This document discusses why consumers should be interested in competition law. It defines competition as rivalry between firms striving to gain sales and profits, which benefits society. Competition law aims to protect the competition process and curb anticompetitive practices like price fixing. The law established the Competition Commission of India to investigate anticompetitive behaviors like cartels, abuse of dominance, and anticompetitive mergers. Enforcing competition law promotes consumer welfare through lower prices, better quality goods and services, more choices, and easier access. While challenges remain in establishing a competition culture, competition enforcement directly benefits consumers.

1. WHY SHOULD
CONSUMERS BE
INTERESTED IN A
COMPETITION LAW?
CHARAK RAY
LIBRA.CHARAK@GMAIL.COM

2. WHAT IS COMPETITION?
• THE PROCESS OF RIVALRY BETWEEN FIRMS STRIVING TO
GAIN SALES AND MAKE PROFITS
• MOTIVE: SELF-INTEREST, BUT OUTCOME MOSTLY
BENEFICIAL FOR THE SOCIETY
• COMPETITION IS NOT JUST AN EVENT, BUT A PROCESS
• IT IS NOT AUTOMATIC – NEEDS TO BE NURTURED

3. TYPES OF COMPETITION
• PRICE COMPETITION: WINNING CUSTOMERS BY
LOWERING PRICE
• NON-PRICE COMPETITION: WINNING CUSTOMERS BY
ADVERTISING, OFFERING AFTER-SALES-SERVICES,
USING SALE PROMOTION TOOLS, ETC.

4. WAYS OF COMPETITION
• FAIR COMPETITION: FAIR MEANS SUCH AS PRODUCING
QUALITY GOODS, BECOMING COST-EFFICIENT,
OPTIMISING THE USE OF RESOURCES, BEST TECHNOLOGY,
RESEARCH & DEVELOPMENT, ETC.
• UNFAIR COMPETITION: UNFAIR MEANS SUCH AS FIXING
PRICE WITH THE RIVALS, PREDATORY PRICING,
DISPARAGING OR MISLEADING ADVERTISEMENTS, ETC.

5. BENEFITS FROM COMPETITION
• EFFICIENCY
• INNOVATION
• CHECK ON CONCENTRATION
• ECONOMIC GROWTH (WEALTH AND JOB CREATION)
• CONSUMER WELFARE GAINS:
• LOWER PRICES,
• BETTER QUALITY,
• FREEDOM OF CHOICE AND
• EASY ACCESS

6. COMPETITION LAW
• AIMS TO PROTECT PROCESS OF COMPETITION AND
NOT COMPETITORS
• CONSIST OF A SET OF RULES TO CURB ANTI
COMPETITIVE PRACTICES (ACPS)
• SETS UP THE COMPETITION AUTHORITY:
• COMPETITION COMMISSION OF INDIA (CCI) AND
• COMPETITION APPELLATE TRIBUNAL (COMPAT)
• OVER 120 COUNTRIES HAVE ADOPTED COMPETITION
LAW

7. MYTHS & REALITIES
• MYTH: COMPETITION POLICY AND LAW WILL ALLOW
FOREIGN FIRMS TO COME IN AND UNDERMINE DOMESTIC
FIRMS.
• REALITY: EFFECT OF FOREIGN ENTRY DEPENDS UPON
CAPABILITIES OF DOMESTIC FIRMS. COMPETITION LAW
PROTECTS DOMESTIC FIRMS FROM ACPS OF FOREIGN
FIRMS.
EXAMPLE: MULTINATIONAL VITAMIN CARTEL CASE.

8. MYTHS & REALITIES
• MYTH: COMPETITION POLICY AND LAW ARE THE
TOOLS FOR RICH AND URBAN SOCIETIES.
• REALITY: POOR DO BENEFIT FROM ACTION AGAINST
COMPETITION ABUSES, IF THEY CAN ACCESS JUSTICE.
EXAMPLE: RUKMINI DEVI IN RASHMI, CHITTORGARH

9. MYTHS & REALITIES
• MYTH: COMPETITION LAW AND POLICY WORKS FOR
THE RICH AND AFFLUENT SECTIONS ONLY.
• REALITY: COMPETITION LAW AND POLICY CAN ALSO
BENEFIT THE POOR
EXAMPLE: TIED SELLING AT GOVERNMENT RATION
SHOPS

10. EVOLUTION OF COMPETITION LAW IN INDIA
• THE FIRST LEGISLATION MONOPOLIES AND
RESTRICTIVE TRADE PRACTICES ACT, 1969, PROVED
INADEQUATE.
• THE COMPETITION ACT 2002, WAS SUBSEQUENTLY
ENACTED DUE TO STRONG LOBBYING BY THE
CONSUMER MOVEMENT, LEAD BY CUTS IN 1990S.

