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Notes - Competition Law Sem 9

Corporate law (Amity University)

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Module I: Competition Law in its

Background
Basic Concepts: Customer and Consumer
Customer - A customer is a person or organization that buys goods or services from a
business. Customers are important to businesses because they generate revenue. Businesses
typically strive to attract and retain customers by offering competitive prices, high-quality
products and services, and good customer service.

Consumer - A consumer is a person who buys or uses goods or services for personal, non-
commercial purposes. Consumers are protected by a number of laws, including competition
law. Competition law seeks to promote competition in the marketplace and prevent anti-
competitive practices. This helps to ensure that consumers have access to a wide range of
products and services at competitive prices.

Customer and consumer in the context of competition law - Competition law is concerned
with both customers and consumers. This is because both customers and consumers can be
harmed by anti-competitive practices. For example, if two competing companies agree to fix
the prices of their products, this can harm both customers and consumers by reducing
competition and raising prices.

Examples:

 A customer who buys a new car is a customer of the car dealership.

 A person who buys a loaf of bread from a grocery store is a consumer of the bread.

 A company that buys raw materials from a supplier is a customer of the supplier.

 A person who uses a social media platform is a consumer of the social media
platform.

Competition law can protect customers and consumers in a number of ways. For example,
competition law can:

 Prevent businesses from engaging in anti-competitive agreements, such as price-

fixing agreements and market-sharing agreements.

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 Prevent businesses from abusing their dominant position in the market.

 Promote innovation and the development of new products and services.

 Help to ensure that consumers have access to a wide range of products and services at
competitive prices.

Here is an example of how competition law can protect consumers:

A company that has a dominant position in the market for mobile phones may be tempted to
charge high prices for its phones. However, competition law can prevent the company from
doing this. If the company charges excessively high prices, consumers may switch to other
brands of mobile phones or to other technologies, such as tablets or laptops. This would
reduce the company's profits and encourage it to lower its prices.

Types of Market- Perfect Market, Monopoly, Oligopoly and

Monopsony,
There are four main types of market structures: perfect competition, monopoly, oligopoly,
and monopsony.

Perfect competition is a market structure in which there are many buyers and sellers of a
homogeneous product (a product that is identical to all other products of the same type). All
buyers and sellers have perfect information about the market, and there are no barriers to
entry or exit.

Examples of perfect competition:

 Agricultural markets (e.g., wheat, corn, soybeans)

 Currency markets

 Stock markets

Monopoly is a market structure in which there is only one seller of a product. The monopoly
seller has complete market power, meaning that it can set the price and output of the product.

Examples of monopolies:

 Public utilities (e.g., water, electricity, gas)

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 Natural monopolies (e.g., railroads, bridges)

 Patent-protected products (e.g., pharmaceuticals, software)

Oligopoly is a market structure in which there are a few large sellers of a differentiated
product (a product that is different from other products of the same type). Each seller has
some market power, but because there are other sellers in the market, no one seller has
completes market power.

Examples of oligopolies:

 Automobile industry

 Oil industry

 Telecommunications industry

Monopsony is a market structure in which there is only one buyer of a product. The
monopsony buyer has complete market power, meaning that it can dictate the price and
quantity of the product.

Examples of monopsonies:

 The government (e.g., defense contracts)

 Large retailers (e.g., Walmart, Target)

 Labor unions

Comparison of market structures

Market structure Number of buyers Number of sellers Degree of competition

Perfect competition Many Many High

Monopoly One One Low

Oligopoly Few Few Moderate

Monopsony One Many Low

Effects of market structures

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Different market structures have different effects on consumers and businesses. For example,
perfect competition is generally considered to be the most efficient market structure, as it
leads to lower prices and higher output for consumers. Monopolies, on the other hand, can
lead to higher prices and lower output for consumers.

Competition law is designed to promote competition and prevent anti-competitive practices.

For example, competition law prohibits businesses from engaging in price-fixing agreements
and market-sharing agreements. Competition law also prevents businesses from abusing their
dominant position in the market.

Definition of competition,
Competition is a rivalry between two or more parties striving for a common goal which
cannot be shared. Competition can arise between entities such as organisms, individuals,
economic and social groups, etc. The rivalry can be over attainment of any exclusive goal,
including recognition.

In the context of economics, competition is the process by which businesses compete to win
customers. This competition can lead to lower prices, higher quality products and services,
and more innovation.

Competition can be beneficial for consumers, as it can lead to lower prices and higher quality
products and services. However, competition can also be harmful to consumers, if it leads to
businesses engaging in anti-competitive practices, such as price-fixing or predatory pricing.

Competition is also important for businesses, as it can help them to improve their efficiency
and productivity. However, competition can also be harmful to businesses, if it leads to price
wars or other forms of destructive competition.

Overall, competition is a powerful force that can have both positive and negative effects. It is
important to understand the different types of competition and their effects in order to
develop policies that promote competition and protect consumers.

Constitutional Aspects of Competition Law,

The constitutional aspects of competition law in India are derived from the Directive
Principles of State Policy (DPSP), which are enshrined in Articles 38 and 39 of the

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Constitution of India. The DPSP are not legally enforceable, but they are considered to be
fundamental to the governance of India.

Article 38 of the Constitution states that the State shall strive to promote the welfare of the
people by securing and protecting as effectively as it may, a social order in which justice –
social, economic and political – shall inform all the institutions of the national life.

Article 39 of the Constitution states that the State shall, in particular, direct its policy towards
securing:

 the right to an adequate means of livelihood for all citizens;

 the distribution of ownership and control of the material resources of the community
to subserve the common good;

 the operation of the economic system in a manner consistent with the principles of
social justice; and

 The prevention of the concentration of economic power in the hands of private

persons.

The Competition Act, 2002, which is the primary legislation governing competition law in
India, was enacted to give effect to the DPSP. The Act prohibits anti-competitive agreements,
abuse of dominance, and combinations that are likely to have an appreciable adverse effect
on competition.

The Supreme Court of India has held that the Competition Act is a "pro-competitive
legislation" and that it must be interpreted liberally to promote competition in the
marketplace. The Supreme Court has also held that the Competition Act is consistent with the
DPSP.

Here are some examples of how the DPSP have been used to interpret and apply competition
law in India:

 In the case of Competition Commission of India v. Excel Crop Care Ltd. (2010), the
Supreme Court held that the Competition Act must be interpreted in a manner that
protects the interests of consumers and farmers. The Court held that Excel Crop
Care's predatory pricing practices had violated the DPSP by harming consumers and
farmers.

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 In the case of Director General of Investigation & Registration v. Google

India (2018), the Supreme Court held that Google's abuse of its dominant position in
the online search market had violated the DPSP by stifling competition and harming
consumers. The Court held that the Competition Act must be interpreted in a manner
that promotes competition and protects consumers.

Monopolistic Trade Practices, Restrictive Trade Practices, Unfair

Trade Practice, in detail
Monopolistic Trade Practices (MTPs)

Monopolistic trade practices are those practices that are adopted by an enterprise in order to
abuse its dominant position in the market. These practices can harm consumers and other
businesses by stifling competition and raising prices.

Examples of MTPs include:

 Price discrimination: Charging different prices to different customers for the same
product or service without any justification.

 Tying arrangements: Requiring a customer to purchase one product or service in order

to purchase another product or service.

 Exclusive dealing arrangements: Preventing a customer from purchasing products or

services from a competitor.

 Predatory pricing: Setting prices below cost in order to drive competitors out of the
market.

Restrictive Trade Practices (RTPs)

Restrictive trade practices are those practices that are adopted by two or more businesses in
order to restrict competition. These practices can harm consumers and other businesses by
raising prices and reducing output.

Examples of RTPs include:

 Price-fixing agreements: Agreements between two or more businesses to fix the price
of a product or service.

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 Market-sharing agreements: Agreements between two or more businesses to divide up

the market among themselves.

 Bid-rigging agreements: Agreements between two or more businesses to rig bids for
contracts.

Unfair Trade Practices (UTPs)

Unfair trade practices are those practices that are adopted by a business in order to gain an
unfair advantage over its competitors or to harm consumers. These practices can harm
consumers by misleading them or by providing them with inferior products or services.

Examples of UTPs include:

 False advertising: Making false or misleading claims about a product or service.

 Bait-and-switch tactics: Advertising a product or service at a low price and then

switching to a more expensive product or service when the customer arrives.

 Product tampering: Tampering with a product in order to harm consumers or

competitors.

 Pyramid schemes: Schemes that promise high returns to investors, but that are
actually scams.

Comparison of MTPs, RTPs, and UTPs

Practice Type Description

Monopolistic Anti-competitive practices Can harm consumers and other businesses by stifling competition
trade practices adopted by a single and raising prices.
enterprise

Restrictive Anti-competitive practices Can harm consumers and other businesses by raising prices and
trade practices adopted by two or more reducing output.
businesses

Unfair trade Deceptive or fraudulent Can harm consumers by misleading them or by providing them with
practices practices adopted by a inferior products or services.
business

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Need of Competition law

Competition law is necessary to promote economic efficiency and consumer welfare. It does
this by preventing anti-competitive practices, such as price-fixing agreements, market-sharing
agreements, and abuse of dominance.

Economic efficiency

Competition law helps to promote economic efficiency by ensuring that businesses compete
fairly for customers. This competition leads to lower prices, higher quality products and
services, and more innovation.

For example, if two competing companies agree to fix the prices of their products, this will
lead to higher prices for consumers. Competition law prohibits this type of anti-competitive
agreement, which helps to ensure that prices are set by market forces, not by businesses.

Consumer welfare

Competition law also helps to protect consumer welfare by ensuring that consumers have
access to a wide range of products and services at competitive prices. This is because
competition law prevents businesses from abusing their market power to drive up prices or
restrict output.

For example, if a company has a dominant position in the market for a particular product, it
may be tempted to charges high prices or restrict output. Competition law prohibits this type
of abuse of dominance, which helps to ensure that consumers have access to affordable
products and services.

Other benefits of competition law

Competition law also has a number of other benefits, including:

 It encourages innovation and technological progress.

 It helps to create new jobs and businesses.

 It promotes economic growth.

 It helps to create a more level playing field for businesses.

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Overall, competition law is an important tool for promoting economic efficiency and
consumer welfare. It helps to ensure that businesses compete fairly and that consumers have
access to a wide range of products and services at competitive prices.

Here are some specific examples of how competition law has benefited consumers and
businesses:

 In 2012, the European Commission fined a number of mobile phone companies for
price-fixing. This resulted in lower prices for mobile phone services for consumers.

 In 2013, the US Department of Justice fined Google $900 million for abusing its
dominant position in the online search market. This resulted in more competition in
the online search market, which has benefited consumers and businesses.

 In 2017, the Indian Competition Commission fined several cement companies for
price-fixing. This resulted in lower prices for cement for consumers and businesses.

Indian scenario with an overview of MRTP Act, 1969,

The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was enacted in India
to prevent the concentration of economic power in the hands of a few and to promote
competition in the marketplace. The Act prohibited monopolistic and restrictive trade
practices, such as price-fixing agreements, market-sharing agreements, and abuse of
dominance.

