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Competition Act, 2002     [AS AMENDED BY COMPETITION (AMENDMENT) ACT, 2007]
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Definitions
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Definitions
“ Chairperson”   means the Chairperson of the Commission appointed under sub-section (1) of section 9 “ Commission”   means the competition Commission of India established under sub-section (1) of section 7 “ Director General”   means the Director General appointed under sub-section (1) of section 16 “ service”   means service which is made available to potential users of any industrial or commercial matters such as banking, communication, education, financing, insurance, real estate, transport, entertainment, amusement, construction, or information and advertising Definitions
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Definitions
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Definitions
“ turnover”   includes value of sale of goods or services “ trade”   means any trade, business, industry, profession relating to the production, supply, distribution, storage of goods and provision of services “ practice”   includes any practice relating to the carrying on of any trade by a person or an enterprise; “ prescribed”   means prescribed by rules made under this Act “ price”   in relation to the sale of any goods or to the performance of any services, includes every valuable consideration Definitions
Anti-competitive Agreements
3. (1)  No enterprise shall enter into any agreement in respect of production,  supply, distribution, storage, acquisition or control of goods or provision of services, which causes an adverse effect on competition within India 3. (2)   Any agreement entered into in contravention of the provisions contained in sub-section (1) shall be void Anti-competitive Agreements
3. (3)  Any agreement entered into between enterprises or practice carried on, or decision taken, which — 3. (3a)  directly or indirectly determines purchase or sale prices; 3. (3b)  limits or controls production, supply, markets, technical development, investment or provision of services; 3. (3c)  shares the market or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market 3. (3d)  directly or indirectly results in bid rigging, shall be presumed to have an adverse effect on competition Anti-competitive Agreements
(4)  Any agreement amongst enterprises, in respect of production, supply, distribution, storage, sale, or trade in goods / services, including: ( a )  tie-in arrangement; ( b )  exclusive supply agreement; ( c )  exclusive distribution agreement; ( d )  refusal to deal; ( e )  resale price maintenance, shall be an agreement in contravention of sub-section (1) if such  agreement causes an adverse effect on competition in India. Anti-competitive Agreements
4( a ) “tie-in arrangements”  any agreement requiring a purchaser to purchase some other goods; 4( b ) “exclusive supply agreement”  any agreement restricting the purchaser from acquiring any goods other than those of the seller 4( c ) “exclusive distribution agreement”  any agreement to restrict the supply of any goods for sale of the goods; 4( d ) “refusal to deal”  any agreement which restricts to deal with the persons to whom goods are sold or bought from; 4( e ) “resale price maintenance” any agreement to sell goods on condition that the prices to be charged shall be the prices stipulated by the seller Anti-competitive Agreements
(5) Nothing contained in this section shall restrict— ( i )  the right of any person to restrain any infringement of, or to  impose reasonable conditions, as may be necessary for protecting  any of his rights which have been him under— ( a )  Copyright Act, 1957 ( b )  Patents Act, 1970; ( c )  Trade and Merchandise Marks Act, 1958 ( d )  Geographical Indications of Goods Act, 1999 ( e )  Designs Act, 2000; ( ii )  the right of any person to export goods from India to the extent  to which the agreement relates exclusively to the production,  supply,  distribution or control of goods / services for such export. Anti-competitive agreements
Abuse of Dominant Position
4.1 [No enterprise or group shall abuse its dominant position. ] 2) There shall be an abuse of dominant position under sub-section (1), if an enterprise ( a ) directly or indirectly, imposes unfair— ( i ) condition in purchase or sale of goods / services; ( ii ) price in purchase or sale of goods / services; ( b )  limits or restricts— ( i ) production of goods / services or market; or ( ii ) technical or scientific development relating to goods  or services; or Abuse of Dominant Position
( c ) indulges in practice resulting in denial of market access; or ( d ) makes conclusion of contracts subject to acceptance by  other parties who have no connection with the subject of such  contracts; or ( e ) uses its dominant position in one relevant market to enter  into other relevant market. Abuse of Dominant Position
Explanation: ( a )  “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 favor; ( b )   “predatory price”  means the sale of goods or services, at a price which is below the cost, with a view to reduce competition or eliminate the competitors Abuse of Dominant Position
Combination of Mergers & Acquisition
