1

Competition Law

Unit 1

History

 1969:
o Monopolies and Restrictive Trade Practices Act (MRTP Act): The first competition law in India aimed at
preventing concentration of economic power and prohibiting monopolistic and restrictive trade practices.
 1991:
o Economic Reforms: Liberalization, privatization, and globalization led to the need for a more modern
competition law.
 2002:
o Competition Act: Enacted to replace the MRTP Act, focusing on promoting and sustaining competition,
protecting consumer interests, and ensuring freedom of trade.
 2003:
o Competition Commission of India (CCI): Established to enforce the Competition Act and promote
competition in markets.
 2009:
o Full Operationalization: The CCI became fully functional, with provisions for anti-competitive agreements,
abuse of dominant position, and regulation of combinations (mergers and acquisitions) coming into force.

Concep

 Define: A legal framework designed to promote and sustain competition in markets, protect consumer
interests, and ensure freedom of trade in India.
 Key Areas:
o Anti-competitive Agreements: Prohibiting agreements that appreciably prevent, restrict, or distort
competition.
o Abuse of Dominant Position: Preventing dominant firms from abusing their market power.
o Regulation of Combinations: Monitoring mergers, acquisitions, and amalgamations to ensure they do not
harm competition.

Objective

 Consumer Welfare: Ensuring consumers have access to a variety of goods and services at competitive prices.
 Economic Efficiency: Encouraging efficient allocation of resources and fostering innovation and
entrepreneurship.
 Fair Competition: Creating a level playing field for businesses of all sizes.
 Market Integrity: Preventing market manipulation and promoting transparency.
 Free Trade: Ensuring that markets are open and competitive, supporting economic growth and development.
 2

Development

 Legislative Amendments:
o 2007 Amendment: Enhanced the powers of the CCI and streamlined procedures.
o 2009 Amendment: Introduced provisions related to competition advocacy and simplified the combination
review process.
o 2020 Amendment Bill (proposed): Suggested changes to update the law in line with evolving market
conditions, including the introduction of a ‘Green Channel’ for automatic approval of certain combinations.
 Enforcement and Jurisprudence:
o Landmark Cases: Cases such as DLF (abuse of dominance in real estate), Google (anti-competitive practices
in digital advertising), and the cement cartel case have shaped competition jurisprudence in India.
o Penalties and Remedies: The CCI has imposed significant penalties and prescribed behavioral remedies to
ensure compliance with competition norms.
o
 Challenges and Debates:

o Digital Markets: Addressing anti-competitive practices in digital and technology markets.
o Market Dynamics: Adapting to rapid changes in market structures and business models.
o Global Coordination: Enhancing cooperation with international competition authorities to address cross-
border issues.
o
 Modern Trends:
o Competition Advocacy: The CCI actively engages in advocacy to promote competition principles across
sectors.
o Consumer Protection: Greater emphasis on protecting consumer interests in various sectors, including e-
commerce and digital services.
o Sustainability and Social Impact: Emerging discussions on how competition law can support sustainable
development and address social issues.

Key Institutions

 Competition Commission of India (CCI): The main regulatory authority responsible for enforcing the
Competition Act, conducting investigations, and promoting competition advocacy.
 Competition Appellate Tribunal (COMPAT): Initially established to hear appeals against CCI orders; later
replaced by the National Company Law Appellate Tribunal (NCLAT) in 2017.

Impact

 Economic Growth: Promoted a more competitive and open market environment, contributing to economic
growth and consumer welfare.
 Legal Framework: Established a robust legal framework for addressing anti-competitive practices and
ensuring fair competition.
 Business Environment: Improved the overall business environment by promoting transparency, fairness, and
efficiency in markets.
 3

Constitutional Aspects of Competition Law (Competition Act, 2002)

The Competition Act, 2002, governs the competition law in India.. This act aligns with various constitutional
provisions that ensure fair trade practices and prevent monopolistic activities.

