Long View 4Open, 40 entriessince 30 September 2026
India’s business groups and the argument over their powerकुछ घराने, कई बाज़ार
A record of how much of India’s economy a few family business groups hold, where people meet that in the prices they pay, whether size raises prices, and how India and other countries have tried to check big business. Kept by the editors.
Between 2001 and 2020, market concentration, or how much of an industry’s sales its largest firms take, fell across India, mainly because the state sector shrank.
Who holds the economy.Despite the fall in overall concentration, many industries remained dominated by a few firms. In 2020, the five largest firms took over 70% of sales in more than half of the study’s detailed industry categories.
The largest family groups gained economic weight even as overall concentration fell. The top 25 ’ revenues rose from 11% of India’s GDP in 2001 to more than 15% in 2020, and their sales compared with costs that vary with output, the study’s measure of , rose 16% from 2013 to 2020.
Five named conglomerates increased their hold over non-financial assets. The five largest groups named by Viral Acharya and Rahul Singh Chauhan are Reliance, Tata, Aditya Birla, Adani and Bharti Telecom. Their share of assets in sectors outside finance rose from 10% in 1991 to nearly 18% in 2021, while the next five groups’ share fell from 18% in 1992 to less than 9%.
The five groups held especially large sales shares in telecommunications, retail trade and civil engineering and construction. By 2021, the five groups held over 84% of telecommunications sales, over 65% of retail trade sales and 42% of civil engineering and construction sales, up from 31% in 2016.
Family groups entered new industries, usually without quickly winning much of their sales. The top 25 family groups also entered new industries, though in just under 90% of cases they had less than 5% of sales five years after entering.
Does size raise prices?Acharya and Chauhan found that a larger sales share for the five biggest groups within an industry was associated with higher wholesale-price inflation the following year. They estimated that a 10% rise in the groups’ share of industry sales was associated with 2.7 percentage points more wholesale-price inflation the next year.
SBI Research’s measure of concentration-weighted consumer prices stayed below core inflation for most of the period it studied. SBI Research compared core consumer-price inflation with an index that reweighted consumer prices according to how concentrated each sector was; its index stayed below core inflation from January 2015 except from January to November 2020 and later during the pandemic. SBI Research put the rise in prices during the pandemic down more to supply-chain and logistical disruptions, from the pandemic and the war in Ukraine, than to firms’ pricing power, and its model found that a 1% increase in food prices raised general consumer-price inflation by 0.6% between April 2014 and February 2023.
Tariff cuts lowered costs faster than prices, while firms’ markups rose. A study of tariff cuts from 1989 to 1997 found that factory-gate prices fell 18.1% while the cost of making additional output fell 30.7%; markups rose 12.6% as firms passed on only a small share of their cost savings. The study found no different effect from the trade reform for firms that belonged to business groups.
At the till.In June 2024, Jio, Airtel and Vodafone Idea announced mobile tariff rises within hours of one another. A JP Morgan note cited by The Indian Express called Jio the sector’s price setter and said its change to the threshold for unlimited 5G data drove a 46% tariff increase for users on 5G plans.
The Department of Telecommunications said mobile rates had been determined under by the telecom regulator for two decades, and that with three private players and one public sector player, the market operates under the forces of demand and supply.
Two airline groups held most of India’s domestic aviation market in 2025. IndiGo and the Air India Group together held 91% of India’s domestic aviation market in 2025, according to figures given to Parliament. The government’s figures put IndiGo’s share at nearly 64% and the Air India Group’s at 27%.
A parliamentary committee found airlines’ self-regulation of fares ineffective and recommended that the aviation regulator be empowered to regulate fares. A parliamentary committee said in 2024 that airlines’ self-regulation of fares was ineffective, and recommended a ceiling on fares route by route and a way for the aviation regulator, the DGCA, to regulate them.
Adani subsidiaries operated seven Airports Authority of India airports in 2025; in 2024, privately operated airports averaged 4.96 out of five for passenger satisfaction, compared with 4.81 for Airports Authority of India airports.
The 2019 airport tender set aside a Finance Ministry proposal to limit how many airports one bidder could win. At a 2019 airport tender, the Finance Ministry recommended that no bidder receive more than two airports, but the committee set that advice aside and Adani Enterprises was declared the highest bidder for all six.
Adani Ports said it handled 27.1% of all cargo in India and 45.5% of the country’s container traffic in FY26.
Cement, a cartel twice.The cement case found that companies could lack dominance as a single firm or group and still act together to restrict supply and fix prices. In cement, the Competition Commission found that no single firm or group could act independently of competitive forces, but held that companies shared prices and production information through their association and acted together to fix prices and restrict supply. In 2018, the competition tribunal dismissed appeals by 11 cement companies and their association, upholding the finding that they had fixed prices and limited supply.
India’s long argument.India’s inquiries in the 1960s found production of some goods concentrated in a few firms, and large industrial houses filing a large share of licence applications.The 1965 Monopolies Inquiry Commission found that Union Carbide made 82% of dry-battery output and Mahindra Owen made 86.6% of trailer output; its majority called the concentration that came with business groups spreading across industries a necessary evil in the country’s economic interests, while recommending a watchful eye on dominant enterprises and action against restrictive practices.
Two inquiries into industrial licensing measured what the large houses took: a fifth of all licence applications in one, and most of the licensed capacity for rayon grade pulp in the other. R. K. Hazari found that the 28 houses whose applications each involved investment above ₹10 crore filed 1,961 licence applications between 1959 and June 1966, equal to 21% of applications after deferred cases were excluded. A later licensing inquiry found that in rayon grade pulp, one of the products it studied, large industrial houses held about 84% of the licensed capacity, with the Birla house alone holding 36% and Sahu Jain 20%.
India’s competition law moved from the Monopolies and Restrictive Trade Practices Act of 1969 to the Competition Act of 2002, then changed again in 2023. A committee reviewing the 1969 Act said it did not define or even name practices such as abuse of dominance, cartels and predatory pricing, and proposed replacing the Act and its commission with a Competition Commission of India. The 2002 Act provided for the Competition Commission of India and treated agreements between competitors to fix prices, divide markets or rig bids as presumed to harm competition. The 2023 amendment added a transaction-value test for mergers: once the change is in force, a deal above the stated value threshold can count as a combination subject to review if the business being acquired has substantial operations in India.
Brandeis argued that investment bankers had gained power over much of American business. In 1914, Louis Brandeis argued that a small group of investment bankers held power over American business through their ties to banks, railroads and industrial firms.
Lina Khan argues that US antitrust law should look beyond low prices when judging competition. Lina Khan argues that the Chicago-school turn in antitrust thinking made low prices alone count as evidence of sound competition, and calls for attention to the competitive process and market structure, or for dominant platforms to be regulated as common carriers.
The Microsoft appeals court upheld part of the finding against the company but set aside the order to split it. In the Microsoft case, an appeals court upheld the finding that Microsoft unlawfully maintained its operating-system monopoly, reversed the finding that it tried to monopolise the browser market and set aside the order to split the company.
Asia’s family empires.Japan and South Korea used state action to address large family business groups. Japan’s post-war orders transferred designated zaibatsu families’ assets to a commission for management and liquidation, while South Korea later put its largest chaebol through a creditor-led restructuring plan.
Post-war Japan’s orders called for the dissolution of two major trading companies while most restricted business components were to be reorganised. A 1947 directive called for the Mitsubishi and Mitsui trading companies to be dissolved, while most restricted Japanese business components were to be reorganised.
South Korea’s 1998 plan put creditors in charge of restructuring and required the largest chaebol to bear their own costs. Under South Korea’s 1998 plan, major creditor institutions were to lead restructuring and the five largest chaebol were expected to bear the costs of their own reorganisation.
A later comparison found that rules aimed at business groups had different effects in Japan and South Korea. A later comparison found that rules applied consistently helped end pyramidal business groups in Japan, while South Korea’s reliance mainly on corporate-governance reform had limited effect and its groups continued to dominate the economy.
The record does not yet show whether the largest groups’ rising shares across industries caused higher consumer prices across those industries.॥
Words used here
Words underlined with dots above open their explanation. All of them are here.
Business group A set of legally separate companies under common control, usually by one family, often spread across industries that have little to do with each other.
A set of legally separate companies under common control, usually by one family, often spread across industries that have little to do with each other.
How it is worked out
Each company has its own shareholders and its own accounts, and many are listed on the stock exchange. A family holds control of all of them through a holding company and through the companies' stakes in one another, so money, managers and connections can move within the group.
For example
The Tata group is one: steel, cars, software, salt, tea and hotels are run by separate companies, with Tata Sons at the top holding stakes in each.
Read with care
Economists disagree about what groups do. Where banks, courts and markets for talent are weak, a group can raise money and start new businesses faster than a lone firm. The same reach can also shut out rivals and blur accounts, and it gives a family influence across many markets at once.
Concentration ratio CR5 The share of a market’s sales taken by its largest few firms, such as the top five (CR5) or the top ten (CR10).
The share of a market’s sales taken by its largest few firms, such as the top five (CR5) or the top ten (CR10).
How it is worked out
Rank the firms in a market by their sales, add up the sales of the largest five, and divide by the sales of the whole market.
For example
If India’s five largest cement makers sell 55 of every 100 bags sold, the market’s CR5 is 55%.
Read with care
It says nothing about how the sales are split among the leaders: one giant and four small firms can give the same CR5 as five firms of equal size. That is why it is read beside the Herfindahl–Hirschman Index, which does see the split.
Markup How far a firm’s price stands above what it costs to make one more unit of what it sells.
How far a firm’s price stands above what it costs to make one more unit of what it sells.
How it is worked out
Economists cannot see a firm’s costs item by item, so they estimate. One way, used for Indian business groups, divides a firm’s sales by its variable costs: the costs that rise with each unit made, such as raw materials, power, wages, packing and distribution. A ratio of 1.5 means ₹150 of sales for every ₹100 of such costs.
For example
A biscuit maker spends ₹100 on flour, sugar, packing, power, wages and transport for a batch, and sells the batch for ₹150. Its markup is 150 ÷ 100 = 1.5.