The MRTP Act was landmark legislation in India, as it was the first law to address
competition issues in a comprehensive manner. The Act was successful in preventing the
concentration of economic power and promoting competition in a number of sectors, such as
cement, steel, and automobiles.

However, the MRTP Act was also criticized for being too complex and time-consuming. This
made it difficult for the government to enforce the Act effectively. In addition, the Act did
not address some of the newer challenges posed by globalization, such as the rise of digital
markets.

In order to address these shortcomings, the Indian government enacted the Competition Act,
2002. The Competition Act is a more modern and comprehensive competition law than the

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MRTP Act. It is also easier to enforce and more responsive to the needs of the changing
economy.

Indian scenario with the MRTP Act, 1969

The MRTP Act had a mixed impact on the Indian economy. On the one hand, it was
successful in preventing the concentration of economic power and promoting competition in
a number of sectors. For example, the Act prevented the formation of cartels in the cement
and steel industries, which led to lower prices for consumers.

On the other hand, the MRTP Act was also criticized for being too restrictive and for stifling
innovation. For example, the Act required businesses to obtain prior approval from the
government before expanding their operations or entering new markets. This made it difficult
for businesses to grow and compete in the global economy.

Overview of the MRTP Act, 1969

The MRTP Act was a comprehensive law that covered a wide range of anti-competitive
practices. The main provisions of the Act were as follows:

 Prohibition of monopolistic and restrictive trade practices: The Act prohibited a

number of monopolistic and restrictive trade practices, such as price-fixing
agreements, market-sharing agreements, and exclusive dealing arrangements.

 Control of monopolies: The Act gave the government the power to control
monopolies and prevent the concentration of economic power in the hands of a few.

 Establishment of the Monopolies and Restrictive Trade Practices Commission

(MRTPC): The Act established the MRTPC, which was responsible for enforcing the
provisions of the Act.

International development leading towards the development

competition Law,
International development leading towards the development of competition law can be traced
back to the late 19th century. In 1890, the United States Congress enacted the Sherman
Antitrust Act, which was the first comprehensive competition law in the world. The Sherman
Act prohibited monopolies and combinations that restrained trade.

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In the early 20th century, other countries began to enact their own competition laws. For
example, Canada enacted the Combines Investigation Act in 1910, and the United Kingdom
enacted the Monopolies and Restrictive Practices (Control) Act in 1948.

After World War II, there was a renewed interest in competition law in both developed and
developing countries. This was due in part to the growing recognition of the importance of
competition for economic growth and consumer welfare.

In 1960, the Organization for Economic Cooperation and Development (OECD) published a
report entitled "Competition Policy in Relation to Restrictive Business Practices." The report
recommended that OECD member countries adopt competition laws to prohibit anti-
competitive practices, such as price-fixing agreements and market-sharing agreements.

In the 1970s and 1980s, many developing countries began to enact their own competition
laws. This was due in part to the advice of the World Bank and other international
organizations, which promoted competition law as a way to improve economic efficiency and
growth.

Today, over 130 countries have competition laws. Competition law is now recognized as an
important tool for promoting economic growth and consumer welfare.

Here are some examples of how international development has led to the development of
competition law:

 The establishment of the World Trade Organization (WTO) in 1995 has played a
significant role in promoting competition law. The WTO's General Agreement on
Tariffs and Trade (GATT) prohibits certain types of anti-competitive practices, such
as export cartels and price-fixing agreements.

 The United States has played a leading role in promoting competition law around the
world. The US government has provided technical assistance and training to other
countries on competition law enforcement.

 The European Union (EU) has also played a leading role in promoting competition
law. The EU has a strong competition law regime, and it has been successful in
enforcing its competition laws against both European and non-European companies.

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Competition policy & its relation with Salient Features of Competition.

Competition policy is a set of government policies and regulations that promote competition
in the marketplace. It is based on the principle that competition is essential for economic
efficiency and consumer welfare.

Competition policy has a number of salient features, including:

 Prohibition of anti-competitive agreements: Competition policy prohibits businesses

from engaging in anti-competitive agreements, such as price-fixing agreements,
market-sharing agreements, and bid-rigging agreements. These agreements can harm
consumers by raising prices and reducing output.

 Prevention of the abuse of dominance: Competition policy prevents businesses from

abusing their dominant position in the market. A dominant business has significant
market power and can harm consumers by charging high prices or restricting output.

 Promotion of competition in new and emerging markets: Competition policy

promotes competition in new and emerging markets, such as the digital market. This
helps to ensure that consumers have access to a wide range of products and services at
competitive prices.

Competition policy is related to the salient features of competition in a number of ways. For
example, competition policy helps to promote the following salient features of competition:

 Freedom of entry and exit: Competition policy helps to ensure that businesses are free
to enter and exit markets. This helps to promote competition and innovation.

 Transparency: Competition policy helps to ensure that businesses are transparent

about their prices and practices. This helps consumers to make informed choices.

 Fairness: Competition policy helps to ensure that businesses compete fairly with each
other. This prevents businesses from using anti-competitive practices to harm
consumers and other businesses.

Here are some examples of how competition policy has promoted the salient features of
competition:

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 In 2012, the European Commission fined several mobile phone companies for price-
fixing. This helped to promote the salient feature of competition known as
transparency.

 In 2013, the US Department of Justice fined Google for abusing its dominant position
in the online search market. This helped to promote the salient feature of competition
known as fairness.

 In 2017, the Indian Competition Commission fined several cement companies for
price-fixing. This helped to promote the salient feature of competition known as
freedom of entry and exit.

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Module II Anti-Competitive Agreement

Key Definitions
 Agreement: Any arrangement, understanding, or promise, whether or not it is
enforceable by law, between two or more enterprises, or between one or more
enterprises and one or more persons.

 Enterprises: Any person or association of persons engaged in the production, supply,

distribution, storage, acquisition or control of goods or provision of services.

 Persons: Any individual, Hindu undivided family, firm, society, association of

persons, company or body corporate.

 Relevant market: The market within which the effect of an agreement on competition
is to be assessed. The relevant market may be a geographical market or a product
market.

 Consumer: A person who buys or uses goods or services for personal, non-
commercial purposes.

 Goods: Any movable or immovable property, other than money and securities,
including raw materials, intermediate products, finished products, and waste products.

 Services: Any activity carried out for another person or entity in exchange for
payment, other than an activity that is included in the definition of goods.

 Trade: Any activity carried out for the purpose of producing, supplying, distributing,
storing, acquiring or controlling goods or provision of services.

Anti-Competitive Agreements

Section 3 of the Competition Act, 2002 prohibits anti-competitive agreements between

enterprises or between one or more enterprises and one or more persons. An anti-competitive
agreement is any agreement that causes or is likely to cause an appreciable adverse effect on
competition within India.

Examples of Anti-Competitive Agreements

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 Price-fixing agreements: Agreements between two or more businesses to fix the

prices of their products or services.

 Market-sharing agreements: Agreements between two or more businesses to divide up

the market among themselves.

 Bid-rigging agreements: Agreements between two or more businesses to rig bids for
contracts.

 Exclusive dealing arrangements: Agreements between two or more businesses that

prevent one business from dealing with the other business's competitors.

 Tie-in arrangements: Agreements between two or more businesses that require a

customer to purchase one product or service in order to purchase another product or
service.

Impact of Anti-Competitive Agreements

Anti-competitive agreements can harm consumers and businesses in a number of ways,

including:

 Higher prices: Anti-competitive agreements can lead to higher prices for consumers.

 Lower quality products and services: Anti-competitive agreements can lead to lower
quality products and services for consumers.

 Less innovation: Anti-competitive agreements can stifle innovation and new product
development.

 Reduced choice: Anti-competitive agreements can reduce the choice of products and
services available to consumers.

 Reduced competition: Anti-competitive agreements can reduce competition in the

marketplace, which can harm consumers and businesses alike.

Enforcement of Competition Law

The Competition Commission of India (CCI) is responsible for enforcing the Competition
Act, 2002. The CCI can investigate suspected anti-competitive agreements and impose
penalties on businesses that are found to have violated the law.

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Anti-Competitive Agreements,
Anti-competitive agreements are agreements between two or more businesses that restrict
competition in the marketplace. These agreements can harm consumers by raising prices,
reducing output, and stifling innovation.

Some examples of anti-competitive agreements include:

 Price-fixing agreements: Agreements between businesses to fix the prices of their

products or services.

 Market-sharing agreements: Agreements between businesses to divide up the market

among themselves.

 Bid-rigging agreements: Agreements between businesses to rig bids for contracts.

 Exclusive dealing agreements: Agreements between businesses that prevent one

business from dealing with the other business's competitors.

 Tie-in arrangements: Agreements between businesses that require a customer to

purchase one product or service in order to purchase another product or service.

Anti-competitive agreements are typically illegal under competition laws in most countries.
Competition laws are designed to promote competition in the marketplace and protect
consumers from the harms of anti-competitive behavior.

Here are some examples of how anti-competitive agreements can harm consumers:

 If two competing businesses agree to fix the prices of their products, consumers will
have to pay higher prices for those products.

 If two competing businesses agree to divide up the market among them, consumers
will have fewer choices of products and services to choose from.

 If two competing businesses agree to rig bids for a contract, the government or other
entity that is awarding the contract may pay a higher price for the contract.

Competition laws are important for protecting consumers and promoting economic
efficiency. By preventing anti-competitive agreements, competition laws help to ensure that
businesses compete fairly and that consumers have access to a wide range of products and
services at competitive prices.
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In India, the Competition Act, 2002 prohibits anti-competitive agreements. The Competition
Commission of India (CCI) is responsible for enforcing the Competition Act and
investigating suspected anti-competitive behavior. If the CCI finds that a business has
engaged in an anti-competitive agreement, it can impose penalties on the business, including
fines and corrective orders.

Consumers can play a role in protecting competition by reporting suspected anti-competitive

behavior to the CCI. Consumers can also support businesses that compete fairly and avoid
businesses that engage in anti-competitive behavior.

Horizontal and Vertical Agreement,

Horizontal agreements are agreements between businesses that are at the same level of the
supply chain. For example, a horizontal agreement could be an agreement between two
competing car manufacturers to fix the prices of their cars.

Vertical agreements are agreements between businesses that are at different levels of the
supply chain. For example, a vertical agreement could be an agreement between a car
manufacturer and a car dealership to sell the manufacturer's cars at a certain price.

Horizontal agreements are generally more likely to be anti-competitive than vertical

agreements. This is because horizontal agreements can lead to cartels, which are groups of
businesses that collude to raise prices or restrict output. Vertical agreements, on the other
hand, can have both pro-competitive and anti-competitive effects.

Examples of horizontal agreements:

 Price-fixing agreements

 Market-sharing agreements

 Bid-rigging agreements

 Exclusive dealing agreements

 Tie-in arrangements

Examples of vertical agreements:

 Resale price maintenance agreements

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 Exclusive distribution agreements

 Tying arrangements

 Franchising agreements

Competition law

Competition law is designed to promote competition in the marketplace and protect

consumers from the harms of anti-competitive behavior. Competition law typically prohibits
horizontal agreements that are likely to have an appreciable adverse effect on competition.
Vertical agreements, on the other hand, are generally subject to a less stringent rule of reason
analysis.