Relevant Articles of the Indian Constitution

1. A-19(1) (g): Freedom to Practice Any Profession, or to carry on Any Occupation, Trade or Business--
-----Ensures that every citizen has the right to carry on any trade or business.
o Relevance to CL: The Competition Act, 2002, ensures that markets remain competitive, which indirectly
supports the freedom of trade. By preventing anti-competitive practices, the act ensures businesses can
operate freely without the unfair dominance of a few entities.
o
2. A- 38: State to Secure a Social Order for the Promotion of Welfare of the People
o Mandates the state to promote the welfare of the people by securing a social order in which justice—social,
economic, and political—prevails.
o Relevance to CL: The Competition Act contributes to economic justice by preventing practices that harm
competition, such as monopolies and cartels, thus fostering a fair market environment that benefits
consumers and small businesses.
o
3. A-39: Certain Principles of Policy to be Followed by the State
4.
o A- 39(b): Ownership and Control of Material Resources of the Community
 Ensures that the ownership and control of material resources are distributed to serve the common good.
 Relevance to CL: The Competition Act prevents the concentration of economic power and promotes
equitable distribution of resources by regulating anti-competitive practices.

o A- 39(c): Operation of the Economic System
 Ensures that the economic system does not result in the concentration of wealth and means of production to
the common detriment.
 Relevance toCL: By curbing monopolistic and restrictive trade practices, the Competition Act promotes an
equitable economic system.

5. A- 301: Freedom of Trade, Commerce, and Intercourse
o Ensures the freedom of trade, commerce, and intercourse throughout the territory of India.
o Relevance to CL: The Competition Act supports this freedom by ensuring that businesses can compete
fairly across state lines, preventing regional monopolies and promoting interstate commerce.
o
6. A- 14: Equality Before Law
o Ensures equality before the law and equal protection of the laws within the territory of India.
o Relevance to CL: The Competition Act enforces equal treatment of businesses and prevents discriminatory
practices, thus aligning with the principle of equality.
o
o
 4

7. A 21: Protection of Life and Personal Liberty

o Ensures the protection of life and personal liberty except according to the procedure established by law.
o Relevance toCL: While indirectly related, a fair economic system ensured by the Competition Act can
enhance the quality of life by promoting consumer welfare and preventing exploitation through
monopolistic practices.

CASE
Google Inc. v. Competition Commission of India (2020)
 Significance: This landmark case involved Google allegedly abusing its dominant position in the online search
and advertising markets.
 Judgement:

o Background: The CCI initiated an investigation into Google's practices following complaints from various
stakeholders, including Bharat Matrimony and Consumer Unity & Trust Society (CUTS).
o Allegations: Google was accused of using its dominant position in the search market to favor its own services
and manipulate search results to the detriment of competitors and consumers.
o CCI Findings: The CCI found Google guilty of abusing its dominant position, noting that its practices stifled
competition and innovation. Specific issues included biased search results, favoring its own vertical search
services, and imposing unfair conditions on advertisers.
o Penalties: The CCI imposed a fine of ₹136 crores on Google, ordered it to cease and desist from unfair
practices, and mandated changes to its search algorithms and advertising policies to ensure a level playing field.
o Judicial Review: Google challenged the CCI's decision in various courts. However, the principle that digital
markets should remain competitive and fair, protecting consumer interests and preventing abuse of dominance,
was upheld.
 5

Anti-Trust Law in India

 Purpose: To prevent anti-competitive practices, promote fair competition, and protect consumer interests.
 Governing Legislation: The Competition Act, 2002 (amended in 2007, 2009, and 2019).
 Enforcement Authority: Competition Commission of India (CCI).

Key Objectives

1. Prevent Anti-Competitive Agreements.

2. Prohibit Abuse of Dominant Position.
3. Regulate Combinations (Mergers and Acquisitions).

Imp Provisions

1. Anti-Competitive Agreements (S 3)
o Horizontal Agreements: Agreements between competitors at the same level of the supply chain (e.g., cartels).
o Vertical Agreements: Agreements between different levels of the supply chain (e.g., resale price maintenance).
o
2. Abuse of Dominant Position (S 4)
o Dominance: Determined by factors such as market share, economic power, and control over supply.
o Abuse: Includes practices like unfair pricing, limiting production, denying market access, and using dominance to gain an advantage in
another market.
o
3. Regulation of Combinations (S 5 & 6)
o Combinations: Includes mergers, acquisitions, and amalgamations.
o Thresholds: Specific monetary thresholds for assets and turnover require CCI approval.
o Approval Process: CCI reviews combinations to ensure they do not adversely affect competition.

Competition Commission of India (CCI)----Established in 2003.

