The SC's Schott Glass verdict: A win for policy certainty

The apex court's ruling draws a distinction between market dominance and abuse that must be honoured

- ADITYA SINHA & AASHEERWAD DWIVEDI

Here's a temptation that afflicts every regulator over time: the urge to intervene. Like the man with a hammer who sees everything as a nail, some regulators across the globe begin to see their relevance lying in their reach, not their restraint. They start mistaking regulation for virtue and enforcement for wisdom. Markets, in their view, are suspect until proven innocent. India, which aims to be a global hub for manufacturing and innovation, can ill afford such regulatory excess. When enforcement diverges from economic logic, when success itself is treated as suspicious, we risk turning the very institutions meant to foster growth into instruments that stifle it.

This is the context in which the Supreme Court's (SC) recent judgment in Competition Commission of India vs Schott Glass India Pvt Ltd must be seen. Fortunately, it is a principled reaffirmation of how regulation must serve economic freedom, not strangle it.

For over 15 years, Schott Glass India faced allegations of abusing its market position. Its rival, Kapoor Glass, accused it of exclusionary discounts, discriminatory terms and selective supply refusals. The Competition Commission of India (CCI) agreed, imposed a hefty fine and issued a cease-and-desist order.

But what the SC found after a forensic examination of the case was telling: the CCI's conclusions were not built on proof, but on presumption. The regulator had relied on untested statements, outdated correspondence and a startling absence of economic harm analysis. It had denied Schott a chance to cross-examine adverse witnesses and failed to assess whether consumers or competitors were actually harmed.