2. Contents
• Introduction
• Meaning
• Objective
• Features
• MRTP act
• UTP
• CCI of India
• Current competition act
3. INTRODUCTION
• Because of globalization ,India opened up its economy ,
removing controls and resorting to liberalization. The MRTP
Act 1969 has become obsolete and there is need for new
competition law.
4. Meaning
• Competition is “a situation in a market in which firms or sellers
independently strive for the buyer’ patronage in order to
achieve a particular business objective for example, profit,
sales or market share”(World Bank, 1999)
5. Competition Law
• Competition Law 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. 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).
6. OBJECTIVES OF COMPETITION LAW & POLICY
• 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.
• Ensuring fairness and equity in market place transaction.
Protecting the ‘public interest’ including in some cases
considerations relating to industrial competitiveness and
employment. Protecting opportunities for small and medium
business.
7. SALIANT FEATURES OF THE ACT
• PROHIBITION OF ANTI COMPETITIVE AGREEMENTS. All
agreements which have adverse effect in competition in India
are declared as void. ANTI COMPETITIVE AGREEMENT MAY
INCLUDE THE FOLLOWING: 1) directly or indirectly determines
purchase or sale price. 2) limits or control production,
supply ,investment etc. 3)manipulates the process of bidding.
8. • 2) ABUSE OF DOMINANT POSITION: dominant position means
the position of strength enjoyed by and enterprise in the
relevant market in India which enable it to(A) operate
independent or consumer of competitive forces (b) Affects its
competitors or consumer in its favour. There shall be abuse of
dominant position if an enterprise: 1) impose unfair condition
on purchase or sale of goods or service . 2) Limits or restricts
production ,technical development .
9. • 3) REGULATION OF COMBINATION: combination include
acquisitions ,merger or amalgamations. 1)any acquisitions,
merger or amalgamation which result is combined assts of
more than rs 1000 cr. Or combined turnover of more than rs
3000 cr. in India
10. MRTP/UTP
• Introduction MRTP: concentration of economic power means control of economic
power in form of capital income, employment and means of production by few
individual or groups.
• MRTP act came in to force in 1969. it applies to whole of India except the state of
Jammu and Kashmir. OBJECTIVE: 1) controlling monopolistic trade practices. 2)
regulating Restrictive and UTP. :
• Main provision of the MRTP act: (1)Concentration of economic power to be
prevented . (2)Monopolistic trade practices. (3) Restrictive trade practice.
• UNFAIR TRADE PRACTICE: section 36 A of the MRTP act 1969 states UTP is a trade
practice which for the purpose of promoting the sale ,use or supply of any good. 1)
falsely representing that goods and service are of a particular standard quality
,grade or model 2)falsely representing second hand renovated goods as new
goods. 3) giving misleading advertisement
11. CCI
• CCI has been constituted under act .
• Govt. has appointed director general for detailed
investigation of anti competitive agreement and assisting CCI.
• It is flexible and its provision can be change according to
needs.
• It has replaced MRTP act.
• This act has penalty provisions.
• NOT APPLICABLE IN FOLLOWING CASES:
– 1)public financial institutions.
– 2)banks
– 3)foreign institutional investors.
12. Recent Cases
CCI gives SAIL clean chit over agreement with Indian Railways
• The Competition Commission of India has given a clean chit to railways and SAIL MoU.
• The competition watchdog said that JSPL's allegations do not hold ground as it would be incorrect to say
that SAIL has misused its dominant position to create entry barriers.
• CCI has observed that markets of rails is emerging and is likely to see considerable growth with
expansion of private sidings.
• The complaint dates back to December 2009, when Jindal Steel and Power had alleged that the
exclusive arrangement debarred JSPL, which also manufactures rail steel, from supplying rail steel to
Indian Railways.
• Dismissing the complaint SAIL had argued that the company had to undertake an investment of over INR
700 crore solely for the manufacture of rail steel which it was not producing till then.
• They had further argued it was because of this that the two sides had decided to enter into an
arrangement in 2003 as per which SAIL would be the sole supplier of rail steel to Indian Railways
13. • MUMBAI: India's competition regulator Competition Commission of India has absolved sugar
manufacturing associations and their members of cartelisation and price manipulation charges.