 Functions:
o Investigate anti-competitive practices.
o Conduct inquiries into mergers and acquisitions.
o Impose penalties for violations.
o Promote competition advocacy and awareness.

Penalties and Remedies

1. Anti-Competitive Agreements:
o Fines: Up to 10% of the average turnover for the last three financial years.
o Cartels: Up to three times the profit or 10% of turnover for each year of the cartel's existence.
o
2. Abuse of Dominance:
o Fines: Up to 10% of the average turnover for the last three financial years.
o Orders: Cease-and-desist orders, structural remedies (e.g., division of the enterprise).
o
3. Combinations:
o Invalidation: Unnotified or unapproved combinations can be declared void.
o Penalties: Up to 1% of the total turnover or assets of the combination.

Recent Amendments -------Competition (Amendment) Bill, 2020:

o Green Channel: Fast-track approval process for certain combinations.

o Settlements and Commitments: Introduces these concepts for non-cartel cases.
o Leniency Plus: Enhanced leniency for entities disclosing additional cartels.
2. Digital Markets:
o Increased focus on anti-competitive practices in digital markets and platform-based businesses.
 6

Raghavan Committee Report

 Constitution Year: 2000

 Head: S. V. S. Raghavan
 Members: Comprised of legal experts, economists, industry representatives, and government officials.
 Objective:
o To review and overhaul India's competition law framework, particularly the Monopolies and Restrictive Trade Practices
(MRTP) Act, 1969.
o To propose a modern competition law that fosters fair competition, prevents monopolistic practices, and protects consumer
interests.
 Developments:
o Review of Existing Legislation:
 Assessed the limitations and shortcomings of the MRTP Act in addressing contemporary competition issues.
 Studied international best practices in competition law and regulation.
o Recommendations:
 Advocated for the repeal of the MRTP Act and the introduction of the Competition Act, 2002.
 Proposed the establishment of the Competition Commission of India (CCI) as an independent regulatory authority.
 Suggested amendments to strengthen provisions against anti-competitive practices, mergers, and acquisitions that could
harm fair competition.
 Emphasized on enhancing enforcement mechanisms and creating a competitive market environment conducive to economic
growth and consumer welfare.
 Impact:
o The Raghavan Committee Report laid the foundation for the modern competition law framework in India.
o It led to the enactment of the Competition Act, 2002, and the establishment of the Competition Commission of India (CCI),
which became the central authority for enforcing competition laws and promoting fair market practices.

MRTP Act (Monopolies and Restrictive Trade Practices Competition Act, 2002
Act)
The MRTP Act is a legislation that was established in 1969 The Competition Act, 2002 is a legislation that was
with the primary objective of curbing monopolistic established in 2002 with the primary objective of
practices and promoting competition in the Indian market. promoting and protecting competition in the Indian
market.
The MRTP Act is regulated by the Ministry of Corporate The Competition Act, 2002 is regulated by the
Affairs. Competition Commission of India (CCI).
The MRTP Act has provisions for the regulation of The Competition Act, 2002 has provisions for the
monopolies and the prevention of restrictive trade prevention of anti-competitive agreements, the regulation
practices. of combinations (mergers and acquisitions), and the
prevention of abuse of dominant position.
Penalties for non-compliance under the MRTP Act include Penalties for non-compliance under the Competition Act,
fines and imprisonment. 2002 include fines and penalties for individuals and
companies.
The MRTP Act is not applicable to certain sectors like The Competition Act, 2002 applies to all sectors of the
agriculture, small-scale industries and services. economy.
The MRTP Act does not have provision for leniency policy. The Competition Act, 2002 has provision for leniency
policy.
The MRTP Act does not have provision for settlement of The Competition Act, 2002 has provision for settlement of
cases. cases.
 7

Define --- Competition Act, 2002

Cartel (Section 2(c)):

 : An association of producers, sellers, distributors, traders, or service providers who come together to limit
competition by fixing prices, controlling production or distribution, or sharing markets.

Competition -----S 2(d)

 : The process of rivalry between firms seeking to win customers' business by offering better products, services,
or prices.

Competition Commission of India (CCI) -------S 2(e)

 The statutory body established under the Competition Act, 2002, responsible for enforcing competition law,
preventing anti-competitive practices, and promoting fair competition in India.

Consumer ----S 2(g)

 : Any person who buys goods or avails services for personal use or consumption.

