COMPETITION LAW

Ms.DIVYA.K
Asst Professor(Contract Basis)
School of Excellence in law-TNDALU
 SCHEME OF THE SUBJECT
UNIT I-Introduction
UNIT II-Anti Competitive Agreement
UNIT III-Abuse of Dominant Position
UNIT IV-:Regulation of Combinations
UNIT V-Competition Commission in
India
 REFERENCES
1. Avtar Singh, Competition Law, 2012,
Eastern Book Company
2. Tripathi, Competition Law,
3. Universal’s Guide to Competition Law in
India, 2003, Universal Publication
4. Avtar Singh, Law of Monopolies and
Unfair Trade Practices, 1993, Eastern
Book Company
 UNIT I
INTRODUCTION
Objective and Nature of Competition Laws-
Origin of Competition Laws- Anti Trust
Legislation in USA - Sherman Anti Trust Act,
1890 - Federal Trade Commission Act, 1914 -
the Clayton Act, 1914 - UK Competition Act,
1998 - The Enterprises Act, 2002 - Treaty on the
Functions of the European Union (TFEU) –
MRTP Act, 1969 – Ragavan Committee Report,
2000 - Transformation of MRTP Act to
Competition Act, 2002 – Distinction between
MRTP Act and Competition Act –– object and
scope of Competition Act, 2002.
 COMPETITION AND COMPETITION
LAW
COMPETITION
DERIVATION OF THE TERM
The word competition has been derived from the Latin word “competere”
which means to come together
MEANING
 The activity or condition of striving to gain or win something by defeating
or establishing superiority over others.
 Competition is an activity involving two or more firms, in which each firm
tries to get people to buy its own goods in preference to the other firms goods.
COMPETITION LAW
Competition law is a law that promotes or seeks to maintain market
competition by regulating anti-competitive conduct by companies.
1. PUBLIC ENFORCEMENT
2. PRIVATE ENFORCEMENT
Everyone has to face competition in the market to emerge as
successful and efficient. But such a competition should be
non- arbitrary, reasonable and fair in nature leading to
which a tremendous growth has been seen in the adoption of
Competition Law during the past few years

Competition Law aims to control monopolistic, unfair and

restrictive trade practices by creating a set of policies that
enhance competition or competitive outcomes in the
markets. Competition policies are intended to promote
efficiency, to maximize consumer or social welfare, and to
help in the creation of a business environment which is based
on fairness, leads to efficient resource allocation and in which
abuse of market power is prevented or curbed. Such policies
usually include relaxed industrial policy, liberalized trade
policy, conducive entry and exit conditions, reduced controls
and greater reliance on market forces.
VARIOUS COUNTRIES AND TERMS
United States-Antitrust law
China and Russia-Anti monopoly law
United Kingdom and Australia-Trade
practices law
 European Union-Antitrust
and Competition law
 India-Competition Law
 OBJECTIVE AND NATURE OF
COMPETITION LAWS
Competition Law has three main objectives
• It controls or prohibits agreements or practices that
restrict free trading and competition between business
entities. For example, repression of cartels.
• It regulates or bans abusive behaviour by a firm
dominating a market, or anti-competitive practices that
tend to lead to such a dominant position. Predatory
pricing, tying, price gouging, and refusal to deal are some
of the practices that are usually banned.
• It supervises mergers and acquisitions of large
corporations, including some joint ventures. Transactions
that threaten the competitive process can be prohibited
altogether, or in certain cases, approved subject to
remedies.
A perusal of some of the major text books and articles on the
subject provides a list of main objective of Competition Law

