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    Competition Act 2002, India

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    suchitracool1
    The Competition Act 2002 was enacted to promote competition in India by prohibiting anti-competitive practices. It established the Competition Commission of India to enforce the act. The act prevents anti-competitive agreements between companies, abuse of dominant market positions, and regulates mergers and acquisitions that may impact competition. Its objectives are to encourage competition, prevent abuse of dominance, protect consumers, and ensure fair participation in the economy.

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    Competition Act 2002, India

    Uploaded by

    suchitracool1
    258 views41 pages
    The Competition Act 2002 was enacted to promote competition in India by prohibiting anti-competitive practices. It established the Competition Commission of India to enforce the act. The act prevents anti-competitive agreements between companies, abuse of dominant market positions, and regulates mergers and acquisitions that may impact competition. Its objectives are to encourage competition, prevent abuse of dominance, protect consumers, and ensure fair participation in the economy.

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    competion act replacing MRTP act

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    The Competition Act 2002 was enacted to promote competition in India by prohibiting anti-competitive practices. It established the Competition Commission of India to enforce the act. The act prevents anti-competitive agreements between companies, abuse of dominant market positions, and regulates mergers and acquisitions that may impact competition. Its objectives are to encourage competition, prevent abuse of dominance, protect consumers, and ensure fair participation in the economy.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    258 views41 pages

    Competition Act 2002, India

    Uploaded by

    suchitracool1
    The Competition Act 2002 was enacted to promote competition in India by prohibiting anti-competitive practices. It established the Competition Commission of India to enforce the act. The act prevents anti-competitive agreements between companies, abuse of dominant market positions, and regulates mergers and acquisitions that may impact competition. Its objectives are to encourage competition, prevent abuse of dominance, protect consumers, and ensure fair participation in the economy.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 41

    Competition Act 2002

    As a consequence of LPG Indian


    economy opened up and the
    controls were removed.
    The older law MRTP Act, 1969
    has become obsolete. It curbed
    monopolies, restrictive and
    unfair trade practices, whereas
    The Competition Act 2002
    wanted to promote competition.

    Competition laws are also known


    as Anti-Trust laws. The laws make
    certain practices to be illegal
    which hurt both business and
    consumers.
    Other countries use the term
    Competition Law

    This Act extends to the whole of


    India except J & K. It comprises
    of 66 sections.

    Objectives of the Act

    Encourage competition
    Prevent abuse of dominant
    position
    Protect the consumer
    Ensure a level playing field to
    participate in the Indian
    economy

    The provisions under which the Act is


    related to comes under four categories-

    Anti-competitive agreements
    (Section 3)
    Abuse of Dominance
    (section 4)
    Regulation of combinations
    (section 5 & 6)
    Competition advocacy (section 49)

    Competition Commission of
    India
    In accordance with the provisions
    of the Competition Amendment
    Act, the Commission was duly
    constituted in March 2009.
    The Commission has a
    Chairperson and six members.

    1. Anti-competitive agreements
    (section-3)
    Firms enter into which may restrict
    competition. Agreements may be
    written or oral understanding which
    may or may not be enforceable by
    legal proceedings.
    There are two types of
    agreements - horizontal and
    vertical agreements between firms.

    Horizontal agreement is among


    competitors and vertical
    agreements are those relating to
    an actual or potential
    relationship of purchasing or
    selling to each other
    Manufacturer 1

    A harmful type of horizontal


    agreement is a cartel.
    Vertical agreements are harmful
    if they are between firms in a
    position of dominance

    Agreements between two or


    more enterprises that are at the
    same stage of production chain
    and in the same market are
    horizontal agreements.
    For the law to be applicable the
    products produced by the two
    enterprises must be substitutes

    The Act presumes four type of


    agreements(horizontal) between
    enterprises, involved in similar
    manufacturing or trading of
    goods or provision of services
    have an adverse affect on
    competition -

    Agreement regarding prices fixing


    purchase or sale price
    Agreements regarding quantities
    limiting or controlling production,
    supply, markets, technical
    development, investment or provision
    of services.
    Agreements regarding bids (collusive
    bidding or rig bidding) tenders
    submitted as a joint activity or
    agreement

    Agreements regarding market


    sharing agreements for sharing
    of market or sources of
    production or type of goods or
    services by way of geographical
    area of market or number of
    customers in the market

    Such horizontal agreements,


    which include membership of
    cartels, lead to unreasonable
    restrictions of competition

    Vertical agreement
    Vertical agreement do not come
    under so much of coverage of
    law as the horizontal
    agreements.
    Wherever vertical agreement has
    the character of distorting or
    preventing competition then it is
    not spared from law.