Goods ----S 2(h)

 Tangible products or commodities that can be bought and sold in the market.

Market ---S 2(m)

 : The area of economic activity where buyers and sellers engage in the exchange of goods or services.

Service ---S 2(o)

 Any activity done for consideration, which includes provision of facilities in connection with banking,
financing, insurance, transport, processing, supply of electrical or other energy, telecom, housing construction,
entertainment, amusement, etc.

Enterprise ----S 2(h)

 : Any entity engaged in activities related to production, distribution, or trading of goods or provision of
services.

Person ----S 2(l)

 : Includes an individual, a Hindu undivided family, a company, a firm, an association of persons or a body of
individuals, whether incorporated or not.

Agreement: S-2(b),
 8

an agreement includes any arrangement, understanding, or action in concert whether or not it is formal or in writing.
It covers both oral and written agreements among competitors, suppliers, distributors, and any other parties that can
affect competition.

Undertaking: -- S 2(u) –
defines undertaking as any entity engaged in economic activity, whether it is a person, a firm, or a corporation.
Essentially, it refers to any business or commercial activity.

Enterprise: S- 2(h)---
The term 'enterprise' is not explicitly defined in the Competition Act, but it generally refers to a business entity or
organization engaged in economic activities. It is often used interchangeably with 'undertaking'.

Relevant Market—S 2(r)

, relevant market refers to the market that may be determined by the Commission with reference to the relevant
product market or the relevant geographic market or with reference to both the markets.

Dominant Position (De-Minus): S- 4

deals with abuse of dominant position. 'De-Minus' refers to the process of determining whether an entity holds a
dominant position in the relevant market. If an enterprise is found to have a dominant position, it must refrain from
abusing this position to protect competition.

Parallel Behaviour:
This refers to conduct by firms in a market that mirrors each other’s actions, even in the absence of explicit collusion
or agreement.

S- 3(3) --prohibits anti-competitive agreements, including those that lead to parallel behaviour, if they cause or are
likely to cause an appreciable adverse effect on competition (AAEC).

Appreciable Adverse Effect on Competition (AAEC): S-3 + 19(g)

deals with anti-competitive agreements. An agreement or conduct is considered to have an AAEC if it significantly
harms competition in the relevant market. This harm can include increased prices, reduced quality, or diminished
innovation.

Section 2 (a) says that “Acquisition” refers to the act of directly or indirectly obtaining or agreeing to obtain any
enterprise’s shares, voting rights, or assets; any enterprise’s control over management or control over its assets
 9

The Anti-Competition Agreement--- Section 3

The Competition Act, 2002 in India, pertains to agreements between enterprises or persons that have an appreciable
adverse effect on competition (AAEC) within India.
Definition--: Section 3 -- defines anti-competitive agreements as agreements, whether formal or informal, between
enterprises or persons engaged in identical or similar trade of goods or provision of services, which:
o Directly or indirectly determine purchase or sale prices.
o Limit or control production, supply, markets, technical development, investment, or provision of services.

o Share the market or source of production or provision of services by way of allocation of geographical area of
market, or type of goods or services, or number of customers in the market.
o Result in bid rigging or collusive bidding.

Appreciable Adverse Effect on Competition (AAEC): For an agreement to be considered anti-competitive under
Section 3, it must have an AAEC in India. AAEC refers to a significant negative impact on competition in the
relevant market within India. The Competition Commission of India (CCI) assesses whether an agreement causes
AAEC by considering factors such as market share, the extent of barriers to entry, and the market structure.

Types of Agreements Covered: Section 3 covers various types of agreements, including:

o Horizontal Agreements: These are agreements between competitors operating at the same level of the supply
chain. For example, agreements among producers or distributors that restrict competition.

o Vertical Agreements: These are agreements between parties operating at different levels of the supply chain, such
as between a manufacturer and a distributor that may affect competition.

Exemptions (S-3):

 Exempted Agreements: Section 3(3) provides exemptions for agreements that promote:
o Technical or economic advancement.
o Improvement in production or distribution of goods or provision of services.
o Promotion of exports.
o Benefits to consumers.
 Conditions: These exemptions are subject to conditions that such agreements do not eliminate
competition altogether or cause AAEC.