ECONOMIC WELFARE ECONOMIC INTEGRATION

ECONOMIC EFFICIENCY ENTREPRENEURSHIP

FREE AND FAIR DEMOCRACY AND

COMPETITION DEVELOPMENT

LIBERTY AND DISPOSAL OF CONSUMER WELFARE

ECONOMIC POWER

SOCIO-ECONOMIC BALANCED GROWTH

OBJECTIVES
MANAGEMENT OVER TRADE REMEDIRES
COMPETTION AGAINST IMPORTS
 NATURE OF COMPETITION
LAW
 Prohibition of certain agreements considered to be anti-
competitive in nature
 Exploitation of dominant position by imposing unfair
conditions and restricting production of goods and services
 Regulation of combination which causes or likely to cause
an adverse effect on competition within India, such
combinations are considered void.
 To promote and sustain competition in market.
 To protect the interest of consumers
 To ensure freedom of trade carried on by other participants in
the market.
ORIGIN OF COMPETITION LAW
Various geographical regions all over the globe are seen to adopt
the competition law and they brought their economies under the
provisions of the competition law. Gradually, the market
failures, abuse of dominance and other ill
practices in the form of any anti-competitive policy and so on
are made subject to the competition laws and policies. It is
realized that the implementation of the competition law is a need
of the hour and not a privilege.
The necessity was to regulate the competition in the market so
that any company or any enterprise is not able to destruct any
other person in the market for satisfying its own demands or
reach the zenith of success. And eventually to conduct and
regulate competition in the market and to put a sword on all the
anti-competitive practices in the market, a separate and new
branch of law has come to upfront namely Competition Law
THE UNITED STATES OF AMERICA
COMPETITION LAW
Once upon a time, way back in the 1800s, there were several
giant businesses known as “trusts.” They controlled whole
sections of the economy, like railroads, oil, steel, and sugar.
Two of the most famous trusts were U.S. Steel and Standard
Oil; they were monopolies that controlled the supply of their
product as well as the price. With one company controlling
an entire industry, there was no competition, and smaller
businesses and people had no choices about from whom to
buy. Prices went through the roof, and quality didn’t have to
be a priority. This caused hardship and threatened the new
American prosperity.
While the rich, trust-owning businessmen got richer and
richer, the public got angry and demanded the government
take action. President Theodore Roosevelt “busted” many
trusts by enforcing what came to be known as “antitrust”
laws. The goal of these laws was to protect consumers by
promoting competition in the marketplace.
The U.S. Congress passed several laws to help promote
competition by outlawing unfair methods of competition:
 The Sherman Act is the nation’s oldest antitrust law. Passed
in 1890, it makes it illegal for competitors to make agreements
with each other that would limit competition. So, for example,
they can’t agree to set a price for a product that’d be price
fixing. The Act also makes it illegal for a business to be a
monopoly if that company is cheating or not competing fairly.
Corporate executives who conduct their business that way could
wind up paying huge fines and even go to jail.
 The Clayton Act was passed in 1914. With the Sherman Act in
place, and trusts being broken up, business practices in America
were changing. But some companies discovered merging as a
way to control prices and production (instead of forming trusts,
competitors united into a single company. The Clayton Act
helps protect American consumers by stopping mergers or
acquisitions that are likely to stifle competition.
 With the Federal Trade Commission (FTC) Act (1914), Congress
created a new federal agency to watch out for unfair business
practices—and gave the Federal Trade Commission the authority
to investigate and stop unfair methods of competition and
deceptive practices.
The Federal Trade Commission’s (FTC’s) Bureau of
Competition and the Department of Justice’s Antitrust
Division enforce these three core federal antitrust laws
The other two antitrust laws are
1.The Robinson Patman Act 1936
2.The Celler-Kefauver Act 1950
 THE SHERMAN ACT 1890
The Sherman Antitrust Act is the first antitrust legislation to
be passed by the United States Congress. It was introduced
during the term of US President Benjamin Harrison. The law
was named after Ohio politician, John Sherman, who was an
expert in trade and commerce regulation. The Sherman Act is
codified 15 U.S.C. §§ 1-38 in Title 15 of the U.S. Code.
Sherman crafted the law to prevent the concentration of power
into the hands of a few large enterprises to the disadvantage of
smaller enterprises. Specifically, the act attempted to prohibit
business practices that attempt to monopolize the market, as well
as anti-competitive agreements that push small enterprises and
new entrants out of the market.
The act gave the federal government and the Department of
Justice the authority to institute legal suits against enterprises
that violate the act.
The Provisions of the Sherman Antitrust Act addressed the
issues of Restraint in Trade, Concerted Action, Price Fixing
and Market Allocation, Boycotts, Tying Arrangements and
Monopolies
The Sherman Antitrust Act is divided into three parts with
specific provisions for regulating economic competition.
Section 1, set forth a basis for anticompetitive conduct when
dealing with commerce. Section 1 of the act states, “Every
contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade or commerce among the
several States, or with foreign nations, is declared to be
illegal.” This means that any attempt to monopolize a business
across state lines or national borders will be deemed illegal and a
violation of the act.
Section 2, discusses the effects of anticompetitive behaviour. It
states, “Every person who shall monopolize, or attempt to
monopolize, or combine or conspire with any other person or
persons, to monopolize any part of the trade or commerce
among the several States, or with foreign nations, shall be
deemed guilty of a felony…”This section gives the
consequences of violating the Sherman Antitrust Act. It seems to
be used to deter corporations from engaging in anticompetitive
practices.
Section 3, extends the provisions of Section 1 to U.S. territories
and the District of Columbia.
 SPECTRUM SPORTS, INC. V. MCQUILLAN 506 U.S. 447 (1993)
The Supreme Court observed that
The purpose of the [Sherman] Act is not to protect businesses from the
working of the market; it is to protect the public from the failure of the
market. The law directs itself not against conduct which is competitive, even
severely so, but against conduct which unfairly tends to destroy competition
itself.
PURPOSE OF THE SHERMAN ACT
 To respond to the public outcry against monopolies and their
damaging effect on prices and therefore consumers and
suppliers
 To reduce the power of the Robber Barons
 To regain a balance in industry allowing equal opportunities to
all businesses
 To prohibit anti-competitive practices
 To regulate interstate commerce
 To curb restraint in trade
 To restrict price fixing and market allocation
 To prevent boycotts by two or more companies
 To prohibit monopolies and attempts or conspiracies to
monopolize
 THE CLAYTON ACT 1914
The Clayton Antitrust Act is a United States antitrust law that was enacted in
1914 with the goal of strengthening the Sherman Antitrust Act. After the
enactment of the Sherman Act in 1890, regulators found that the act
contained certain weaknesses that made it impossible to fully prevent anti-
competitive businesses practices in the United States.
Senator Henry Clayton of Alabama introduced the Clayton Antitrust Bill
to the US Congress in 1914. The US Congress passed the bill in June 1914,
and President Woodrow Wilson later signed it into law.
The Clayton Antitrust Act sought to address the weaknesses in the Sherman
Act by expanding the list of prohibited business practices that would prevent
a level playing field for all businesses. Some of the practices that the law
focuses on include price fixing, exclusive dealings, price discrimination, and
unfair business practices.
The Clayton Antitrust Act comprised 26 sections. The following are some of
the most notable sections that influence business practices in the United States
Section 2: Price discrimination
 Section 2 of the Clayton Act deals with price discrimination, where a company
decides to offer different prices for the same product or service. Such a
strategy attempts to maximize the price that each customer is willing to pay.
Price discrimination is intended to lessen competition or create a monopoly.
 The section was later strengthened through the Robinson-Patman Act 1936
which was designed to protect small retailers from anti-competitive practices
pursued by large business chains and discount stores. An example of the anti-
competitive practices is fixing minimum prices for certain retail products.
Section 3: Monopoly or attempts to create a monopoly
 Section 3 deals with business practices that attempt to create a monopoly. The
section prevents businesses from carrying out a sale, lease, contract for sale, or
agreements that may reduce the competition or create a monopoly in its
specific industry.
Section 7: Mergers and acquisition
 Section 7 prevents companies from merging or acquiring other smaller entities
with the goal of gaining too much power that lessens competition. The law
extends to other antitrust laws where a merger transaction would essentially
create a monopoly.
 The Clayton Act was strengthened by the Hart-Scott-Rodino Antitrust Act,
which requires companies planning a merger or acquisition to notify the
Federal Trade Commission and the Department of Justice. The agencies
reserve the right to reject or approve a merger transaction depending on their
findings.
OBJECTIVES OF THE CLAYTON ACT 1914

