Outside cp knowledge presentation competition act _2002

  • 752 views
Uploaded on

 

More in: Business
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
752
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
26
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Provisions of the Competition Act, 2002 Sanjay Bhatt Partner – Litigation Kesar Dass B. & Associates
  • 2. What is Competition?
    • A market situation, in which sellers independently strive for buyer’s patronage to achieve business objectives such as profits, sales or market share.
    • It is the foundation of an efficiently working market system.
  • 3. Competition – why ?
    • The ultimate objective of competition is to secure the interest of the Consumer - it empowers the consumer, best guarantee for consumer protection.
    • It is a means of reducing cost and improving quality.
    • It also implies an open market where shortages are rapidly eliminated through the best allocation of resources.
    • It accelerates growth and development; preserves economic and political democracy.
  • 4.
    • Government constituted a committee in 1999 to examine MRTP Act, 1969 for shifting the focus of the law from curbing monopolies to promoting competition and to suggest a modern competition law in line with international developments to suit Indian conditions.
    • As a sequel to the Report of the Committee, the Competition Act, 2002 to replace MRTP Act was enacted and notified in January, 2003.
    Competition Act 2002 - Background
  • 5. Basic objectives of Competition Act, 2002
    • 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
  • 6. Establishment of Competition Commission of India (CCI) & its duties
    • Competition Act 2002 provides for establishment of a Commission to prevent practices having adverse effect on competition etc.
    • To eliminate practices having adverse effect on competition
    • To promote and sustain competition
    • To protect interests of consumers, etc.
  • 7. JURISDICTION OF CCI
    • Enquire into Anti-Competitive Agreements (eg. Cartel, bid-rigging, etc.) [Section 3]
    • Enquire into abuse of dominant position (eg. Predatory Pricing, etc.) [Section 4]
    • Regulate combinations (Mergers, Acquisitions, etc.), [Section 5 & 6]
    • Undertake Competition Advocacy (including advise on policy issues), create public awareness, impart training on competition issues, [Section 49].
  • 8. Roadmap to Merger & Acquisition under the Act
    • S ection 5 provides detailed criteria for “combination” falling within its purview
    • Section 6 provides for regulation of “combination” having adverse effect on competition by CCI
    • “ combination” taken place outside India or party to it outside India also covered under its purview
    • Factors such as actual and potential level of competition, degree of consolidation in the market and degree of countervailing power taken into account while determining adverse effect on competition.
  • 9. continued…..
    • Reporting of such combination by parties to the CCI optional and not mandatory
    • CCI also has suo motu power to enquire whether a combination causes or is likely to cause an appreciable adverse effect on competition
    • Enterprises with a lower asset value and turnover than threshold are excluded from the purview
    • Share subscriptions, financing facilities and acquisitions by public financial institutions, foreign institutional investors, banks and venture capital funds exempted from purview
  • 10. continued …….
    • Combinations that are found to have a negative impact on competition are to be rendered void ab initio by CCI
    • Unlike abuse of dominance, which demands evidence of actual abuse, combinations that are merely likely to have an adverse effect on competition are prohibited.
    • No inquiry by CCI after expiry of one year from the date on which such combination has taken effect.
    • Modification to combination permissible during inquiry before CCI
  • 11. Critical Issues
    • Pre-notification of proposed “combination” voluntary and not mandatory
    • Bar to initiate inquiry after expiry of one year from taking effect of a “combination”
    • Likely logistical limitations of CCI to take suo motu cognizance of every violative “combination”
    • Overlapping of jurisdictions with that of High Courts and SEBI as regard merger/acquisition
    • Unrealistic time period for disposal of inquiry
  • 12. continued ………
    • Non availability of any residuary/inherent power to inquire into a “combination” not falling within threshold but giving rise to appreciable adverse effect on competition in the relevant market
    • No provision empowering CCI to seek co-operation and co-coordination directly from their counter parts abroad.
    • Trained/skilled professional manpower
    • Infrastructure support system
    • Access to updated data-base, information, international developments etc.
  • 13. Thank you Kesar Dass B. & Associates Corporate & Commercial Lawyers 15, Birbal Road, Jangpura Extn. New Delhi - 110014 Phone: 91-11-41823285-89 Fax: 91-11-41823290-91 E-mail: [email_address] Web: www.kesardass.org