This document discusses competition law in India. It provides an overview of the benefits of competition as well as the evolution of competition law in India from the MRTP Act of 1970 to the current Competition Act of 2002. The Competition Act aims to promote fair competition and prevent anti-competitive practices. It covers anti-competitive agreements between firms, abuse of dominant position, and mergers and acquisitions. The Competition Commission of India regulates combinations and enforces penalties for violations of the Competition Act.

1. P R E S E N TE D B Y
D I P U TH O M A S JO Y

2. Competition
Is “a situation in a market in which firms or
sellers independently strive for the buyers’
patronage in order to achieve a particular business
objective for example, profits, sales or market
share”

3. Benefits of Competition
Companies : Efficiency, cost-saving operations, better
utilization of resources, etc.
The Consumer : Wider choice of goods at competitive
prices
 The Government : Generates revenue
But all these benefits are lost if Competition is UNFAIR
or NON-EXISTANT

4. evolution of Competition law
• Before MRTP Act came into force (1970), limited
provisions existed under :
– The Indian Contract Act
– Directive Principles of State Policy (Non-enforceable)
• The MRTP Act brought in a four-pronged thrust :
– Concentration of economic power
– Restrictive Trade Practices
– Monopolistic Trade Practices
– Unfair Trade Practices

5. Competition law
• Introduced in the year 2002
• It extends to the whole of India except the
State of Jammu and Kashmir.
• It is a tool to implement and enforce
competition policy and to prevent and
punish anti-competitive business practices
by firms and unnecessary Government
interference in the market.

6. Competition law
• Competition Law generally covers 3 areas:
– Anti - Competitive Agreements, e.g., cartels,
– Abuse of Dominant Position by enterprises, e.g.,
predatory pricing, barriers to entry and
– Regulation of Mergers and Acquisitions (M&As).

7. oBJeCtives of Competition law
 Promoting economic efficiency in both static and
dynamic sense
 Protecting consumers from the undue exercise of
market power
 Facilitating economic liberalization, including
privatization. Deregulation and reduction of external
trade barriers
 Preserving and promoting the sound development of a
market economy

8. Cont…
 Ensuring fairness and equity in market place
transactions
 Protecting the ‘public interest’ including in some
cases considerations relating to industrial
competitiveness and employment
 Protecting opportunities for small and medium
business

9. anti-Competitive
agreements
• No enterprise or association of enterprises or
person or association of persons shall enter
into any agreement in respect of production,
supply, distribution, storage, acquisition or
control of goods or provision of services,
which causes or is likely to cause an
appreciable adverse effect on competition
within India.

10. aBuse of dominant
position
• "dominant position" means a position of strength, enjoyed by
an enterprise, in the relevant market, in India, which enables
it to—
• (i) operate independently of competitive forces prevailing
in the relevant market; or
• (ii) affect its competitors or consumers or the relevant
market in its favour.

11. ComBinations
Regulation of combinations
No person or enterprise shall enter into a
combination which causes or is likely to
cause an appreciable adverse effect on
competition

12. eXemptions
GOVERNMENT BY NOTIFICATION MAY EXEMPT FROM THE COMPETITION
LAW
 ANY CLASS OF ENTERPRISES IN THE INTEREST OF NATIONAL
SECURITY/PUBLIC INTEREST.
 ANY PRACTICE/AGREEMENT ARISING OUT OF INTERNATIONAL
TREATY/AGREEMENT
 ANY ENTERPRISE PERFORMING A SOVEREIGN FUNCTION ON BEHALF OF
GOVERNMENT
 DIFFERENT PROVISIONS FROM DIFFERENT DATES IF, NEED BE.

13. status of the Competition
Commission
• It is a body corporate
• It has Regulatory and quasi-judicial powers;
functions through Benches
• Each Bench shall consist of at least two
Members and one of such Members must be a
judicial Member

14. power of the Competition
Commission
After inquiry into abuse of dominant position, the
Competition Commission can order:
• discontinuance of abuse of dominant position
• impose a penalty upto 10% of the average
turnover of the enterprise

15. Cont..
• Cease and desist order
• Impose penalty up to 10% of turnover.
• In case of cartel, penalty can be 10% of
turnover or 3 times of profit illegally gained
from cartel activity, whichever is higher.

16. Cont..
• Recommend to Government the division of
dominant Enterprise
• Various penalties ranging from Rs.1 lac upto
Rs.1 crore are also provided for failure to
comply with direction/order of Commission.

17. old wine or new wine ?
MRTP ACT NEW LAW
 BASED ON PRE-1991 LPG BASED ON POST-1991 LPG
PREMISED ON SIZE PREMISED ON BEHAVIOUR/
CONDUCT
PROCEDURE ORIENTED
RESULT ORIENTED.
COVERS UNFAIR TRADE
PRACTICES (INDIVIDUAL UNFAIR TRADE PRACTICES
CONSUMER INTEREST) EXCLUDED (COVERED UNDER
CONSUMER PROTECTION
 POLITICAL APPOINTMENTS ACT)
OF CHAIRPERSON/MEMBERS
APPOINTMENTS BY A
COLLEGIUM
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