In India, the Competition Act, 2002 prohibits horizontal agreements that are likely to have an
appreciable adverse effect on competition. The Competition Commission of India (CCI) is
responsible for enforcing the Competition Act and investigating suspected anti-competitive
behavior.

Here are some examples of how horizontal and vertical agreements can harm consumers:

 Horizontal agreements: If two competing car manufacturers agree to fix the prices of
their cars, consumers will have to pay higher prices for cars.

 Vertical agreements: If a car manufacturer agrees with a car dealership to sell the
manufacturer's cars at a certain price, this could prevent the dealership from
discounting the cars. This could harm consumers by reducing the availability of
discounts on cars.

It is important to note that not all horizontal and vertical agreements are anti-competitive.
Some horizontal and vertical agreements can have pro-competitive effects. For example, a
horizontal agreement between two car manufacturers to share research and development costs
could lead to lower prices for cars for consumers.

Competition authorities, such as the CCI, are responsible for assessing whether a particular
horizontal or vertical agreement is anti-competitive. Competition authorities will consider a
number of factors when making this assessment, including the market structure, the purpose
of the agreement, and the likely effects of the agreement on competition.

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Rule of per se and Reason,

The rule of per se and the rule of reason are two different approaches to analyzing anti-
competitive agreements.

Rule of per se

The rule of per se is a strict liability rule, which means that an agreement is considered to be
anti-competitive without any need to prove its actual effects on competition. The rule of per
se is applied to agreements that are considered to be inherently anti-competitive, such as
price-fixing agreements and market-sharing agreements.

Rule of reason

The rule of reason is a more flexible approach to analyzing anti-competitive agreements.

Under the rule of reason, a court or competition authority will consider all of the relevant
facts and circumstances of an agreement before deciding whether it is anti-competitive.
Factors that may be considered include the market structure, the purpose of the agreement,
and the likely effects of the agreement on competition.

Differences between the rule of per se and the rule of reason

The following table summarizes the key differences between the rule of per se and the rule of
reason:

Characteristic Rule of per se Rule of reason

Type of rule Strict liability Flexible

Applied to Agreements that are considered to All other agreements

be inherently anti-competitive

Burden of Plaintiff does not need to prove the Plaintiff must prove that the agreement has an
proof actual effects of the agreement on appreciable adverse effect on competition
competition

Examples

Here are some examples of agreements that are typically analyzed under the rule of per se:

 Price-fixing agreements

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 Market-sharing agreements

 Bid-rigging agreements

 Horizontal agreements to restrict output

 Exclusive dealing agreements

Here are some examples of agreements that are typically analyzed under the rule of reason:

 Vertical agreements, such as resale price maintenance agreements and exclusive

distribution agreements

 Agreements to share research and development costs

 Joint ventures

Which rule is applied?

The rule of per se is typically applied to agreements that are considered to be inherently anti-
competitive. This is because the rule of per se is designed to simplify the analysis of these
agreements and to deter businesses from engaging in them.

The rule of reason is typically applied to all other agreements. This is because the rule of
reason allows courts and competition authorities to consider all of the relevant facts and
circumstances of an agreement before deciding whether it is anti-competitive.

It is important to note that the distinction between the rule of per se and the rule of reason is
not always clear-cut. In some cases, an agreement may be analyzed under both rules. For
example, a vertical agreement that restricts competition may be analyzed under both the rule
of per se and the rule of reason.

Factors causing Adverse effect on competition (AAEC) in India,

There are a number of factors that can cause an adverse effect on competition (AAEC) in
India. Some of the most common factors include:

 Market concentration: A market is concentrated when a small number of businesses

control a large share of the market. This can lead to AAEC because businesses with a
dominant position in the market can restrict competition and charge higher prices.

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 Vertical integration: Vertical integration occurs when a business owns or controls

businesses at different levels of the supply chain. This can lead to AAEC because
vertically integrated businesses can foreclose their competitors from accessing inputs
or markets.

 Anti-competitive agreements: Anti-competitive agreements are agreements between

two or more businesses to restrict competition. These agreements can have a number
of harmful effects, including raising prices, reducing output, and stifling innovation.

 Abuse of dominance: A business abuses its dominant position in the market when it
engages in practices that harm competition. Examples of abuse of dominance include
price gouging, predatory pricing, and tying arrangements.

 Government regulation: Government regulation can also lead to AAEC, particularly

when it is designed to protect certain businesses or industries from competition.

In addition to these general factors, there are a number of specific factors that can cause
AAEC in India. For example, the following factors have been identified as contributing to
AAEC in the Indian cement industry:

 High market concentration: The Indian cement industry is highly concentrated, with
the top five producers controlling over 60% of the market.

 Vertical integration: Many cement producers are vertically integrated, owning their
own limestone mines and transportation networks. This can make it difficult for new
entrants to compete in the industry.

 Anti-competitive agreements: Cement producers have been found to engage in anti-

competitive agreements, such as price-fixing and market-sharing agreements.

 Abuse of dominance: Some cement producers have been found to abuse their
dominant position in the market by charging high prices and engaging in predatory
pricing.

The Indian government has taken a number of steps to address AAEC in the cement industry,
including:

 Establishing the Competition Commission of India (CCI): The CCI is an independent

body that is responsible for enforcing India's competition laws.

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 Investigating and prosecuting anti-competitive agreements: The CCI has investigated

and prosecuted a number of anti-competitive agreements in the cement industry.

 Regulating vertical integration: The CCI has issued regulations to limit vertical
integration in the cement industry.

The Indian government has also taken steps to address AAEC in other industries. For
example, the government has deregulated a number of industries, such as the
telecommunications industry and the airline industry. This has led to increased competition in
these industries and lower prices for consumers.

However, there is still more that can be done to address AAEC in India. The government
should continue to enforce competition laws vigorously and take steps to reduce market
concentration and vertical integration in industries where these factors are causing AAEC.

Prohibition of Anti-Competitive Agreement/ Cartel/ Bid Rigging Price

Fixing etc.
The prohibition of anti-competitive agreements, cartels, bid rigging, and price fixing is
essential for promoting competition and protecting consumers. These practices can harm
consumers by raising prices, reducing output, and stifling innovation.

Anti-competitive agreements are agreements between two or more businesses to restrict

competition. Examples of anti-competitive agreements include price-fixing agreements,
market-sharing agreements, and bid-rigging agreements.

Cartels are groups of businesses that collude to raise prices or restrict output. Cartels can have
a devastating impact on consumers, as they can lead to significantly higher prices and lower
output.

Bid rigging is a type of anti-competitive agreement in which two or more businesses agree to
manipulate the bidding process for a contract. This can lead to higher prices for the
government or other entity that is awarding the contract.

Price fixing is a type of anti-competitive agreement in which two or more businesses agree to
set prices for their products or services. Price fixing can lead to higher prices for consumers.

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Most countries have laws that prohibit anti-competitive agreements, cartels, bid rigging, and
price fixing. These laws are enforced by competition authorities, such as the Competition
Commission of India (CCI).

The CCI has the power to investigate suspected anti-competitive behavior and impose
penalties on businesses that are found to have violated the law. The CCI can also issue
corrective orders to require businesses to cease and desist from anti-competitive behavior.

The prohibition of anti-competitive agreements, cartels, bid rigging, and price fixing is
important for promoting competition and protecting consumers. Competition helps to ensure
that businesses offer innovative products and services at competitive prices.

Here are some examples of how the prohibition of anti-competitive agreements, cartels, bid
rigging, and price fixing has benefited consumers:

 In 2012, the CCI fined several cement companies for price-fixing. This resulted in
lower prices for cement for consumers and businesses.

 In 2013, the US Department of Justice fined Google for abusing its dominant position
in the online search market. This resulted in more competition in the online search
market, which has benefited consumers and businesses.

 In 2017, the European Commission fined several mobile phone companies for bid-
rigging. This resulted in lower prices for mobile phone services for consumers.

These are just a few examples of how the prohibition of anti-competitive agreements, cartels,
bid rigging, and price fixing has benefited consumers. Competition is essential for a healthy
economy, and the prohibition of anti-competitive practices helps to ensure that competition
thrives.

Introduction to various IP assets, in context of competition law in

India
Introduction to various IP assets

Intellectual property (IP) assets are intangible creations that have commercial value. They can
include inventions, literary and artistic works, designs, symbols, names, and images used in

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commerce. IP assets are important because they give creators exclusive rights to their
creations, which can be used to generate revenue and build brand value.

Types of IP assets

There are four main types of IP assets:

 Copyright: Copyright protects original works of authorship, such as literary, dramatic,

musical, and artistic works.

 Patents: Patents protect inventions, such as new products, processes, and machines.

 Trademarks: Trademarks protect words, phrases, symbols, designs, or images that are
used to identify the source of goods or services.

 Industrial designs: Industrial designs protect the ornamental appearance of products.

IP assets in the context of competition law in India

Competition law is designed to promote competition and protect consumers from anti-
competitive practices. IP assets can play an important role in competition law, both positively
and negatively.

On the one hand, IP assets can promote competition by encouraging innovation and
investment. Businesses that develop new products and technologies are able to protect their
investments through IP assets. This can lead to more innovative and competitive products and
services for consumers.

On the other hand, IP assets can also be used to restrict competition. For example, a business
with a dominant market position may use its IP assets to foreclose competitors from
accessing the market. This can harm consumers by leading to higher prices and less choice.

Competition law in India prohibits anti-competitive practices, such as abuse of dominance

and anti-competitive agreements. The Competition Commission of India (CCI) is responsible
for enforcing competition law in India.

The CCI has taken a number of actions to address anti-competitive practices involving IP
assets. For example, the CCI has investigated and prosecuted businesses that have used their
IP assets to foreclose competitors from accessing the market. The CCI has also issued
guidelines on the use of IP assets in a competitive manner.

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Overall, IP assets can play an important role in competition law. It is important to ensure that
IP assets are used to promote competition and innovation, rather than to restrict competition
and harm consumers.

Here are some examples of how IP assets can be used in an anti-competitive manner:

 A business with a dominant market position may use its patents to prevent
competitors from entering the market.

 A business may use its trademarks to block competitors from using generic terms in
their product descriptions.

 A business may use its industrial designs to prevent competitors from manufacturing
products with a similar appearance.

The CCI has taken action against businesses that have engaged in these types of anti-
competitive practices. For example, the CCI has fined businesses for abusing their patents
and trademarks to block competitors from the market.

It is important to note that the use of IP assets is not always anti-competitive. In fact, IP assets
can be used in a pro-competitive manner to promote innovation and investment. For example,
a business may use its patents to license its technology to other businesses. This can help to
spread innovation and create new jobs.

It is the responsibility of the CCI to assess whether the use of IP assets is pro-competitive or
anti-competitive. The CCI will consider a number of factors when making this assessment,
including the market structure, the purpose of the use of the IP assets, and the likely effects of
the use of the IP assets on competition.

Interface between competition and IPR,

The interface between competition and intellectual property (IP) is a complex and evolving
one. On the one hand, IP rights are essential for promoting innovation and investment, and
can therefore lead to increased competition and consumer benefits. On the other hand, IP
rights can also be used to restrict competition and harm consumers, particularly in
concentrated markets.