11. ACTION COMPONENTS OF COMPETITION
LAW
• ANTICOMPETITIVE PRACTICES, SUCH AS CARTELS
(SECTION 3)
• ABUSE OF DOMINANCE (SECTION 4)
• MERGERS AND ACQUISITIONS (SECTION 5 & 6)
• COMPETITION ADVOCACY (SECTION 49)

12. COLLUSION AND OTHER ACPS (SEC 3)
“OUR COMPETITORS ARE OUR FRIENDS, OUR CUSTOMERS
ARE THE ENEMY”-ARCHER DANIELS MIDLAND!
• CARTEL IS AN AGREEMENT BETWEEN FIRMS TO ACT IN
CONCERT ON PRICES, PRODUCTION LEVELS OR
TERRITORIES.
E.G. CABLE TV IN CITIES
• OTHER ANTI-COMPETITIVE PRACTICES, SUCH AS TIED
SALES
E.G. GAS CONNECTION AND GAS STOVES
RAZOR BLADES WITH SUGAR
SCHOOL UNIFORMS AND STATIONERY
BRANDED MEDICINES/TESTS

13. ABUSE OF DOMINANCE (SEC 4)
• DOMINANCE MEANS HAVING AUTHORITY OR
CONTROL.
• CAUSE OF CONCERN IS NOT DOMINANCE BUT ITS
ABUSE.
• ABUSE OF DOMINANCE:
1. EXPLOITATIVE PRACTICES: EXCESSIVE PRICING,
DISCRIMINATION OR TIED SELLING OR IPR ABUSES
EG. MONSANTO-MAHYCO PRICING OF BT COTTON
SEEDS
2. EXCLUSIONARY PRACTICES: PREDATORY PRICING
AND REFUSAL TO DEAL.

14. COMBINATIONS (SEC 5 & 6)
• COMBINATIONS INCLUDE MERGERS: A FUSION
BETWEEN TWO OR MORE FIRMS.
• TAKEOVER/ACQUISITION: PURCHASE OF ALL OR
SUFFICIENT NUMBER OF SHARES OF OTHER FIRM(S).
• CAUSE OF CONCERN IS NOT COMBINATIONS BUT ITS
LIKELIHOOD TO RESULT IN MONOPOLY OR
DOMINANCE IN MARKET.
EG. RECENT TAKEOVER OF INDIAN PHARMA
COMPANIES WITHOUT ANY MERGER REVIEW

15. COMPETITION AUTHORITY
• TWO TIER AGENCY CREATED AS PER THE
PROVISIONS OF THE COMPETITION ACT, 2002
• COMPETITION COMMISSION OF INDIA (CCI)
• COMPETITION APPELLATE TRIBUNAL (COMPAT)
• CCI ASSISTED BY THE DIRECTOR GENERAL
• COMPAT HEARS APPEALS AND CAN ALSO
PROVIDE COMPENSATION
• ULTIMATE APPEAL AT THE SUPREME COURT

16. OTHER FUNCTIONS OF CCI
• PERFORM THE FUNCTION OF COMPETITION ADVOCACY EFFECTIVELY
AND PROMOTE COMPETITION CULTURE
E.G. RBI FAVOURING PUBLIC SECTOR BANKS
• COOPERATION WITH OTHER REGULATORY AGENCIES
E.G. WITH SECTOR REGULATORS ON COMPETITION ISSUES
• COOPERATION WITH OTHER COMPETITION AGENCIES
E.G. WITH COMPETITION AGENCIES ABROAD

17. CHALLENGES FOR INDIA
• ABSENCE OF COMPETITION CULTURE
• LACK OF COMPETENT AND EXPERIENCED STAFF
• GOVERNMENT SUPPORT IS NOT ALWAYS ASSURED
• VESTED INTERESTS (POLITICAL-ECONOMY ASPECTS)
• LACK OF CLARITY ON OVERLAP BETWEEN THE
COMPETITION AUTHORITY AND SECTOR REGULATORS
• ROLE OF CONSUMERS/CIVIL SOCIETY
• WEAKNESS IN DISSEMINATION/COMMUNICATION

18. COMPETITION ENFORCEMENT AND
CONSUMER WELFARE
Consumer
Welfare
QUALITY
ACCESS
CHOICE
PRICE
Anti Competitive
Practices restricting
access
Poor quality
goods/services by a firm
abusing dominant
position
Tied-selling restricting
consumer choice
Anti Competitive
Practices leading to
excessive prices
Competition
Authority’s
Enforcement
Actions

19. CONCLUSIONS
• COMPETITION ENFORCEMENT LEADS TO CONSUMER WELFARE
DIRECTLY AND INDIRECTLY
• STAKEHOLDERS NEED TO RECOGNISE THEIR ROLE IN
PROMOTING COMPETITION
• POLICYMAKERS/GOVERNMENT NEED TO PRIORITISE
COMPETITION REFORMS
• CCI TO REMAIN INDEPENDENT
• CCI TO CREATE A PUBLIC BUY IN
• CONSUMER MOVEMENT: NATURAL ALLIES OF A COMPETITION
REGIME

20. THANK YOU…