Read with care
A markup is not all profit: the gap must also pay for factories, machines, advertising and interest. What economists watch is whether markups rise over time, and whether they rise most where a few firms hold the market, which suggests prices are set by power rather than cost.
Herfindahl–Hirschman Index HHI A measure of how concentrated a market is, made by squaring each firm’s share of its sales and adding the squares up.
A measure of how concentrated a market is, made by squaring each firm’s share of its sales and adding the squares up.
How it is worked out
Write each firm’s share of the market’s sales as a fraction, square it, and add them all. A market held by a single firm scores 1. A market split among very many small firms scores close to 0. Squaring makes large firms count far more than small ones. Some write the shares as percentages instead, which puts the same scale between 0 and 10,000.
For example
Four firms with a quarter of the market each: 0.25² × 4 = 0.25 (or 2,500). One firm with 70% and three with 10% each: 0.49 + 0.01 + 0.01 + 0.01 = 0.52 (or 5,200). The second market has the same four firms but is twice as concentrated.
Read with care
The number depends on where the market’s edges are drawn. An industry measured across all of India can look crowded while a town has one cement dealer. There is no single line above which a market is "too concentrated": American competition authorities call a market highly concentrated above 1,800 today, and used 2,500 before 2023.
Forbearance When a regulator that has the power to set prices chooses, for the time being, not to set them and lets companies fix their own.
When a regulator that has the power to set prices chooses, for the time being, not to set them and lets companies fix their own.
How it is worked out
India's telecom regulator, TRAI, can fix the tariffs that phone companies charge. Under forbearance it notifies no tariff for a service, so the companies set their own prices, while still reporting them to the regulator and following its rules: prices must be open, must not treat customers differently without reason, and must not be set below cost to drive rivals out. TRAI has left most mobile tariffs to the companies this way for about two decades.
For example
When Jio, Airtel and Vodafone Idea announced higher tariffs within days of each other in June 2024, they needed no permission: the prices were theirs to set. What the regulator can do is look at whether the new tariffs broke its rules.
Read with care
Forbearance works best when there are many rivals, so that a company that raises prices loses customers. TRAI itself has said it is not a permanent policy and can be withdrawn. How well it protects customers depends on how many companies are left in the market.
A set of legally separate companies under common control, usually by one family, often spread across industries that have little to do with each other.
How it is worked out
Each company has its own shareholders and its own accounts, and many are listed on the stock exchange. A family holds control of all of them through a holding company and through the companies' stakes in one another, so money, managers and connections can move within the group.
For example
The Tata group is one: steel, cars, software, salt, tea and hotels are run by separate companies, with Tata Sons at the top holding stakes in each.
Read with care
Economists disagree about what groups do. Where banks, courts and markets for talent are weak, a group can raise money and start new businesses faster than a lone firm. The same reach can also shut out rivals and blur accounts, and it gives a family influence across many markets at once.
How far a firm’s price stands above what it costs to make one more unit of what it sells.
How it is worked out
Economists cannot see a firm’s costs item by item, so they estimate. One way, used for Indian business groups, divides a firm’s sales by its variable costs: the costs that rise with each unit made, such as raw materials, power, wages, packing and distribution. A ratio of 1.5 means ₹150 of sales for every ₹100 of such costs.
For example
A biscuit maker spends ₹100 on flour, sugar, packing, power, wages and transport for a batch, and sells the batch for ₹150. Its markup is 150 ÷ 100 = 1.5.
Read with care
A markup is not all profit: the gap must also pay for factories, machines, advertising and interest. What economists watch is whether markups rise over time, and whether they rise most where a few firms hold the market, which suggests prices are set by power rather than cost.
When a regulator that has the power to set prices chooses, for the time being, not to set them and lets companies fix their own.
How it is worked out
India's telecom regulator, TRAI, can fix the tariffs that phone companies charge. Under forbearance it notifies no tariff for a service, so the companies set their own prices, while still reporting them to the regulator and following its rules: prices must be open, must not treat customers differently without reason, and must not be set below cost to drive rivals out. TRAI has left most mobile tariffs to the companies this way for about two decades.
For example
When Jio, Airtel and Vodafone Idea announced higher tariffs within days of each other in June 2024, they needed no permission: the prices were theirs to set. What the regulator can do is look at whether the new tariffs broke its rules.
Read with care
Forbearance works best when there are many rivals, so that a company that raises prices loses customers. TRAI itself has said it is not a permanent policy and can be withdrawn. How well it protects customers depends on how many companies are left in the market.
The Wire reports on a study in the World Bank Economic Review, ‘Business Groups, Concentration and Market Power in India’, on how far India’s biggest family business groups dominate corporate income.
The top 25 family business groups ended two decades of liberalisation with a larger share of India’s economy than they began it: their revenues rose from 11 to 15 percent of GDP between 2001 and 2020.
How concentrated Indian markets are, which family groups lead them, and how they grew.
6 entries · 2005–2026
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In particular, their share in total assets of the non-financial sectors rose from 10% in 1991 to nearly 18% in 2021, whereas the share of the next big five (Big 6-10) business groups fell from 18% in 1992 to less than 9%. In other words, Big-5 grew not just at the expense of the smallest firms, but also of the next largest firms.
Business Groups in Emerging Markets: Paragons or Parasites?
By Tarun Khanna and Yishay P. Yafeh
Tarun Khanna of Harvard Business School and Yishay Yafeh of Hebrew University survey the research on the family-run, multi-industry groups that dominate most emerging markets. They ask whether the groups are ‘paragons’ or ‘parasites.’ Their conclusion is that no verdict is possible yet: the studies used to condemn groups, on tunneling and rent-seeking, are less conclusive than they are usually read to be. On whether groups hold market power, they can offer only a conjecture.
Market power is more plausible in South Korea or in South Africa, where four or five leading groups account for the vast majority of market capitalization, than in India or Brazil, where the top groups account for less than 10 percent. But as of now, this is merely a conjecture.
Group firms had significantly steadier operating profits in four of the twelve emerging markets studied; India was the exception to the pattern.p. 9
For Indian business groups the link between diversification and profit is not a straight line: past a certain level, more diversified groups were more profitable.p. 17
In Korea, whatever edge the diversified group form once gave its members had gone by the 1990s, and the paper says the reasons for the old advantage and its loss are still unclear.p. 17
The churn among India's leading groups over sixty years is too great to fit a story of entrenched houses in league with the state.p. 33
Despite reasons to suspect that groups can keep rivals out, no one has used modern empirical techniques to measure whether they hold market power.p. 38
Chapter of the Economic Survey·Economic Survey 2019-20, Volume 1
Pro-Business versus Pro-Crony
The Economic Survey for 2019–20 gave a chapter to the difference between policy that makes firms compete and policy that favours the well connected, and used the Sensex as its measure of churn. A firm entering the index in 1986 could have expected sixty years on it; the survey puts the expected stay now at twelve. It reports that an index of firms with political connections beat the market by 7 per cent a year from 2007 to 2010, then underperformed by 7.5 per cent from 2011.
Despite impressive progress in enabling competitive markets, pro-crony has destroyed value in the economy. For example, an equity index of connected firms significantly outperformed the market by 7 per cent a year from 2007 to 2010, reflecting abnormal profits extracted at common citizens’ expense. In contrast, the index underperforms the market by 7.5 per cent from 2011, reflecting the inefficiency and value destruction inherent in such firms.
More from this sourceWhat it found and the figures checked
What it found
A firm that entered the Sensex in 1986 could have expected to stay on it for sixty years had the 1991 reforms not happened; the survey puts the expected stay now at twelve years, a fifth of that.p. 3
Roughly one in three firms on the index is replaced every five years.p. 3
Where an index of connected firms beat the market by about seven percentage points a year up to 2010, such firms earned 7.5 percentage points a year less than the BSE 500 over 2007 to 2016.p. 11
Firms that got coal blocks through committee allocation, not auction, saw total income fall by 54.9 per cent over three years compared with firms that got no block.p. 17
By 2018 wilful defaulters owed their lenders close to ₹1.4 lakh crore, a sum the survey sets against the Union budget's spending on health, education and social protection.p. 19
The 4 figures in the note checked on pp. 1 and 3
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R Nagaraj’s I G Patel Memorial Lecture, published in The India Forum, traces where the credit of the 2000s boom went. Bank credit to the private corporate sector grew at an unprecedented pace and a large share reached big business and politically connected firms; when the boom broke, their unpaid loans became the banks’ bad debts. Nagaraj argues the decade of distress that followed was made at home by policy, and that a government which saw crony capitalism and weak bank screening missed a collapse in demand that public investment could have answered.
The ‘Dream Run’ was also a debt-led growth with bank credit to the private corporate sector (PCS) burgeoning at an unprecedented pace; a large share accrued to big business and politically connected firms. These resources went into infrastructure projects such as roads, ports, coal, and thermal power plants (Nagaraj, 2013).
India at 75: Replete with Contradictions, Brimming with Opportunities, Saddled with Challenges
By Viral V Acharya
Viral Acharya wrote this paper for the Spring 2023 Brookings Papers on Economic Activity conference, and the part that belongs in this Long View is his count of how concentrated Indian industry has become. With Rahul Singh Chauhan, working from CMIE’s Prowess Dx database, he finds the largest non-financial groups losing ground after the 1991 reforms and then gaining from 2015. By 2021 the Big-5 of Reliance, Tata, Aditya Birla, Adani and Bharti Telecom held nearly 18% of non-financial sector assets, while the next five groups fell under 9%. He links that market power to markups back at their 1990s level and to higher wholesale price inflation, and proposes dismantling the largest conglomerates.