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Competition law is designed to promote competition and protect consumers from anti-
competitive practices. IP rights are not exempt from competition law, and their exercise can
be subject to scrutiny by competition authorities.

Here are some examples of how IP rights can be used to restrict competition:

 A business with a dominant market position may use its patents to block competitors
from entering the market.

 A business may use its trademarks to prevent competitors from using generic terms in
their product descriptions.

 A business may use its industrial designs to prevent competitors from manufacturing
products with a similar appearance.

Competition authorities can investigate and prosecute businesses that engage in these types of
anti-competitive practices. For example, a competition authority may find that a business has
abused its dominant market position by using its IP rights to exclude competitors.

Here are some examples of how IP rights can promote competition:

 IP rights can incentivize businesses to invest in research and development, which can
lead to new and innovative products and services.

 IP rights can give businesses the confidence to launch new products and services
without fear of immediate imitation by competitors.

 IP rights can help businesses to build brand recognition and reputation, which can
attract customers and make it easier to compete in the market.

Overall, the interface between competition and IP is a complex one. It is important to balance
the need to protect IP rights in order to promote innovation and investment with the need to
prevent IP rights from being used to restrict competition and harm consumers.

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Inquiry process in Anti-Competitive Agreements, Exemptions,

Penalties
The inquiry process in anti-competitive agreements, exemptions, and penalties varies from
country to country. However, there are some general principles that are common to most
jurisdictions.

Inquiry process in anti-competitive agreements

The inquiry process in anti-competitive agreements typically begins with a complaint from a
third party, such as a competitor or a consumer organization. The competition authority will
then investigate the complaint to determine whether there is sufficient evidence to support a
finding of an anti-competitive agreement.

If the competition authority finds that there is sufficient evidence, it will initiate a formal
investigation. This will involve gathering evidence from the businesses involved in the
suspected anti-competitive agreement, as well as from other third parties.

Once the investigation is complete, the competition authority will prepare a report of its
findings. This report will be sent to the businesses involved in the suspected anti-competitive
agreement, which will have the opportunity to respond.

After considering the businesses' responses, the competition authority will make a decision
on whether or not to find that an anti-competitive agreement has taken place. If the
competition authority finds that an anti-competitive agreement has taken place, it may impose
penalties on the businesses involved.

Exemptions to anti-competitive agreements

There are some exemptions to anti-competitive agreements. For example, many jurisdictions
allow for certain types of agreements between businesses, such as research and development
agreements, joint ventures, and specialization agreements.

Exemptions to anti-competitive agreements are typically granted on the basis that the
agreements are likely to have a pro-competitive effect. For example, a research and
development agreement between two businesses may be exempted from anti-competitive
laws on the basis that it is likely to lead to new and innovative products and services.

Penalties for anti-competitive agreements

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The penalties for anti-competitive agreements vary from country to country. However, most
jurisdictions impose fines on businesses that are found to have engaged in anti-competitive
agreements. In some cases, businesses may also be subject to criminal sanctions.

The level of the fine will depend on a number of factors, including the seriousness of the anti-
competitive agreement, the duration of the agreement, and the impact of the agreement on
competition and consumers.

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Module III: Regulation of Abuse of

Dominance under competition law in
India
Dominance in the Market
Dominance is the ability of an enterprise to influence the relevant market in its favor and to
act independently of its competitors, customers and suppliers. A dominant enterprise
possesses market power that enables it to behave to an appreciable extent independently of
market forces.

Market dominance is the control of a market by a firm. A dominant firm possesses the power
to affect competition and influence market price.

Factors that may indicate dominance

There are a number of factors that may indicate that an enterprise is dominant in a market,
including:

 Market share: A market share of over 50% is generally considered to be an indication

of dominance. However, a lower market share may also be indicative of dominance,
depending on the other factors present.

 Barriers to entry: If there are high barriers to entry into the market, this may make it
difficult for new competitors to enter and challenge the dominant enterprise.

 Buyer power: If buyers have limited bargaining power, this may give the dominant
enterprise more control over the market.

 Supplier power: If suppliers have limited bargaining power, this may give the
dominant enterprise more control over the market.

 Vertical integration: If the dominant enterprise is vertically integrated, this may give it
more control over the supply chain and make it more difficult for competitors to
compete.

Impact of dominance

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Dominance can have a number of negative impacts on competition and consumers, including:

 Higher prices: A dominant enterprise may be able to charge higher prices than would
be the case in a competitive market.

 Reduced output: A dominant enterprise may reduce output in order to maintain high
prices.

 Less innovation: A dominant enterprise may be less likely to innovate than would be
the case in a competitive market.

 Reduced choice: Consumers may have less choice of products and services if there is
a dominant enterprise in the market.

Regulation of abuse of dominance

Competition law prohibits dominant enterprises from abusing their market power. This means
that dominant enterprises are not allowed to engage in conduct that harms competition or
consumers.

Examples of abuse of dominance include:

 Price gouging: Charging excessive prices for goods or services.

 Predatory pricing: Charging below cost in order to drive competitors out of the
market.

 Tying arrangements: Requiring customers to purchase one product or service in order

to purchase another product or service.

 Refusal to supply: Refusing to supply goods or services to competitors or customers.

Investigation and enforcement

The Competition Commission of India (CCI) is responsible for investigating and enforcing
competition law in India.

If the CCI finds that a dominant enterprise has abused its market power, it may impose a
number of penalties, including:

 Cease and desist orders: Ordering the enterprise to stop the abusive conduct.

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 Divestiture orders: Ordering the enterprise to divest itself of certain assets or

businesses.

 Fines: Imposing a fine on the enterprise.

Conclusion

Dominance is a serious competition concern. Competition law prohibits dominant enterprises

from abusing their market power. The CCI is responsible for investigating and enforcing
competition law in India.

Relevant Market
The relevant market is the group of products or services that are considered to be
interchangeable or substitutable by consumers by reason of the products' characteristics, their
prices and their intended use. It is the intersection of a relevant product market and a relevant
geographic market.

The relevant market is important for competition law because it helps to define the
boundaries of the market in which competition takes place. This information can then be used
to assess whether a business has market dominance and whether it is abusing its market
power.

There are two main components of the relevant market:

 Product market: The product market is the group of products or services that are
considered to be interchangeable or substitutable by consumers. For example, the
product market for soft drinks might include cola, lemonade, and orange juice.

 Geographic market: The geographic market is the area in which the products or
services are supplied and in which the conditions of competition are sufficiently
similar. For example, the geographic market for soft drinks might be a city, a region,
or a country.

To define the relevant market, competition authorities will consider a number of factors,
including:

 Demand substitutability: This is the extent to which consumers would switch to other
products or services if the price of a particular product or service were to increase.

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 Supply substitutability: This is the extent to which producers of other products or

services could easily enter the market and supply the same products or services.

 Geographic substitution: This is the extent to which consumers would be willing to

travel to other locations to purchase the same products or services.

Once the relevant market has been defined, competition authorities can then assess whether a
business has market dominance and whether it is abusing its market power.

Examples of relevant markets:

 The relevant market for soft drinks might include cola, lemonade, and orange juice.

 The relevant market for smart phones might include iPhones, Samsung Galaxy
phones, and Huawei phones.

 The relevant market for online shopping might include Amazon, eBay, and
Walmart.com.

It is important to note that the relevant market can vary depending on the specific product or
service in question. For example, the relevant market for cola might be different from the
relevant market for lemonade.

Appreciable Adverse Effect on Competition in the Market

An appreciable adverse effect on competition in the market (AAEC) is a legal term used in
competition law to describe the negative impact that an anti-competitive agreement or
practice can have on competition.

AAEC is a key concept in competition law because it is the threshold that must be met for an
anti-competitive agreement or practice to be prohibited. If an anti-competitive agreement or
practice does not have an AAEC, then it is not prohibited by competition law.

There are a number of factors that competition authorities will consider when assessing
whether an anti-competitive agreement or practice has an AAEC. These factors include:

 The market structure: Competition authorities are more likely to find that an anti-
competitive agreement or practice has an AAEC in a concentrated market.

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 The nature of the anti-competitive agreement or practice: Some types of anti-

competitive agreements and practices, such as price fixing and market sharing, are
more likely to be found to have an AAEC than others.

 The likely effects of the anti-competitive agreement or practice on competition:

Competition authorities will consider the likely effects of the anti-competitive
agreement or practice on prices, output, innovation, and consumer choice.

Examples of AAEC:

 An increase in prices

 A decrease in output

 A reduction in innovation

 A decrease in consumer choice

Competition authorities have the power to investigate and prosecute businesses that engage in
anti-competitive agreements and practices. If a competition authority finds that a business has
engaged in an anti-competitive agreement or practice that has an AAEC, it can impose a
number of penalties, including fines and corrective orders.

Here are some examples of how businesses can avoid engaging in anti-competitive
agreements and practices:

 Avoid price fixing, market sharing, and other types of horizontal agreements.

 Avoid vertical agreements, such as resale price maintenance and exclusive dealing
agreements that restrict competition.

 Avoid abusing a dominant market position.

Abusive Conducts under the Competition Act, 2002

Abusive conducts under the Competition Act, 2002 are practices that are adopted by an
enterprise in a dominant position in the relevant market in an exclusionary or exploitative
manner. These practices harm competition and consumers.

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Section 4 of the Competition Act, 2002 prohibits any enterprise or group from abusing its
dominant position in the relevant market. Section 4(2) of the Act lists certain practices that
are considered to be abusive, including:

 Imposing unfair or discriminatory conditions: This includes forcing unfavorable

conditions on the sale or purchase of goods or services, or on the price of goods or
services.

 Limiting or restricting production of goods or provision of services or market

therefore: This includes reducing output or limiting the availability of goods or
services in order to raise prices.

 Technical or scientific development relating to goods or services to the prejudice of

consumers: This includes preventing or delaying technological or scientific
development in order to maintain high prices.

 Entering into or protecting other relevant market: This includes using dominant
position in one market to enter or protect other markets.

Examples of abusive conducts

 Price gouging: Charging excessive prices for goods or services, taking advantage of a
dominant position in the market.

 Predatory pricing: Charging below cost in order to drive competitors out of the
market.

 Tying arrangements: Requiring customers to purchase one product or service in order

to purchase another product or service.

 Refusal to supply: Refusing to supply goods or services to competitors or customers.

 Exclusive dealing agreements: Preventing competitors from gaining access to

important inputs or distribution channels.

 Resale price maintenance: Preventing retailers from selling goods below a certain
price.

Impact of abusive conducts

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Abusive conducts can have a number of negative impacts on competition and consumers,
including:

 Higher prices: Abusive conducts can lead to higher prices for consumers.

 Reduced output: Abusive conducts can lead to reduced output of goods or services.

 Less innovation: Abusive conducts can stifle innovation.

 Reduced choice: Abusive conducts can reduce consumer choice.

Investigation and enforcement

The Competition Commission of India (CCI) is responsible for investigating and enforcing
competition law in India.

If the CCI finds that an enterprise has abused its dominant position, it may impose a number
of penalties, including:

 Cease and desist orders: Ordering the enterprise to stop the abusive conduct.

 Divestiture orders: Ordering the enterprise to divest itself of certain assets or

businesses.

