Whatsapp
Radio Chip Technology and Competition Law in India: Regulatory Framework, Legal Provisions and Judicial Interpretation
Introduction
Radio chip technology, encompassing Radio Frequency Identification chips and semiconductor components used in wireless communications, has emerged as a critical area of intersection between intellectual property rights and competition law in India. The regulation of radio chip technology involves complex considerations of market dominance, patent licensing, and anti-competitive practices. This article examines the regulatory framework governing radio chip technology under the Competition Act 2002, the interplay with the Patents Act 1970, and the evolving jurisprudence that shapes how competition authorities address technology-related markets in India.
The semiconductor industry, which includes radio chip manufacturing and licensing, represents a sector where innovation, standardization, and competition concerns converge. Radio chips, particularly those incorporating standard essential patents for telecommunications and wireless technologies, have been at the center of significant legal disputes regarding fair licensing practices, royalty determination, and market dominance. Understanding how competition law applies to this sector requires examining the statutory framework, regulatory mechanisms, and judicial pronouncements that have shaped the current landscape.
The Competition Act 2002: Framework and Objectives
The Competition Act 2002 was enacted by Parliament to replace the Monopolies and Restrictive Trade Practices Act 1969, marking a fundamental shift in India’s approach to competition regulation [1]. The Act received Presidential assent in January 2003 and was subsequently amended by the Competition Amendment Act 2007 and the Competition Amendment Act 2009. The primary objective of the Act, as stated in its preamble, is to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets in India.
The Act established the Competition Commission of India as the principal regulatory body responsible for enforcing competition law. The Commission is a body corporate with perpetual succession and common seal, having the power to acquire, hold and dispose of property, both movable and immovable, and to contract and sue or be sued in its own name. The Commission consists of a Chairperson and not less than two and not more than six other Members appointed by the Central Government. Under the Act, the Commission has the duty to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in markets in India.
The Competition Act addresses three primary areas of concern. First, it prohibits anti-competitive agreements under Section 3, which includes agreements that cause or are likely to cause an appreciable adverse effect on competition in India. Second, it prohibits abuse of dominant position under Section 4, where enterprises holding positions of strength in relevant markets engage in conduct that adversely affects competition. Third, it regulates combinations under Sections 5 and 6, requiring notification of mergers, acquisitions and amalgamations that exceed specified thresholds and may cause adverse effects on competition.
The Act defines dominant position as a position of strength enjoyed by an enterprise in the relevant market in India which enables it to operate independently of competitive forces prevailing in the relevant market or affect its competitors or consumers in its favor. Neither the Act nor its implementing regulations provide specific market share levels above which market dominance can be presumed. Instead, Section 19 of the Act lays down factors such as market share of the enterprise, size and resources of the enterprise, size and importance of competitors, economic power of the enterprise, vertical integration, dependence of consumers, monopoly or dominant position, entry barriers, countervailing buying power, market structure and size of market, social obligations and social costs, and relative advantage by way of contribution to economic development, which the Commission shall consider while determining whether an enterprise enjoys a dominant position.
Prohibition of Anti-Competitive Agreements and Abuse of Dominant Position
Section 3 of the Competition Act 2002 prohibits enterprises from entering into agreements in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services which cause or are likely to cause an appreciable adverse effect on competition in India. Such agreements are consequently void. The provision distinguishes between horizontal agreements, which are agreements between enterprises engaged in similar trade of goods or provision of services, and vertical agreements, which are agreements between enterprises at different stages or levels of the production chain in different markets.
The Act presumes that certain horizontal agreements have an appreciable adverse effect on competition. These include agreements determining purchase or sale prices, limiting or controlling production, supply, markets, technical development, investment or provision of services, sharing the market by way of allocation of geographical area of market or type of goods or services or number of customers, and directly or indirectly resulting in bid rigging or collusive bidding. Such agreements are commonly referred to as cartels and are subject to stringent enforcement action by the Competition Commission.