TO STOP PRICE
DISCRIMINATION

EXCLUSIVE DEALS

PRIVATE LAWSUITS

LABOUR UNION
ORGANIZATION

MERGERS AND
ACQUISITIONS
In 1936, the Robinson-Patman Act amended the
Clayton Act to prohibit anticompetitive price
discrimination and allowances in dealings between
merchants. Robinson-Patman was designed to
protect small retail shops against unfair
competition from large chain and “discount” stores
by establishing minimum prices for certain retail
products.
The Clayton Act was again amended in 1976 by
the Hart-Scott-Rodino Antitrust Improvements Act,
which requires companies planning major mergers
and acquisitions to notify both the Federal Trade
Commission and the Department of Justice of their
plans well in advance of the action.
The Federal Trade Commission Act 1914
 The Federal Trade Commission Act (FTCA) is a federal
law passed in 1914 establishing the Federal Trade
Commission (FTC). It was signed into law by President
Woodrow Wilson on September 26, 1914.
 It replaced the Bureau of Corporations –Theodore
Roosevelt created the Bureau of Corporations which was an
agency that reported on the economy and businesses in the
industry.
 The five-member body was created to protect consumers by
preventing what it deemed unfair methods of competition
between businesses and deceptive business practices.
 The FTC investigates price-fixing agreements and other
unfair methods of competition
 Prohibits mergers and price discriminations that threatened
to lessen competition;
 Investigates deceptive practices such as false advertising
and
 Regulates packaging and labelling of consumer goods to
prevent deception.
The Act gave the commission the authority to
(a) prevent unfair methods of competition and unfair or deceptive acts or
practices in or affecting commerce;
(b) seek monetary redress and other relief for conduct injurious to consumers;
(c) prescribe rules defining with specificity acts or practices that are unfair or
deceptive, and establishing requirements designed to prevent such acts or
practices;
(d) gather and compile information and conduct investigations relating to the
organization, business, practices, and management of entities engaged in
commerce; and
(e) make reports and legislative recommendations to Congress and the public.
COMMISSION MEMBERS
The five commissioners of the FTC are nominated by the President and must
be confirmed by the Senate. Commissioners are appointed for seven-year
terms. No more than three of the FTC members can be from the same
political party.
FTC BUREAUS
The FTC includes the Bureau of Consumer Protection, the Bureau of
Competition, and the Bureau of Economics.
AMENDING STATUTES
Below is a partial list of subsequent laws that amended provisions of the
Federal Trade Commission Act
• The Robinson-Patman Act 1936 outlawed price
discrimination, defined as "a pricing strategy that
charges customers different prices for the same
product or service.“ This act added price
discrimination as an anticompetitive practice regulated
by the FTC.
• The Wheeler-Lea Act 1938 expanded the FTC's
regulatory authority to include unfair and deceptive
practices targeting consumers, such as false advertising.
Prior to this act, the FTC was limited to regulating
anticompetitive practices among businesses.
• The Magnuson-Moss Warranty—Federal Trade
Commission Improvement Act (1975) authorized the
FTC to regulate written warranties on consumer
products.
• The Hart-Scott-Rodino Act (1976) requires the
parties to a large merger or acquisition to provide
notification and information to the FTC before the
transaction is completed.
UNITED KINGDOM
 United Kingdom competition law is influenced by both British and
European elements. The Competition Act 1998 and
the Enterprise Act 2002 are the most vital statutes for cases with a
purely national element. However, if the effect of a business conduct
would reach across borders, the European Commission has
authority to deal with the problems, and exclusively EU law would
apply. Section 60 of the Competition Act 1998 provides that UK
rules are to be applied in line with European jurisprudence.
The three main objectives of UK Competition Law are
 Prohibiting agreements or practices that restrict free trading and
competition between business entities. This includes in particular the
repression of cartels.
 Banning abusive behaviour by a firm dominating a market, or anti-
competitive practices that tend to lead to such a dominant position.
Practices controlled in this way may include predatory
pricing, tying, price gouging, refusal to deal and many others.
 Supervising the mergers and acquisitions of large corporations,
including some joint ventures.
 THE COMPETITION ACT 1998
The Competition Act, 1998 is considered to be one of the major sources of
competition law in the United Kingdom. This Act provides a contemporary skeleton
for identifying as well as tackling the conditional business practices. The Act also
provides a shield against the abusive nature of dominant markets. In other words, this
Act protects the country against the damaging effect on the competition via any
agreement or business practice.
OBJECT OF THE ACT
An Act to make provision about competition and the abuse of a dominant position
in the market; to confer powers in relation to investigations conducted in
connection with Article 85 or 86 of the treaty establishing the European
Community; to amend the Fair Trading Act 1973 in relation to information which
may be required in connection with investigations under that Act; to make
provision with respect to the meaning of "supply of services" in the Fair Trading
Act 1973; and for connected purposes.
The Act is divided into IV parts and 14 schedules, Chapter I (Agreements) and
Chapter II (Abuse of Dominant Position) of Part I being the important ones for the
scope of this article.
Part I consists of six chapters, that is, from Section 1 to Section 60. Chapter I
prohibits any agreement or concerted (collaborative) practice that is performed with
the purpose of preventing, restricting or distorting competition, provided an
exemption from the prohibition applies.
Part II: European Investigations
Part II of the Act throws light on market investigations. The European
Commission was given the power to investigate markets. The European
Union market investigation power is inspired by the power under United
Kingdom legislation to carry out competition investigations into markets.
This Part provides various provisions such as the power to enter a business or
non-business premises under a warrant with respect to related Articles;
privileged communication; power to conduct an investigation; offences etc
Part III: Amendments to the Fair Trading Act, 1973
Part III of the Act deals with ‘Monopolies’ and consists of four sections, that is,
from Section 66 to 69. The Fair Trading Act, 1973 has extended as well as
integrated the United Kingdom competition law by controlling monopolies,
mergers, takeovers, resale prices, and restrictive trade agreements. This Act
established a regulatory authority, namely the Office of Fair Trading (OFT)
with powers to supervise all aspects of competition policy along with specific
responsibilities to oversee matters affecting consumers’ interests.
Part IV: Miscellaneous amendments
Part IV of the Act is a supplement to this Act and consists of seven sections, that
is, Section 70 to 76.
This Act has ceased the existence of various
Acts such as
Monopolies and Restrictive Practices Act, 1948;
Monopolies and Mergers Act, 1965;
Restrictive Practices Court Act, 1976;
Resale Prices Act, 1976;
Nowadays, competition law in the United
Kingdom is regulated primarily by:
• Fair Trading Act 1973;
• Competition Act 1998; and
• European Community Legislation (it is either
implemented or directly applicable)
THE ENTERPRISE ACT 2002
The Enterprise Act 2002 is a key piece of UK legislation involved in the effort
to enforce competition law and crack down on anti-competitive behaviour
conducted by businesses in the UK. The Competition and Markets
Authority (CMA) is responsible for enforcing the Enterprise Act 2002 across
the UK. It is important for organisations to be aware of this legislation and
what it demands from them regarding their business conduct. If the
organisation does not become aware of the Enterprise Act 2002, there is
potential for severe consequences.
The Enterprise Act 2002 was established with the purpose of tightening
control on competition law and ensuring that those organisations which do
conduct anti-competitive activity are penalised. The Enterprise Act focuses
upon establishing penalties and regulations in order to deter organisations