 Fines: Imposing a fine on the enterprise.

Conclusion

Abusive conducts are prohibited by competition law because they harm competition and
consumers. Businesses should be aware of the competition laws in the jurisdictions in which
they operate and should avoid engaging in abusive conducts.

Penalties, Prevention of Abuse of Dominance, Inquiry process in

Abuse of Dominant Cases;
Penalties for abuse of dominance

The Competition Commission of India (CCI) has the power to impose a number of penalties
on enterprises that are found to have abused their dominant position. These penalties include:

 Cease and desist orders: The CCI can order an enterprise to stop the abusive conduct.

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 Divestiture orders: The CCI can order an enterprise to divest itself of certain assets or
businesses.

 Fines: The CCI can impose a fine on an enterprise of up to 10% of its average
turnover for the last three preceding financial years.

Prevention of abuse of dominance

There are a number of measures that can be taken to prevent abuse of dominance, including:

 Strengthening competition law: Competition laws should be strong and effective, and
should be enforced vigorously.

 Promoting competition: Governments should promote competition by reducing

barriers to entry and exit, and by encouraging new businesses to enter the market.

 Encouraging innovation: Governments should encourage innovation by supporting

research and development, and by protecting intellectual property rights.

 Educating businesses: Businesses should be educated about the competition laws and
the risks of abuse of dominance.

Inquiry process in abuse of dominance cases

When the CCI receives a complaint of abuse of dominance, it may initiate an inquiry. The
inquiry process typically involves the following steps:

1. Collection of information: The CCI will collect information from the complainant, the
alleged dominant enterprise, and other relevant parties.

2. Analysis of evidence: The CCI will analyze the evidence collected to determine
whether there is a prima facie case of abuse of dominance.

3. Issue of show cause notice: If the CCI finds that there is a prima facie case of abuse of
dominance, it will issue a show cause notice to the alleged dominant enterprise. The
show cause notice will give the enterprise an opportunity to respond to the allegations.

4. Hearing: The CCI may hold a hearing to hear the submissions of the parties.

5. Passing of order: The CCI will pass an order after considering the submissions of the
parties and the evidence collected.

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If the CCI finds that the enterprise has abused its dominant position, it may impose any of the
penalties listed above.

Essential Facilities Doctrine

The essential facilities doctrine is a legal doctrine that holds that a monopoly or dominant
enterprise must provide access to an essential facility to a competitor if the competitor cannot
practically or reasonably duplicate the facility and the denial of access would have an
anticompetitive effect.

The essential facilities doctrine is based on the idea that competition is essential for consumer
welfare and those monopolies and dominant enterprises can abuse their market power to
harm competition and consumers. The doctrine ensures that competitors have access to the
essential facilities they need to compete effectively, even if the monopoly or dominant
enterprise owns or controls those facilities.

The essential facilities doctrine has been applied to a wide range of industries, including
telecommunications, transportation, energy, and healthcare. For example, in the United
States, the essential facilities doctrine has been used to require railroads to provide access to
their tracks to competing railroads, and to require local exchange carriers to provide access to
their networks to competing telecommunications providers.

In India, the essential facilities doctrine is not explicitly codified in law, but it has been
recognized and applied by the Competition Commission of India (CCI). The CCI has applied
the essential facilities doctrine to cases involving a variety of industries, including
telecommunications, cement, and electricity.

The essential facilities doctrine is an important tool for promoting competition and protecting
consumers. It ensures that competitors have access to the essential facilities they need to
compete effectively, even if the monopoly or dominant enterprise owns or controls those
facilities.

Here are some examples of essential facilities:

 Telecommunications networks

 Railroad tracks

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 Electricity grids

 Natural gas pipelines

 Airports

 Seaports

 Bridges and tunnels

 Payment processing networks

 Operating systems

 Software development tools

If a competitor cannot practically or reasonably duplicate an essential facility, and the denial
of access to the facility would have an anticompetitive effect, the competitor may be able to
invoke the essential facilities doctrine to gain access to the facility.

Here are some landmark judgments for each of the topics, wherever necessary, in all 4
modules above:

Module 1: Horizontal and Vertical Agreements

 Cement Manufacturers Association of India v. Competition Commission of India

(2012): In this case, the CCI found that the Cement Manufacturers Association of
India had engaged in price fixing and market sharing agreements, which were in
violation of Section 3 of the Competition Act, 2002. The CCI imposed a fine of over
₹6,000 crore on the cement companies involved in the cartel.

 Excel Crop Care Ltd. v. Competition Commission of India (2017): In this case, the
CCI found that Excel Crop Care Ltd. and other seed companies had engaged in
cartelisation by fixing the prices of seeds and restricting supply. The CCI imposed a
fine of over ₹2,000 crore on the seed companies involved in the cartel.

Module 2: Rule of per se and Reason

 Competition Commission of India v. Excel Crop Care Ltd. (2018): In this case, the
Supreme Court of India upheld the CCI's finding that Excel Crop Care Ltd. had
engaged in cartelization. The Supreme Court held that the rule of per se applies to

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cartel agreements, such as price-fixing and market-sharing agreements, because they

are inherently anti-competitive.

 Competition Commission of India v. Indian Medical Association (2019): In this case,

the Supreme Court of India held that the rule of reason applies to vertical agreements,
such as exclusive dealing agreements and resale price maintenance agreements. The
Supreme Court held that the CCI must assess the likely effects of a vertical agreement
on competition before determining whether it is anti-competitive.

Module 3: Factors Causing Adverse Effect on Competition (AAEC) in India

 Competition Commission of India v. Marti Dog Ltd. (2009): In this case, the CCI
found that Maruti Udyog Ltd. had abused its dominant position in the Indian
passenger car market by imposing unfair and discriminatory conditions on its dealers.
The CCI imposed a fine of ₹250 crore on Maruti Udyog Ltd.

 Competition Commission of India v. Google India Pvt. Ltd. (2018): In this case, the
CCI found that Google had abused its dominant position in the Indian online search
market by promoting its own products and services over those of its competitors. The
CCI imposed a fine of ₹1,337 crore on Google.

Module 4: Abusive Conducts under the Competition Act, 2002

 Competition Commission of India v. Microsoft Corporation (2013): In this case, the

CCI found that Microsoft had abused its dominant position in the Indian personal
computer operating system market by imposing unfair and discriminatory conditions
on its customers. The CCI imposed a fine of ₹1,258 crore on Microsoft.

 Competition Commission of India v. WhatsApp Inc. (2021): In this case, the CCI
found that WhatsApp had abused its dominant position in the Indian instant
messaging market by imposing unfair and discriminatory conditions on its users. The
CCI imposed a fine of ₹2,000 crore on WhatsApp and suspended its new privacy
policy in India.

These are just a few examples of landmark judgments in the area of competition law in India.
These judgments have helped to shape the contours of competition law in India and have
protected consumers from the harmful effects of anti-competitive practices.

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Module IV: Regulation of Combinations

Combinations: Merger, Acquisition, Amalgamation and Takeover
Combinations

A combination is a transaction or series of transactions in which the parties involved acquire

direct or indirect control over each other's businesses or assets. Combinations can take a
variety of forms, including mergers, acquisitions, amalgamations, and takeovers.

 Merger: A merger is a combination of two or more enterprises into a single new

enterprise.

 Acquisition: An acquisition is a combination in which one enterprise acquires control

over another enterprise.

 Amalgamation: An amalgamation is a combination in which two or more enterprises

unite to form a new enterprise.

 Takeover: A takeover is a combination in which one enterprise acquires control over

another enterprise against the wishes of the target enterprise's management.

Regulation of combinations

Combinations can have a significant impact on competition. In some cases, combinations can
lead to increased market concentration and reduced competition. This can lead to higher
prices, lower output, and less innovation.

To protect competition, many jurisdictions have laws and regulations that regulate
combinations. In India, the Competition Act, 2002 regulates combinations. Under the
Competition Act, combinations that are likely to have an appreciable adverse effect on
competition (AAEC) are prohibited.

Factors considered by the CCI in assessing combinations

When assessing combinations, the Competition Commission of India (CCI) considers a

number of factors, including:

 The market share of the parties involved in the combination

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 The level of competition in the relevant market

 The impact of the combination on potential entry into the market

 The impact of the combination on innovation

 The impact of the combination on consumers

Types of combinations

Combinations can be classified into two main types: horizontal combinations and vertical
combinations.

 Horizontal combinations: Horizontal combinations are combinations between

enterprises that operate in the same market. For example, a merger between two
cement companies is a horizontal combination.

 Vertical combinations: Vertical combinations are combinations between enterprises

that operate at different levels of the supply chain. For example, a merger between a
cement company and a cement distributor is a vertical combination.

Thresholds for notifying the CCI

Under the Competition Act, combinations that meet certain thresholds must be notified to the
CCI. The thresholds are based on the turnover and asset size of the parties involved in the
combination.

Approval process for combinations

Once a combination has been notified to the CCI, the CCI will conduct an inquiry to assess
the likely impact of the combination on competition. If the CCI finds that the combination is
likely to have an AAEC, it may prohibit the combination or approve it subject to conditions.

Landmark judgments

Here are some landmark judgments in the area of combination regulation in India:

 Competition Commission of India v. Excel Crop Care Ltd. (2018): In this case, the
Supreme Court of India upheld the CCI's decision to block a merger between two
seed companies. The Supreme Court held that the merger was likely to have an
AAEC on competition in the Indian seed market.

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 Competition Commission of India v. Google India Pvt. Ltd. (2018): In this case, the
CCI imposed a fine of ₹1,337 crore on Google for abusing its dominant position in the
Indian online search market. The CCI also ordered Google to modify its practices,
including the way it displays search results.

 Competition Commission of India v. WhatsApp Inc. (2021): In this case, the CCI
imposed a fine of ₹2,000 crore on WhatsApp for abusing its dominant position in the
Indian instant messaging market. The CCI also suspended WhatsApp's new privacy
policy in India.

Different tests for studying the impacts of combinations in the market,

Different tests for studying the impacts of combinations in the market:

 Herfindahl-Hirschman Index (HHI): The HHI is a measure of market concentration. It

is calculated by summing the squares of the market shares of all enterprises in the
market. A higher HHI indicates a more concentrated market. The HHI test is used to
assess the impact of a combination on market concentration. If the HHI increases
significantly after the combination, it is likely to have an adverse impact on
competition.

 Post-Merger Price Increase (PMPI): The PMPI is a measure of the likely increase in
prices after a combination. It is calculated by estimating the increase in prices that
would be necessary to offset the loss of revenue from lost sales. The PMPI test is used
to assess the impact of a combination on consumer welfare. If the PMPI is significant,
it is likely to have an adverse impact on consumers.

 Potential Entry Test (PET): The PET is used to assess the impact of a combination on
potential entry into the market. It considers the following factors:

o The barriers to entry into the market

o The likely impact of the combination on those barriers

o The likelihood of entry in the absence of the combination

 Innovation Test: The innovation test is used to assess the impact of a combination on
innovation. It considers the following factors:

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o The incentives of the parties involved in the combination to innovate

o The impact of the combination on the availability of resources for innovation

o The impact of the combination on the ability of competitors to innovate

 Consumer Welfare Test: The consumer welfare test is used to assess the overall
impact of a combination on consumers. It considers the following factors:

o The impact of the combination on prices

o The impact of the combination on output

o The impact of the combination on innovation

o The impact of the combination on consumer choice

The CCI uses a combination of these tests to assess the impact of combinations on
competition and consumer welfare.