Section 4 of the Competition Act prohibits abuse of dominant position. An enterprise or group shall not abuse its dominant position. The provision specifically identifies conduct that may constitute abuse, including directly or indirectly imposing unfair or discriminatory conditions in purchase or sale of goods or services, directly or indirectly imposing unfair or discriminatory prices in purchase or sale of goods or services, limiting or restricting production of goods or provision of services or market therefor or technical or scientific development relating to goods or services to the prejudice of consumers, indulging in practice or practices resulting in denial of market access, making conclusion of contracts subject to acceptance by other parties of supplementary obligations which have no connection with the subject of such contracts, and using dominant position in one relevant market to enter into or protect other relevant market.
The determination of abuse requires first establishing the existence of a dominant position in the relevant market, and second, demonstrating that the enterprise has engaged in conduct that constitutes abuse of that position. The Commission has discretion in applying these provisions, considering the overall competitive dynamics and effects on consumers and markets. The Act explicitly provides under Section 3(5) that nothing contained in Section 3 shall restrict the right of any person to restrain any infringement of, or to impose reasonable conditions as may be necessary for protecting any of his rights which have been or may be conferred upon him under the Copyright Act 1957, the Patents Act 1970, the Trade Marks Act 1999, the Geographical Indications of Goods (Registration and Protection) Act 1999, the Designs Act 2000, the Semi-conductor Integrated Circuits Layout-Design Act 2000. This provision recognizes the intersection between intellectual property rights and competition law.
Radio Chip Technology and Standard Essential Patents
Radio chip technology often incorporates standard essential patents, which are patents that are essential to implement technical standards adopted by industry bodies. In the telecommunications and wireless communications sectors, standards such as GSM, CDMA, LTE and other cellular standards require implementation of numerous patented technologies. Manufacturers of mobile devices, including radio chips that enable wireless connectivity, must obtain licenses to these standard essential patents to produce standards-compliant products.
The licensing of standard essential patents has been a contentious area in radio chip technology competition law in India, as well as globally. Patent holders who contribute their technologies to technical standards typically commit to licensing their patents on fair, reasonable and non-discriminatory terms, commonly known as FRAND commitments. These commitments are made to standard-setting organizations to ensure that the adoption of a particular technology as a standard does not confer excessive market power on patent holders or result in hold-up of implementers who have invested in the standard.
In India, the Competition Commission initially took cognizance of several cases involving allegations that holders of standard essential patents were abusing their dominant positions by imposing unfair licensing terms, charging excessive royalties, or imposing discriminatory conditions on different licensees. The cases primarily concerned patents essential to telecommunications standards, including those implemented in radio chips and baseband processors used in mobile devices.
The Competition Commission in cases involving Telefonaktiebolaget LM Ericsson raised concerns about royalty rates calculated as a percentage of the net selling price of devices rather than based on the value of the component implementing the patented technology. The Commission’s preliminary assessment suggested that such percentage-based pricing could constitute abuse of dominant position, particularly where the patented technology represented only a small component of the overall device value. The Commission also expressed concerns about potential patent hold-up and royalty stacking, where multiple patent holders each demanding royalties could collectively impose excessive costs on implementers.
The Patents Act 1970 and Competition Concerns
The Patents Act 1970 contains provisions specifically addressing competition concerns related to patent rights. Chapter XVI of the Patents Act deals with working of patents, compulsory licenses and revocation. Section 83 sets out general principles applicable to the working of patented inventions and specifies that patents are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article. The provision further states that patents are granted to make the invention available at reasonably affordable prices to the public, that patents are not granted to enable the patentee to enjoy a monopoly or to adopt practices which unreasonably restrain trade or adversely affect the international transfer of technology, and that patents are granted in a manner so as to prevent abuse of patent rights by the patentee.
Section 84 of the Patents Act provides for compulsory licensing where the reasonable requirements of the public with respect to the patented invention have not been satisfied, or the patented invention is not available to the public at a reasonably affordable price, or the patented invention is not worked in the territory of India. Section 84(6)(iv) as amended specifies that in considering applications for compulsory licenses, the Controller shall take into account whether the applicant has made efforts to obtain a license from the patentee on reasonable terms and conditions and such efforts have not been successful. The proviso states that this requirement shall not be applicable in case of national emergency or other circumstances of extreme urgency or in case of public non-commercial use or on establishment of a ground of anti-competitive practices adopted by the patentee.