from engaging in anti-competitive conduct.
Ultimately, the Enterprise Act has introduced changes to UK competition law
to establish more awareness of competition law in the UK so that businesses
cannot neglect its existence.
 An Act to establish and provide for the functions of the
Office of Fair Trading, the Competition Appeal
Tribunal and the Competition Service; to make
provision about mergers and market structures and
conduct; to amend the constitution and functions of the
Competition Commission; to create an offence for those
entering into certain anti-competitive agreements; to
provide for the disqualification of directors of
companies engaging in certain anti-competitive
practices; to make other provision about competition
law; to amend the law relating to the protection of the
collective interests of consumers; to make further
provision about the disclosure of information obtained
under competition and consumer legislation; to amend
the Insolvency Act 1986 and make other provision
about insolvency; and for connected purposes.
 Part 1: The Office of Fair Trading (ss 1-11)
 Part 2: The Competition Appeal Tribunal (ss 12-21)
 Part 3: Mergers
 Chapter 1: Duty to make references (ss 22-41)
 Chapter 2: Public interest cases (ss 42-58)
 Chapter 3: Other special cases (ss 59-70)
 Chapter 4: Enforcement (ss 71-95)
 Chapter 5: Supplementary (ss 96-130
 Part 4: Market Investigations
 Chapter 1: Market investigation references (ss 131-138)
 Chapter 2: Public interest cases
 Chapter 3: Enforcement
 Chapter 4: Supplementary (ss 168-184)
 Part 5: The Competition Commission (ss 185-187)
 Part 6: Cartel offence (ss 188-202)
 Part 7: Miscellaneous Competition Provisions (ss 203-209)
 Part 8: Enforcement of certain consumer legislation (ss 210-236)
 Part 9: Information (ss 237-247)
 Part 10: Insolvency (ss 248-272)
 Part 11: Supplementary (ss 273-281)
Schedules
 KEY FEATURES OF THE ENTERPRISE ACT 2002
 Directors who are involved in anti-competitive behaviour, whether this be
formation of a cartel or agreements, can now face up to 5 years in prison. Moreover,
they will be disqualified from holding the position of a director for 15 years. This
shows that members of the management team within businesses need to ensure they
comply with competition law and set the example.
 It is considered a severe criminal offence for those who are engaged in and
conduct cartel activity, and the respective investigations and penalties issued will
reflect the severity of this offence.
 The Act has empowered the Office of Fair Trading (OFT) and separated it from
the government, making it independent. There can now be super-complaints issued to
the OFT by certain bodies in relation to anti-competitive conduct.
 With the empowerment of the OFT (which saw the abolition of the Director
General of Fair Trading (DGFT)), now it has the previous powers enjoyed by the
DGFT for the investigation process into competition law.
 In terms of creating stricter penalties for anti-competitive behaviour, the Enterprise
Act has increased the prison sentences imposed.
 Following the investigation into a business which has been accused of anti-
competitive behaviour, the competition commission can now go further and
investigate the whole industry which that business was a part of. Consequently,
competition commissions now have the capability to extend their investigations,
ensuring they capture all anti-competitive conduct.
 The Act now establishes more specific merger control upon the business sector.
 The Commission Appeals Tribunal (CAT) has been established to allow
companies to appeal against the competition commission, therefore ensuring all
investigations conducted are fair.
TREATY ON THE FUNCTIONS OF THE
EUROPEAN UNION (TFEU)
The European Union (EU) is a political and economic
partnership that represents a unique form of cooperation
among sovereign countries. The EU is the latest stage in a
process of integration begun after World War II, initially by
six Western European countries, to foster
interdependence and make another war in Europe
unthinkable. The EU currently consists of 27 member
states, including most of the countries of Central and
Eastern Europe, and has helped to promote peace, stability,
and economic prosperity throughout the European
continent.
The EU is governed by several institutions. EU member
states work together through common institutions to set
policy and promote their collective interests.
 The Treaties of Rome are two treaties signed in Rome on 25
March 1957 which came into force on 1 January 1958:
 The Treaty establishing the European Economic
Community, also referred to as the EEC Treaty, established
the European Economic Community (EEC);
 The Treaty establishing the European Atomic Energy
Community, also referred to as the Euratom Treaty, established
the European Atomic Energy Community (EAEC or Euratom).
Both were signed by the six founding Member States: Belgium,
France, Italy, Luxembourg, the Netherlands and West Germany.
The EEC Treaty is the legal basis for the European Union (EU).
The EEC Treaty has been amended and renamed on several
occasions, the most important of which were:
 The 1993 Treaty of Maastricht on European Union renaming the
Treaty establishing the European Economic Community (EEC
Treaty) to the Treaty establishing the European
Community or EC Treaty;
 The Treaty of Lisbon, which entered into force on 1 December
2009, replacing the EC Treaty with the Treaty on the
Functioning of the European Union (TFEU)
OBJECTIVES OF TFEU
 The fundamental objective is to prevent of distortion of
competition
 To combat discrimination based on sex, racial or ethnic origin,
religion or belief, disability, age or sexual orientation
 To establish EU citizenship and accord rights to it.
 To maintain price stability and work with the principles of an
open market and free competition
 To give rise to the weight of European Labour Law
 To concern education, vocational training, youth and sport
policies.
 To allow measures for public health
 To act for consumer protection
 To promote industry and industrial policy
 To improve environmental policy
 To ensure civil protection
 To ensure administrative cooperation
 To promote tourism
 To concern research and development and space policy
THE TEFU IS SPLIT INTO 7 PARTS
Part 1-Principles
Part 2-Non-discrimination and citizenship
of the Union
Part 3-Union policies and internal actions
Part 4-Association of the overseas countries
and territories
Part 5-External action by the Union
Part 6-Institutional and financial provisions
Part 7-General and final provisions
Part 1 :Principles:
 Describes the scope of the treaty and its link to the TEU (Article 1);
 Outlines the EU competences according to the level of EU powers in each
area (Articles 2, 3, 4, 5 and 6);
 Sets out general principles governing the action of the EU (Articles 7 to 17).
Part 2 :Non-discrimination and citizenship of the EU:
 Outlaws nationality-based discrimination (Article 18);
 States the EU will ‘combat discrimination based on sex, racial or ethnic
origin, religion or belief, disability, age or sexual orientation’ (Article 19);
 Establishes and defines citizenship of the EU and the related rights (Articles
20 to 24).
Part 3 : The largest (Articles 26 to 197), it brings the legal basis for the EU
policies and internal actions in the following areas:
 The internal market (Title I);
 The free movement of goods (Title II), including the customs union;
 The common agricultural policy and the common fisheries policy (Title III);
 The free movement of workers (and people in
general), services and capital (Title IV);
 The area of freedom, justice and security (Title V), including police and
justice cooperation;
 Transport (Title VI);
 Competition, taxation and the harmonisation of legislation (Title VII);
 Economic and monetary policy (Title VIII), including articles on the euro;
 Employment policy (Title IX);
 Social policy (Title X), with reference to the European Social
Charter (1961) and the Community Charter of the Fundamental Social
Rights of Workers (1989) — Title XI establishes the European Social Fund;
 Education, vocational training, youth and sport policies (Title XII);
 Culture (Title XIII);
 Public health (Title XIV);
 Consumer protection (Title XV);
 Trans-European networks (Title XVI);
 Industrial policy (Title XVII);
 Economic, social and territorial cohesion — in other words, reducing
disparities in development (Title XVIII);
 Research and development and space policy (Title XIX);
 Environmental policy (Title XX);
 Energy policy (Title XXI);
 Tourism (Title XXII);