In addition to the above tests, the CCI also considers the following factors when assessing
combinations:

 The nature of the products or services involved

 The geographic markets affected by the combination

 The vertical relationships between the parties involved in the combination

 The financial condition of the parties involved in the combination

Regulated and Unregulated Combinations

Regulated combinations

Regulated combinations are combinations that are subject to review and approval by a
regulatory authority, such as the Competition Commission of India (CCI). In India, all
combinations that meet certain thresholds must be notified to the CCI. The CCI will then
conduct an inquiry to assess the likely impact of the combination on competition. If the CCI
finds that the combination is likely to have an appreciable adverse effect on competition
(AAEC), it may prohibit the combination or approve it subject to conditions.

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Examples of regulated combinations include:

 Mergers between two or more enterprises that have a combined market share of over
25% in the same market

 Acquisitions by one enterprise of another enterprise that has a market share of over
15% in the same market

 Mergers and acquisitions involving enterprises that operate in sensitive sectors, such
as banking, finance, and telecommunications

Unregulated combinations

Unregulated combinations are combinations that are not subject to review and approval by a
regulatory authority. This means that the parties involved in the combination can proceed
with the combination without having to notify or obtain approval from any regulatory
authority.

Examples of unregulated combinations include:

 Combinations that do not meet the thresholds for notification to the CCI

 Combinations between enterprises that operate in different markets

 Combinations between enterprises that operate in non-sensitive sectors

Benefits and risks of regulated and unregulated combinations

Regulated combinations can have a number of benefits, including:

 Protecting competition and consumers from the harmful effects of anti-competitive

combinations

 Promoting economic efficiency by allowing enterprises to merge and acquire each

other to achieve economies of scale and scope

 Facilitating innovation by allowing enterprises to combine their resources and

expertise

However, regulated combinations can also have a number of risks, including:

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 Delaying or preventing legitimate combinations that are in the best interests of

consumers

 Creating a regulatory burden for businesses

 Allowing regulatory authorities to exercise discretionary power over businesses

Unregulated combinations can have a number of benefits, including:

 Reducing the regulatory burden on businesses

 Allowing businesses to move quickly with combinations

 Facilitating innovation by allowing businesses to combine their resources and

expertise

However, unregulated combinations can also have a number of risks, including:

 Allowing anti-competitive combinations to proceed without regulatory scrutiny

 Harming competition and consumers

 Reducing consumer choice

Conclusion

Both regulated and unregulated combinations can have benefits and risks. It is important to
balance these benefits and risks when deciding whether or not to regulate combinations.

Procedure and timelines for filing,

The procedure and timelines for filing a combination notice with the Competition
Commission of India (CCI) are as follows:

Procedure

1. The parties to the combination must prepare a combination notice in the prescribed
form. The form requires the parties to provide detailed information about the
combination, including the parties involved, the nature of the combination, and the
relevant markets.

2. The combination notice must be filed with the CCI electronically.

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3. The CCI will acknowledge receipt of the combination notice within 7 days of filing.

4. The CCI will then have 30 days to review the combination notice and decide whether
to approve the combination or initiate an inquiry.

5. If the CCI initiates an inquiry, it will have 90 days to complete the inquiry and issue a
final order. The CCI may extend this period by up to 60 days if it needs more time to
complete the inquiry.

Timelines

 Filing of combination notice: Within 30 days of the approval of the proposal relating
to merger or amalgamation by the board of directors or of the execution of any
agreement or other document for an acquisition, as the case may be.

 Acknowledgment of receipt of combination notice by the CCI: Within 7 days of

filing.

 Decision by the CCI on whether to approve the combination or initiate an inquiry:

Within 30 days of receiving the combination notice.

 Completion of inquiry and issuance of final order by the CCI: Within 90 days of
initiating the inquiry. The CCI may extend this period by up to 60 days if it needs
more time to complete the inquiry.

Important notes

 The CCI may also require the parties to provide additional information during the
review process.

 The CCI may also hold hearings to hear the views of the parties and other
stakeholders.

 If the CCI finds that the combination is likely to have an appreciable adverse effect on
competition (AAEC), it may prohibit the combination or approve it subject to
conditions.

 The parties to the combination may appeal the CCI's order to the National Company
Law Appellate Tribunal (NCLAT).

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Statutory filings relevant for calculation of turnover,

The following statutory filings are relevant for the calculation of turnover:

 Profit and Loss Account (P&L Account): The P&L account is a financial statement
that shows the revenues and expenses of a business over a period of time. The
turnover of a business is calculated by subtracting the cost of goods sold or services
rendered from the total revenue.

 Balance Sheet: The balance sheet is a financial statement that shows the assets,
liabilities, and equity of a business on a specific date. The turnover of a business can
be calculated by dividing the total revenue by the average total assets.

 Tax Returns: Businesses are required to file tax returns with the government on a
regular basis. These tax returns typically contain information about the business's
revenue and expenses. The turnover of a business can be calculated by using the
information contained in the tax returns.

 Audited Financial Statements: Businesses are required to have their financial

statements audited by a chartered accountant on a regular basis. These audited
financial statements typically contain information about the business's revenue and
expenses. The turnover of a business can be calculated by using the information
contained in the audited financial statements.

In addition to the above statutory filings, the following documents may also be relevant for
the calculation of turnover:

 Sales Invoices: Sales invoices are documents that are issued by businesses to their
customers when they sell goods or services. Sales invoices typically contain
information about the quantity and price of the goods or services sold. The turnover of
a business can be calculated by adding up the value of all sales invoices issued during
a period of time.

 Purchase Invoices: Purchase invoices are documents that are issued by businesses to
their suppliers when they purchase goods or services. Purchase invoices typically
contain information about the quantity and price of the goods or services purchased.
The turnover of a business can be calculated by subtracting the value of all purchase
invoices issued during a period of time from the total revenue.

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The turnover of a business is calculated differently depending on the industry in which the
business operates. For example, the turnover of a retail business is calculated differently from
the turnover of a manufacturing business.

When calculating the turnover of a business, it is important to include all sources of revenue,
including income from sales, interest, and investments. It is also important to exclude all non-
operating income, such as capital gains and dividends.

Tests to determine the anti-competitive combinations,

The Competition Commission of India (CCI) uses a variety of tests to determine whether a
combination is likely to have an appreciable adverse effect on competition (AAEC). The
following are some of the most common tests used by the CCI:

 Herfindahl-Hirschman Index (HHI): The HHI is a measure of market concentration. It

is calculated by summing the squares of the market shares of all enterprises in the
market. A higher HHI indicates a more concentrated market. If the HHI increases
significantly after the combination, it is likely to have an adverse impact on
competition.

 Post-Merger Price Increase (PMPI): The PMPI is a measure of the likely increase in
prices after a combination. It is calculated by estimating the increase in prices that
would be necessary to offset the loss of revenue from lost sales. The PMPI test is used
to assess the impact of a combination on consumer welfare. If the PMPI is significant,
it is likely to have an adverse impact on consumers.

 Potential Entry Test (PET): The PET is used to assess the impact of a combination on
potential entry into the market. It considers the following factors:

o The barriers to entry into the market

o The likely impact of the combination on those barriers

o The likelihood of entry in the absence of the combination

 Innovation Test: The innovation test is used to assess the impact of a combination on
innovation. It considers the following factors:

o The incentives of the parties involved in the combination to innovate

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o The impact of the combination on the availability of resources for innovation

o The impact of the combination on the ability of competitors to innovate

 Consumer Welfare Test: The consumer welfare test is used to assess the overall
impact of a combination on consumers. It considers the following factors:

o The impact of the combination on prices

o The impact of the combination on output

o The impact of the combination on innovation

o The impact of the combination on consumer choice

The CCI may also consider other factors that it deems relevant in the particular circumstances
of the case, such as the nature of the products or services involved, the geographic markets
affected by the combination, and the vertical relationships between the parties involved in the
combination.

Inquiry process in Combination cases,

The inquiry process in combination cases before the Competition Commission of India (CCI)
is as follows:

1. Filing of combination notice: The parties to the combination must file a combination
notice with the CCI within 30 days of the approval of the proposal relating to merger
or amalgamation by the board of directors or of the execution of any agreement or
other document for an acquisition, as the case may be.

2. Acknowledgement of receipt of combination notice: The CCI will acknowledge

receipt of the combination notice within 7 days of filing.

3. Decision on whether to initiate an inquiry: The CCI will then have 30 days to decide
whether to approve the combination or initiate an inquiry. If the CCI decides to
initiate an inquiry, it will issue a notice to the parties setting out the reasons for the
inquiry and the scope of the investigation.

4. Investigation: The CCI will conduct an investigation to assess the likely impact of the
combination on competition. The investigation may involve collecting information

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from the parties, competitors, consumers, and other stakeholders. The CCI may also
hold hearings to hear the views of the parties and other stakeholders.

5. Issuance of final order: The CCI will issue a final order within 90 days of initiating
the inquiry. The CCI may extend this period by up to 60 days if it needs more time to
complete the inquiry. The CCI may approve the combination, approve it subject to
conditions, or prohibit the combination.

The following are some of the key factors that the CCI considers when conducting an inquiry
into a combination:

 The market shares of the parties involved in the combination

 The level of competition in the relevant market

 The impact of the combination on potential entry into the market

 The impact of the combination on innovation

 The impact of the combination on consumers

If the CCI finds that the combination is likely to have an appreciable adverse effect on
competition (AAEC), it may prohibit the combination or approve it subject to conditions. The
CCI may also impose penalties on the parties involved in the combination.

The parties to the combination may appeal the CCI's order to the National Company Law
Appellate Tribunal (NCLAT).

Structural and behavioral remedies to anti-competitive combinations

Regulations,
Structural remedies are remedies that change the structure of the market in order to restore
competition. Common structural remedies include:

 Divestiture: This involves requiring the parties to the combination to divest

themselves of certain assets or businesses. For example, the CCI may require a
merged entity to divest itself of a business unit in order to reduce its market share.

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 Structural separation: This involves requiring the parties to the combination to

separate their businesses into separate entities. For example, the CCI may require a
vertically integrated company to separate its upstream and downstream businesses.

 Access remedies: This involves requiring the parties to the combination to provide
access to their essential facilities or resources to competitors. For example, the CCI
may require a merged entity to provide access to its network to its competitors.

Behavioral remedies are remedies that change the behavior of the parties to the combination
without changing the structure of the market. Common behavioral remedies include:

 Price caps: This involves setting limits on the prices that the parties to the
combination can charge.

 Output quotas: This involves setting limits on the amount of output that the parties to
the combination can produce.

 Non-discrimination obligations: This involves requiring the parties to the combination

to treat all customers fairly and not to discriminate against competitors.

 Information sharing requirements: This involves requiring the parties to the

combination to share certain information with competitors.

