An economic rivalry amongst enterprises to control greater market power.
Offers wider choice to consumers at lower prices.
Leads to optimal allocation of resources.
Where two enterprises adopt fair means such as production of fair goods/services, invstmt in R&D etc. Competition is fair Where an enterprise adopts Restrictive Trade Practices (RTPs) such as predatory pricing, exclusive dealing, resale-price maintenance and forming a cartel, it has appreciable adverse effect. Competition is unfair
Predatory pricing is seen as an aspect of abuse of dominance.
“ Predatory Pricing” means the sale of goods or provision of services, at a price which is below the cost,, with a view to reduce competition or eliminate the competitors.
This narrow definition may hamper all introductory pricing initiatives.
The distinction between predatory behavior and competitive pricing is very thin and not easily ascertainable.
The yardstick for determination of cost is unclear.
Average variable cost is frequently used as an indicator , which is not conclusive. Whether the cost audit report under Section 209 of the Co’s Act or the industry average or the break even cost of an enterprise or economies of scale is to be taken as the yardstick in determination of ‘cost’ is not clear in the regulations.
Group synergy and operational efficiency should not get penalized.
8. Filing of scheme to stock exchanges 21 st Oct 2008
9. Approval of stock exchanges 20 th Nov 2008
10.Filing Petition to HC 25 th Nov 2008
11.Shareholders/creditors meeting 25 th Dec 2008
12.Filing of petition to courts for scheme sanction 26 th Dec 2008
13.Court Order 25 th Jan 2009
14.Merger becomes effective 30 th Jan 2009
MERGER NOTIFICATIONS & REVIEW IN OTHER COUNTRIES 90 days 14 days Voluntary Australia 3. 60 days 30 days Mandatory Spain 8. 90 days 30 days Mandatory Portugal 7. 30 days - Mandatory Netherlands 6. Max. 4 months (If required) 30 days Voluntary Germany 5. 90 days 30 days Mandatory China 4. 90 days 25 days Voluntary United Kingdom 2. 30 days 30 days Mandatory United States 1. DETAILED REVIEW INITIAL REVIEW NOTIFICATION COUNTRY SR. NO.
The Committee presented its report and taking into account their recommendations and the legal challenges and to make the CCI fully operational on a sustainable basis, the Competition (Amendment) Bill, 2007 was introduced and was further passed.
MAJOR HIGHLIGHTS & AMENDMENTS
would act as an expert body
which would function as a market regulator
for preventing and regulating anti-competitive practices &
would also play an advisory and advocacy role.
A perception that it may function in the manner of a judicial body
Competition Commission of India Now Earlier Provision
In the U.S., the Hart-Scott-Rodino Act (HSR Act) requires persons wishing to acquire or merge to submit notification and fees to the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division (DOJ) if either the transaction or the person’s assets exceed monetary thresholds.
However, the HSR Act has a two-step test, the “size of the transaction” and “size of the person test”. This two-step test acts as a filtering device, excluding a significant number of lesser transactions from review.
To compare anti-trust laws prevalent globally, either the notification is optional as is the case in UK and Australia or the review period is short, where notification is mandatory, for example, in USA review period is 30 days .
The Indian economy is still in its infant stage as compared to global standards & therefore its important that the law not control M&A, but foster an environment of rapid growth and encouragement to the Indian economy.
Countries with similar economic conditions and imperatives do not have such wide discretionary powers with Competition Authorities. India’s competition law could project India’s economy as being unfavourable to globalization and as one that is unduly restrictive of competition.
While it is necessary to regulate combinations which may result in abuse of dominance it is imperative to ensure that there is no over-regulation as this could be counter productive and retard the country’s economic growth.
Competition law in India should be enacted in line with the dynamics of the Indian economy as opposed to merely replicating international principles, particularly so when it results in the law becoming more a hindrance than a tool to promote competition.