Penalties (S-27):

 Enforcement: Section 27 empowers the Competition Commission of India (CCI) to impose penalties
if it finds an agreement to be anti-competitive.
 10

 Penalty Provisions: The penalties can be up to 10% of the average turnover of the concerned
enterprise for the last three preceding financial years.
 Orders: CCI can also direct parties to cease and desist from anti-competitive agreements or modify
such agreements.


Prohibition of Cartels ---S-- 3(3):

 Definition: Cartels are explicitly prohibited under Section 3(3) of the Competition Act.
 Nature: Cartels involve agreements between competitors to fix prices, limit production or supply,
share markets, or bid rigging.
 Exceptions: There are no exemptions for cartels under Section 3(3) due to their inherently anti-
competitive nature.
 Enforcement: CCI actively investigates and penalizes cartel activities to ensure fair competition.

Bid Rigging ---S-- 3(3)(d):

 Definition: Bid rigging involves agreements or practices where competitors collude to determine the
outcome of competitive bidding processes.
 Prohibition: Specifically prohibited under Section 3(3)(d) as it distorts the competitive process.
 Types: Includes practices such as cover bidding, bid suppression, bid rotation, and market allocation.
 Penalties: CCI imposes severe penalties on entities engaged in bid rigging, including fines and
directions to cease such practices.

Landmark Judgment:

Excel Crop Care Ltd. v. Competition Commission of India (2017)

 Case Overview: The Supreme Court upheld CCI's findings against several pesticide manufacturers for
cartelization in the market for aluminium phosphide tablets.
 Details: The case highlighted the following:
o Background: CCI found that the companies had engaged in price coordination and market allocation,
restricting competition.
o CCI's Decision: CCI imposed penalties on the companies involved and directed them to cease such practices.
o Supreme Court Verdict: The Supreme Court affirmed CCI's findings and penalties, emphasizing the
importance of competitive pricing and market access in maintaining a healthy market environment.

Competition Commission of India v. Co-ordination Committee of Artists and Technicians of W.B. Film
and Television (2017)

 Case Overview: CCI investigated anti-competitive agreements among associations in the film and television
industry in West Bengal.
 Details: CCI found that the associations had engaged in agreements that restricted competition and affected
market dynamics.
 CCI's Decision: CCI imposed penalties and directed the associations to cease such agreements, ensuring fair
competition in the industry.
 11

Abuse of Dominance in Market ----sec-4

The Competition Act, 2002, is a legislative framework aimed at promoting and sustaining competition,
protecting consumer interests, and ensuring freedom of trade. One of the critical aspects it addresses is the
abuse of dominance in the market, specifically under Section 4
Concept of Dominance (Section 4)
 Dominance is defined under Section 4 of the Competition Act, 2002, as a position of strength enjoyed by an
enterprise in the relevant market, which enables it to:
o Operate independently of competitive forces.
o Affect competitors, consumers, or the relevant market in its favor.
 Assessment Factors:
o Market share of the enterprise.
o Size and resources of the enterprise.
o Size and importance of competitors.
o Economic power of the enterprise.
o Vertical integration of the enterprise.
o Dependence of consumers on the enterprise.
o Entry barriers (regulatory, financial, technical).
o Countervailing buying power.
o Market structure and size.
Appreciable Adverse Effect on Competition (AAEC)
 The concept of AAEC involves evaluating whether certain practices have a significant negative impact on
competition in the market.
 Criteria for Evaluation:
o Creation of barriers to new entrants in the market.
o Driving existing competitors out of the market.
o Foreclosure of competition by hindering market access.
o Accrual of benefits to consumers.
o Improvement in production or distribution of goods or provision of services.
o Promotion of technical, scientific, and economic development by means of production or distribution of goods
or services.
Abusive Conduct (Section 4)
 Abusive conduct refers to the actions of a dominant enterprise that unfairly exploit or exclude competitors,
thereby harming the competitive process.
 12