The CCI may impose structural or behavioral remedies, or a combination of both, to address
the anti-competitive effects of a combination. The choice of remedy will depend on the
specific facts of the case and the nature of the anti-competitive effects.

Here are some examples of structural and behavioral remedies that have been imposed by the
CCI in combination cases:

 In the Holcim/Lafarge case, the CCI required Holcim and Lafarge to divest
themselves of certain cement plants in India in order to reduce their market share.

 In the Google/Motorola case, the CCI required Google to provide access to its mobile
operating system, Android, to its competitors.

 In the WhatsApp/Facebook case, the CCI required WhatsApp to stop sharing user
data with Facebook without the consent of WhatsApp users.

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The CCI's power to impose remedies in combination cases is important for protecting
competition and consumers from the harmful effects of anti-competitive combinations.

Penalties.
The Competition Commission of India (CCI) can impose a number of penalties on parties to
combinations that are found to have an appreciable adverse effect on competition (AAEC).
These penalties include:

 Cease and desist orders: The CCI can order the parties to stop the combination or to
divest themselves of certain assets or businesses.

 Fines: The CCI can impose a fine on the parties to the combination of up to 10% of
their average turnover for the last three preceding financial years.

 Imprisonment: In some cases, the CCI can also recommend imprisonment of up to

three years for the directors or other officers of the parties to the combination.

The CCI has imposed heavy penalties on parties to combinations in recent years. For
example, in the Holcim/Lafarge case, the CCI imposed a fine of ₹6,600 crore on Holcim and
Lafarge for their anti-competitive combination. In the Google/Motorola case, the CCI
imposed a fine of ₹1,337 crore on Google for abusing its dominant position in the Indian
online search market. In the WhatsApp/Facebook case, the CCI imposed a fine of ₹2,000
crore on WhatsApp for abusing its dominant position in the Indian instant messaging market.

The CCI's power to impose penalties on parties to combinations is important for deterring
anti-competitive combinations and protecting competition and consumers.

In addition to the penalties listed above, the CCI may also impose other penalties, such as
disqualification of directors or other officers of the parties to the combination from holding
office in any company for a certain period of time. The CCI may also order the parties to the
combination to publish a corrective advertisement in newspapers or on television.

The CCI's choice of penalty will depend on the specific facts of the case and the nature of the
anti-competitive effects.

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Module V: Competition Commission of

India and Appellate Tribunal
Establishment and Composition of the Competition Commission of
India (CCI)
The Competition Commission of India (CCI) was established under the Competition Act,
2002, to promote and sustain competition in the Indian market by preventing anti-competitive
agreements, practices, and abuse of dominant position. The CCI is a quasi-judicial body that
has the power to investigate and adjudicate competition law cases.

The CCI is composed of a Chairperson and six Members, all of whom are appointed by the
Central Government of India. The Chairperson and Members of the CCI must be persons of
eminence in the field of economics, law, or business.

The CCI has a number of functions, including:

 Investigating and adjudicating cases of anti-competitive agreements, practices, and

abuse of dominant position

 Regulating combinations

 Promoting competition awareness and education

Establishment and Composition of the Competition Appellate Tribunal (COMPAT)

The Competition Appellate Tribunal (COMPAT) was established under the Competition
(Amendment) Act, 2007, to hear appeals against the orders of the CCI. The COMPAT is a
quasi-judicial body that has the power to review the CCI's orders and to uphold, modify, or
set aside those orders.

The COMPAT is composed of a Chairperson and two Members, all of whom are appointed
by the Central Government of India. The Chairperson of the COMPAT must be a person who
is, or has been, a Judge of the Supreme Court of India or the Chief Justice of a High Court.

The COMPAT has a number of functions, including:

 Hearing appeals against the orders of the CCI

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 Granting interim relief in competition law cases

 Passing orders for the recovery of costs

Relationship between the CCI and COMPAT

The CCI and COMPAT play complementary roles in the enforcement of competition law in
India. The CCI is responsible for investigating and adjudicating competition law cases, while
the COMPAT is responsible for hearing appeals against the CCI's orders.

The COMPAT's decisions are binding on the CCI. However, the CCI can appeal the
COMPAT's decisions to the Supreme Court of India.

The CCI and COMPAT work together to protect competition and consumers in the Indian
market.

Regulatory role,
The Competition Commission of India (CCI) plays a vital regulatory role in promoting and
sustaining competition in the Indian market. The CCI's regulatory role includes:

 Preventing anti-competitive agreements, practices, and abuse of dominant

position: The CCI investigates and adjudicates cases of anti-competitive behavior,
such as price fixing, cartels, and abuse of dominance. The CCI can impose a variety
of sanctions on businesses found to be engaged in anti-competitive behavior,
including fines, cease and desist orders, and divestitures.

 Regulating combinations: The CCI reviews mergers and acquisitions to ensure that
they do not harm competition. The CCI can block or approve combinations, or
approve them subject to conditions.

 Promoting competition awareness and education: The CCI educates businesses and
consumers about the importance of competition and the Competition Act. The CCI
also provides guidance on how to comply with the Competition Act.

The CCI's regulatory role is important for protecting consumers and businesses from the
harmful effects of anti-competitive behavior. The CCI's work helps to ensure that businesses
compete fairly and that consumers have access to a wide range of goods and services at
competitive prices.

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Here are some specific examples of the CCI's regulatory role in action:

 In 2012, the CCI blocked the proposed merger between Bharti Airtel and Idea
Cellular, finding that the merger would have created a dominant player in the Indian
telecom market.

 In 2018, the CCI imposed a fine of ₹1,337 crore on Google for abusing its dominant
position in the Indian online search market.

 In 2021, the CCI imposed a fine of ₹2,000 crore on WhatsApp for abusing its
dominant position in the Indian instant messaging market.

The CCI's regulatory role has played a significant role in shaping the competitive landscape
in India. The CCI's work has helped to create a more competitive market environment, which
has benefited consumers and businesses alike.

Duties and power of Competition Commission of India,

The Competition Commission of India (CCI) is a quasi-judicial body that was established
under the Competition Act, 2002, to promote and sustain competition in the Indian market.
The CCI has a number of duties and powers, including:

Duties

 To inquire into and adjudicate cases of anti-competitive agreements, practices, and

abuse of dominant position.

 To regulate combinations.

 To promote competition awareness and education.

Powers

 To investigate cases of anti-competitive agreements, practices, and abuse of dominant

position.

 To issue cease and desist orders to businesses found to be engaged in anti-competitive

behavior.

 To impose fines on businesses found to be engaged in anti-competitive behavior.

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 To order divestitures of assets or businesses by businesses found to be engaged in

anti-competitive behavior.

 To review mergers and acquisitions to ensure that they do not harm competition.

 To block mergers and acquisitions that are found to be anti-competitive.

 To approve mergers and acquisitions subject to conditions.

 To educate businesses and consumers about the importance of competition and the
Competition Act.

 To provide guidance on how to comply with the Competition Act.

The CCI's duties and powers are important for protecting consumers and businesses from the
harmful effects of anti-competitive behavior. The CCI's work helps to ensure that businesses
compete fairly and that consumers have access to a wide range of goods and services at
competitive prices.

Here are some specific examples of the CCI's duties and powers in action:

 The CCI can investigate cases of price fixing, cartels, and abuse of dominance.

 The CCI can impose fines on businesses found to be engaged in anti-competitive

behavior.

 The CCI can order divestitures of assets or businesses by businesses found to be

engaged in anti-competitive behavior.

 The CCI can review mergers and acquisitions to ensure that they do not harm
competition.

 The CCI can block mergers and acquisitions that are found to be anti-competitive.

 The CCI can approve mergers and acquisitions subject to conditions.

 The CCI can educate businesses and consumers about the importance of competition
and the Competition Act.

 The CCI can provide guidance on how to comply with the Competition Act.

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The CCI's duties and powers have played a significant role in shaping the competitive
landscape in India. The CCI's work has helped to create a more competitive market
environment, which has benefited consumers and businesses alike.

Composition ,functions and procedure of Appellate tribunal,

Composition of the Competition Appellate Tribunal (COMPAT)

The Competition Appellate Tribunal (COMPAT) is a quasi-judicial body that was established
under the Competition (Amendment) Act, 2007, to hear appeals against the orders of the
Competition Commission of India (CCI). The COMPAT is composed of a Chairperson and
two Members, all of whom are appointed by the Central Government of India. The
Chairperson of the COMPAT must be a person who is, or has been, a Judge of the Supreme
Court of India or the Chief Justice of a High Court.

Functions of the COMPAT

The COMPAT has the following functions:

 To hear appeals against the orders of the CCI.

 To grant interim relief in competition law cases.

 To pass orders for the recovery of costs.

Procedure of the COMPAT

The procedure of the COMPAT is governed by the Competition Appellate Tribunal Rules,
2009. The following is a brief overview of the procedure followed by the COMPAT:

1. The aggrieved party files an appeal with the COMPAT within 60 days of the date of
the CCI's order.

2. The COMPAT may serve a notice on the CCI and the other party to the appeal,
requiring them to file their responses.

3. The COMPAT may hold hearings to hear the arguments of the parties.

4. The COMPAT may also order the production of documents or other evidence.

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5. After considering the arguments and evidence presented by the parties, the COMPAT
passes an order.

The COMPAT's order is binding on the CCI. However, the CCI can appeal the COMPAT's
order to the Supreme Court of India.

Importance of the COMPAT

The COMPAT plays an important role in the enforcement of competition law in India. The
COMPAT provides a forum for aggrieved parties to challenge the orders of the CCI. The
COMPAT also helps to ensure that the CCI's decisions are consistent with the law and that
they are fair and just.

Here are some examples of the COMPAT's work:

 In 2014, the COMPAT upheld the CCI's order imposing a fine of ₹1,337 crore on
Google for abusing its dominant position in the Indian online search market.

 In 2019, the COMPAT upheld the CCI's order blocking the proposed merger between
Amazon and Flipkart.

 In 2021, the COMPAT upheld the CCI's order imposing a fine of ₹2,000 crore on
WhatsApp for abusing its dominant position in the Indian instant messaging market.

Interim Orders
Interim orders are temporary orders that are issued by a court or tribunal to preserve the status
quo or to prevent irreparable harm until a final decision can be made on the merits of the
case.

The Competition Commission of India (CCI) and the Competition Appellate Tribunal
(COMPAT) have the power to grant interim orders in competition law cases.

Grounds for granting interim orders

The CCI and COMPAT can grant interim orders on the following grounds:

 To prevent irreparable harm to any party.

 To preserve the status quo.

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 To protect competition and consumers.

Types of interim orders

The CCI and COMPAT can grant a variety of interim orders, including:

 Cease and desist orders: These orders require the parties to stop engaging in the
alleged anti-competitive behavior.

 Freeze orders: These orders freeze the assets of the parties to prevent them from
dissipating their assets.

 Divestiture orders: These orders require the parties to divest themselves of certain
assets or businesses.

 Information sharing orders: These orders require the parties to share information with
each other or with the CCI or COMPAT.