5.     The acquisition or merger of enterprises shall be a combination of such enterprises , if: 5( a )  any acquisition where— ( i )  the parties to the acquisition, whose shares or assets have  been acquired jointly have,— ( A )  either, in India, the assets of the value of more  than Rs.1000 crores or turnover more than Rs. 3000  crores; or  (B) in India or outside India, the assets of the value of  more than 500 million USD, including at least Rs. 500  crores in India, or turnover more than 1500 million  USD, including at least Rs. 1500 crores in India; Combination of Mergers & Acquisition
( ii )  the group, to which the enterprise whose shares, assets  have been acquired, would belong after the acquisition, jointly  have,— ( A )  either in India, the assets of the value of more  than Rs. 4000 crores or turnover more than Rs.  12000 crores; or ( B ) in India or outside India, the assets of the value of  more than 2 billion USD, including at least Rs. 500  crores in India, or turnover more than 6 billion USD,  including at least Rs. 1500 crores in India;  Combination of Mergers & Acquisition
5( b )    acquiring of control by an enterprise over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods / service, if — ( i ) the enterprise over which control has been acquired along  with the enterprise over which the acquirer already has direct or  indirect  control jointly have, ( A ) either in India, the assets of the value of more than  Rs. 1000 crores or turnover more than Rs. 3000 crores;  (B) in India or outside India, the assets of the value of  more than 500 million USD, including at least Rs. 500  crores in India, or turnover more than 1500 million  USD, including at least Rs. 1500 crores in India; Combination of Mergers & Acquisition
( ii )  the group, to which enterprise whose control has been  acquired, would belong after the acquisition, jointly have,— ( A )  either in India, the assets of the value of more than  Rs. 4000 crores or turnover more than Rs. 12000  crores; or ( B ) in India or outside India, the assets of the value of  more than 2 billion USD, including at least Rs. 500  crores in India, or turnover more than 6 billion USD,  including at least Rs. 1500 crores in India;  Combination of Mergers & Acquisition
5( c )   any merger in which— ( i )  the enterprise remaining after merger, have,— ( A )  either in India, the assets of the value of more  than Rs. 1000 crores or turnover more than Rs. 3000  crores; or (B) in India or outside India, the assets of the value  of more than 500 million USD, including at least Rs.  500 crores in India, or turnover more than 1500  million USD, including at least Rs. 1500 crores in  India; Combination of Mergers & Acquisition
( ii )  the group, to which the enterprise remaining after the  merger, would belong after the merger have,— ( A )  either in India, the assets of the value of more  than Rs. 4000 crores or turnover more than Rs. 12000  crores; or ( B ) in India or outside India, the assets of the value of  more than 2 billion USD, including at least Rs. 500  crores in India, or turnover more than 6 billion USD,  including at least Rs. 1500 crores in India. Combination of Mergers & Acquisition
Regulation of Combinations
6.     (1) No enterprise shall enter into a combination which causes an appreciable adverse effect on competition in India (2) Subject to the provisions contained in sub-section (1), any enterprise, which proposes to enter into a combination,  shall  give notice to the Commission, disclosing the details of  the proposed combination, within  30  days of— a )  approval of the proposal relating to merger or  amalgamation, ( b ) execution of any agreement or other document for  acquisition Regulation of Combinations
(3) The Commission shall, after receipt of notice deal with such notice in accordance with the provisions contained in sections 29, 30 and 31. (4) The provisions of this section shall not apply to share subscription or any acquisition, by a financial institution,  foreign institutional investor ,  bank or venture capital fund, or investment agreement (5) The financial institution,  foreign institutional investor ,  bank or venture capital fund, shall, within 7 days from the date of the acquisition, file with the Commission the details of the acquisition including the details Regulation of Combinations
New Competition Laws:  Regulating Anti-Competitive Conduct
[object Object],[object Object],[object Object],[object Object],[object Object],Regulating Anti-Competitive Conduct
Anti competitive Agreements Section 3 of the Act prohibits agreements which restrict the production, distribution, acquisition of goods or services, which cause an adverse effect on competition within India A party that breaches these provisions  may be liable for penalties of up to 10% of the average turnover for the last 3 years Regulating Anti-Competitive Conduct
Abuse of dominance Section 4 of the Act prohibits the abuse of a dominant position by an enterprise.  An entity that contravenes this section may be liable for penalties up to 10% of the dominant firm's average turnover for 3 proceeding years Regulating Anti-Competitive Conduct
[object Object],[object Object],[object Object],[object Object],[object Object],Regulating Anti-Competitive Conduct
[object Object],[object Object],[object Object],[object Object],Impact of the New Provisions on  Domestic Indian & Foreign Enterprises
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Competition Act - Business Law

  • 1. Competition Act, 2002    [AS AMENDED BY COMPETITION (AMENDMENT) ACT, 2007]
  • 2.