 Types of Abusive Conduct:

o Predatory Pricing: Selling goods or services below cost with the intent to eliminate competitors (Section
4(2)(a)(ii)).
o Unfair Trade Practices: Imposing unfair or discriminatory conditions or prices in the sale or purchase of
goods or services (Section 4(2)(a)(i)).
o Limiting Production: Limiting or restricting production, technical development, or supply of goods/services
to the detriment of consumers (Section 4(2)(b)).
o Denial of Market Access: Denying market access in any manner (Section 4(2)(c)).
o Supplementary Obligations: Making the conclusion of contracts subject to acceptance of supplementary
obligations which have no connection with the subject of such contracts (Section 4(2)(d)).
o Leverage Dominance: Using dominant position in one market to enter into, or protect, another market
(Section 4(2)(e)).
Penalties for Abusive Conduct (Section 27)
 Penalties: The Competition Commission of India (CCI) can impose penalties on enterprises found guilty of
abusing their dominant position. The penalties can be:
o Up to 10% of the average turnover of the last three financial years.
o In cases of predatory pricing, the penalty can be up to three times the amount of profit made out of such
abusive practice or up to 10% of the average turnover of the last three financial years, whichever is higher.
 Orders: The CCI can also issue directives to:
o Cease and desist from abusive practices.
o Modify agreements to prevent such abuse in the future.
Prevention of Abuse
 Regulatory Framework: The CCI is empowered to monitor, investigate, and take action against potential
abuses of dominance.
 Enforcement Mechanisms:
o Conduct inquiries based on information received from any person, consumer, or their association.
o Act on a reference made by the Central Government or a State Government.
o Suo moto (on its own) take cognizance of any activity that it believes to be abusive.
 Guidelines and Advocacy: The CCI issues guidelines and conducts advocacy programs to educate
enterprises and the public about fair competition practices and the importance of preventing abuse of
dominance.
Landmark Judgment
 Case: MCX Stock Exchange Ltd. v. National Stock Exchange of India Ltd. (NSE), 2011
 13

o Facts: MCX Stock Exchange Ltd. (MCX-SX) filed a complaint against the National Stock Exchange (NSE),
accusing it of abusing its dominant position in the currency derivatives segment by offering its services for
free to eliminate competition.
o Decision: The CCI found NSE guilty of abusing its dominant position by engaging in predatory pricing and
directed NSE to cease and desist from such practices. The CCI also imposed a penalty on NSE.
o Significance: This case was significant in establishing the CCI’s approach to handling predatory pricing and
setting a precedent for future cases involving abuse of dominance.
Combination ------S.5

The active or passive procurement of shares, voting power, or resources, or command over management or
supervision over assets of more than one enterprise by one or even more people.

It is the merger or amalgamation among companies. In the context of the competition law, a combination is defined
as the merging of two or more businesses or organisations, or the takeover of a business sector (such as a company or
firm) by

Combination refers to the merger, acquisition, or amalgamation of enterprises. In the context of the Competition
Act, 2002, it involves the combination of two or more enterprises that may significantly impact the competit ion
within the relevant market in India.

Types of Combination:

1. Merger
2. Acquisition
3. Amalgamation

1. Merger----Merger involves the combination of two or more entities into a single entity.

Section 5(c) specifies that a merger is considered a combination if the resultant entity meets the asset or turnover
thresholds.

o Section 5(c): Defines mergers and the applicable thresholds.

o Section 6: Prohibits any merger which causes or is likely to cause an appreciable adverse effect on competition
within the relevant market in India.

2. Acquisition----Acquisition refers to the purchase of shares, voting rights, or assets of another enterprise.---:
Under Section 5(a), an acquisition is considered a combination if the acquiring and the target enterprise together
meet the asset or turnover thresholds specified.

o Section 5(a): Defines the acquisition and the thresholds.

o Section 6: Prohibits any combination which causes or is likely to cause an appreciable adverse effect on
competition within the relevant market in India.

3. Amalgamation---: Amalgamation is the combination of one or more companies into a new entity.

 Similar to mergers, Section 5(c) defines amalgamations and applies the same thresholds.

 14

o Section 5(c): Defines amalgamations and the applicable thresholds.

o Section 6: Prohibits any amalgamation which causes or is likely to cause an appreciable adverse effect on
competition within the relevant market in India.

1. Section 5: Definition and Thresholds of Combinations

o Section 5(a): Defines combinations based on asset and turnover thresholds.
 Any acquisition of control, shares, voting rights, or assets if the total value of assets or turnover of the
combined entity exceeds certain thresholds.
o Section 5(b): Includes mergers or amalgamations where the resulting entity meets specific asset or turnover
thresholds.
o Section 5(c): Thresholds can vary based on whether the parties are domestic or international.