 Civil protection (Title XXIII);
 Administrative cooperation (Title XXIV).
Part 4:
Association of the overseas countries and territories (Articles
198 to 204) describes the special relations between the EU and
the overseas territories of some EU countries which, contrary to
outermost regions, are not part of the EU.
Part 5 :
EU external action (Articles 205 to 222) describes:
 The common commercial (external trade) policy;
 Cooperation on development and humanitarian aid for non-EU
countries;
 Relations with non-EU countries (international
treaties, sanctions and solidarity between EU countries) and
international bodies;
 The establishment of EU delegations;
 That external actions must be in accordance with the principles
laid out in Chapter 1, Title 5 of the TEU regarding the common
foreign and security policy (Article 205).
Part 6
Institutional and financial provisions elaborates on:
 EU institutions (Articles 223 to 227);
 EU consultative bodies (Articles 300 to 307);
 The European Investment Bank (Articles 308 and 309);
 Legislative acts (regulations, directives, etc.)
and procedures of the EU (Articles 288 to 299);
 The EU budget (Articles 310 to 325);
 Enhanced cooperation between EU countries (Articles
326 to 334).
Part 7
General and final provisions (Articles 335 to 358) deals
with specific legal points such as the legal capacity of
the EU, territorial and temporal application, the seat of
institutions, immunities and the effect on treaties signed
before 1958 or the date of accession.
 TFEU-COMPETITION PROVISIONS
European antitrust policy is developed from two central rules set
out in the Treaty on the Functioning of the European Union:
 Article 101 of the Treaty prohibits agreements between two or
more independent market operators which restrict competition.
This provision covers both horizontal agreements (between
actual or potential competitors operating at the same level of the
supply chain) and vertical agreements (between firms operating
at different levels, i.e. agreement between a manufacturer and its
distributor).
Only limited exceptions are provided for in the general
prohibition. The most flagrant example of illegal conduct
infringing Article 101 is the creation of a cartel between
competitors, which may involve price-fixing and/or market
sharing.
 Article 102 of the Treaty prohibits firms that hold a dominant
position on a given market to abuse that position, for example
by charging unfair prices, by limiting production, or by refusing
to innovate to the prejudice of consumers.
 The European Commission is empowered by the Treaty to
apply these rules and has a number of investigative powers to
that end (e.g. inspection at business and non-business
premises, written requests for information, etc.).
The Commission may also impose fines on undertakings
which violate the EU antitrust rules. National Competition
Authorities (NCAs) are empowered to apply Articles 101
and 102 of the Treaty fully, to ensure that competition is not
distorted or restricted. National courts may also apply these
provisions to protect the individual rights conferred on
citizens by the Treaty. Building on these achievements,
the Commission on Ten Years of Antitrust Enforcement
identified further areas to create a common competition
enforcement area in the EU.
 As part of the overall enforcement of EU competition law,
the Commission has also developed and implemented a
policy on the application of EU competition law to actions
for damages before national courts. It also cooperates with
national courts to ensure that EU competition rules are
applied coherently throughout the EU.
COMPETITION LAW IN INDIA
 India is hailed as a green-field competition regime. However, India's competition
law jurisprudence is older than many of its developing country counterparts.
 The pre-independence period had witnessed a certain level of industrialization
amongst a class of people who managed to attain an entrepreneurial rank despite the
misery and havoc caused by the colonial rule.
 The country wholly adopted the Indian Industrial Policy (1948-1991) after the
independence in order to promote and protect the economic development. The new
policy also clearly defined the role of State in commercial development.
 Another important resolution which was passed in 1956 started the regulatory
process of the government. The government actively intervened in the entire
mechanism of industrialization. It laid an effective platform for the public sector to
reach the summits of success by assigning core industrial sectors such as steel and
coal to public sector.
 On the other hand, the private sectors had restricted licensing ability. Since the
government was the sole controller of all the activities taking place on the
commercial front, there were high tariffs and needless to say, no freedom to compete
fairly. The government supported the successful and influential entrepreneurs by
granting commercial licences, as they largely contributed to the economy and secured
collaborations world over.
 However, this scenario also led to anti-competitive behaviour amongst a group of
businessmen and this was harming the interests of the public at large.
 This led to formation of the MRTP Act, 1969 to prevent monopolistic and
restrictive trade practices which cause jeopardy to the consumer as well as the service
 THE MONOPOLIES AND RESTRICTIVE TRADE
PRACTICES ACT,1969
Three studies primarily influenced the shaping up of the
MRTP Act.
(i) Hazari Committee Report on Industrial Licensing
Procedure , 1955
This study stated that the States have been biased in granting
Industrial Licenses only to wealthy and influential
entrepreneurs and it has resulted in an uneven growth of the
industries.
(ii) Mahalanobis Committee Report on Distribution and
Levels of Income, 1964
This study reported that the economic model was planned in a
way that it supported the successful industrialists and a
handful of influential groups controlled a huge chunk of
income.
(iii) Monopolies Inquiry Commission Report of Das
Gupta,1965- According to this study, the economic power
was in the hands of a few commercial houses and restrictive
and monopolistic trade practices were widespread.
 Witnessing the irregularities in the market, extensive control of
the State and the soft legal system, the Monopolies Inquiry
Commission (MIC) drafted a bill .This Bill later became the
Monopolies and Restrictive Trade Practices Act, 1969. It
came into force on 1stJune 1970. The MRTP Act had its
legislative roots in the Directive Principles of State Policy
which are incorporated in the Constitution of India. Sub-
sections (b) and (c) of Article 39 of the Constitution mention
that the state must drive its policies to ensure that
Art 39 (b) the ownership and control of the material resources of
the community are so distributed as best to serve the common
good;
(c) the operation of the economic system does not result in
the concentration of wealth and means of production to the
common detriment.
INFLUENCED: The new MRTP Act drew heavily upon the
Sherman Act and the Clayton Act of the United States, the
Monopolies and Restrictive Trade Practices (Inquiry and
Control) Act, 1948, the Resale Prices Act, 1964 and the
Restrictive Trade Practices Act, 1964 of the United Kingdom
and also laws enacted in Japan, Canada and Germany. The US
Federal Trade Commission Act, 1914 as amended in 1938
OBJECT OF THE MRTP ACT,1969
An Act to provide that the operation of the economic
system does not result in the concentration of
economic power to the common detriment, for the
control of monopolies, for the prohibition of
monopolistic and restrictive trade practices and for
matters connected therewith or incidental thereto.
AIM OF MONOPOLISTIC AND RESTRICTIVE
TRADE PRACTICES (MRTP) ACT, 1969:
• Prevention of concentration of economic power to the
common detriment.
• Control of monopolies.
• Prohibition of Monopolistic Trade Practices (MTP).
• Prohibition of Restrictive Trade Practices (RTP).
THE MONOPOLISTIC TRADE PRACTICE (MTP)-Sec 2(i)
MONOPOLY: A market structure characterized by a single seller, selling a unique
product in the market. In a monopoly market, the seller faces no competition, as he is
the sole seller of goods with no close substitute.
An MTP is a trade practice which has or is likely to have the effect of:
 Maintaining the prices of goods or charges for the services at an unreasonable level
by limiting, reducing or otherwise controlling the production, supply or distribution
of goods or the supply of any services or in any other manner;
 Unreasonably preventing or lessening competition in the production, supply or