More from this sourceWhat it found and the figures checked
What it found
After the 1991 opening, the top five groups' share of non-financial sector sales or assets fell sharply, as publicly listed firms gave up ground to private entrants. The share held by private top-five firms rose gradually, caught up with the overall top five by 2010, and then both fell over 2010-2015, before turning up again from 2015.p. 13
By 2021 the top five groups' share of sales was above half in telecommunications (over 84%) and retail trade (over 65%), but 42% in civil engineering and construction, up from 31% in 2016.p. 13
The five biggest groups took a growing slice of the non-financial sector's assets, from 10% in 1991 to nearly 18% in 2021, while the next five groups shrank from 18% in 1992 to less than 9%.p. 14
Firm markups fell from the early 1990s until 2013, then rose steadily and by 2021 were back at the 1.4 level of the 1990s.p. 16
A 10% rise in the Big-5's sales share within an industry is followed by 2.7 percentage points more wholesale price inflation the next year.p. 17
Business Groups, Concentration and Market Power in India
By Simon Commander, Saul Estrin, Naveen Joseph Thomas and Varun Lingineni
The top 25 family business groups ended two decades of liberalisation with a larger share of India’s economy than they began it: their revenues rose from 11 to 15 percent of GDP between 2001 and 2020. Working from CMIE Prowess records on nearly 500,000 observations, Simon Commander, Saul Estrin, Naveen Joseph Thomas and Varun Lingineni measure concentration industry by industry. They find that the fall in concentration across India came mainly from the shrinking state sector, while a block of industries stayed highly concentrated. For the largest groups, the ratio of sales to variable costs turned up after 2013, a rise of 16 percent by 2020.
Despite continuing market liberalization since 2000 and some evidence of declining concentration as a result, business groups –especially family-owned ones—have retained a leading place in the Indian economy. Explicitly encouraged and favored by public policy, particularly before 1990, these groups have very successfully entrenched themselves. The top 25 FBGs’ revenues accounted for > 15 percent of GDP in 2020. Further, there has been limited turnover in their ranks, even in the face of market liberalization.
More from this sourceWhat it found and the figures checked
What it found
Most of the fall in India's overall market concentration between 2001 and 2020 came from the shrinking state sector, the authors find.
Splitting the concentration measure industry by industry at the two-digit level, the top 25 family groups' share of it rose from just over 3 percent in 2001 to 10.4 percent in 2020. Over the same years the state sector's share fell from 96.2 to 87.8 percent.
Concentration fell unevenly: in 2020 more than half of the three-digit industries still had their top five firms taking over 70 percent of revenue.
The tie between concentration and markups is much weaker for firms outside the top 25 family groups: in 2013–2020 their coefficient was about one-eighth the size, and across the whole 2001–2020 period it was not statistically significant.
Groups kept entering new three-digit industries, but in most cases they did not end up with a large slice of sales: five years after entry, revenue share was under 5 percent in just under 90 percent of cases.
The 4 figures in the note checked on pp. 3, 14 and 15
.
In 2020, India's Big Five Family Businesses Held Over 60% of Top 25 FBGs' Revenues Combined: Study
By The Wire Staff
The Wire reports on a study in the World Bank Economic Review, ‘Business Groups, Concentration and Market Power in India’, on how far India’s biggest family business groups dominate corporate income. The study found that market concentration fell after liberalisation as the public sector shrank, yet the large groups kept their hold and spread into new sectors, and their mark-ups rose sharply after slipping a little between 2000 and 2013.
The study noted that the concentration in the market has reduced as competitiveness increased after liberalisation. However, it did not prevent these family businesses from dominating the market. … On the concentration of market power, the authors crucially noted, while the FBGs’ mark-ups indicate these declined marginally between 2000 and 2013, it “then rose sharply, a change strongly correlated with increases in concentration at NIC-3 level”.
Economists disagree on whether bigger groups mean higher prices for everyone else.
3 entries · 2016–2023
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The answer is surprising: we find that markups actually increased as a result of the tariff reductions. Prices still declined due to the cost reduction effect, but the prices facing consumers declined by much less than one would have expected in the absence of market power.
By Jan De Loecker, Penny Goldberg, Amit Khandelwal and Nina Pavcnik
The paper behind this column looked at how the prices and markups of Indian firms moved after the tariff cuts India made in the early 1990s. When firms can charge above their costs, the pro-competitive channel says cheaper imports should force markups down and prices closer to costs. The source notes that this channel is absent from traditional trade models, which assume either perfect competition or markups that do not respond to policy. Here competition did push markups down on its own, but the tariff cuts also made imported inputs cheaper, and that effect lifted markups by more. On net markups rose, and prices fell by much less than costs.
More from this sourceWhat it found
What it found
Cutting tariffs on imported inputs lowered Indian firms' costs, but markups went up instead of down.
Cheaper imports did squeeze markups on their own, and hardest for the products that carried the biggest markups; the cost cut pushed markups up by more.
On average, firms passed on only a small part of their cost savings.
The firms whose markups rose most were also the ones most likely to put out new products, which the authors read as a sign that the extra profit paid for innovation.
By Jan De Loecker, Pinelopi K. Goldberg, Amit K. Khandelwal and Nina Pavcnik
An Econometrica paper that measures what India’s tariff cuts did to factory-gate prices, marginal costs and markups, using product-level price and quantity data from Prowess, the CMIE’s firm database. Prices fell 18.1 percent and marginal costs 30.7 percent over 1989 to 1997, while markups rose 12.6 percent: firms kept much of the saving from cheaper imported inputs instead of passing it to buyers. It matters to this Long View because the markups it estimates vary widely across firms and products, and because it tests, and finds nothing distinctive about, firms that belong to Indian business groups.
Not surprisingly, we find that trade liberalization lowers factory-gate prices and that output tariff declines have the expected pro-competitive effects. However, the price declines are small relative to the declines in marginal costs, which fall predominantly because of the input tariff liberalization. The reason for this incomplete cost pass-through to prices is that firms offset their reductions in marginal costs by raising markups.
More from this sourceWhat it found and the figures checked
What it found
Factory-gate prices fell 18 percent over the reform period even though output tariffs fell 62 percentage points, so a large cut in protection produced a modest fall in prices.p. 4
The fall in costs came from cheaper imported inputs, not from the disciplining effect of import competition on domestic firms.p. 5
Rising markups swallowed about half the fall in marginal costs, which is why prices moved so little.p. 49
Where output tariffs fell, markups came down most sharply on products that had started with the highest markups.p. 51
Firms that were part of Indian business groups did not respond to the reform differently from other firms.p. 63
The 3 figures in the note checked on pp. 48 and 49
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Ecowrap: Factually Incorrect to Conjecture That Industrial Concentration Power Dictates Pricing Capacity of Firms in India: Corporate Ecosystem in India Thrives on Coexistence of Large & Small Players
By Soumya Kanti Ghosh
SBI Research tested the claim that the pricing power of a few big firms keeps India’s core inflation high, and rejected it. An index that reweights the consumer price index by how concentrated each sector is stayed below core CPI from January 2015, rising above it from January to November 2020 and also further during the pandemic, as supply disruptions weighed heavily. The bank’s model traced general inflation to food: a 1% increase in food CPI raised general CPI by 0.6% between April 2014 and February 2023. Its economists also found Indian companies outlast those elsewhere, with nearly 45% trading for more than 20 years.
The resultant “CPI Concentration Index” results show that estimated Concentration CPI is consistently less than the Core CPI since January’15. … The findings in fact suggest that the increase in prices during the pandemic was more on account of supply chain and logistical disruptions caused by the pandemic and after the outbreak of the war in Ukraine rather than firms increasing prices because of higher pricing power.
More from this sourceWhat it found and the figures checked
What it found
An index that reweights CPI by how concentrated each sector is stayed below core inflation every month from January 2015, rising above it from January to November 2020 and also further during the pandemic, when supply disruptions were heavy.
The bank's model put food prices, not core prices, behind the general index.
A 1% increase in Food CPI raised General CPI by 0.6% in the period of April 2014 to Feb 2023.
The bank's ARDL model found wholesale prices had no impact on company profit margins; separately, the report reads the gap between consumer and wholesale inflation, about 400 basis points, as retailers absorbing input costs.
Indian firms survive far longer than the global average, with nearly 45% trading for more than two decades.
The 4 figures in the note checked on pp. 1 and 3
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Where people meet concentration in what they pay for phones, flights, airports and ports.
9 entries · 2017–2026
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In its note, the DEA noted unequivocally, “the six airport projects are highly capital intensive projects, hence it is suggested to incorporate the clause that no more than two Airports will be awarded to the same bidder duly factoring the high financial risk and performance issues. Awarding them to different companies would also facilitate yardstick competition.”
Held. The Commission found no prima facie case that Reliance Jio or Reliance Industries broke Sections 3 or 4 of the Competition Act, and closed the complaint.
However, the Informant has not demonstrated reduction of competition or elimination of any competitor nor has any intent to that effect is demonstrated. The Commission notes that providing free services cannot by itself raise competition concerns unless the same is offered by a dominant enterprise and shown to be tainted with an anti-competitive objective of excluding competition/ competitors, which does not seem to be the case in the instant matter as the relevant market is characterised by the presence of entrenched players with sustained business presence and financial strength.
On 9 June 2017 the Competition Commission of India closed Bharti Airtel’s complaint against Reliance Jio Infocomm and its parent, Reliance Industries, without ordering an investigation. Airtel called Jio’s free voice and data offers, running since September 2016, predatory pricing, and said Reliance’s money was paying for it. The Commission found Jio was not dominant: it held 6.4 per cent of wireless subscribers, and never more than 7 per cent in any circle. It held that an entrant’s short-term strategy of attractive offers to penetrate the market cannot be considered anti-competitive in nature. Without dominance, it noted, the question of examining the alleged abuse did not arise.
More from this source4 more passages and the figures checked
On why the Commission refused to split 4G off as its own market
The Commission is cognizant of the fact that 4G technology is superior to 3G technology in certain aspects and will be operative only in 4G compatible mobile instruments. It will not be operative in a 3G compatible handset. However, a 3G network will be operative in a 4G compatible handset.
The subscriber shares of the twelve operators, and Jio's ceiling in every circle
The market is led by the Informant with a market share of 23.5% followed by Vodafone (18.1%), Idea (16.9%), BSNL (8.6%), Aircel (8%), RCOM (7.6%), OP-2 (6.4%), Telenor (4.83%), Tata (4.70), Sistema (0.52%), MTNL (0.32%) and Quadrant (0.27%). Further, in none of the 22 telecommunication circles, the Opposite Party has a market share higher than 7%.
