Competition Act, 2002

OBJECTIVES:
Prevention of concentration of economic
power in a few hands
Control and regulation of monopolies in
certain sectors
Prevention of unfair trade practices
Prevention of restrictive trade practices
Protect the interests of consumers
Promote and sustain competition in markets
Competition Act , 2OO2
THE COMPETITION ACT, 2002
What and how
WHAT?
Main Focus areas of the Act :
Prohibition of Anti Competitive Agreements
Prohibition of Abuse of Dominance
Regulation of Combinations
Competition Advocacy

HOW?
Through establishment of a Competition
Commission of India (CCI)

Focus Area of 2002,ACT-1


A. PROHIBITION OF ANTI-COMPETITIVE
AGREEMENTS
All Anti-competitive agreements are void, i.e.,
agreements which could restrict competition,
vertical or horizontal.
Tie-in agreement:-ex- a purchaser of scooter to
purchase helmet also.
Certain agreements between same or similar
enterprises regarding prices or quantities, on
bidding, or to share or divide market.( Bid
rigging)
Exclusive supply agreement.



Cont..
Exclusive supply agreement
Exclusive distribution agreement
Refusal to deal
Resale price maintenance
Focus Area of 2002 act-1
EXCEPTIONS:
Export cartels (problem is somewhere else!)
Agreements permitted in law
Agreements under IPR (not unreasonable
restrictions like patent pooling, price-fixing etc.)

RULE OF REASON TO BE APPLIED (factors):
Creation of entry barriers
Driving existing competitors out of the market
Accrual of benefits to consumers
Improvements in goods and services
Increase in Technical development

FOCUS AREAS OF 2002 ACT - 2
B. PROHIBITION OF ABUSE OF DOMINANT
POSITION:
Mere dominance is not an offence, abuse of
dominance is prohibited
Important shift from size / structure to
behaviour / conduct
Instances of unfair, discriminatory or
predatory pricing; restricting quantities,
markets or technical development, etc. will
qualify

Focus Area of 2002 act-3
C. REGULATION OF COMBINATIONS:
Includes M&As, Amalgamations, Acquisitions of
control - all above a certain high level threshold
(Rs.1000 crore aggregate value of assets or
Rs.3000 crore turnover of combining parties)
Thresholds deliberately high to allow small Indian
companies to combine to become active
international players
Combinations that cause or are likely to cause an
adverse effect on competition are under focus
(e.g., horizontal mergers between competitors;
vertical merger by dominant player with firm in
adjacent market, etc.)
Pre-notification voluntary

Focus Area of 2002-4
D. COMPETITION ADVOCACY:
CCI to create culture of competition
Empowered to participate in formulation of
countrys economic policies
Create awareness and training on competition
issues
Establishment of Competition Fund for
above
Recently asked to develop Consultation Paper
on National Competition Policy (to harmonise
various government policies)

COMPETITION COMMISSION
OF INDIA (CCI)
Adjudicative wing distinct from Investigative and
Prosecution wing
Allows appointment of economists, lawyers,
other professionals as investigators (departure
from practice of appointing retd. bureaucrats)
UTPs removed from the purview of Act and all
pending cases transferred to the Consumer
Protection Act, 1986 (CPA)
Phased introduction of Act competition
advocacy (Y1); Anti-Competitive Practices and
Abuse of Dominance (Y2); Combinations (Y3)

COMPETITION APPELLATE TRIBUNAL
(CAT)
Established after intervention by Supreme
Court of India to retain judicial powers
within the judicial system
CAT to hear and dispose appeals against any
direction issued or decision made or order
passed by CCI

Competition in India
Shift from size / structure focus to conduct
Shift from discouraging dominance to discouraging
abuse of dominance
Includes combinations (previously ignored)
Includes strong component on competition advocacy
Replaces Rule of Law approach with Rule of Reason
approach
New Competition law to deliver above
Decision to locate Competition law within broader
Competition Policy that harmonises various policies