distribution of any goods or in the supply of any services;
 Limiting technical development or capital investment to the common detriment or
allowing the quality of any goods produced, supplied or distributed, or any services
rendered, in India to deteriorate;
MTP is a result of
 Unreasonable pricing
 Limiting or restricting competition or no free market
 Limiting development (technical and economic development by limiting production
and supply)
 Making unreasonable profits
Example
Unreasonably increasing the price of certain goods in the market or selling or
reselling the goods at a price which is more than the Maximum Retail Price (MRP).
The Restrictive Trade Practice (RTP) –Sec 2(o)
A restrictive trade practice is generally one which has the effect of preventing,
distorting or restricting competition. In particular, a practice which tends to obstruct
the flow of capital or resources into the stream of production is an RTP. Likewise,
manipulation of prices, conditions of delivery or flow of supply in the market which
may have the effect of imposing on the consumer unjustified costs or restrictions are
regarded as restrictive trade practices.
It is a result of:
 Refusal to deal with the consumers
 Selective dealings
 Discrimination in pricing scheme
 Restriction of area
 Tying up the sales
Example
 A contract between Manufacturer A and Distributor B may state that Manufacturer A
will not sell to Distributor C. Alternatively, it may state that Distributor B will not buy
from Manufacturer D
 A trader accumulates his stock of food grains in order to increase the price of the
grains in the market so that he can sell it at a higher price.
 In order to buy a television from trader X, one needs to buy a table first.
THE UNFAIR TRADE PRACTICE (UTP)
An unfair trade practice refers to that malpractice of a trader that is unethical
or fraudulent. These practices cause an inconvenience or grievance to
consumers. It is a trade practice carried out for the promotion of sale. It is the
distribution or utilisation of any good or service by adopting a deceptive
method or practice.
It is a result of:
 Hoarding or destruction of goods
 Promoting false and misleading promotional contests Retail Price (MRP).
 Bargain sale
 Misleading Advertisement
 Free Riding over someone else’s reputation
 The practice of making any oral or written statement which suggests that the
renovated, repolished or old goods are new.
EXAMPLES
• A dress has been used for 2 months and is now being sold by a seller as a
new dress.
• The battery of a mobile phone is guaranteed to work well for one year but
wears away in a month.
• A geyser that is not ISI approved has an ISI mark.
• A table of Rs. 500 is sold online with Rs. 600 delivery charge, but the good is
claimed by the seller to be free of cost.
 The MRTP ACT 1969 comprised of IX Chapters divided
into 67 sections
 Chapter I-Preliminary –Sec 1-4
 Chapter II-Monopolies And Restrictive Trade Practices
Commission-Sec 5-19
 Chapter III-Concentration of Economic Power-Sec 27-27B
 Part A consisting sections 20 to 26 and words "Part B",
omitted by Act No. 58 of 1991 s.8(a) and s. 8(b) respectively,
w.e.f. 27th. September, 1991
 Chapter IV Monopolistic Trade Practices-Sec 31 and 32
 Chapter V Restrictive Trade Practices And Unfair Trade
Practices-Sec 33-36E
 Chapter VI Control of Certain Restrictive Trade Practices-
Sec 37-41
 Chapter VII Power To Obtain Information And Appoint
Inspectors-Sec 42-44
 Chapter VIII Offences And Penalties-Sec 45-53
 Chapter IX Miscellaneous-Sec 54-67
MRTP act was not applicable to :
 Government Company and undertaking owned by Government.
 Company established by a Central or State Act.
 Trade Unions
 Companies which have been taken over by the central Government.
 Companies owned by registered Cooperative Societies.
 Any financial institution.
Monopolies And Restrictive Trade Practices Commission
An important organ of the Ministry of Company Affairs is the
Monopolies and Restrictive Trade Practices Commission (
MRTPC) which is a quasi-judicial body.
The MRTP Commission established under Section 5 of the
Monopolies and Restrictive Trade Practices Act, 1969, discharges
functions as per the provisions of the Act.
The main function of the MRTP Commission is to enquire into and
take appropriate action in respect of unfair trade practices and
restrictive trade practices. In regard to monopolistic trade
practices, the Commission is empowered under Section 10(b) to
enquire into such practices
(i) upon a reference made to it by the Central Government or
(ii) upon its own knowledge or information and submit its findings to
Central Government for further action.
 Uptil 1984, MRTP was successfully regulating the competition in the Indian
market. However, by 1984, certain amendments were required to update the
act as per the needs of the society.
Following are the major amendments made to the MRTPA
1984 Amendment This amendment was based on the recommendations of the
Sachar Committee. The amendment inserted Section 36A to the Act to protect
the final consumers against the unfair trade practices so that an effective
action can be taken against them. Thus, claims against false advertisements,
deceptive representation of goods, false guarantees came under the purview
of the Act.
1991 Amendment This amendment allowed the MRTP Act to be extended to
the public sector and the government owned companies also. After this
amendment, the private players functioning in the market were no longer
required to take special approvals or permission from the government before
carrying out any corporate reconstruction. This amendment to the MRTPA
came to effect in the light of the New Economic Policy which led to the
opening of Indian economy. The License Raj which restricted the growth of
the Indian economy was thus abolished
DRAWBACKS OF MRTP ACT
1. Poorly resourced commission
2. Inadequacy in dealing effectively with anticompetitive
practices, due to lack of definitions, cumbersome procedures
and scarce resources
3. Absence of specification of identifiable anti competition
practices
4. Anti- competition practices like cartels , predatory pricing,
rigging etc are not clearly defined.
It should be noted here that despite the above amendments to
remedy the shortfalls of the MRTP Act, there were many
loopholes left which catalyzed its repeal.
A perusal of MRTP Act shows that there is neither definition
nor even a mention of certain offending trade practises such as
abuse of dominance, cartels, collusions and price fixing, bid
rigging and predatory pricing. The MRTP Act became
obsolete in certain areas in the light of international
economic developments relating to competition laws. The
competition act while replacing the MRTP Act shifts our focus
from curbing monopolies to promoting competition. But the
Indian competition Act should be strong enough and also try to
match up with the international standards.
 The Ministry of Corporate Affairs, Government of India has issued a
Notification dated 28th August 2009, whereby the most controversial
the Monopolies and Restrictive Trade Practices Act, 1969 (“the MRTP
Act”) stands repealed and is replaced by the Competition Act, 2002,
with effect from September 1, 2009.
LANDMARK JUDGMENTS
1.Registrar Of Restrictive Trade vs Bata India Ltd 1975 45 Comp Cas
674 NULL
In this case, Bata had a dominant position in the footwear market in India.
It was actively involved in the manufacturing of different kinds of
footwear. The poor manufacturers essentially involved cobblers and other
small scale manufacturers. The agreements between the parties restricted
the small scale traders to only buy raw material and soles from the parties
and dealers approved by Bata. After analysing the agreements in question,
the MRTP Commission took the view that the acts committed by Bata were
restrictive and monopolistic in the light of the provisions of the MRTP Act,
1969. According to the Commission, such restrictive trade practices were
detrimental to public interest.
2.Modern Food Industries Case 1996 3 Comp LJ 154, New Delhi,
1996.
In this case, the MRTP Commission had to deal with a complaint of
predatory pricing. Modern Food Industries was engaged in the production. of
bread and bakery products. It was selling breads at prices lower than the cost
of productions, so as to attain a dominant position in the market by
eliminating all its competitors. Its ultimate motive was to increase prices after
attaining a dominant position in the market. Pricing below marginal costs
with an intention to eliminate competition is a monopolistic trade practice