2. Section 6: Regulation of Combinations

o Section 6(1): Prohibits combinations that cause or are likely to cause an appreciable adverse effect on
competition within India.
o Section 6(2): Requires parties to notify the Competition Commission of India (CCI) of any proposed
combination meeting the thresholds within 30 days.
o Section 6(2A): Imposes a standstill obligation where parties cannot consummate the combination until the CCI
approves it.
o Section 6(3): Provides the CCI the power to investigate, assess, and approve or prohibit combinations.
o Section 6(4): Specifies combinations that are exempt from the requirement of notification to the CCI.
o Section 6(5): Provides exemptions for certain banking and financial institutions.

c. Sections 29, 30, and 31: Investigation and Approval Process

 Section 29: Procedure for investigation of combinations.


o Phase I Review: Preliminary review to determine if a combination raises any competition concerns.
o Phase II Review: Detailed investigation if the combination raises prima facie concerns.
 Section 30: Procedure for issuing regulations for inquiries.
 Section 31: Orders of the CCI on combinations.
o Approval: Combination is allowed.
o Conditional Approval: Combination is allowed with modifications.
o Prohibition: Combination is not allowed if it has a significant adverse effect on competition.
 15

Regulation of Combinations

a. Notification Process

 Pre-filing Consultation: Optional step where parties can seek informal guidance from the CCI.
 Form I or Form II: Filing of notice in prescribed formats.
o Form I: For combinations unlikely to raise competition concerns.
o Form II: For combinations that may raise significant competition issues.

b. Review Process

 Initial Scrutiny: CCI conducts a preliminary review within 30 days of filing.

 Detailed Investigation: If required, the CCI can extend the review period up to 210 days from the date of
filing.
 Public Comments: In complex cases, the CCI may seek comments from the public.

c. Assessment Criteria

 Market Share: Evaluation of the combined market share of the entities involved.
 Potential Competition: Analysis of how the combination affects existing and potential competitors.
 Consumer Impact: Assessment of the impact on consumers, including pricing and availability of products or
services.
 Barriers to Entry: Evaluation of whether the combination creates barriers to entry for other competitors.

d. Orders and Remedies

 Approval: Unconditional clearance if no competition concerns are found.

 Conditional Approval: Approval with conditions such as divestitures or behavioral commitments to mitigate
adverse effects.
 Prohibition: Complete ban on the combination if it is likely to significantly harm competition.
 Approval or Rejection: Based on the investigation, the CCI can approve, reject, or approve the combination
with modifications.

. Exemptions
Certain combinations are exempt from notification:
 Combinations where the enterprises have assets or turnover below a specified threshold.
 Intra-group acquisitions, share subscriptions, and other specified transactions.
 16

.
Penalties for Non-Compliance

 Failure to notify: Penalties can be up to 1% of the total turnover or assets of the combination.
 Implementation without approval: The CCI can impose penalties and also direct the parties to unwind the
combination.

Appeals and Revisions

 Appeals: Orders of the CCI can be appealed to the National Company Law Appellate Tribunal (NCLAT).
 Revisions: The CCI has the power to revise its orders under certain circumstances

Landmark cases on competition law

1. Google Inc. & Ors v. Competition Commission of India—2015

Fact
The CCI received a complaint alleging that Google Inc. misused its dominating position in the online
advertising market by marketing its vertical online services such as YouTube, Google News, Google
Maps, and so on. In other words, regardless of their popularity or relevancy, such services display
prominently on the Google search engine result page.

Issues
The main question was whether an administrative authority, such as CCI, has inherent rights to
examine or recall a decision issued under Section 26(1) without any particular provisions in the
Competition Act 2002.

Decision
The Delhi High Court stated that the CCI has the authority to recall or reconsider its decision in
accordance with specific conditions and that this should be done selectively but not in all cases in
which the investigation has been conducted without a thorough inquiry.

2. Mohit Manglani v. M/s Flipkart India Pvt. Ltd. & Ors- 2015
Facts
Mohit Manglani challenged four prominent firms in the Indian e-commerce sector: Flipkart, Jasper
Infotech, Xerion Retail, and Amazon Vector E-commerce (collectively, the ‘Opposite Parties’).

The complainant claimed that the opposite parties established exclusive selling and distribution
contracts with producers of goods and services to engage in anti-competitive acts in contravention of
the Competition Act, 2002.