Earlier, the competition regulator had sent a notice to sugar mills associations and their members
charging them of cartelisation and price manipulation. The suo motu action charged Indian Sugar
Mills Association (Isma), National Sugar Mills Co-operative Federation, and some private sugar
firms of cartel violation.
• However, the sugar associations and companies argued that sugar prices are market driven and
monitored by government regulations. Also, with nearly 620 small-to-big production units in the
country, the industry is fragmented and it is difficult for a few people to dictate prices, the
associations said.
• "Traditionally prices of sugar are based on market forces and government regulations," said
Abinash Verma, secretary general of Isma.
• "The CCI has given us a clean chit after considering all aspects of the business." CCI had earlier
alleged that industry members had decided to increase the ex-factory price of sugar by 4-6% in
order to prevent prices from falling below production cost.
• The private companies that had been charged by CCI included Shree Renuka Sugars, DCM
• Shriram Consolidated, Bajaj Hindustan and Mawana Sugar, among others.
14. • Competition panel asks Qualcomm to file fresh application
• The Competition Commission of India has asked Qualcomm to apply afresh for merging its four broadband
subsidiaries into Qualcomm Asia Pacific.
• The Commission has told the US chipmaker that its current application was not valid since the shareholding
pattern had changed in the ventures following an acquisition by Bharti Airtel
• On May 8, Qualcomm had approached the anti-monopoly watchdog for combination of its subsidiaries,
including Wireless Business Service, Wireless Broadband Business Service, Kerala and Wireless Broadband
Business Service,Haryana into Qualcomm Asia Pacific.
• Bharti buy
• At the time of the application, Qualcomm had 74 per cent equity share capital of each of the four subsidiaries.
The balance 26 per cent equity was owned by Tulip Telecom and Global Holding Corporation. On May 29,
Bharti Airtel acquired 49 per cent stake in Qualcomm's 4G business in India for Rs 923 crore.
• “Bharti has presence in the telecom infrastructure. Therefore, it is observed that facts relating to Bharti which
are required to be examined for the purpose of assessment of the proposed combination in term of the notice
have not been dealt in the notice,” the CCI said, adding that the earlier notice is treated as not valid.
• The Commission, in its order, said that in its current form the combination is likely to give rise to adverse
• competitions and the directed the parties in question to apply with fresh details.
• Current deal
• Qualcomm had formed these four subsidiaries as the Department of Telecom had refused to give four licences
to the company. Qualcomm had won broadband spectrum in four circles during the auctions held in 2010.
• Under the current deal, Bharti will buy out Qualcomm's local partners Tulip Telecom Ltd and Global Holding
Corp.
• It will acquire an additional 23 per cent stake through purchase of fresh shares in Qualcomm's India entities.
• The US company will continue to hold 51 per cent till it exits India in the next two years. Bharti will take
• Qualcomm's Rs 4,000-crore debt on its books when it acquires 100 per cent stake in the venture in 2014.
15. • Leading non-banking finance company Shriram City Union Finance has got fair trade regulator CCI's approval
for a proposed merger of its two group companies through a multi-stage transaction.
• In an order released today, the Competition Commission of India (CCI) said it is approving the deal as the
proposed transaction is between entities from same group and is "not likely to raise any adverse
competition concern in India".
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• As per the proposed transaction, Shriram Enterprise Holdings Pvt Ltd (SEHPL) would be first amalgamated
with Shriram Retail Holdings Pvt Ltd (SRHPL) and thereafter the consolidated entity would be merged into
Shriram City Union Finance Ltd (SCUFL).
• SEHPL is currently a wholly-owned subsidiary of SRHPL and after the completition of all stages of the
transaction, SCUFL would remain as the single "surviving entity", the companies had said in their application
for CCI approval.
• Further, as per the notice, 51% stake in SRHPL is held by Shriram Capital Ltd (SCL) and the rest 49% by TPG
India Investment Ltd.
• Moreover, SRHPL holds 50.67% stake, while SCL holds 4.38% in SCUFL, the rest is held by public
shareholders, CCI said in order dated December 11.