On Reliance Industries' money in Jio, and why the Commission would not call it leverage
In the absence of any finding of anti-competitive conduct by OP-2, OP-1 cannot be held to be in contravention of Section 4(2)(e) of the Act just because it has made huge investments in OP-2. Mere investments cannot be regarded as leverage of dominant position, particularly when OP-1 itself is not engaged in business of providing telecom services or any activities incidental thereto. If one were to construe such investment as anti-competitive, the same would deter entry and/or expansion and limit the growth of markets.
On financial strength as one test among many for dominance
The Commission notes that financial strength is relevant but not the sole factor to determine dominant position of an enterprise. Considering comparable investments and financial strengths of competitors, the success of OP-2 in managing large scale investments does not suggest dominant position being enjoyed by OP-2.
Finance Ministry, NITI Aayog guidelines ignored in airport privatisation
By Jagriti Chandra
The Hindu’s account, built on the record of the 85th PPP Appraisal Committee, of how the Centre cleared the leasing of airports owned by the Airports Authority of India. The Finance Ministry’s Department of Economic Affairs asked for a cap on the number of airports a single bidder could take, and NITI Aayog wanted prior operation and management experience. The committee cited an Empowered Group of Secretaries decision and set both aside. Three days after that meeting the Airports Authority of India floated its tender, and Adani Enterprises Limited was declared the highest bidder for all six airports, with the suggestions of the government’s own advisers on the file.
Market Study on the Telecom Sector in India: Key Findings and Observations
The Competition Commission of India began this study of the telecom market in January 2020 and published its key findings in January 2021, with the Indian Council for Research on International Economic Relations (ICRIER) as implementation partner. It describes a market that consolidated until Jio, Airtel and Vodafone-Idea owned almost 88.4 per cent of it, and where average industry revenue fell in every year from 2016–17 to 2018–19. When the incumbents asked the regulator to fix a floor price, the Commission advised it to keep tariff forbearance.
The prevailing market structure validates the empirical finding expressed as the rule of three, which predicts that mature markets normally support three main competitors, others who survive, are limited to the fringes or a niche. The three major private sector operators, namely Jio, Airtel and Vodafone-Idea own almost 88.4 per cent of the market. As of April 2020, Reliance Jio has the highest market share with respect to subscribers (33.3 per cent).
More from this sourceWhat it found and the figures checked
What it found
Industry estimates put the weighted average return on equity at 7.46 per cent in 2015-16 and minus 7.59 per cent in 2017-18.p. 15
Data went from a small part of what operators earned per user to a large one: its share of ARPU rose from 12.9 per cent in 2014 to 42.9 per cent in 2019.p. 9
The study's expert consultations put the cost of spectrum in India at about 7.6 per cent of operators' aggregate revenue, with Thailand next at 7.3 per cent and Bangladesh at 7 per cent.p. 12
The Commission advised the telecom regulator against fixing floor prices, warning that they risk making operators complacent about their service offerings and holding back innovations that make services affordable.p. 19
Telcos and internet-based services companies have moved from contract agreements to strategic transactions. Reliance Jio bought stakes in the video content firm Eros and in Balaji Telefilms, Airtel and Vodafone signed content deals with Hotstar and Amazon, and Facebook invested in Reliance Jio.p. 15
Parliamentary panel suggests route-specific capping of airfares
By PTI
A standing committee of Parliament has told the government that airlines cannot be left to police their own ticket prices, and it wants a route-by-route ceiling on fares plus a separate body with quasi-judicial powers to control what carriers charge. The report says fares are set by revenue management and the drive to maximise shareholder value, and that self regulation by the airlines has not worked. It belongs here as a working example of how the argument over market power plays out in one industry.
In the report, the panel said it has come across various instances where there has been abnormal increase in airfares especially during festivals or holidays, and is of the opinion that self regulation by airlines has not been effective and also recommended that a mechanism may be evolved whereby DGCA is empowered to regulate air tariffs.
Why tariff hikes by Airtel, Jio,Vi were inevitable
By Soumyarendra Barik
This Indian Express report records Reliance Jio, Bharti Airtel and Vodafone Idea announcing tariff rises within hours of each other in June 2024. It also gives the industry’s own case for them: that what a subscriber pays each month is too low for the business to stay healthy. Jio, which a JP Morgan note calls the sector’s price setter, led the round this time, and the bank reads that as a statement of intent that its focus has shifted from share gains to monetisation.
Jio premiumised 5G access by increasing the threshold for unlimited 5G data to 2GB/day plans from 1.5GB/day plans that effectively drives a 46 per cent increase in tariffs for 5G users, 2x the overall hikes driving 5G monetisation
Tariff hike by telecom companies complies with the prescribed regulatory framework: DoT
By Rakesh Kumar
The Congress attacked last week’s mobile tariff hikes as an extra burden on customers, and the Ministry of Communication answered the next day. In a press statement, the Department of Telecommunications said the increases were made under the Telecom Regulatory Authority of India Act, 1997, which gives TRAI the power to set telecom rates. For the past two decades TRAI has determined mobile rates under forbearance. The government also said that with three private players and one public sector player, the mobile services market operates under the forces of demand and supply, and pointed to heavy 5G spending by some of the service providers.
The DoT also highlighted that the tariff hike was implemented in accordance with the provisions of the Telecom Regulatory Authority of India (TRAI) Act 1997, which empowers TRAI as an independent regulator to set telecom service rates in the country. It noted that for the past two decades, mobile service rates have been determined under forbearance by TRAI.
Parliamentary answer · Ministry of Civil Aviation, Government of India
4.96average score out of five for private-operated airports in the 2024 Airport Service Quality survey
Source: Airport Service Quality (ASQ) Survey by Airport Council International, as cited in the reply to Rajya Sabha Unstarred Question No. 1627
Seven airports of the Airports Authority of India (Mumbai, Lucknow, Ahmedabad, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram) are now operated and managed by subsidiaries of Adani Airports Holdings, the government told the Rajya Sabha on 4 August 2025. Private airports averaged 4.96 out of five in the 2024 Airport Service Quality survey run by Airport Council International; AAI’s own airports averaged 4.81. The user development fee is typically higher at leased and PPP airports, the reply says, because the capital spending on infrastructure there is far larger than at AAI’s airports.
More from this sourceWhat it found and the figures checked
What it found
In 2024, airports run by private operators averaged 4.96 out of five on passenger satisfaction, against 4.81 for the airports the Airports Authority of India runs.p. 1
AAI keeps watch on the private partners through independent engineers, auditors and inspections.p. 2
Airport charges are set by the Airports Economic Regulatory Authority, which applies one tariff method at major airports whoever owns them.p. 2
The 3 figures in the note checked on pp. 1 and 2
.
IndiGo and Air India Hold 91% of Domestic Aviation Market, Govt Tells Parliament
By The Wire Staff
The civil aviation ministry’s written reply to a Rajya Sabha question, reported here, sets out the government’s own count of how few airlines sell most domestic seats. It lists the market share held by each major and regional carrier, the flights IndiGo cancelled during its December 2025 meltdown, the passengers affected and the compensation the minister says it has paid. The crisis followed new duty-time rules that IndiGo was accused of failing to plan for adequately. For the December 3 to 5 cancellations the airline cited crew shortages, though for the month’s disruptions it said it could not pinpoint the exact cause.
In a written reply to Trinamool Congress (TMC) MP Sagarika Ghose in the Rajya Sabha, minister of state for civil aviation Murlidhar Mohol said that Directorate General of Civil Aviation (DGCA) data for 2025 shows IndiGo holds a nearly 64% market share, and the Air India Group holds 27%. “Together, these two airlines hold 91% of the domestic market,” Mohol said in the reply.
The results deck Adani Ports and Special Economic Zone Limited took to investors for the quarter and year ended March 2026. It maps the reach of the company’s ports business: 653 million tonnes of port capacity, 136 marine vessels, 12 multi-modal logistics parks and 3.1 million sq ft of warehouses. It gives the company’s own figures for its market share: 27.1% of all cargo handled in India and 45.5% of its container traffic.
In the last decade, APSEZ domestic port volume growth was ~2x industry growth … APSEZ targets 850 MMT domestic cargo volume by 2030
More from this sourceWhat it found and the figures checked
What it found
The company says it handled 500.8 million tonnes of cargo in FY26, 11% more than the 450.2 million tonnes the year before.p. 31
Its share of all cargo handled in India was 27.1% in FY26, against 27% in FY25.p. 14
Container traffic through its terminals came to 45.5% of India's total, unchanged from the year before.p. 14
It targets 850 million tonnes of domestic cargo by 2030, and says its domestic port volumes grew at about twice the industry rate over the last decade.p. 45
Gross debt stood at ₹55,103 crore at the end of March 2026, with net debt at 1.9 times EBITDA.p. 30
The 6 figures in the note checked on pp. 5, 6, 14 and 29
.
The same industry found fixing prices under the old monopoly law and the new competition law.
3 entries · 2007–2018
18902026
In the present case, we have found direct as well as indirect evidence of concert. The existence of a common platform in the form of respondent No. which frequently reviews the price-situation is a strong pointer towards existence of a cartel. Admittedly, respondent No. has been fixing prices during the control regime. The same apparatus continues even now without any change. In this scenario, the simultaneous and frequent rise in prices by the respondents, although within a narrow band, would clearly indicate that the respondents acted in a concert.
Monopolies & Restrictive Trade Practices Commission, New Delhi judgment
Director General (Investigation and Registration) v. Cement Manufacturers' Association
Restrictive Trade Practices Enquiry No. 99 of 1990
Held. The commission found the respondents guilty of restrictive trade practices under Section 33(1)(d), except three that had stopped operating before the period it examined. It ordered them not to fix prices in concert, directly or indirectly, whether through the Cement Manufacturers’ Association or otherwise.
The price of a bag of cement in Delhi, 1989–90
With the decontrol of cement, the prices of cement have been shown an upward trend; a bag of cement which was priced at Rs. 70/- in November, 1989 was being sold at Rs. 78/- in March, 1990 in Delhi. After the new budget in 1990, the price of cement shot-up to Rs. 85/- per bag and at the time of filing the compliant in September, 1990, the price of cement was being quoted at Rs. 95/- per bag.