He further claimed that as a result of such exclusive contracts, the opposite parties had obtained a
product-specific monopoly, i.e., all of the opposite parties had a hundred percent market domination
for commodities that were solely offered on their websites.

Issue
 17

Is it a violation of the Competition Act to engage in exclusive agreements for the sale and acquisition
of products via e-commerce?

Decision
The Commission found that the OPs’ digital distribution channels allow consumers to compare prices
as well as the benefits and disadvantages of the service. It also offers the choice of delivery at their
leisure. As a result, it appears that the exclusive agreement between manufacturers and e-portals does
not result in AAEC in the industry.

Competition Authorities in India

The Competition Act, 2002, has established authorities for the purpose of monitoring competition in India and
investigating anti-competitive agreements and violations of the laws.

Competition Commission of India-----CCI

Section 7 of the Act states the establishment of the Competition Commission of India or CCI. It has the following
characteristics:

 It is body corporate.
 The commission has perpetual succession.
 It has a common seal of power.
 It has the power to hold and dispose both moveable and immovable properties.
 It has the power to enter into contracts and to sue or be sued.

The head office of the Competition Commission of India is situated in New Delhi. The Commission also has the
power to establish offices in other places within India.

Composition and Appointment of Competition Commission of India

Section 8 of the Act states the composition of the Competition Commission of India.
The Commission is headed by a Chairperson, and
The number of members in the Commission shall not be less than two and it shall not be more than six members.
These members are appointed by the Central Government.
The Chairperson and members of the Commission are appointed by a selection committee. This selection
committee elects the following designations-

The Chairperson and the members of the Commission are eligible to be re-elected.
However, no one can be a member of the Competition Commission of India after the age of sixty five years.
The Chairperson and the members can resign from their office by serving a notice of resignation in writing to the
Central Government.

Duties of the Competition Commission of India

 18

The Competition Commission of India is endowed with the following duties:

 To eliminate those practices from the market which have an adverse effect on competition by enquiring into
various agreements;
 To investigate the agreements and acts which are harmful to competition;
 To issue such interim and other orders required to regulate competition in the market;
 To impose penalty on enterprises and individuals acting in contravention of the Competition Act, 2002;
 To promote competition in the market and work towards sustaining it;
 To protect the interests of consumers in the market;
 To ensure that the market is characterised by freedom of trade for all participants in India.

Competition Appellate Tribunal

Earlier, all appeals from the orders of the CCI would lie with the Competition Appellate Tribunal or COMPAT.
However, an amendment was brought into effect from 2017, as a result of which all the functions of the
Competition Appellate Tribunal are now conferred on the National Company Appellate Tribunal (NCLAT).

Any person, enterprise, or government aggrieved by the orders of the Competition Commission of India can prefer
an appeal before the NCLAT as per Section 53A of the Act.

The time limit for filing an appeal is sixty days from the date on which a copy of the order or direction of the
CCI is received by such aggrieved person, enterprise, or government. However, the NCLAT has the discretionary
power to entertain appeals even after the expiration of the time limit if there is sufficient cause for the delay. The
NCLAT will then provide each of the parties with the opportunity to be heard and pass such orders or directions as
may be necessary.

The NCLAT has been given the responsibility to deal with appeals under the Competition Act as expeditiously as
possible. Section 53B(5) states that the NCLAT will try to dispose of the matter within six months of the filing
of the appeal.

Every proceeding before the NCLAT is deemed to be a judicial proceeding, and the Tribunal is considered to be a
civil court.

Supreme Court of India

The highest authority of appeal under the Competition Act is the Supreme Court of India. Persons, enterprises or
the government aggrieved by the orders of the NCLAT may prefer an appeal before the highest court of India,
which is the Supreme Court.

PREVENT CARTELISATION
 19

The appeal must be filed within sixty days from the serving of the order by the NCLAT on the matter. This
limitation of sixty days can be waived by the Supreme Court if it can be established that the delay was due to some
sufficient cause. The decision of the Supreme Court shall be final.


o For example – It has prevented the cartelization of cement companies. CCI imposed a fine
of 63.07 billion (US$910 million) on 11 cement companies for cartelisation in June 2012.
 Undertake competition advocacy, create public awareness and impart training on competition
issues.
 Ensure smooth alignment of sectoral regulatory laws and competition laws.

 It has ensured that there is proactive engagement with all stakeholders , including consumers,
industry, government and international jurisdictions.