By- Kumar Ratnam, LLM Candidate, Amity University, Noida
Abstract
If these global decarbonization goals are to be met, there needs to be intense collaboration among competing firms in the development, standardisation, and diffusion of green technologies such as solar photovoltaics, electric vehicle infrastructure, and green hydrogen. Classical competition law however (as designed for traditional market economies and predicated on a fear of horizontal collusion and a focus on static price effects) regards such collaborative activities more readily as presumptively unlawful cartels rather than drivers of dynamic innovation and green public goods. India, interestingly, embodies this structural tension between a necessity of rapid green technology dissemination for the sake of international commitments and domestic policy goals and an absence within the Competition Act, 2002 of a sustainability-conscious test with which to separate the green pro-competitive alliance from the anti-competitive one. The author argues that the current anti-cartelisation architecture under Section 3, together with the weak exceptions provided in Section 3(5) and Section 54 of the Competition Act, is theoretically and institutionally insufficient to allow legitimate green technology joint ventures and patent pooling. Utilizing the 2023 Horizontal Guidelines by the European Union, which have, for the first time, developed a specific chapter on sustainable agreements and a detailed safe harbour for it, this article evaluates how a narrowly construed "sustainability carve out" can be provided under Indian competition law without compromising effective anti-cartelisation. It examines first the problem of transfer of green technologies, namely access incentive for which has been said to involve competition law related complexities, second, how Section 3(3) along with the IPR exception under Section 3(5) apply to green ventures, and finally, the normative and institutional experience from EU's safe harbour and individual exemption models. The paper contends that India should move towards a limited safe harbour for well-governed sustainability agreements, combined with a transparent, guidance-based mechanism for individually assessing more complex collaborations, anchored in India’s constitutional commitments to environmental protection and technological development.
Introduction
The regime of Indian competition law currently sits at the intersection of three imposing forces: product and capital market liberalization, expansion of intellectual property rights protection through TRIPS, and growing emphasis on climate transition. The Competition Act, 2002 repealed the MRTP Act, 1969 and updated Indian competition law with effects-based, modern, antitrust laws; but was passed in an era where climate-proofing of competition policy discourse had barely begun. Meanwhile, as the third highest greenhouse gas emitter in the world and a technology importing, developing nation, India occupies an interesting space within the global climate architecture- it must not only encourage domestic green innovation, but also maintain affordable access to foreign technology, while ensuring meaningful competition in the green market.
The structural problem is that many of the horizontal collaborations necessary for green technologies-joint R&D agreements, patent pools, sustainability standards and joint purchasing of green inputs-share some of the formal characteristics that were intended by competition law to be abhorrent. Section 3(3) of the Act prohibits AAEC rebuttably where agreements "limit or control" the volume of production, the supply of technology or development of technical processes, and therefore could embrace all kinds of green collaboration. Furthermore, as stated before, unlike the EU approach under Article 101 TFEU, the Act contains neither a specific sustainability exemption nor a formalized balancing test, which would allow the weighing up of the environmental and dynamic innovative benefits of collaboration against its restrictive static impact..
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