Section 84(7) provides that for the purposes of Chapter XVI, the reasonable requirements of the public shall be deemed not to have been satisfied if by reason of the refusal of the patentee to grant a license or licenses on reasonable terms the existing trade or industry or the development thereof or the establishment of any new trade or industry in India or the trade or industry of any other person or persons trading or manufacturing in India is prejudiced, and it is in the public interest that a license or licenses should be granted. This provision specifically addresses anti-competitive conduct by stating that reasonable requirements shall be deemed unsatisfied if by reason of conditions imposed by the patentee upon the grant of licenses or upon the purchase, hire or use of the patented article or process, the trade or industry of any person or persons trading or manufacturing in India in the article or process is prejudiced.
Section 90 of the Patents Act empowers the Controller to make orders for licensing of related patents in public interest. Section 140 provides for revocation of patents by the Appellate Board on various grounds, including that the invention has not been worked in the territory of India on a commercial scale or that the patentee has failed to satisfy the reasonable requirements of the public. The Act thus provides a framework within which competition-related concerns arising from patent rights can be addressed by the Controller of Patents or the Appellate Board.
Jurisdictional Conflict: Delhi High Court Judgment
The question of whether the Competition Commission has jurisdiction to investigate alleged anti-competitive conduct by patentees exercising their rights under the Patents Act came before the Delhi High Court in a series of consolidated cases. The Division Bench of the Delhi High Court in Telefonaktiebolaget LM Ericsson PUBL v Competition Commission of India and in related matters involving Monsanto Holdings delivered a significant judgment addressing this jurisdictional issue [2].
The Delhi High Court held that when a patent is issued in India and the patentee asserts rights under the Patents Act, the Competition Commission does not have jurisdiction to inquire into the actions of such patentee in exercise of its powers under the Competition Act. The Court observed that both the Competition Act and the Patents Act are specific legislations with regard to their respective fields. However, based on analysis of the provisions and remedies provided, the Court determined that the Patents Act provides powers to the Controller of Patents to deal with anti-competitive concerns and due to its character as lex specialis, its own criteria should prevail over considerations under the Competition Act.
The Court applied the principles of statutory interpretation, particularly the maxims generalia specialibus non derogant, meaning the general does not derogate from the specific, and lex posterior derogat priori, meaning later laws abrogate earlier laws. The Court noted that Chapter XVI of the Patents Act was introduced by amendment after the enactment of the Competition Act, and this Chapter comprehensively addresses issues related to unreasonable conditions in patent licensing agreements, abuse of patentee status, inquiries and relief provisions. The legislative intent was therefore apparent that matters relating to patents, unreasonable conditions in licensing agreements, abuse of status as patentee, inquiry in respect thereof and relief to be granted therefore are all to be governed by the Patents Act.
The Court distinguished the Competition Act as general legislation pertaining to anti-competitive agreements and abuse of dominant position generally, whereas the Patents Act specifically addresses these matters within the context of patents. The inclusion of Section 84(6)(iv) in the Patents Act by way of amendment after the Competition Act was passed, specifically referencing anti-competitive practices adopted by patentees, was particularly instructive of the legislative intent. The Court emphasized that in reconciling the two statutes, the subject matter in focus is not merely anti-competitive agreements and abuse of dominant position generally, but specifically the exercise of rights granted under the Patents Act.
Supreme Court Position and Current Status
The Competition Commission filed special leave petitions before the Supreme Court of India challenging the Delhi High Court’s decision [3]. The Supreme Court in September 2025 delivered its judgment confirming that the Competition Commission does not have jurisdiction to review conduct covered by the Patents Act. The Supreme Court ruled in favor of Monsanto Holdings and Telefonaktiebolaget LM Ericsson, holding that the Patents Act being a special statute prevails over the Competition Act which is a general statute in matters concerning the exercise of patent rights.