In 1990 the Monopolies and Restrictive Trade Practices Commission issued a notice of enquiry against the Cement Manufacturers’ Association and 44 cement producers. The complaint was that they fixed the price of cement in an arbitrary and unjustified manner. Prices of several manufacturers in the same region were uniform, though the cost of production of different units differed. The bench did not decide the case until December 2007, when it held that the association had been the common platform through which the firms moved prices together, and ordered them to stop. It said the guilt would pass to successor companies if there was a change in management since the start of the enquiry.
More from this source3 more passages and the figures checked
The bench on witnesses who denied knowing the association's committees
Such statements by witnesses of the respondents which are towards denial of existence of area-wise committees of CMA and statements of the witnesses who have not denied the existence of such committees but have claimed non-familiarity with their functions are to be taken with a grain of salt. A number of such witnesses are high functionaries or have been high functionaries with their organizations. Their denials on such basics relating to an association which has been there for several years would lead to an inevitable conclusion that there is something which is sought to be kept away.
On who was culpable, and which successors inherited the guilt
Applying the test of balance of probabilities and liaison of intentions and also superimposing these tests on the facts observed in the market, we believe that there is sufficient evidence both direct and indirect to establish the culpability of all the respondents except respondents Nos. 15, 34 and 39 who had ceased to operate before the relevant period of enquiry. The culpability so established would travel to their successor companies as well if there is change in the management of the companies since the start of the enquiry.
Before we part with this order, we cannot fail to observe that NOE which was issued in 1990 and pertained to an economic situation should have been addressed expeditiously as interest of large number of consumers was involved and thus should have been concluded in a much shorter time frame. However, mandatory procedural requirements including adjournments granted have been time-consuming.
Held. The Commission found no abuse of dominance under Section 4, because no single firm or group was in a position to operate independent of competitive forces. At paragraph 286 it held that the cement companies had used the Cement Manufacturers’ Association to share details of prices, capacity utilisation, production and dispatch. That restricted production and supply, contrary to Section 3(1) read with Section 3(3)(b). And they had acted in concert to fix prices, contrary to Section 3(1) read with Section 3(3)(a).
As regards the prevailing market structure in the cement industry, the DG has submitted that there are two groups comprising of three companies who have pan-India presence. The Holcim Group which controls ACC Ltd. and Ambuja Cements Ltd. and the Birla Group which controls UltraTech Cements Ltd.. The top three companies viz. ACC Ltd., Ambuja Cements Ltd. and UltraTech Cement Ltd. have about 40% of the total market share.
The Commission decided this case twice. It found the cement makers in contravention in June 2012, and the appellate tribunal set that order aside in December 2015. This fresh order followed hearings in January 2016. It found no abuse of dominance, since no single firm or group was in a position to operate independent of competitive forces. But at paragraph 286 it held that the cement companies had used the Cement Manufacturers’ Association as a platform to share details of prices, capacity utilisation, production and dispatch. That, it held, restricted production and supply, and the companies had acted in concert to fix prices. The DG’s investigation report described the cement industry as oligopolistic, with the Holcim group controlling ACC and Ambuja and the Birla group controlling UltraTech. The top three companies held about 40% of the total market share.
More from this source4 more passages and the figures checked
The Commission on acting in concert to fix prices
Further, the conduct of the OP cement companies not only exhibited mere price parallelism as the evidence on record establishes that they were acting in concert to fix prices of cement in contravention of the provisions of Section 3(1) read with Section 3(3)(a) of the Act resulting in high prices for consumers and high profit margins for producers.
On the twelve large firms and the test for dominance
The Commission also notes that as per the report of the DG, ACC Ltd., ACL, UltraTech Cement Ltd., JAL, The India Cements Ltd., Shree Cement, Ramco, Century Cement, JK Cement, J K Lakshmi Cement Ltd., Binani and Lafarge India Pvt. Ltd. control about 75% market share of cement in India. … No single firm or a group is in position to operate independent of competitive forces or affect its competitors or consumers in its favour to make it dominant within the meaning of Explanation (a) to Section 4 of the Act.
On committee meetings and the price rises that followed
During investigation it was also gathered by the DG that CMA has formed a High Power Committee (HPC) of its members. The prices of cement are discussed in the meetings of this Committee. For instance, meetings of HPC were held on 03.01.2011, 24.02.2011 and 04.03.2011, after which prices of cement of all the top companies who were present in these meetings had increased.
The big players holding the maximum share normally trigger the price increase which is followed by the other manufacturers. The collusive price leadership is thus playing a great deal of role in the concerted action of cement manufacturers.
Ambuja Cements Limited v. Competition Commission of India & Ors.
TA(AT) (Compt) No. 22 of 2017
Held. The Tribunal dismissed the appeals of the cement companies and their association. It agreed that they had fixed prices and limited supply in breach of Section 3(3)(a) and 3(3)(b) of the Competition Act, 2002, and left the penalty, already the minimum, undisturbed.
They were openly circulating the sale price of cement of each of the Cement Companies, though they were competitors. The Government of India if called for details of the Companies, the respective companies could have sent it themselves in a sealed cover. But, it was sent to the competitors who were discussing not only the sale price of the cement but also the order issued by one of the company from Government of U.P. From the aforesaid facts based on evidence, there will be one conclusion that there was meeting of minds between the Appellants with regard to the fixation of sale price of cement and for regulating its supply and production.
India’s competition tribunal upheld the finding that 11 cement companies and their association ran a cartel, and dismissed their appeals. The companies argued that parallel prices were ordinary in a commodity where everyone can see everyone’s prices, and that no agreement had been shown. The Tribunal answered that the association’s own minutes, and its collection and circulation of each member’s prices, production and dispatches, proved a meeting of minds. It added that the market had been looked at state by state and region by region. A cartel, it held, need be proved only on a balance of probabilities, and the minimum penalty stood.
More from this source4 more passages and the figures checked
On the CMA platform as the meeting point
The most significant and clinching evidence that the Appellants were in fact, acting in concert was the fact that the Companies using the platform of CMA met at regular intervals, discussed pricing and sensitive information relating to production, capacity, dispatch etc. with each other All competitive restraints and competition policies were given a total go by the Appellant cement companies.
The rise in price in February 2011 was unusually high compared to previous years. In fact, if the price charts submitted by the Commission before the Appellants, based on data submitted by the Appellants are perused, it is clear that there are absolute change in price of Appellants in each state which would show clearly that the Appellants without any reason or justification grossly hiked the prices totally departing from their normal trends over the previous years.
While dealing with the price chart, we have noticed that the Commission not only looked into ‘Sate-wise Market’ but also ‘Region-wise Market’ and range of percentage change in prices between 2007-2011. The Commission has noticed the Range of Percentage change of different years for the months of October over September (2007-2011) for ‘Central, Northern and Eastern States’.
On dispatch, production and the price rise together
the fact that there are agreement which amounts to cartel and there being a percentage change in the prices and particularly in the month of October over September (2007-2011) for the Southern States and for the month of February over January (2007-2011) for Central, Northern and Eastern States highlighting the unprecedented trend for the percentage increase in the prices which was not the case in the previous years for the corresponding months, shows that the agreement has direct bearing on Section 3(3)(a)
Six decades of inquiries and laws on how much power big business should have.
8 entries · 1965–2024
18902026
In the absence of a proper competitive environment, we may find ourselves with a first class competition law but no competition. We may also end up by protecting the competitor and not the competitive system.
Reporting·Report of the Monopolies Inquiry Commission, 1965, Volumes I and II
Report of the Monopolies Inquiry Commission 1965: Volumes I and II
The Monopolies Inquiry Commission sat in Delhi throughout its sittings and undertook no tours, and its 1965 report counted who held the market in one product after another, then added up the holdings of whole business groups. It found a single firm or a small handful dominant in many goods. The majority concluded that business groups spreading into new industries, and the country-wise concentration that comes with it, was a necessary evil for the country’s industrial development. It still had to be watched for monopolistic and restrictive practices. R. C. Dutt recorded a note of dissent, listed in the report’s contents as the Note of Dissent by Shri R. C. Dutt.
The legislative measures we have already recommended, if adopted, will enable the Commission, which would also be required under the proposed law to keep a watchful eye on all dominant enterprises, to take suitable action where industrialists who have achieved concentration, whether country-wise or product-wise, are guilty of monopolistic or restrictive practices.
In the dry battery market, Union Carbide produced over four-fifths of all output, facing only one other domestic competitor.p. 20
Trailers had eight producers, and one of them, Mahindra Owen Private Ltd., made 86.6% of the output.p. 20
In the jute textile industry, production was dispersed across dozens of mills, with the largest business group holding just over a tenth of total output.p. 34
Burmah Shell held 51% of kerosene production, Esso 25%, Caltex 12% and Assam Oil Co. 6%.p. 35
The Tata group alone had twenty-seven companies with assets of not less than Rs. 1 crore each.p. 117
Industrial Planning and Licensing Policy: Final Report
By R. K. Hazari
R. K. Hazari, appointed an honorary consultant to the Planning Commission in July 1966 to study licensing under the Industries (Development and Regulation) Act, submitted this final report on 14 September 1967. From the files of the Licensing Committee he picked out 28 houses, each of which applied for licences involving investment above ₹10 crore. Between 1959 and June 1966 they filed 1,961 applications, 21 per cent of all applications net of those deferred. The Birla group applied for such a wide range of products that, he wrote, it was to some extent legitimate to infer that it tended to pre-empt licensable capacity in many industries. Whether that kept other firms out was an open question.
Government should be reasonably clear in its mind at the outset regarding the industries in which competition can and should be fostered and others in which, on account of technological and economic compulsions, there is no alternative to some degree of monopoly. In the latter group of cases, it is obviously better to tolerate monopoly—though not monopolistic abuses—than to pursue ad hoc anti-monopoly licensing practices, which encourage uneconomically small plants.