  • 4.
  • 5. “ Chairperson” means the Chairperson of the Commission appointed under sub-section (1) of section 9 “ Commission” means the competition Commission of India established under sub-section (1) of section 7 “ Director General” means the Director General appointed under sub-section (1) of section 16 “ service” means service which is made available to potential users of any industrial or commercial matters such as banking, communication, education, financing, insurance, real estate, transport, entertainment, amusement, construction, or information and advertising Definitions
  • 6.
  • 7.
  • 8. “ turnover” includes value of sale of goods or services “ trade” means any trade, business, industry, profession relating to the production, supply, distribution, storage of goods and provision of services “ practice” includes any practice relating to the carrying on of any trade by a person or an enterprise; “ prescribed” means prescribed by rules made under this Act “ price” in relation to the sale of any goods or to the performance of any services, includes every valuable consideration Definitions
  • 10. 3. (1) No enterprise shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes an adverse effect on competition within India 3. (2) Any agreement entered into in contravention of the provisions contained in sub-section (1) shall be void Anti-competitive Agreements
  • 11. 3. (3) Any agreement entered into between enterprises or practice carried on, or decision taken, which — 3. (3a) directly or indirectly determines purchase or sale prices; 3. (3b) limits or controls production, supply, markets, technical development, investment or provision of services; 3. (3c) shares the market or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market 3. (3d) directly or indirectly results in bid rigging, shall be presumed to have an adverse effect on competition Anti-competitive Agreements
  • 12. (4) Any agreement amongst enterprises, in respect of production, supply, distribution, storage, sale, or trade in goods / services, including: ( a )  tie-in arrangement; ( b )  exclusive supply agreement; ( c )  exclusive distribution agreement; ( d )  refusal to deal; ( e )  resale price maintenance, shall be an agreement in contravention of sub-section (1) if such agreement causes an adverse effect on competition in India. Anti-competitive Agreements
  • 13. 4( a ) “tie-in arrangements” any agreement requiring a purchaser to purchase some other goods; 4( b ) “exclusive supply agreement” any agreement restricting the purchaser from acquiring any goods other than those of the seller 4( c ) “exclusive distribution agreement” any agreement to restrict the supply of any goods for sale of the goods; 4( d ) “refusal to deal” any agreement which restricts to deal with the persons to whom goods are sold or bought from; 4( e ) “resale price maintenance” any agreement to sell goods on condition that the prices to be charged shall be the prices stipulated by the seller Anti-competitive Agreements
  • 14. (5) Nothing contained in this section shall restrict— ( i )  the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be necessary for protecting any of his rights which have been him under— ( a )  Copyright Act, 1957 ( b )  Patents Act, 1970; ( c )  Trade and Merchandise Marks Act, 1958 ( d )  Geographical Indications of Goods Act, 1999 ( e )  Designs Act, 2000; ( ii )  the right of any person to export goods from India to the extent to which the agreement relates exclusively to the production, supply, distribution or control of goods / services for such export. Anti-competitive agreements
  • 15. Abuse of Dominant Position
  • 16. 4.1 [No enterprise or group shall abuse its dominant position. ] 2) There shall be an abuse of dominant position under sub-section (1), if an enterprise ( a ) directly or indirectly, imposes unfair— ( i ) condition in purchase or sale of goods / services; ( ii ) price in purchase or sale of goods / services; ( b )  limits or restricts— ( i ) production of goods / services or market; or ( ii ) technical or scientific development relating to goods or services; or Abuse of Dominant Position
  • 17. ( c ) indulges in practice resulting in denial of market access; or ( d ) makes conclusion of contracts subject to acceptance by other parties who have no connection with the subject of such contracts; or ( e ) uses its dominant position in one relevant market to enter into other relevant market. Abuse of Dominant Position
  • 18. Explanation: ( a )  “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 favor; ( b )  “predatory price” means the sale of goods or services, at a price which is below the cost, with a view to reduce competition or eliminate the competitors Abuse of Dominant Position
  • 19. Combination of Mergers & Acquisition