The Supreme Court emphasized that the original informants in the matters before the Competition Commission had already reached settlements and therefore there was no justification to interfere with the Delhi High Court’s order. The Supreme Court however clarified that any questions of law regarding the interplay between the Patents Act and the Competition Act remain open and may be addressed in future cases where actual disputes exist. The Court did not foreclose the possibility of revisiting these questions in appropriate circumstances.
This judgment reinforces the primacy of the Patents Act over the Competition Act in matters concerning the exercise of patent rights, particularly where remedies for anti-competitive conduct are already provided under the Patents Act. The Supreme Court’s decision upholds the principle that special legislation prevails over general legislation in case of conflict, and that sector-specific regulators have exclusive jurisdiction over issues arising from the exercise of rights conferred by such special statutes. The decision has significant implications for how competition law concerns related to patents, including the licensing of patents embodied in radio chips and other semiconductor technologies, will be addressed going forward.
Regulatory Framework for Radio Frequency Technologies
Radio chip technology utilizing radio frequency transmission is also subject to regulatory oversight concerning spectrum allocation and technical standards. In the United States, the Federal Communications Commission regulates radio frequency devices under FCC Part 15 [4]. Devices operating at frequencies of at least 9 kHz that generate radio frequency energy are subject to technical standards to minimize interference. Radio frequency identification systems and radio chips used in wireless communications must comply with applicable frequency allocation and technical specifications.
While India has not enacted specific legislation mirroring the CHIPS and Science Act adopted in the United States to promote domestic semiconductor manufacturing, there has been increasing recognition of the strategic importance of the semiconductor industry. The government has introduced initiatives to strengthen domestic semiconductor manufacturing capabilities and reduce dependence on imports. These policy initiatives complement the competition law framework by addressing supply chain resilience and technological self-sufficiency objectives.
Implications for Radio Chip Markets
The judicial clarification that the Patents Act takes precedence over the Competition Act in matters relating to patent rights has important implications for Radio Chip technology markets under Competition Law. Manufacturers of radio chips incorporating standard essential patents and other patented technologies can exercise their patent rights, including determining licensing terms, without direct intervention by the Competition Commission. However, such rights remain subject to the provisions of the Patents Act, particularly Chapter XVI, which addresses the working of patents, reasonable requirements of the public, and anti-competitive practices by patentees.
Licensees who believe that patent holders are imposing unreasonable licensing terms or engaging in anti-competitive practices can seek remedies under the Patents Act by approaching the Controller of Patents. The Controller has authority to grant compulsory licenses where anti-competitive practices have been established, to examine whether reasonable requirements of the public are being satisfied, and to ensure that patent rights are not abused to unreasonably restrain trade. This framework provides a mechanism to balance the legitimate interests of patent holders in obtaining returns on their innovations with the public interest in access to technology at reasonable terms.
The semiconductor industry, including radio chip manufacturing, is characterized by rapid technological advancement, high capital intensity, and complex value chains involving design, fabrication, assembly and testing. Competition in these markets depends on access to manufacturing capacity, intellectual property, and technological capabilities. The regulatory framework must therefore balance incentives for innovation and investment with ensuring competitive markets and preventing abuse of market power.
Digital Competition and Future Regulatory Developments
The Committee on Digital Competition Law constituted by the Ministry of Corporate Affairs released its report in March 2024 recommending enactment of a Digital Competition Act to enable ex-ante regulation of large digital enterprises [5]. The Committee noted that the current ex-post framework under the Competition Act 2002 does not facilitate timely redressal of anti-competitive conduct by digital enterprises. The Committee observed that present framework may not be effective to address irreversible tipping of markets in favor of large digital enterprises.
The proposed Digital Competition Act would empower the Competition Commission to designate certain large digital enterprises as Systemically Significant Digital Enterprises and Associate Digital Enterprises and to impose specific obligations on such entities. These obligations would include prohibitions on favoring their own products and services, using non-public data of business users to compete with those users, restricting users from using third-party applications, and requiring or incentivizing users to use other products or services offered by the designated enterprise. The draft legislation would enable ex-ante regulation, meaning intervention before harm occurs, rather than ex-post enforcement after anti-competitive conduct has taken place.