3. Lakhanpal National Ltd. v. MRTP Commission

It was alleged before the Commission that The appellant company was
manufacturing NOVINO (dry cell) batteries in collaboration with M/s.
Mitsushita Electric Industrial Company of Japan, and not with National
Panasonic of Japan using their techniques, as advertised by it and
The representation that NOVINO batteries are manufactured in joint venture
or in collaboration with National Panasonic is false and misleading and
thereby it was held to be Unfair Trade Practice.
 S.V.S. RAGHAVAN COMMITTEE
REPORT
. Taking a cue from this report, Hon’ble Finance Minister of India in his
Budget Speech on 27th February, 1999 stated that: “The Monopolies and
Restrictive Trade Practices Act has become obsolete in certain areas in the
light of international economic developments relating to competition laws.
We need to shift our focus from curbing monopolies to promoting
competition. The Government has decided to appoint a commission to
examine this range of issues and propose a modern competition law suitable
for our conditions”-Budget Speech of Shri Yashwant Sinha, Finance
Minister, GOI, 27th Feb, 1999 (Union Budget 1999- 2000)
This led to the constitution of a High Level Committee on Competition
Policy and Law in October, 1999 also known as the “S.V.S Raghavan
Committee”
S. V. S. Raghavan is an Indian industrialist and the former head of Bharat
Business International Limited (BBIL). He has been the executive
chairman of the Competition Commission of India, the watchdog
organization set up by the Government of India for the enforcement of The
Competition Act, 2002. During this period, he headed the Central
Government committee of 2000 set up for advising policy guidelines
on competition and corporate governance,which later came to be known
as SVS Raghavan Committe e
 The Raghavan Committee considered between amending
the existing MRTP Act and enacting a new modern
competition law. They agreed to the finance minister’s view
that the MRTP Act has become obsolete in certain areas in line
with the international economic developments relating to
competition laws.
 The amendments of MRTP Act would only be beneficial for
curbing monopolies and it wouldn’t be effective for the fair
competition in the market economy. It was perceived by the
Raghavan Committee that drafting a new and modern
competition law suitable for Indian economy would be most
beneficial for promoting competition and suitable for dealing
with issues of the competition of the new liberal business
atmosphere, which was the main focus of the Indian Govt.
 This led to the enactment of the Competition Act. The report
of the Raghavan Committee concluded in May 2000. The
committee studied the government strategies and policies and
their effect on the Indian industrial system, the insufficiencies
and inadequacies of the Industry to compete with multi-
nationals.
The Salient points of their recommendations are:
 Setting up of competition commission and winding up of
MRTP commission.
 Government monopolies, foreign companies will be
covered by competition law.
 Government should make a specific rule on mergers above
a threshold investment limit and predatory pricing as an
abuse if any dominant undertaking engages in it.
 Competition law should cover all kinds of consumers for
the purpose of protection of interest.
 Small scale sector should not enjoy any protection or
reservation if the products of any SSI fall in the OGL
category, for the purpose of imports.
 BIFR should be closed-
 Urban Land Ceiling Act, Industrial Dispute Act should be
repealed.
 All pending cases of MRTPC should be transferred to
competition commission of India.
TRANSFORMATION OF MRTP ACT TO COMPETITION
ACT, 2002
 After recommendations of the committee, the Govt. of India consulted all
concerned stakeholder including the associations of trade and industry
and also the general public. On the basis of the recommendations of the
Committee and the suggestions from concerned parties, a ‘draft’ of
competition law was presented to the Government of India in
November 2000 and the ‘Competition Bill’ was introduced in the
Parliament by the Government which was plotted basically to
restrain monopolies in the market with a modern new competition law in
synchronization with the established principles of competition law.
 Bill was referred to the Parliamentary Standing Committee. After
considering the recommendations of the Standing Committee, the
Parliament passed the ‘Competition Act, 2002′ in December , 2002 as
the first step towards the transformation from old obsolete laws to the
neo-liberal economic condition suited competition law.
 The Competition Act received the assent of the President and it came
into existence on the 13th January, 2003. This Act was introduced as
a replacement to the MRTP Act under the provision in Section 66 of
the Competition Act which states the repeal of MRTP Act and for the
transfer of cases of related matters to the Competition Commission
of India (CCI) .
 DISTINCTION BETWEEN MRTP 1969 ACT AND
COMPETITION 2002
S.No MRTP ACT, 1969 COMPETITION ACT, 2002
1 It is based on the pre- It is based on the post-reforms scenario.
liberalisation and
globalisation era.
2 The objective of the Act is to The objective of the Act is prevent practices
prevent concentration of having adverse effect on competition and to
economic power to common promote as well as sustaining the competition to
detriment to control of protect consumer interests at market place and
monopolies, prevention of ensuring freedom of trade.
monopolistic and restrictive
trade practices.
3 It lists out 14 offences, which It recognises only 4 offences, which are deemed
are against the principle of to be against the principle of natural justice.
natural justice.
4 MRTP Commission has the The Competition Act can pass an order to
power to pass only "Cease" prevent and punish such of those activities,
and "Desist" orders. which abuses competition.
5 The MRTP Act did not provide The Competition Act provides competition
for the formation of fund for its fund for promotion of competition advocacy
activities. and creation of awareness about competitive
issues and training as may be prescribed in its
rules.