More from this sourceWhat it found and the figures checked
What it found
Between 1959 and June 1966, the 28 houses whose applications each involved investment above ₹10 crore together filed 1,961 licence applications, net of those deferred, which came to 21 per cent of all applications in the period.p. 12
Where investment figures were recorded, the 832 approvals to those houses covered ₹740 crore of investment in capital equipment, 38 per cent of all approved investment in the period.p. 12
Hazari wrote that it was, to some extent, legitimate to infer that Birla tended to pre-empt licensable capacity in many industries. His reason: the sheer pressure of multiple applications for each product must yield positive results for at least two or more of them.p. 14
The report argued that a project must first be feasible in itself and high in the order of priorities before it can be considered for scarce resources such as foreign exchange. Fitting the foreign exchange available should not by itself qualify a project for approval.p. 26
The 5 figures in the note checked on pp. 6 and 12
.
Report of the Industrial Licensing Policy Enquiry Committee (Main Report)
By Subimal Dutt, H. K. Paranjape and S. Mohan Kumaramangalam
The Industrial Licensing Policy Inquiry Committee examined how India’s industrial licensing system had worked over the decade to 1966, and whether the larger industrial houses had secured an undue advantage over other applicants in the issue of licences. Its answer was that the disproportion was real but concentrated in a few houses, not spread evenly across the group. It counted the 20 Larger Industrial Houses together with their second-tier concerns, firms it treated as tied to a house though outside its core. Together they held about 31 per cent of the private corporate sector’s paid-up capital in 1958–59. They took 41 per cent of the investment proposed in approved licence applications, and 40 per cent of the capital goods approvals given at first consideration. In one product it studied, rayon grade pulp, large houses held about 84 per cent of the licensed capacity.
The share of Large Industrial Houses in the licensed capacity was about 84 per cent. The share of the House of Birla alone was 36 per cent and that of Sahu Jain 20 per cent. Thus, this is a clear example of disproportionately large share secured by Large Houses and especially by a single large house.
More from this sourceWhat it found and the figures checked
What it found
Of the houses studied, 30 took a larger share of the investment proposed in approved licence applications than their share of paid-up capital, and only four beat it by more than two percentage points: Birla by 8.40, J. K. by 4.30, Shri Ram by 4.31 and Martin-Burn by 2.13.p. 58
Polyester and acrylic fibre went almost entirely to big concerns: all the licences and letters of intent but one were issued in the Large Industrial Sector.p. 61
Of the licences still valid but unimplemented at the end of 1966, nearly two-thirds had stood unused for more than three years; the 73 Large Houses held 146 of those, and the 20 Larger Houses 88.p. 90
Items on the banned list were still considered for particular parties, which the committee called an undue advantage because the practice was not publicly known, and it found that most such cases went to the Large Industrial Sector.p. 74
Public-sector banking credit limits sanctioned to the private corporate sector gave about 62 per cent to concerns belonging to the 73 Large Houses.p. 174
The 5 figures in the note checked on pp. 21, 58 and 67
.
Report·Department of Company Affairs, Ministry of Law, Justice and Company Affairs, Government of India
Report of the High Level Committee on Competition Policy and Law
By S.V.S. Raghavan, Mala Banerjee, S. Chakravarthy, K.B. Dadiseth, Rakesh Mohan, Sudhir Mulji, P.M. Narielvala, Pallavi Shroff and G.P. Prabhu
In October 1999 the Department of Company Affairs set up a committee under S.V.S. Raghavan to examine the Monopolies and Restrictive Trade Practices Act, 1969 and say whether it should be amended or replaced. This is its report. The committee found that the 1969 Act never even named the practices it was meant to catch, from abuse of dominance to cartels and predatory pricing. It asked for the Act to be repealed, the MRTP Commission wound up, and a Competition Commission of India set up in its place.
More from this sourceWhat it found
What it found
India's 1969 monopolies law did not define or even name several restrictive practices, among them abuse of dominance, cartels, bid rigging, boycotts and predatory pricing.p. 88
The committee proposed pre-notification rather than prior approval for mergers once the merged entity held ₹500 crore or more in assets, or the group it belonged to held ₹2,000 crore or more, both figures tied to the Wholesale Price Index.p. 65
About 5,000 cases were pending before the MRTP Commission when the committee wrote.p. 95
Of the products reserved for small-scale industry, 812 were still on the list.p. 33
The new commission was to have at least ten members, two of whom would sit as a Mergers Commission.p. 85
The law that repealed the Monopolies and Restrictive Trade Practices Act of 1969 and set up the Competition Commission of India. It prohibits agreements between firms that harm competition. It prohibits an enterprise or group from abusing its dominant position, for instance by imposing unfair or discriminatory prices or conditions. And it lets the Commission regulate large mergers and acquisitions, which the Act calls combinations.
More from this sourceThe figures checked
The 2 figures in the note checked on pp. 5 and 14
.
Mr. Umar Javeed, Ms. Sukarma Thapar and Mr. Aaqib Javeed v. Google LLC and Google India Private Limited
Case No. 39 of 2018
Held. The Director General’s investigation found Google dominant in the five relevant markets it examined. The Commission held that the anti-fragmentation agreement, which stops handset makers developing competing versions of Android, is a covenant not to compete. Together with the Mobile Application Distribution Agreement, it eliminates a potential distribution channel for rival app developers and restricts competition in the operating system and general search markets.
Through the tying arrangement, Google has used Android as a vehicle, especially, to cement the dominance of its search engine. Google’s strategy rests on the reach, scale and market power of Android, which allows Google to have control over a vast majority of smart mobile devices that serve as key gateways to the internet. Keeping Android OS open and ‘free’ of monetary consideration is thus in as much Google’s interest as it claims it to be for the OEMs and users. Combined with the power of Android is the dominance that Google enjoys over Play Store which has attained unparalleled market position benefitting from huge indirect network effects, resulting in an overwhelming dependence of users, app developers and consequently of the OEMs. Its gatekeeper position in the Android mobile ecosystem thus makes Google well placed to leverage its power to protect and further enhance its dominance in online search by making it difficult for rival search service providers to enter and compete effectively in the mobile search space. The well-regarded benefits of the open-source system of Android cannot legitimize an exclusionary conduct that causes harm to competition in any specific area/markets.
The Competition Commission’s order on a complaint by three consumers of Android phones against Google. The Commission found that a phone maker wanting to preload even Google’s Play Store had to sign agreements committing it to preinstall Google’s full suite of apps. Through this tying, it found, Google used Android to cement the dominance of its search engine. The Commission’s own chart put Android at 98.50% of smartphone and tablet shipments in India at the end of 2018.
More from this sourceWhat it found, 4 more passages and the figures checked
What it found
No new operating system developer entered the market for licensable operating systems for smartphones and tablets in the five years before the order, and Microsoft's Windows Phone left that market in 2016.p. 48
Downloads from rival Android app stores were tiny next to Google Play's: the numbers from Xiaomi's, Huawei's, Oppo's and other stores appeared miniscule compared with apps downloaded from the Play Store in 2018.p. 62
One97 described sideloading as needing several additional steps and a security warning, and a US report quoted by the investigation described a twenty-step process with multiple security warnings. The Commission held that the ability to sideload puts no check on Google in the Android app store market.p. 71
Yahoo told the investigation that on Android devices a new phone comes out of the box inside the Google ecosystem, so every other search provider must take extra steps to reach users.p. 102
On Android's share of phone and tablet shipments in India
At the outset, the Commission notes that the abovementioned data includes data pertaining to the other OSs such as iOS, Blackberry which are not part of the relevant market of licensable smart mobile device OS. However, despite that Android OS enjoys a significantly high market share since 2012 and at the end of 2018, it was massive at 98.50%. It indicates a strong position of Android OS in India which is unassailable. If the data pertaining to the other OSs such as iOS, Blackberry is excluded, then probably Android OS would be close to a monopoly in the relevant market in India.
Why a new phone operating system finds it hard to break in
‘applications barrier to entry’ - stems from two characteristics of the software market: (1) most consumers prefer the OS for which a large number of applications have already been written; and (2) most developers prefer to write for an OS that already has a substantial consumer base. Consequently, this ‘chicken-and-egg’ situation arising from applications barrier to entry ensures that applications will continue to be written for the already dominant OS, which in turn ensures that consumers will continue to prefer it over other competing OSs…’
One of the most important issue that comes out is to what extent should a platform operator, in this case Google, set governance rules purportedly to “protect” its ecosystem and should there be limits to this self-assumed role. The Commission observes that such a role assumed by Google, that is undoubtably a dominant entity, harms competition and should be brought to question by a competition authority. Competition is about experimentation, failures, successes and choice, Google’s role of a referee for the Android ecosystem is at best paternalistic but its anti-competitive harm cannot remain unchecked as innovative response of competitors is stymied by Google’s conduct. Market forces should eventually decide whether an Android fork will succeed and attract OEMs, developers, and users.
Microsoft on the search box that comes with the phone
A user is more likely to use a search widget on its home screen or use a browser, than open an app specifically for search, especially when this app may not even be on the home screen. Accordingly, the Google search on home screen and default search setting in the default browser, drive a significant number of searches on mobile devices, and Microsoft believes that a pre-installed dedicated search application on a device drives significant internet search usage…
Parliament passed this Act to amend the Competition Act, 2002, and it reaches combination thresholds, cartel penalties and investigation powers, and adds settlement and commitment provisions. Once it is brought into force, a new test applies to deals for control, shares, voting rights or assets of an enterprise, and to mergers. Such a deal will count as a combination if it is worth more than rupees two thousand crore and the target has substantial business operations in India. For the purposes of section 5, a group means two or more enterprises where one can exercise twenty-six per cent of the voting rights in the other, appoint more than half its board, or control its management or affairs. Failing to notify a deal can cost up to one per cent of the total turnover or assets or the deal value, whichever is higher. Each member of a cartel faces up to three times its profit or ten per cent of its turnover or income for each year the agreement ran, whichever is higher. A firm under inquiry over a vertical agreement, one between firms at different stages of a supply chain, or over abuse of dominance, may apply to settle on payment of an amount or offer commitments, which the Commission may accept. No appeal lies against either order.
More from this sourceThe figures checked
The 4 figures in the note checked on pp. 4, 10 and 14
.
