Introduction Introduction and and

ObjectivesObjectivesIn the pursuit of globalization, India In the pursuit of globalization, India has responded by opening of its has responded by opening of its economy, removing controls and economy, removing controls and resorting to liberalization. The resorting to liberalization. The natural corollary of this that the natural corollary of this that the Indian market should be geared to Indian market should be geared to face competition from within the face competition from within the country and from outside. The MRTP country and from outside. The MRTP Act. 1969 had become obsolete and Act. 1969 had become obsolete and was choking the economy. The was choking the economy. The Competition Act 2002 which has Competition Act 2002 which has replaced the MRTP Act, 1969 has replaced the MRTP Act, 1969 has the following objectives: the following objectives:

•To prevent practices having To prevent practices having adverse effect on competition.adverse effect on competition.

•To promote and sustain To promote and sustain competition in marketcompetition in market

•To protect the interest of To protect the interest of consumersconsumers

•To ensure freedom of trade To ensure freedom of trade carried on by other participants carried on by other participants in market in India in market in India

Prohibition of Prohibition of AgreementsAgreements• Sec. 3 provides for prohibition of Sec. 3 provides for prohibition of

entering into anti-competitive entering into anti-competitive agreements. agreements.

• It shall not be lawful for any enterprise It shall not be lawful for any enterprise or association of enterprises or person or association of enterprises or person or association of persons to enter into or association of persons to enter into an agreement in respect of production, an agreement in respect of production, storage, and distribution of goods storage, and distribution of goods which causes an appreciable adverse which causes an appreciable adverse effect on competition with India. effect on competition with India.

Abuse of Abuse of Dominant Dominant PositionPosition• Sec.4 prohibits abuse of dominant position Sec.4 prohibits abuse of dominant position

by any enterprise.by any enterprise.• Such abuse of dominant position , inter Such abuse of dominant position , inter

alia, includes imposition, either directly or alia, includes imposition, either directly or indirectly, of unfair purchase or selling indirectly, of unfair purchase or selling prices.prices.

• Sec.5 deals with combination of enterprises Sec.5 deals with combination of enterprises and persons.and persons.

• Acquisition of one or more enterprises by Acquisition of one or more enterprises by one or more persons or acquiring of control one or more persons or acquiring of control or merger or amalgamation of enterprise or merger or amalgamation of enterprise under certain circumstances specified. under certain circumstances specified.

Regulation of Regulation of CombinationsCombinations

• No person or enterprise shall enter into No person or enterprise shall enter into a combination which causes appreciable a combination which causes appreciable adverse effect on competition within the adverse effect on competition within the relevant market in India and such a relevant market in India and such a combination shall be void[Sec.6(1)] combination shall be void[Sec.6(1)]

• Exemption. Exemption. Any person or enterprise, Any person or enterprise, who or which proposes to enter into a who or which proposes to enter into a combination, may, at his or its option, combination, may, at his or its option, give notice to the Competition give notice to the Competition Commission of India. Commission of India.

Competition Competition Commission of Commission of

IndiaIndia Establishment Establishment ofof commission commission

With effect from such date as the Central With effect from such date as the Central Govt. may appoint, there shall be Govt. may appoint, there shall be established, for the purposes of this act, a established, for the purposes of this act, a commission to be called the “Competition commission to be called the “Competition Commission of India” [Sec.7(1)]Commission of India” [Sec.7(1)]

Corporate body. The commission shall be Corporate body. The commission shall be body corporate by the name Competition body corporate by the name Competition Commission of India having perpetual Commission of India having perpetual succession and a common seal.[Sec.7(2)] succession and a common seal.[Sec.7(2)]

Duties, Powers and Duties, Powers and Functions of Functions of CommissionCommission• Eliminate practices having adverse Eliminate practices having adverse

effect on competitioneffect on competition• Promote and sustain competitionPromote and sustain competition• Protect the interest of customersProtect the interest of customers• Ensure freedom of trade carried by Ensure freedom of trade carried by

other participants, in markets in Indiaother participants, in markets in India• Power to grant interim relief (Sec.33)Power to grant interim relief (Sec.33)• Power to award compensation (Sec.34) Power to award compensation (Sec.34) • Power of commission to regulate its Power of commission to regulate its

own procedure own procedure