6 Entity having status of dominant Entity having status of dominant position is not
position is itself considered as bad. considered as bad. Whereas abuse of dominant
position affecting consumer interest is
considered as immoral.

7 In general registration of agreement It does not lay down any such requirement for
was mandatory. registration of agreements.

8 The definition of 'group' was wider. The 'group' definition has been simplified.

9 The size of the firm, is the factor It focuses on the firm's structure not on the size
for determining dominance etc. factor.
10 MRTP Commission dealt with the The cases relating to unfair trade practices will
unfair trade practices. be transferred to consumer courts.

11 Focussed on consumer interest at Focuses on public at large.

large.

12 The chairman of MRTP The chairman of the commission will be

Commission was appointed by appointed by a committee consisting of retired
Central Government. judiciary, person having professional expertise in
various fields of trade commerce, industry,
finance etc.
 COMPETITION ACT 2002
In the wake of liberalization and privatization that was triggered in India in
early nineties, a realization gathered momentum that the existing
Monopolistic and Restrictive Trade Practices Act, 1969 ("MRTP Act")
was not equipped adequately enough to tackle the competition aspect of the
Indian economy. With starting of the globalization process, Indian enterprises
started facing the heat of competition from domestic players as well as from
global giants, which called for level playing field and investor-friendly
environment. In October 1999, the Government of India constituted a High
Level Committee under the Chairmanship of Mr. SVS Raghavan to advise
a modern competition law for the country in line with international
developments and to suggest legislative framework, which may entail a new
law or suitable amendments in the MRTP Act, 1969. The Raghavan
Committee presented its report to the Government in May 2000.
On the basis of the recommendations of the Raghavan Committee, a draft
competition law was prepared and presented in November 2000 to the
Government and the Competition Bill was introduced in the Parliament,
which referred the Bill to its Standing Committee. After considering the
recommendations of the Standing Committee, the Parliament passed
December 2002 the Competition Act, 2002. The Monopolies and Restrictive
Trade Practices Act, 1969 repealed and was replaced by the Competition Act,
The objectives of the act have been set
forth in its preamble which states that
the act would provide for
establishment of a Commission (i.e.
Competition Commission of India) to
prevent anti-competitive practices, to
promote and sustain competition in
the market, to protect the consumers
and to ensure freedom of trade
carried on by the other participants
of the market.
 SCHEME OF THE COMPETITION
ACT,2002
The Act is divided into IX Chapters and 66 sections
CHAPTER I PRELIMINARY-Sec 1 and 2
CHAPTER II PROHIBITION OF CERTAIN AGREEMENTS, ABUSE OF
DOMINANT POSITION AND REGULATION OF COMBINATIONS-
Sec 3-6
CHAPTER III COMPETITION COMMISSION OF INDIA-Sec 7-17
CHAPTER IV DUTIES, POWERS AND FUNCTIONS OF
COMMISSION-Sec 18-40
CHAPTER V DUTIES OF DIRECTOR GENERAL-Sec 41
CHAPTER VI PENALTIES-Sec 42-48
CHAPTER VII COMPETITION ADVOCACY-Sec 49
CHAPTER VIII FINANCE, ACCOUNTS AND AUDIT-Sec 50-53
CHAPTER VIIIA APPELLATE TRIBUNAL –Sec 53-53U
CHAPTER IX MISCELLANEOUS-Sec 54-66
OBJECTIVES OF THE COMPETITION ACT 2002
 To protect the interests of the consumers by providing them good products
and services at reasonable prices.
 To promote healthy competition in the Indian market.
 To prevent the interests of the smaller companies or prevent the abuse of
dominant position in the market.
 To prevent those practices which have adverse impact on competition in the
Indian markets.
 To ensure freedom of trade in Indian markets.
 To regulate the operation and activities of combinations (acquisitions, mergers
and amalgamation).
THE ACT MAINLY COVERS THESE ASPECTS
 Prohibition of anti competitive agreements
 Prohibition of abuse of dominance
 Regulation of combination (acquisition, mergers, and amalgamation of certain
size)
 Establishment of the competition commission of India
 Power and functions of the competition commission of India
THE ACT IDENTIFIES THREE WAYS WHICH CAN HAVE ADVERSE
EFFECT ON THE COMPETITION
 Anti competitive agreement (vertical agreement, horizontal agreement)
 Abuse of dominant position; enjoying a dominant position will not be crime
but its abuse will be a crime
 Elimination/reduction of competitors in the market achieved
SALIENT FEATURES
The following are the features of the Competition Act:
1. Anti Competitive Agreements: Enterprises, persons or associations of
enterprises or persons, including cartels, shall not enter into agreements in respect
of production, supply, distribution, storage, acquisition or control of goods or
provision of services, which cause or are likely to cause an “appreciable adverse
impact” on competition in India. Such agreements would consequently be
considered void.
2. Abuse of dominant position: There shall be an abuse of dominant position if an
enterprise imposes directly or indirectly unfair or discriminatory conditions in
purchase or sale of goods or services or restricts production or technical
development or create hindrance in the entry of new operators to the prejudice of
consumers.
3. Combinations: The Act is designed to regulate the operation and activities of
combinations, a term, which contemplates acquisition, mergers or amalgamations.
A combination that exceeds the threshold limits specified in the Act in terms of
assets or turnover, which causes or is likely to cause an adverse impact on
competition within the relevant market in India, can be scrutinized by the
Competition Commission of India.
4. Competition Commission of India: The Competition Commission of India is
a body corporate and independent entity possessing a common seal with the power
to enter into contracts and to sue in its name.
 It is to consist 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 an
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 an opinion on
competition issues on a reference received from a statutory
authority established under any law and to undertake
competition advocacy, create public awareness and impart
training on competition issues.
AMENDMENTS TO THE COMPETITION ACT,2002
The Competition Act, 2002 was amended by the Competition
(Amendment) Act, 2007 and again by the Competition
(Amendment) Act, 2009.
The Competition Law Review Committee (CLRC) was set
up on October 1st, 2018 to review the Competition Act, 2002
and other incidental rules there under. Keeping in mind, the
need for a robust framework due to the growth of newer and
disruptive models of business, the CLRC released its report in
July 2019. After incorporating certain reforms suggested by
the CLRC, the draft Competition (Amendment) Bill, 2020