Anti-big, Anti-global? India's Competition Law and Policy for Dominant Enterprises
By Shreyas Narla
A Mercatus research paper on India’s competition law, arguing that the Competition Act, 2002 and the Competition Commission of India carry an anti-big bias inherited from the MRTP Act, 1969, and often equate size with wrongdoing. It records that the five largest conglomerates (Reliance, Tata, Aditya Birla, Adani and Bharti Telecom) raised their share of assets in more than 40 major nonfinancial sectors from 10 percent in 1991 to 18 percent in 2021. Over the same years the next five biggest groups fell from 18 percent in 1992 to less than 9 percent in 2021. It asks that Section 4 be amended so harm to competition and consumers must be shown, and that Section 28, which lets the CCI break up firms, be dropped.
The big five conglomerates in India—Reliance (Mukesh Ambani) Group, Tata Group, Aditya Birla Group, Adani Group, and Bharti Telecom—now have a finger in every pie, from metals and minerals to retail and telecommunications. … Their share in total assets of these sectors grew from 10 percent in 1991 to 18 percent in 2021. And the share of the next five biggest groups shrank from 18 percent in 1992 to less than 9 percent in 2021.
More from this sourceWhat it found and the figures checked
What it found
The five biggest business groups grew their share of assets across more than 40 major nonfinancial sectors from 1991 to 2021, while the next five's share fell from 18 percent in 1992 to less than 9 percent in 2021.p. 6
In the Uber case, the Supreme Court concurred in ordering an investigation without evaluating whether Uber was dominant; the CCI cleared it six years after the complaint.p. 5
The CCI issued no penalty guidelines in the 15 years after the penalty provision took effect, so fine amounts stayed unpredictable.p. 17
A 2023 amendment redefined turnover for penalties to mean global turnover.p. 17
Section 28 lets the CCI split a firm without any finding that it abused its dominance, a power the paper says has never been used.p. 5
From the Sherman Act of 1890 to the argument that low prices are not the only test.
7 entries · 1890–2023
18902026
The dominant element in our financial oligarchy is the investment banker. Associated banks, trust companies and life insurance companies are his tools. Controlled railroads, public service and industrial corporations are his subjects. Though properly but middlemen, these bankers bestride as masters America’s business world, so that practically no large enterprise can be undertaken successfully without their participation or approval.
Act of July 2, 1890(Sherman Anti-Trust Act), July 2, 1890; Enrolled Acts and Resolutions of Congress, 1789-1992; General Records of the United States Government; Record Group 11; National Archives.
America’s first federal antitrust law, approved on 2 July 1890 and named for Senator John Sherman of Ohio. It declared illegal every contract or conspiracy in restraint of trade among the states or with foreign nations, let the federal government sue to dissolve trusts, and allowed people who lost business to recover triple damages. The Supreme Court dismantled it in United States v. E. C. Knight Company in 1895, but it was used later against Standard Oil, American Tobacco and Microsoft.
The Standard Oil Company of New Jersey et al. v. The United States
221 U.S. 1
Held. The Court read the Sherman Act to bar only unreasonable or undue restraints of trade in interstate commerce. It held that Standard Oil’s ownership of the stock of its subsidiary companies was an unlawful combination and a monopolization. It affirmed the decree dissolving the combination, with directions to modify it in part.
we think no disinterested mind can survey the period in question without being irresistibly driven to the conclusion that the very genius for commercial development and organization which it would seem was manifested from the beginning soon begot an intent and purpose to exclude others which was frequently manifested by acts and dealings wholly inconsistent with the theory that they were made with the single conception of advancing the development of business power by usual methods, but which on the contrary necessarily involved the intent to drive others from the field and to exclude them from their right to trade and thus accomplish the mastery which was the end in view.
The judgment broke up the Standard Oil combination in 1911; the trust of 1882 had already come to an end. It is where the Supreme Court held that the Sherman Act of 1890 carries the common-law rule of reason, applied by a court to the facts before it. The act, the Court held, forbids contracts and combinations that amount to an unreasonable or undue restraint of trade in interstate commerce, and, under § 2, every act bringing about that result. On the record before it the Court found the oil combination unreasonable and affirmed the decree that dissolved it, with directions to modify it in part. Justice Harlan agreed in part and dissented in part. He wrote that the court’s decision, read by the language of its opinion, had upset the long-settled reading of the act and usurped the constitutional functions of the legislative branch of the Government.
More from this source3 more passages
The court on the rule of reason
the criteria to be resorted to in any given case for the purpose of ascertaining whether violations of the section have been committed, is the rule of reason guided by the established law and by the plain duty to enforce the prohibitions of the act and thus the public policy which its restrictions were obviously enacted to subserve.
The means the government said the combination used
contracts with competitors in restraint of trade; unfair methods of competition, such as local price cutting at the points where necessary to suppress competition; espionage of the business of competitors, the operation of bogus independent companies, and payment of rebates on oil, with the like intent; the division of the United States into districts and the limiting of the operations of the various subsidiary corporations as to such districts so that competition in the sale of petroleum products between such corporations had been entirely eliminated and destroyed
the conviction was universal that the country was in real danger from another kind of slavery sought to be fastened on the American people, namely, the slavery that would result from aggregations of capital in the hands of a few individuals and corporations controlling, for their own profit and advantage exclusively, the entire business of the country, including the production and sale of the necessaries of life.
By Louis D. Brandeis. Frederick A. Stokes Company.
A book by the lawyer Louis D. Brandeis, gathered from his articles in Harper’s Weekly, which ran from August 1913 to December 1914, on how a few investment bankers came to run American business. Brandeis argues that four separate trades ended up in the same few hands: selling securities, directing railroads and factories, running life insurance companies, and holding bank deposits. The most potent instrument of that power, he writes, was the interlocking directorate: boards shared between firms that competed or did business with each other. J. P. Morgan & Co. held deposits of $162,491,819.65 on November 1, 1912, he writes, and the $22,000,000,000 credited to the inner group by the Pujo Committee understates what it controls.
United States of America v. Western Electric Company, Incorporated, and American Telephone and Telegraph Company
Civil Action No. S2-0192
Held. The court ordered AT&T to separate its local Bell operating companies’ telephone business from itself within 18 months after the decree took effect, by a spin-off of stock to AT&T’s shareholders or other disposition. After that, the local companies were generally barred from long-distance calls, information services and making telephone equipment, subject to the decree’s stated exceptions. On a phased schedule, each local company had to give every long-distance carrier access equal in type, quality, and price to what AT&T and its affiliates got.
After completion of the reorganization specified in section I, no BOC shall, directly or through any affiliated enterprise: 1. provide interexchange telecommunications services or information Services; manufacture or provide telecommunications products or customer premises equipment (except for provision of customer premises equipment for emergency services); or 3. provide any other product or service, except exchange telecommunications and exchange access service, that is not a natural monopoly service actually regulated by tariff.
The 1982 decree in the United States government’s case against AT&T and Western Electric, which ordered AT&T to transfer its local Bell operating companies out of its ownership. AT&T had to submit a plan of reorganization to the Department of Justice for its approval and then carry it out, completing the separation within 18 months after the decree took effect. On a phased schedule, the local companies then had to give every long-distance carrier and information service provider access to their networks equal in type, quality and price to what AT&T got.
More from this source4 more passages and the figures checked
On why the 1956 decree was thrown out and replaced
the parties having subsequently agreed that modification of such Final Judgment is required by the technological, economic and regulatory changes which have occurred since the entry of such Final Judgment; … ORDERED, ADJUDGED, AND DECREED that the Final Judgment entered on January 24, 1956, is hereby vacated in its entirety and replaced by the following items ‘and provisions:
On handing the local companies to AT&T's own shareholders
The transfer of ownership of the separated portions of the BOCs providing local exchange and exchange access services from AT&T by means of a spin-off of stock of the separated BOCs to the shareholders of AT&T, or by other disposition; provided that nothing in this Modification of Final Judgment shall require or prohibit the consolidation of the ownership of the BCCs into any particular number of entities.
The restrictions imposed upon the separated BOCs by virtue of section II(D) shall be removed upon a showing by the petitioning BC that there is no substantial possibility that it could use its monopoly power to impede competition in the market it seeks to enter.
If a separated BOC provides billing services to AT&T pursuant to Appendix B(C)(2), it shall include upon the portion of the bill devoted to interexchange services the following legend: This portion of your bill is provided as a service to AT&T. There is no connection between this company and AT&T. You may choose another company for your long distance telephone calls while still receiving your local telephone service from this company.
Held. The court upheld in part the finding that Microsoft broke section 2 by maintaining its monopoly in Intel-compatible PC operating systems. It reversed the finding that the company tried to monopolize the browser market, and sent the tying claim back to the district court. It set aside the order that would have split the company in two.
We may infer causation when exclusionary conduct is aimed at producers of nascent competitive technologies as well as when it is aimed at producers of established substitutes. Admittedly, in the former case there is added uncertainty, inasmuch as nascent threats are merely potential substitutes. But the underlying proof problem is the same--neither plaintiffs nor the court can confidently reconstruct a product’s hypothetical technological development in a world absent the defendant’s exclusionary conduct.
The US Court of Appeals for the District of Columbia Circuit, sitting en banc, affirmed in part and reversed in part the ruling that Microsoft broke section 2 of the Sherman Act by holding on to its operating system monopoly. Windows ran on more than 95% of Intel-compatible personal computers. The court found that share protected by an applications barrier to entry: most buyers want the system with the most software, and most developers write for the system with the most users. The judges agreed that Microsoft used its Windows licences to stop computer makers promoting rival browsers. That cut those browsers’ share of users and kept developers focused on Windows. They upheld one such restriction: the ban on a maker replacing the Windows desktop automatically at start-up. They reversed the finding that Microsoft tried to monopolize the browser market, and sent the tying claim back for a fresh look. They also set aside the order to split the company, after finding that the trial judge held secret interviews with reporters and made offensive comments about Microsoft officials in public.
More from this source4 more passages and the figures checked
On why nascent rivals count
As to the first, suffice it to say that it would be inimical to the purpose of the Sherman Act to allow monopolists free reign to squash nascent, albeit unproven, competitors at will--particularly in industries marked by rapid technological advance and frequent paradigm shifts.