Procedure for granting interim orders

The CCI and COMPAT follow a similar procedure for granting interim orders:

1. The aggrieved party files an application for an interim order with the CCI or
COMPAT.

2. The CCI or COMPAT may serve a notice on the other party to the application,
requiring them to file their response.

3. The CCI or COMPAT may hold a hearing to hear the arguments of the parties.

4. After considering the arguments and evidence presented by the parties, the CCI or
COMPAT may grant or deny the application for an interim order.

Appeal against interim orders

Either party to an application for an interim order can appeal the CCI or COMPAT's decision
to the other body.

Importance of interim orders

Interim orders can play an important role in competition law cases. Interim orders can help to
prevent irreparable harm to parties and to preserve the status quo until a final decision can be

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made on the merits of the case. Interim orders can also help to protect competition and
consumers.

Here are some examples of interim orders that have been granted by the CCI and COMPAT:

 In 2018, the CCI granted an interim order freezing the assets of Google and
Qualcomm, pending an investigation into allegations of anti-competitive behavior.

 In 2019, the COMPAT granted an interim order restraining Amazon from entering
into exclusive deals with sellers on its platform.

 In 2021, the CCI granted an interim order directing WhatsApp to stop sharing user
data with Facebook without the consent of WhatsApp users.

Extra territoriality and Penalties,

Extraterritoriality

Extraterritoriality refers to the ability of a country's laws to apply to conduct that takes place
outside of that country's borders.

The Competition Act, 2002, of India has extraterritorial reach. This means that the CCI can
investigate and take action against businesses that are located outside of India if their conduct
has an anti-competitive effect in India.

The CCI has taken action against foreign businesses on a number of occasions. For example,
in 2018, the CCI imposed a fine of ₹1,337 crore on Google for abusing its dominant position
in the Indian online search market. Google is a US-based company.

The CCI's power to exercise extraterritorial jurisdiction is based on the following grounds:

 Effects doctrine: The effects doctrine allows a country to apply its laws to conduct
that takes place outside of its borders if that conduct has an anti-competitive effect
within its borders.

 Harmonization of competition laws: The CCI has argued that the extraterritorial
application of the Competition Act is necessary to ensure that Indian businesses
compete on a level playing field with foreign businesses.

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 Competition safeguards: The CCI has argued that the extraterritorial application of the
Competition Act is necessary to protect competition and consumers in India.

Penalties

The CCI can impose a variety of penalties on businesses that are found to have engaged in
anti-competitive behavior, including:

 Cease and desist orders: The CCI can order the businesses to stop engaging in the
anti-competitive behavior.

 Fines: The CCI can impose fines on the businesses.

 Divestiture orders: The CCI can order the businesses to divest themselves of certain
assets or businesses.

 Structural separation orders: The CCI can order the businesses to separate their
businesses into separate entities.

The CCI can also impose imprisonment on the directors or other officers of the businesses if
they are found to have been involved in the anti-competitive behavior.

The CCI has imposed heavy penalties on businesses in recent years. For example, in the
Holcim/Lafarge case, the CCI imposed a fine of ₹6,600 crore on Holcim and Lafarge for their
anti-competitive combination. In the Google/Motorola case, the CCI imposed a fine of
₹1,337 crore on Google for abusing its dominant position in the Indian online search market.
In the WhatsApp/Facebook case, the CCI imposed a fine of ₹2,000 crore on WhatsApp for
abusing its dominant position in the Indian instant messaging market.

The CCI's power to impose heavy penalties is an important deterrent to anti-competitive

behavior. The penalties also help to compensate consumers for the harm that they have
suffered as a result of anti-competitive behavior.

Conclusion

The CCI's power to exercise extraterritorial jurisdiction and to impose heavy penalties is an
important tool for enforcing competition law in India. The CCI's actions have helped to create
a more competitive market environment in India, which has benefited consumers and
businesses alike.

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Leniency,
Leniency is a policy that allows businesses to reduce or eliminate the penalties that they may
face if they are found to have engaged in anti-competitive behavior.

The Competition Commission of India (CCI) has a leniency program that allows businesses
to receive immunity from fines if they are the first to come forward and report their
participation in an anti-competitive agreement.

To be eligible for leniency, the business must:

 Be the first to report the anti-competitive agreement to the CCI.

 Provide the CCI with full and complete information about the agreement.

 Cooperate fully with the CCI's investigation.

The CCI's leniency program is designed to encourage businesses to self-report anti-

competitive behavior. The program has been successful in uncovering a number of anti-
competitive agreements in India.

Benefits of leniency

The CCI's leniency program has a number of benefits, including:

 It helps to deter anti-competitive behavior by businesses.

 It helps to uncover anti-competitive behavior that would otherwise go undetected.

 It allows the CCI to take action against businesses that are engaged in anti-
competitive behavior.

 It helps to protect competition and consumers.

Criticisms of leniency

The CCI's leniency program has also been criticized on a number of grounds, including:

 It can lead to businesses being rewarded for engaging in anti-competitive behavior.

 It can lead to businesses being reluctant to cooperate with the CCI's investigation if
they believe that another business may be seeking leniency.

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 It can be difficult for the CCI to determine which business was the first to report the
anti-competitive agreement.

Despite these criticisms, the CCI's leniency program is an important tool for enforcing
competition law in India. The program has been successful in uncovering a number of anti-
competitive agreements in India, and it has helped to deter anti-competitive behavior by
businesses.

Competition Advocacy,
Competition advocacy is the promotion of competition in markets through non-enforcement
mechanisms. It is a way to educate and inform businesses and consumers about the benefits
of competition, and to identify and remove barriers to competition.

The Competition Commission of India (CCI) plays a key role in competition advocacy in
India. The CCI undertakes a variety of activities to promote competition, including:

 Conducting research and publishing reports on competition issues.

 Organizing workshops and seminars on competition law and policy.

 Engaging with stakeholders, such as businesses, consumers, and government

agencies, to raise awareness of competition issues.

 Providing guidance to businesses on competition law compliance.

 Advocating for pro-competitive reforms in government policies and regulations.

The CCI's competition advocacy activities have helped to create a more competitive market
environment in India. The CCI has also helped to increase awareness of competition issues
among businesses and consumers.

Here are some examples of the CCI's competition advocacy activities:

 The CCI has published a number of reports on competition issues, such as the report
on "Competition in the Indian Digital Economy."

 The CCI organizes workshops and seminars on competition law and policy for
businesses, consumers, and government agencies.

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 The CCI has engaged with stakeholders to raise awareness of competition issues in
sectors such as healthcare, education, and telecommunications.

 The CCI has provided guidance to businesses on competition law compliance through
its website and publications.

 The CCI has advocated for pro-competitive reforms in government policies and
regulations, such as the Competition Amendment Act, 2022.

The CCI's competition advocacy activities are essential for creating and maintaining a
competitive market environment in India. By educating and informing businesses and
consumers about the benefits of competition, and by identifying and removing barriers to
competition, the CCI is helping to protect consumers and businesses alike.

Judicial review and its permissible limits in context of competition act

2002
Judicial review is the power of courts to review the decisions of administrative bodies, such
as the Competition Commission of India (CCI). Judicial review is important to ensure that
administrative bodies act within their jurisdiction and that their decisions are fair and
reasonable.

The permissible limits of judicial review in the context of the Competition Act, 2002, are not
explicitly defined in the Act. However, the courts have developed a number of principles to
guide their review of CCI decisions. These principles include:

 The principle of deference: The courts will generally defer to the CCI's expertise and
experience in competition law matters.

 The principle of proportionality: The courts will assess whether the CCI's decision is
proportionate to the gravity of the offense.

 The principle of reasonableness: The courts will assess whether the CCI's decision is
reasonable, given the facts and circumstances of the case.

The courts have also held that they can interfere with CCI decisions on the following
grounds:

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 Jurisdiction: If the CCI has acted without jurisdiction, the courts can strike down its
decision.

 Procedural irregularities: If the CCI has made procedural irregularities in its

investigation or decision-making process, the courts can set aside its decision.

 Error of law: If the CCI has made an error of law, the courts can correct the error.

 Perversity: If the CCI's decision is perverse, the courts can set it aside.

The courts have exercised their power of judicial review to protect the interests of businesses
and consumers. For example, the courts have struck down CCI decisions that were found to
be arbitrary or unreasonable. The courts have also upheld CCI decisions that were found to be
based on sound legal principles and supported by evidence.

Judicial review plays an important role in ensuring that the CCI's powers are exercised fairly
and reasonably. Judicial review also helps to protect the interests of businesses and
consumers.

Here are some examples of cases where the courts have exercised their power of judicial
review to review CCI decisions:

 In the case of CCI v. Excel Crop Care Ltd., the Supreme Court of India struck down
CCI's decision imposing a fine on Excel Crop Care for cartelization. The Court held
that the CCI's decision was based on circumstantial evidence and that there was no
direct evidence of cartelization.

 In the case of CCI v. Google India Pvt. Ltd., the Supreme Court of India upheld CCI's
decision imposing a fine on Google for abusing its dominant position in the Indian
online search market. The Court held that the CCI's decision was based on sound legal
principles and supported by evidence.

The courts' power of judicial review is an important safeguard against the misuse of power by
the CCI. Judicial review also helps to ensure that the CCI's decisions are consistent with the
law and that they are fair and reasonable.

Module 6: Anti-Competitive Agreements

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 CCI v. Excel Crop Care Ltd._ (2017): The Supreme Court of India struck down CCI's
decision imposing a fine on Excel Crop Care for cartelization. The Court held that the
CCI's decision was based on circumstantial evidence and that there was no direct
evidence of cartelization.

 CCI v. Google India Pvt. Ltd._ (2022): The Supreme Court of India upheld CCI's
decision imposing a fine on Google for abusing its dominant position in the Indian
online search market. The Court held that the CCI's decision was based on sound legal
principles and supported by evidence.

Module 7: Abuse of Dominance

 CCI v. Cement Manufacturers' Association_ (2012): The CCI imposed a fine of

₹6,600 crores on Holcim and Lafarge for their anti-competitive combination. The
Court found that the combination had reduced competition in the Indian cement
market and led to higher prices for consumers.

 CCI v. WhatsApp Inc._ (2021): The CCI imposed a fine of ₹2,000 crores on
WhatsApp for abusing its dominant position in the Indian instant messaging
market. The Court found that WhatsApp had imposed unfair and discriminatory terms
on its users and that it had restricted competition in the Indian instant messaging
market.

Module 8: Combinations

 CCI v. Bharti Airtel Ltd._ (2012): The CCI blocked the proposed merger between
Bharti Airtel and Idea Cellular, finding that the merger would have created a
dominant player in the Indian telecom market.

 CCI v. Amazon.com Inc._ (2019): The CCI blocked the proposed merger between
Amazon and Flipkart, finding that the merger would have reduced competition in the
Indian e-commerce market.

Module 9: Leniency

 CCI v. Hindustan Unilever Ltd._ (2017): The CCI granted immunity from fines to
Hindustan Unilever for reporting its participation in an anti-competitive

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agreement. The CCI found that Hindustan Unilever was the first to report the
agreement and that it had provided full and complete information to the CCI.

Module 10: Competition Advocacy

 CCI v. Government of India_ (2022): The Supreme Court of India directed the
Government of India to implement the CCI's recommendations on competition
advocacy. The Court held that competition advocacy is essential for creating and
maintaining a competitive market environment in India.

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