The following presentation talks about evolution of competition law in India.

1. S U B M I T T E D TO : - D R . A R U N G U P TA
V I C E P R I N C I PA L
I I M T & S C H O O L L AW
S U B M I T T E D B Y: - S R I S H T I B A N S A L
( 3 5 7 1 3 4 0 3 8 1 7 )
EVOLUTION OF
COMPETITION LAW IN INDIA

2. INTRODUCTION
 With the advent of economic reforms in 1991, the law was found inadequate
for fostering competition in markets. Hence, the Competition Act ,2002 was
enacted by the Parliament of India to establish the new competition regime in
India and MRTP was repealed.
 The Competition Act, 2002 was amended by the Parliament of India and
governs Indian competition law.
 The act prohibits anti- competitive agreements, abuse of dominant position by
enterprises and regulates combinations (acquisition, acquiring of control and
merger and acquisitions) which causes or likely to cause an appreciable
adverse effect on competition within India.
 An act to provide keeping in view of the economic development of the
country, for the establishment of a commission 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, in India, and for matters connected therewith.

3. MEANING OF COMPETITION
 Competition is a “situation in the market in which firms or sellers
independently strive for the buyers patronage in order to achieve a
particular business objective for example, profit, sales or market share.
 Buyer prefers to buy a product at a price that maximizes his benefits
whereas the seller prefers to sell the product at a price that maximizes
his profits.

4. DIMENSIONS OF COMPETITION ACT, 2002
Prohibits anticompetitive agreements.
Prohibits abuse of dominant position.
Provides for regulation of
combinations.
Competition advocacy.

5. ANTI COMPETITIVE AGREEMENTS
(Section-3)
 Enterprises, persons or associations of enterprises or persons, including cartels,
shall not enter into agreements in respect of production, supply, distribution,
storage or acquisition or control of goods or provision of services, which cause or
are likely to cause an appreciable adverse impact on competition in India.
 Any agreements entered into in contravention of the provisions shall be considered
void.
 Agreements which would be considered to have an appreciable adverse impact
would be those agreements which-
 Directly or indirectly determine sale or purchase prices.
 Limit or control production, supply, markets, technical development, investment
or provision of services.
 Directly or indirectly result in bid rigging or collusive bidding.
 Share the market or source of production or provision of services by allocation
of inter alia geographical area of market, nature of goods or number of
customers or any other similar way.

6. ABUSE OF DOMINANT POSITION
( Section-4)
 There shall be an abuse of dominant position if an enterprise or a person :-
 Directly or indirectly imposes unfair or discriminatory-
 Condition in purchase or sale of goods or service
 Price in purchase or sale of goods or services
 Limits or restricts-
 Production of goods or provision of services or market
 Technical or scientific development relating to goods or services
 Indulges in practice or practices resulting in denial of market access.
 Makes conclusion of contracts subject to acceptance by other parties of
supplementary obligations which by their nature or according to commercial
usage have no connection with the subject of such contracts.
 Uses its dominant position in one relevant market to enter into or protect
other relevant market.

7. REGULATION OF COMBINATIONS
(Section 5& 6)
 The act is designed to regulate the operation and activities of
combinations, a term, which contemplates acquisition, mergers or
amalgamations.
 Combination that exceeds the threshold limits specified in the act in
terms of assets or turnover, which causes or is likely to cause adverse
impact on competition within the relevant market in India, can be
scrutinized by the Commission.

8. COMPETITION ADVOCACY (Section- 49)
 The Central Government in formulating a policy on competition (including
review of laws related to competition) or on any other matter, and a State
Government may, in formulating a policy on competition or on any other
matter, as the case may be, make a reference to the Commission for its opinion
on possible effect of such policy on competition and on the receipt of such a
reference, the Commission shall, within sixty days of making such reference,
give its opinion to the Central Government, or the State Government, as the
case may be, which may thereafter take further action as it deems fit.]
 The opinion given by the Commission under sub-section (1) shall not be
binding upon the Central Government [or the State Government, as the case
may be,] in formulating such policy.
 The Commission shall take suitable measures for the promotion of
competition advocacy, creating awareness and imparting training about
competition issues.

9. COMPETITION COMMISSION OF INDIA
 Competition Commission of India is a body of Government of India to prevent
activities that have an appreciable adverse effect on competition in India.
 It was established on 14 October 2003 and became fully functional in May
2009.
 It consists of a chairperson, who is to be assisted by a minimum of two, and a
maximum of six, other members.
 It is the duty of the commission to eliminate practices having adverse effect on
competition, promote and sustain competition, protect the interests of
consumers and ensure freedom of trade in the markets of India.
 The commission is also required to give opinion on competition issues on a
referenced received from a statutory authority established under any law and to
undertake competition advocacy, create public awareness and impart training
on competition issues.