To establish a dangerous probability of success, plaintiffs must as a threshold matter show that the browser market can be monopolized, i.e., that a hypothetical monopolist in that market could enjoy market power. This, in turn, requires plaintiffs (1) to define the relevant market and (2) to demonstrate that substantial barriers to entry protect that market. Because plaintiffs have not carried their burden on either prong, we reverse without remand.
Because the applications barrier to entry protects a dominant operating system irrespective of quality, it gives Microsoft power to stave off even superior new rivals. The barrier is thus a characteristic of the operating system market, not of Microsoft’s popularity, or, as asserted by a Microsoft witness, the company’s efficiency.
Microsoft’s primary copyright argument borders upon the frivolous. … That is no more correct than the proposition that use of one’s personal property, such as a baseball bat, cannot give rise to tort liability.
Research paper · The Yale Law Journal, Vol. 126, p. 710
Amazon’s Antitrust Paradox
By Lina M. Khan
Lina M. Khan’s note in the Yale Law Journal argues that American antitrust lost the means to see a firm like Amazon once it took up the Chicago school’s test. That test measures competition by short-run prices and treats market power as harmless until prices rise. She follows that test through the law on predatory pricing and vertical integration, and sets out Amazon’s strategy of sustained losses and expansion across many lines of business. She offers two answers: restore a test built on competitive process and market structure, or regulate dominant platforms as common carriers. It is the American strand of the argument over concentrated business power that this Long View follows.
Due to a change in legal thinking and practice in the 1970s and 1980s, antitrust law now assesses competition largely with an eye to the short-term interests of consumers, not producers or the health of the market as a whole; antitrust doctrine views low consumer prices, alone, to be evidence of sound competition. … It is as if Bezos charted the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them.
In the United States, a plaintiff claiming antitrust injury must now show harm to consumer welfare, usually in the shape of higher prices or restricted output.p. 12
The Supreme Court concluded that predatory pricing schemes were implausible, quoting a consensus among commentators that they are rarely tried and even more rarely successful.p. 19
The Justice Department and the Federal Trade Commission let every vertical merger through during Reagan’s presidency.p. 26
For platform firms, spending on growth instead of reporting profit is rational, and the article says antitrust doctrine has not caught up with that.p. 81
Report·U.S. Department of Justice and the Federal Trade Commission
2023 Merger Guidelines
The US Department of Justice and the Federal Trade Commission issued these guidelines in December 2023 to set out how they choose which mergers to challenge under the Sherman, Clayton and FTC Acts. They are the American half of the question this Long View follows: how concentrated a market may get before the law steps in. They answer it with a hard threshold. A deal that leaves a market above 1,800 on the Herfindahl-Hirschman Index, and lifts it by more than 100 points, is presumed unlawful unless the parties rebut it. The same document lets the agencies weigh a firm’s whole run of takeovers as one strategy, and says the economies a merger promises cannot excuse it.
Tacit coordination can lessen competition even when it does not rise to the level of an agreement and would not itself violate the law. For example, in a concentrated market a firm may forego or soften an aggressive competitive action because it anticipates rivals responding in kind. This harmful behavior is more common the more concentrated markets become, as it is easier to predict the reactions of rivals when there are fewer of them.
More from this sourceWhat it found and the figures checked
What it found
A market counts as highly concentrated once its Herfindahl-Hirschman Index passes 1,800, and a merger that adds more than 100 points to that index is a significant increase.p. 6
A merger that leaves one firm holding more than thirty per cent of a market is presumed unlawful when it also adds more than 100 points to the index.p. 7
The guidelines repeat the Supreme Court's holding that the cost savings a merger claims cannot be used to defend a merger that breaks the law.p. 33
Where a company grows by buying rivals one after another, the agencies may weigh the whole series together instead of judging each deal on its own.p. 24
Harm to the suppliers, workers or creators a merged firm buys from is not cancelled out by any benefit on the side where it sells, so a deal can be unlawful in a buyer market alone.p. 28
How Japan broke up its zaibatsu after the war, and how Korea tried to rein in its chaebol.
4 entries · 1946–2020
18902026
The Top Five chaebol (Hyundai, Samsung, Daewoo, LG, and SK) which have the capacity to absorb losses arising during the course of restructuring are expected to bear the associated costs which restructuring entails. Small and Medium Enterprises (SMEs) which are much too weak financially to take on such a burden will be supported by the creditor financial institutions with which they are affiliated.
Transfer of Zaibatsu Family Properties to Holding Company Liquidation Commission
SCAPIN-1363
The Allied occupation’s order directing the Imperial Japanese Government to hand the property of Japan’s designated families and family members to the Holding Company Liquidation Commission, which was to receive, hold, manage and eventually liquidate it and compensate them. It gave the government five days to widen the commission’s jurisdiction, and moved to the commission the work the Ministry of Finance had been doing in supervising those families, along with its files and records. A memo for record in the same file says it was proposed to liquidate their wealth by converting their assets into non-negotiable government bonds.
Report·Foreign Relations of the United States, 1947, The Far East, Volume VI
The Political Adviser in Japan (Atcheson) to the Secretary of State
By Atcheson
A communication from the United States Political Adviser in Japan to the Secretary of State, enclosing a memorandum to the Japanese Government, Scapin 1741, on the dissolution of trading companies, issued by his headquarters on 3 July 1947. The directive gave specific instructions for dissolving the Mitsubishi and Mitsui Trading Companies through the Japanese Holding Company Liquidation Commission. The chief of the headquarters’ Anti-trust and Cartels Division told an officer of the mission what was intended for the restricted companies, the so-called Zaibatsu. Their individual components would be reorganised rather than dissolved. The exceptions were the two large trading companies and a very few others, which he said were not essential to the Japanese economy and produced no goods. He felt that letting firms such as Mitsubishi and Mitsui enter foreign trade, with their foreign contacts and previous informal cartels, might direct that trade to former subsidiary companies in Japan. That would leave new businesses and small manufacturers at a disadvantage.
In conversation with an officer of this Mission, the Chief of the Anti-trust and Cartels Division, Economic and Scientific Section of this Headquarters, has stated that, with the exception of the two large trading companies mentioned above and a very few others which are not essential to the Japanese economy and which produce no goods, it is intended that individual components of restricted companies (so-called “Zaibatsu” concerns) will be reorganized rather than dissolved.
Corporate Restructuring : Performance and Future Plan
Korea’s Financial Services Commission set out in December 1998 how the country’s chaebol were to be restructured. Major creditor financial institutions would take the leading role, signing capital structure improvement plans with the largest sixty-four chaebol. The biggest five, Hyundai, Samsung, Daewoo, LG and SK, were expected to bear the costs their own reorganisation brought, while nonviable firms would be forced to exit promptly and viable ones supported through workout programmes.
Regulatory Measures to Dismantle Pyramidal Business Groups: Evidence from the United States, Japan, Korea and Israel
By Assaf Hamdani, Konstantin Kosenko and Yishay Yafeh
Assaf Hamdani, Konstantin Kosenko and Yishay Yafeh compare how the United States, Japan, Korea and Israel each went after the large corporate entities they call pyramidal business groups, Korea’s chaebol among them. Korea tried several kinds of rules, then settled on corporate governance reform, and its groups still dominate the economy. Where governments wrote rules aimed at the pyramids and applied them consistently over years, with politics on their side, the groups went.
Korea, after experimenting with variety of regulatory measures, chose to rely primarily on corporate governance-focused reforms to curb the influence of the chaebol, but with limited effects; groups continue to dominate the Korean economy. Our findings point to the importance of specifically-designed regulatory tools, applied consistently over time, against the backdrop of a pro-reform political climate.
More from this sourceWhat it found
What it found
New rules, applied without let-up in the United States in the 1930s and in Japan under American occupation, ended pyramidal business groups in both countries, helped by political conditions unusually favourable to economic reform.
Israel reformed without a severe crisis behind it, using purpose-built tools across a decade, and both the number and the size of its business groups fell markedly.
Korea tried a range of measures and ended up leaning mainly on corporate governance reform, which did little to loosen the chaebol's hold.
The authors conclude that what works is regulation written specifically for these groups, kept up over time, in a political setting that favours reform.
Cite as: Life in India, “Business groups,” Long View 4, revision 1.
The log
Everything added to or changed in this Long View, newest first. Nothing changes without a line here.
Opened with 40 entries and the first “Where things stand”. Revision 1
How this was made
Language models searched for and read the 41 sources on 30 September 2026, drafted the 40 entries
and “Where things stand”, and checked one another’s work. Code checked every quotation, figure and link against its
source. The editor chose every source and read everything before it was published.
The models, each step, and why
Models: Gemini 3.8 Flash, DeepSeek Flash, Xiaomi MiMo V2.6 Flash, Xiaomi MiMo V2.6 Flash Free and Gpt 6 Luna.
Each step, and the models that did it
Searched the web for sources
Gemini 3.8 Flash
Sorted what the search found
Gemini 3.8 Flash
Drafted each entry from its source
DeepSeek Flash, Gemini 3.8 Flash
Revised the entries the checks faulted
DeepSeek Flash, Xiaomi MiMo V2.6 Flash
Judged how far each source bears on the subject
DeepSeek Flash
Checked each entry claim by claim against its source
Gemini 3.8 Flash, Xiaomi MiMo V2.6 Flash Free, Gpt 6 Luna
Wrote “Where things stand” from the entries
Gpt 6 Luna
Checked “Where things stand” against the entries
Xiaomi MiMo V2.6 Flash Free, DeepSeek Flash, Gpt 6 Luna
Chose the links in “Where things stand”
Xiaomi MiMo V2.6 Flash
Every call to a model is logged.
What code checked
Every quotation was found word for word in the source it came from, and every figure in a note on the page it
cites. Every link in “Where things stand” goes to a source that sentence rests on, and every chart value was
found on its page. A second model checked each entry, never the model that wrote it.
What the editor did
The editor chose every source, read the 40 entries and “Where things stand”, and decided what
was published. How much of each source may be quoted is set by copyright rules in code, not by a model.
Why models
I make Life in India alone, alongside a full-time job. Reading every source behind a Long View, following each one as it changes and writing it up is a newsroom’s work, and large language models make it possible for one person to do it. They read and draft, code checks them against the sources, and I decide what goes in. The AI disclosure says why, and how. Read the AI disclosure
