By Amrutha Desikan and Bhavin Patel
Welcome to The Bridge! India's regulators affect markets, govern disputes, and test the rule of law through their orders, regulations, and policy implementation actions. Yet the quality of this work rarely gets the scrutiny it deserves. The Bridge is TrustBridge's window into India's regulatory state: how it decides, how it regulates, and how it could do both better.
Introduction
In a recent decision (Amazon v. Competition Commission of India, C.A. No. 4974 of 2022), the Supreme Court set aside an order of the Competition Commission of India (the “CCI”) which imposed a penalty of Rs. 202 crore on Amazon in relation to its 49% acquisition in Future Coupons Private Limited. The Court held that the CCI had exceeded its statutory powers, that the penalty provisions had been misapplied, and that the proceedings violated natural justice.
This decision has received attention not only for this outcome, but also for the Court’s statements in a non-operative part of the judgment (Part H), titled ‘Role of the regulator and standards of fair regulatory conduct’. This part does not address any of the issues involved in the dispute before the Court - the paragraph immediately preceding Part H states explicitly that all issues have been answered. As such, this part is entirely obiter, a Latin term that means ‘said in passing’, or ‘by the way’. The problem is that these passing statements may enable fallacious arguments in the future, and hold the potential to damage the core rule of law value of the separation of powers.
Enabling fallacious arguments and lack of authority
Part H makes claims that have nothing to do with the matter at hand. The preceding section Part G, offers a summary of the Court’s conclusions on the issues involved in the judgment. And yet, Part H goes on to offer the Court’s perspective on value and principles of economic regulation. It makes claims about risk premia, supply chain realignments, and the strategic value of regulatory certainty to India’s investment climate. Some might find these statements elegant and compelling - but the Court’s claims on macroeconomic consequences of competition policy are completely unrelated to the questions raised before it, and outside the scope of its powers.
Concerns over statements such as these matter because broad, rhetorically (debatably) attractive judicial language travels. It gets extracted from its context, cited in unrelated disputes, and used to support propositions which the original judgment had no authority on. Obiter pronouncements do not hold binding force; yet they are extensively relied on by lower courts for their persuasive value. The Supreme Court should therefore have acted with restraint instead of writing this essay-style exposition that encompasses its view on how regulators should behave on core policy matters. This lack of restraint opens the gates to a series of future arguments based on Part H that are logically fallacious and unsupported by authority.
Violation of the Separation of Powers
The Court has often taken the position that matters of policy are outside its remit. These matters have rightly been held to fall within the domain of the Executive. The Court’s language in this regard is apposite to our discussion. Note the Court’s self-cautionary position in this regard from the past:
In Peerless General Finance and Investment Co. Ltd. v. RBI, the Court held:
“The function of the Court is to see that lawful authority is not abused but not to appropriate to itself the task entrusted to that authority… Courts are not to interfere with economic policy which is the function of experts. It is not the function of the Courts to sit in Judgment over matters of economic policy and it must necessarily be left to the expert bodies. In such matters even experts can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts.” (Emphasis added)
Upon completing an exhaustive survey of its past decisions on this question, the Court has observed in BALCO Employees Union v. Union of India:
“It is evident from the above that it is neither within the domain of the Courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved...
“…in the sphere of economic policy or reform the Court is not the appropriate forum...
“...In the case of a policy decision on economic matters, the Courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgement of the experts who may have arrived at a conclusion unless the Court is satisfied that there is illegality in the decision itself.” (Emphasis added)
Yet, in Amazon v. CCI, the Court ignores its past statements, and takes as a hook for its policy prescriptions a single phrase in the Competition Act’s preamble: “the economic development of the country.” From it, the Court derives the CCI’s statutory purpose and its warrant for everything that follows: the principles of economic regulation, the link between competition policy and investment climate. Not stopping at the CCI’s purpose and the statutory scheme, the Court makes statements about foreign investment and investors, it cites Adam Smith to support “the basic point that broader markets can sustain more specialised activity and deeper rivalry”, and Amartya Sen to claim that “global economic integration is neither new nor inherently one-sided, and that the central question is whether its gains are shared in a fair and inclusive manner”.
But this hook is too thin to bear the weight the Court hangs on it. This is because the Court misses several important points in doing so:
Preambulatory guidance may direct Executive decision-making; it does not act as a license for the judiciary to overstep the boundaries of its powers. The Preamble is an interpretive aid, not a source of substantive powers. It may assist in resolving ambiguity in enacted provisions, but does not authorise the Supreme Court to pronounce policy positions. The Court’s expertise lies in legislative interpretation, not Macroeconomic policy - and it mistakenly relies upon the Act’s Preamble to assume such expertise to prescribe what relation regulation bears to foreign investment flows.
Perhaps most egregious: in 2011, the Ministry of Corporate Affairs prepared a draft National Competition Policy, which articulated the Executive’s considered position on precisely these matters. That draft was developed through a committee process with national consultations - a much better way of forming policy than the pronouncements of a two-judge bench of the Supreme Court. The Court, in four pages of obiter, has now effectively sketched its own version of that policy without the consultation, without the coordination, and without the accountability that accompanies legitimate policy-making. The draft policy has not made it to Parliament, and remains incomplete. If the Court believed that it absolutely needed to make a comment on competition regulatory policy, it could have called on the Ministry of Corporate Affairs and the CCI to finalise that policy, through proper legislative or executive channels. Instead, it substituted its own judgment for the Executive’s. This is a massive red flag for separation of powers.
Conclusion
Part H of the Amazon v CCI joins a growing line of Supreme Court decisions that raise concerns of judicial restraint and separation of powers. The Court must check its temptation to comment on normative questions of policy, as it has always done. A failure to do so would enable future litigants to construct fallacious arguments which would compromise the integrity of precedents as sources of law.
These excesses are also illustrative of how the core rule of law value of the separation of powers may be violated. Separation of powers requires that distinct governmental functions - policy-making and adjudication, in this case - be recognised as such, and be exercised by different persons. This articulation of governmental function sits at the heart of the idea of the rule of law, and, along with the concepts such as checks and balances, are critical to the prevention of tyranny. The Court has often raised the alarm when these ideas are under threat: it would do well to check itself when tempted to violate them itself.
- The authors are researchers at TrustBridge, and would like to thank Renuka Sane for her feedback and suggestions.
CITATION
Amrutha Desikan and Bhavin Patel, 2026. “Amazon v CCI: Sixteen Paragraphs Too Many”, The Bridge, TrustBridge Rule of Law Foundation
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References
Amazon.com NV Investment Holdings LLC v. Competition Commission of India and others, Civil Appeal No. 4974 of 2022.
BALCO Employees Union v. Union of India, AIR 2002 SC 350.
Government of India, Ministry of Corporate Affairs, National Competition Policy (2011).
Peerless General Finance and Investment Co. Ltd. v. RBI, (1992) 2 SCC 343.