, have clarified the
scope of Article 39(b), stating that not all private property can be deemed "material resources of
the community." This ensures a necessary balance between individual property rights and state
intervention. At the same time, the Competition Commission of India (CCI) continues to uphold
the principles of Article 39(c) by regulating anti-competitive practices and curbing market
dominance, particularly in emerging sectors like digital markets.

Both competition law and these constitutional provisions work together to create a fair and
inclusive economic system. While significant progress has been made, ongoing legal and policy
measures are essential to prevent economic power from being concentrated in the hands of a few
and to ensure that markets remain accessible and competitive for all.