  • 20. 5.    The acquisition or merger of enterprises shall be a combination of such enterprises , if: 5( a )  any acquisition where— ( i )  the parties to the acquisition, whose shares or assets have been acquired jointly have,— ( A )  either, in India, the assets of the value of more than Rs.1000 crores or turnover more than Rs. 3000 crores; or (B) in India or outside India, the assets of the value of more than 500 million USD, including at least Rs. 500 crores in India, or turnover more than 1500 million USD, including at least Rs. 1500 crores in India; Combination of Mergers & Acquisition
  • 21. ( ii )  the group, to which the enterprise whose shares, assets have been acquired, would belong after the acquisition, jointly have,— ( A )  either in India, the assets of the value of more than Rs. 4000 crores or turnover more than Rs. 12000 crores; or ( B ) in India or outside India, the assets of the value of more than 2 billion USD, including at least Rs. 500 crores in India, or turnover more than 6 billion USD, including at least Rs. 1500 crores in India; Combination of Mergers & Acquisition
  • 22. 5( b )   acquiring of control by an enterprise over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods / service, if — ( i ) the enterprise over which control has been acquired along with the enterprise over which the acquirer already has direct or indirect control jointly have, ( A ) either in India, the assets of the value of more than Rs. 1000 crores or turnover more than Rs. 3000 crores; (B) in India or outside India, the assets of the value of more than 500 million USD, including at least Rs. 500 crores in India, or turnover more than 1500 million USD, including at least Rs. 1500 crores in India; Combination of Mergers & Acquisition
  • 23. ( ii )  the group, to which enterprise whose control has been acquired, would belong after the acquisition, jointly have,— ( A )  either in India, the assets of the value of more than Rs. 4000 crores or turnover more than Rs. 12000 crores; or ( B ) in India or outside India, the assets of the value of more than 2 billion USD, including at least Rs. 500 crores in India, or turnover more than 6 billion USD, including at least Rs. 1500 crores in India; Combination of Mergers & Acquisition
  • 24. 5( c )   any merger in which— ( i )  the enterprise remaining after merger, have,— ( A )  either in India, the assets of the value of more than Rs. 1000 crores or turnover more than Rs. 3000 crores; or (B) in India or outside India, the assets of the value of more than 500 million USD, including at least Rs. 500 crores in India, or turnover more than 1500 million USD, including at least Rs. 1500 crores in India; Combination of Mergers & Acquisition
  • 25. ( ii )  the group, to which the enterprise remaining after the merger, would belong after the merger have,— ( A )  either in India, the assets of the value of more than Rs. 4000 crores or turnover more than Rs. 12000 crores; or ( B ) in India or outside India, the assets of the value of more than 2 billion USD, including at least Rs. 500 crores in India, or turnover more than 6 billion USD, including at least Rs. 1500 crores in India. Combination of Mergers & Acquisition
  • 27. 6.    (1) No enterprise shall enter into a combination which causes an appreciable adverse effect on competition in India (2) Subject to the provisions contained in sub-section (1), any enterprise, which proposes to enter into a combination, shall give notice to the Commission, disclosing the details of the proposed combination, within 30 days of— a )  approval of the proposal relating to merger or amalgamation, ( b ) execution of any agreement or other document for acquisition Regulation of Combinations
  • 28. (3) The Commission shall, after receipt of notice deal with such notice in accordance with the provisions contained in sections 29, 30 and 31. (4) The provisions of this section shall not apply to share subscription or any acquisition, by a financial institution, foreign institutional investor , bank or venture capital fund, or investment agreement (5) The financial institution, foreign institutional investor , bank or venture capital fund, shall, within 7 days from the date of the acquisition, file with the Commission the details of the acquisition including the details Regulation of Combinations
  • 29. New Competition Laws: Regulating Anti-Competitive Conduct
  • 30.
  • 31. Anti competitive Agreements Section 3 of the Act prohibits agreements which restrict the production, distribution, acquisition of goods or services, which cause an adverse effect on competition within India A party that breaches these provisions may be liable for penalties of up to 10% of the average turnover for the last 3 years Regulating Anti-Competitive Conduct
  • 32. Abuse of dominance Section 4 of the Act prohibits the abuse of a dominant position by an enterprise. An entity that contravenes this section may be liable for penalties up to 10% of the dominant firm's average turnover for 3 proceeding years Regulating Anti-Competitive Conduct
  • 33.
  • 34.