• Following the merger, SCL would hold 30.4% in SCUFL, TPG India Investment would hold 25.04% while the
rest would be held by public shareholders.
• Another subsidiary of SCUFL, Shriram Housing Finance would continue to remain a subsidiary of SCUFL, CCI
said.
16. FEMA - Foreign Exchange Management
Act -1999
• The Foreign Exchange Management Act (FEMA) was passed in the winter
session of Parliament in 1999 replacing Foreign Exchange Regulation Act.
This act seeks to make offenses related to foreign exchange civil offenses. It
extends to the whole of India., which replaced Foreign Exchange Regulation
Act(FERA), had become the need of the hour since FERA had become
incompatible with the pro-liberalisation policies of the Government of India.
has brought a new management regime of Foreign Exchange consistent
with the emerging framework of the World Trade Organisation (WTO). It is
another matter that the enactment of FEMA also brought with it the
Prevention of Money Laundering Act 2002, which came into effect from 1
July 2005.
• Unlike other laws where everything is permitted unless specifically
prohibited, under this act everything was prohibited unless specifically
permitted. Hence the tenor and tone of the Act was very drastic. It required
imprisonment even for minor offences. Under FERA a person was presumed
guilty unless he proved himself innocent, whereas under other laws a
person is presumed innocent unless he is proven guilty.
17. Switch from FERA
• The done in 1974, a period when India’s foreign exchange reserve position
wasn’t at its best. A new control in place to improve this position was the
need of the hour. FERA did not succeed in restricting activities, especially
the expansion of TNCs (Transnational Corporations). The concessions
made to FERA in 1991-1993 showed that FERA was on the verge of
becoming redundant. After the amendment of FERA in 1993, it was
decided that the act would become the FEMA. This was done in order to
relax the controls on foreign exchange in India, as a result of economic
liberalization. FEMA served to make transactions for external trade
(exports and imports) easier – transactions involving current account for
external trade no longer required RBI’s permission. The deals in Foreign
Exchange were to be ‘managed’ instead of ‘regulated’. The switch to
FEMA shows the change on the part of the government in terms of
foreign capital.
18. Need for its management
• The buying and selling of foreign currency and other debt instruments by
businesses, individuals and governments happens in the foreign exchange
market. Apart from being very competitive, this market is also the largest
and most liquid market in the world as well as in India. It constantly
undergoes changes and innovations, which can either be beneficial to a
country or expose them to greater risks. The management of foreign
exchange market becomes necessary in order to mitigate and avoid the
risks. Central banks would work towards an orderly functioning of the
transactions which can also develop their foreign exchange market.
• Whether under FERA or FEMA’s control, the need for the management of
foreign exchange is important. It is necessary to keep adequate amount of
foreign exchange reserves, especially when India has to go in for imports of
certain goods. By maintaining sufficient reserves, India’s foreign exchange
policy marked a shift from Import Substitution to Export Promotion.
19. Main Features
• - Activities such as payments made to any person outside India or receipts from them, along with the deals in foreign exchange
and foreign security is restricted. It is FEMA that gives the central government the power to impose the restrictions.
• - Restrictions are imposed on people living in India who carry out transactions in foreign exchange, foreign security or who own
or hold immovable property abroad.
• - Without general or specific permission of the Reserve Bank of India, FEMA restricts the transactions involving foreign
exchange or foreign security and payments from outside the country to India – the transactions should be made only through
an authorised person.
• - Deals in foreign exchange under the current account by an authorised person can be restricted by the Central Government,
based on public interest.
• - Although selling or drawing of foreign exchange is done through an authorised person, the RBI is empowered by this Act to
subject the capital account transactions to a number of restrictions.
• - People living in India will be permitted to carry out transactions in foreign exchange, foreign security or to own or hold
immovable property abroad if the currency, security or property was owned or acquired when he/she was living outside India,
or when it was inherited to him/her by someone living outside India.
• - Exporters are needed to furnish their export details to RBI. To ensure that the transactions are carried out properly, RBI may
ask the exporters to comply to its necessary requirements.