    Vertical agreement

    Any agreement amongst


    enterprises or persons at
    different stages or levels of the
    production chain in different
    markets in respect of production
    , supply, distribution, storage,
    sale or price of, or trade in goods
    or provision of services, including
    -

    Tie-in agreement
    Exclusive supply agreement
    Exclusive distribution agreement
    Refusal to deal
    Resale price maintenance
    shall be anti-competitive if such
    agreement causes or is likely to
    cause an appreciable adverse
    effect on competition in India.

    The Act lists the following factors to


    determine whether
    an agreement or a practice
    has an
    adverse effect on competition Creation of barriers to new entrants
    in the market
    Driving existing competitors out of
    the market(predatory pricing is one
    such example- pricing below the cost
    to eliminate competitors)

    Preventing accrual of benefits to


    consumers
    Prevents improvements in
    production or distribution of
    goods or provision of services
    Prevents promotion of technical,
    scientific, and economic
    development by its production of
    goods or services

    2. Provisions on abuse of dominance

    As per Section 4 of Indian


    Competition Act, enterprises or
    groups are
    prohibited from abusing their
    dominant position.

    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 the
    competitive forces prevailing in the
    relevant market
    Affect its competitors or consumers
    or the relevant market in its favour.
    Dominance per se is not bad.
    However, its abuse has been
    considered bad.

    Act provides that there shall be


    an abuse of dominant position if
    an enterprise or group ;
    i) Directly or indirectly , imposes
    unfair or discriminatory
    Condition in purchase or sale of
    goods or services; or
    Price in purchase or sale
    (including predatory price) of
    goods or services

    ii) limits or restricts ;


    Production of goods or provision
    of services or market; or
    Technical or scientific
    development relating to goods or
    services to the prejudice of
    customers; or

    iii) indulges in practice or


    practices resulting in denial of
    market access in any manner; or
    iv) Makes conclusion of contracts
    subject to acceptance by other
    parties of supplementary
    obligations which, by their nature
    or according to commercial
    usage, have no connection with
    the subject of such contracts; or

    v) Uses its dominant position in


    one relevant market to enter
    into, or protect, other relevant
    market.

    3. Regulation of
    Combinations(section 5 & 6)
    Section 5 of the Act defines
    Combination
    Section 6 of the Act is concerned
    with regulation of Combinations

    Section 5
    Combinations include
    mergers,
    amalgamations and
    acquisition of control, shares,
    voting rights or assets.

    Combinations are classified into


    horizontal, vertical and
    conglomerate combinations. If a
    proposed combination causes or
    is likely to cause appreciable
    adverse effect on competition, it
    cannot be permitted to take
    effect.

    Horizontal combinations are


    those that are between rivals and
    are most likely to cause
    appreciable adverse effect on
    competition.
    Vertical combinations are those
    that are between enterprises that
    are at different stages of the
    production chain and are less
    likely to cause appreciable
    adverse effect on competition.

    Conglomerate combinations are


    those that are between
    enterprises not in the same line
    of business or in the same
    relevant market and are least
    likely to cause appreciable
    adverse effect on competition.

    The concern mostly arises in the


    case of horizontal mergers
    between competitors operating
    in the same market, i.e. dealing
    with same goods in the same
    area

    However all Amalgamations and


    Mergers are not covered in the
    definition of Section 5 under the
    Competition Act, 2002, only
    those Acquisitions and Mergers
    which cross the Specified Assets
    and Turnover Criteria are covered
    under Competition Act, 2002.

    The law prescribes threshold


    limits, in terms of value of assets
    or turnover, which are indeed
    very high in comparison to limits
    provided in the laws of other
    countries.

    The scrutiny of a combination


    under the Act is usually expected
    to take place beforeit comes into
    effect with an idea of preventing
    a possible anti-competitive
    behaviour which may adversely
    affect the consumers.
    Combinations likely to have an
    anti-competitive effect can be
    permitted after such effects are
    removed by modifications.

    The Combination Regulations


    were amended twice on 23rd
    February 2012 and 4th April
    2013, with a view to relax filing
    requirements in respect of
    transactions not likely to raise
    competition concerns, provide
    certainty, reduce compliance
    requirements and make filings
    simpler.

    4. ADVOCACY FUNCTIONS
    The major tasks for the Commission
    under advocacy functions were to:
    Spread awareness about Competition
    Act and the CCI among various
    stakeholders.
    Reach out to all the stakeholders
    including the consumers, the Government
    departments, industry organizations etc.
    through various Seminars, Workshops and
    Symposiums to make them aware of the
    need and beneficial role of competition.

    Sensitize the stake-holders about

    nuances of competition law, to


    facilitate competition audit of their
    respective laws on different
    subjects.
    Take confidence building measures
    among business enterprises and
    other stakeholders associated with
    competition.
    Take up the issues of National
    Competition Policy

    Benefits of Competition
    The benefits of competition
    enhances allocative, productive
    and dynamic efficiency, and
    thereby benefit the consumers,
    businesses and the government.

    Consumers

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