10. POWERS OF CCI
 Commission has the power to inquire into unfair agreements or abuse
of dominant position or combinations taking place outside India but
having adverse effect on competition in India, if any of the
circumstances exists:-
 An agreement has been executed outside India
 Any contracting party resides outside India
 Any enterprise abusing dominant position is outside India
 A combination has been established outside India
 Any other matter or practice or action arising out of such agreement
or dominant position or combination is outside India.
 To deal with cross border issues, commission is empowered to enter
into any memorandum of understanding or arrangement with any
foreign agency of any foreign country with the prior approval of
Central government.

11. REVIEW OF ORDERS OF COMMISSION
 Any person aggrieved by an order of the Commission can
apply to the Commission for review of its order within
thirty days from the date of the order. Commission may
entertain a review application after the expiry of thirty
days, if it is satisfied that the applicant was prevented by
sufficient cause from preferring the application in time.
No order shall be modified or set aside without giving an
opportunity of being heard to the person in whose favour
the order is given and the Director General where he was
a party to the proceedings.

12. APPEAL
 Any person aggrieved by any decision or order
of the Commission may file an appeal to the
Supreme Court within sixty days from the date
of communication of the decision or order of the
Commission. No appeal shall lie against any
decision or order of the Commission made with
the consent of the parties.

13. PENALTY
 If any person fails to comply with the orders or directions of the Commission
shall be punishable with fine which may extend to ₹ 1 lakh for each day during
which such non compliance occurs, subject to a maximum of ₹ 10 crore.
 If any person does not comply with the orders or directions issued, or fails to
pay the fine imposed under this section, he shall be punishable with
imprisonment for a term which will extend to three years, or with fine which
may extend to ₹ 25 crores or with both.
 Section 44 provides that if any person, being a party to a combination
makes a statement which is false in any material particular or knowing
it to be false or omits to state any material particular knowing it to be
material, such person shall be liable to a penalty which shall not be less
than ₹ 50 lakhs but which may extend to ₹ 1 crore.

14. MRTPACT, 1969
 The government of India in April 1964appointed the Monopolies Inquiry
Commission under the chairmanship of Justice KC Das Gupta.
 The commission presented a report stating that there was concentration of
economic power in the form of product wise and industry wise.
 Few industrial houses were controlling a large number of companies and there
existed a large scale restrictive and monopolistic trade practices.
 The bill drafted by Monopolies Inquiry Commission became the “Monopolies
and Restrictive Trade Practices Act” 1969 and was enforced from June 01,
1970.
 The monopolies and restrictive trade practices act, 1969 had it genesis in the
Directive Principles of State Policy embodied in the constitution of India.
 The Monopolies and Restrictive Trade Practices Act, 1969 was intended to
curb the rise of concentration of wealth in a few hands and of monopolistic
practices.

15. OBJECTIVES OF MRTPACT, 1969
Control monopolies and
monopolistic trade practices.
Prevention of concentration of
economic power in few hands.
Regulate restrictive trade practices.
Regulate unfair trade practices.

16. SHORTCOMINGS OF MRTPACT, 1969
Anti- welfare results.
Stringent provisions.
Ambiguity .
International norms.

17. TRANSITION FROM MRTPACT 1969
TO COMPETIITON ACT 2002
 It was in 1991 that India took the initiative in favour of economic reforms
consisting essentially of liberalization, privatization and globalisation.
 MRTP act, post 1991 did not prohibit merger, amalgamation and takeovers. A
large number of private and public sector companies were brought under the
ambit of MRTP Act.
 A perusal of MRTP act will show that there is neither definition nor even a
mention of certain offending trade practices which are restrictive in nature like
abuse of dominance, cartels, collusion and price fixing, bid rigging etc.
 A question arose if the existing MRTP act could be suitably amended instead
of drafting and bringing a new law.
 In October 1999, Government of India appointed a committee under Mr. SVS
Raghavan. Committee submitted the report in May 2000 and parliament
passed the new law in December 2002 named “ The Competition Act, 2002”.

18. MRTPACT , 1969 COMPETITION ACT, 2002
 Based on pre reform scenario
 Based on size or structure as a factor
 Frowns upon dominance
 Complex in arrangement and
language
 Registration of agreements
compulsory
 No regulation for combinations
 Regulation authority appointed by
the government
 Reactive and rigid
 Little administrative and financial
autonomy.
 Based on post reform scenario
 Based on conduct as a factor
 Frowns upon abuse of dominance
 Simple in arrangement, language
and easily comprehensible
 No registration requirement
 Combinations regulated beyond a
threshold
 Competition commission selected by
a collegium
 Proactive and flexible
 Relatively higher administrative and
financial autonomy
DIFFERENEC BETWEEN MRTP 1969
AND COMPETITON ACT,2002

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