While the proposed Digital Competition Act primarily addresses online platforms and digital services, its principles may also have relevance under Competition Law for Radio Chip markets, to the extent these markets exhibit network effects, data advantages, or other characteristics typically associated with digital markets. The evolution of radio chip technology increasingly involves integration with software, cloud connectivity, and data processing capabilities, potentially bringing such technologies within the expanding scope of digital market regulation. The growing intersection between hardware technologies such as radio chips and software-driven platforms will therefore require careful consideration in the application of competition principles.
Conclusion
Radio chip technology and semiconductor markets in India are governed by a complex interplay of competition law, patent law, and sectoral regulations. The Competition Act 2002 provides the general framework for preventing anti-competitive agreements, prohibiting abuse of dominant position, and regulating combinations. The Patents Act 1970, particularly Chapter XVI, provides specific mechanisms for addressing competition concerns arising from the exercise of patent rights. The judicial pronouncements from the Delhi High Court and Supreme Court have clarified that the Patents Act, being a special statute, takes precedence over the Competition Act in matters relating to the exercise of patent rights.
This framework requires entities operating in radio chip markets to navigate carefully between the legitimate exercise of intellectual property rights and conduct that may constitute abuse under the Patents Act. In the context of radio chip technology and competition law, patent holders must ensure that their licensing practices satisfy statutory requirements, including working the patent in India, meeting the reasonable requirements of the public, and avoiding practices that unreasonably restrain trade. Licensees facing unreasonable licensing terms have recourse to the Controller of Patents for the grant of compulsory licenses or other appropriate relief.
Looking forward, the evolution of competition law enforcement in India will likely involve continued refinement of how traditional competition principles apply to technology markets characterized by rapid innovation, standardization, and network effects. The proposed Digital Competition Act represents a significant shift toward ex-ante regulation for certain digital markets. The semiconductor industry, including radio chip technologies, will need to adapt to this evolving regulatory landscape while maintaining incentives for innovation and investment that drive technological progress.
The regulatory framework must ultimately balance multiple objectives including promoting innovation, ensuring competitive markets, protecting consumer interests, and advancing strategic national objectives related to technology self-sufficiency. Achieving this balance requires coordination between competition authorities, patent authorities, and sectoral regulators, along with continued development of jurisprudence that addresses the unique characteristics of technology markets.
References
[1] Competition Commission of India. (2003). The Competition Act, 2002. Retrieved from https://www.cci.gov.in/images/legalframeworkact/en/the-competition-act-20021652103427.pdf
[2] SCConline. (2023). Delhi High Court: Patent Act prevail over Competition Act. Retrieved from https://www.scconline.com/blog/post/2023/07/15/delhi-high-court-patent-act-prevail-competition-act-legal-updates-patent-act-special-statute/
[3] Shardul Amarchand Mangaldas. (2025). Indian competition law roundup: September 2025. Retrieved from https://www.amsshardul.com/insight/indian-competition-law-roundup-september-2025/
[4] Compliance Gate. (2023). RFID Product Regulations in the United States: An Overview. Retrieved from https://www.compliancegate.com/rfid-products-regulations-united-states/
[5] PRS India. (2024). Digital Competition Law. Retrieved from https://prsindia.org/policy/report-summaries/digital-competition-law
[6] Oxford Academic. (2017). Patents and competition law in India: CCI’s reductionist approach in evaluating competitive harm. Journal of Antitrust Enforcement, 5(2), 299. Retrieved from https://academic.oup.com/antitrust/article/5/2/299/3788021
[7] India Code. (2003). The Competition Act, 2002. Retrieved from https://www.indiacode.nic.in/handle/123456789/2010?view_type=browse
[8] Norton Rose Fulbright. (n.d.). Competition law fact sheet: India. Retrieved from https://www.nortonrosefulbright.com/en/knowledge/publications/ba1b31d2/competition-law-fact-sheet-india
[9] Kluwer Competition Law Blog. (n.d.). The Tussle over Jurisdiction: The Controller General of Patents v. Competition Commission of India. Retrieved from https://legalblogs.wolterskluwer.com/competition-blog/the-tussle-over-jurisdiction-the-controller-general-of-patents-v-competition-commission-of-india/
