COMPETITION

LAW
 INTRODUCTION
• With the advent of economic reforms in India in 1991, the law was
found inadequate to foster the competition in market and to address
several economic and market challenges and to align the country's
economic policies with global best practices, this law came up.
• PRIMARY REASONS:
1. LIBERALIZATION – to reduce governmental control, private
enterprises came up and due which it had to be ensured that the
competition was healthy and monopolistic practices do not hinder
the market.
2. GLOBALIZATION: With increasing globalization, India
needed to create a competitive environment that could attract
foreign investment and integrate with the global economy.

3. CONSUMER PROTECTION: One of the key objectives of

competition law is to protect consumers from unfair business
practices. Prior to the enactment of the Competition Act, 2002,
consumers often faced issues like price-fixing, limited choices,
and poor quality products due to lack of competition.
4. PROMOTION OF INNOVATION AND EFFICIENCY: By
preventing anti-competitive practices and ensuring a level
playing field, competition law encourages businesses to innovate
and operate efficiently promoting overall economic development.
• 5. NEED TO REPLACE THE MONOPOLIES AND
RESTRICTIVE TRADE PRACTICES ACT (MRTP ACT),
1969: The MRTP Act was the predecessor to the
Competition Act, 2002. However, it was found to be
inadequate in addressing modern-day competition issues,
as it focused more on curbing monopolies rather than
promoting competition
 CONSTITUTIONAL ASPECT OF
COMPETITION LAW
• Since attaining Independence in 1947,India, for the better part of half a century
thereafter, adopted and followed policies comprising what are known as Command-
and-Control laws, rules, regulations and executive orders. The competition law of
India, namely, the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act,
for brief) was one such. India has chosen to enact a new competition law
called the Competition Act, 2002. The MRTP Act has metamorphosed into the
new law, Competition Act, 2002. The new law is designed to repeal the extant MRTP
Act. As of now, only a few provisions of the new law have been brought into force
and the process of constituting the regulatory authority, namely, the Competition
Commission of India under the new Act, is on. For the present, the outgoing law,
MRTP Act, 1969 and the new law, Competition Act, 2002 are concurrently in force,
though as mentioned above, only some provisions of the new law have been brought
into force.
– CONSTITUTIONAL ASPECT OF ELIMINATION OF CONCENTRATION
OF WEALTH AND DISTRIBUTION OF RESOURCES ARTICLE 39 (B) (C ).

• Competition Law for India was triggered by Articles 39 of the Constitution of India.
• These Articles are a part of the Directive Principles of State Policy. Based on the Directive
Principles, the first Indian competition law was enacted in 1969 and was labeled the
MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969 (MRTP Act).

• Article 39 of the Indian Constitution, specifically deals with the provisions or principles of
policy that shall be undertaken by the state.
• That the resources and the ownership of those resources and materials shall be distributed
in such a way that it fulfils the common goal. [Article 39(b) of the Indian Constitution]
• That the economic system shall be executed in such a way that the concentration of wealth
and means of production shall not result in a common detriment. [Article 39(c) of the
Indian Constitution]
 DIFFERENCES BEWTEEN MRTP
ACT AND COMPETITION ACT
• The Monopolies and Restrictive Trade Practices (MRTP)
Act was a law in India that aimed to prevent monopolies
and restrict unfair trade practices. It was repealed in 1991
and replaced by the Competition Act. The Competition Act
is a more comprehensive law that aims to prevent
practices that have an adverse effect on competition in
India and promote and sustain competition in markets. It
also establishes the Competition Commission of India,
which is responsible for enforcing the Act.
• Key differences between MRTP Act and Competition Act
• The MRTP Act (Monopolies and Restrictive Trade Practices Act) was enacted in 1969, while the
Competition Act was enacted in 2002.
• The MRTP Act primarily dealt with issues related to monopolies and restrictive trade practices, while
the Competition Act is more comprehensive and deals with anti-competitive practices, abuse of
dominant position, and regulation of mergers and acquisitions.
• The MRTP Act had a broader scope and covered various sectors such as agriculture, industry, and
trade, while the Competition Act is more focused on the economic sector.
• The MRTP Act was enforced by the Monopolies and Restrictive Trade Practices Commission
(MRTPC), while the Competition Act is enforced by the Competition Commission of India (CCI).
• The MRTP Act had provisions for the regulation of prices and production of goods, while the
Competition Act does not have any such provisions.
• The MRTP Act did not have any specific provisions for the regulation of mergers and acquisitions,
while the Competition Act has detailed provisions for the same.
• The MRTP Act had a different threshold for determining dominance, while the Competition Act has a
more objective and transparent method for determining dominance.
• The MRTP Act had a limited scope for penalties and fines, while the Competition Act has higher
penalties and fines for anti-competitive practices.
• The MRTP Act was repealed in 2002 and its provisions were incorporated into the Competition Act,
which replaced it as the primary law for regulating competition in India.
 KEY FEATURES OF
COMPETITION ACT
• Anti-Agreements: No person or business may participate in
production, supply, or distribution activities that would have a
detrimental effect ( harmfull)on India’s competitive
environment. Such agreements are considered illegal in any form.
• Abuse of dominating position: If a business or a connected
person is discovered to have engaged in unfair or discriminatory
actions, this is seen as an abuse of a dominant position under the
Competition Act 2002. A party will be the subject of an inquiry by
the relevant authorities if it is discovered that they have abused
their position.
• Combinations: According to the act, a combination is a
set of conditions that result in mergers or acquisitions.
The Competition Commission of India would examine the
parties concerned if such combinations exceeded the
restrictions set forth by the Competition Act 2002.
• Competition Commission of India: This independent
organization has the authority to enter into contracts and,
if such contracts are broken, to bring legal action against
the violators. The Commission, which has a maximum of
six members, is in charge of upholding and advancing
consumer interests to establish the optimum conditions
for economic competition. Under the Competition Act
2002, the Commission’s other responsibility is to provide
advice to the Indian government on matters related to
economic competition and to raise public awareness of the
problem.
 COMPETITION COMMISSION OF
INDIA (CCI)
• Competition Commission of India (CCI is an important statutory body
Which acts as the competition regulator in India. The Commission was
established in 2003, and became fully functional only by 2009. It aims at
establishing a competitive environment in the Indian economy through
proactive engagement with all the stakeholders, the government, and
international jurisdiction. The objectives of the Commission are:
• • To prevent practices that harm the competition.
• • To promote and sustain competition in markets.
• • To protect the interests of consumers.
• • To ensure freedom of trade.
 COMPETITION ACT 2002
• HISTORY OF COMPETITION ACT
• The Monopolies Inquiry Commission was established in April 1964 under
Justice KC Das Gupta, a Supreme Court judge. The objective of the
commissions was to inquire about the effect and extent of monopolistic
and restrictive trade practices in important sectors of the Indian economy
• he Monopolies and Restrictive Practices Act of 1969 was enacted to limit
the concentration of wealth in a few hands and limit monopolistic
practices, but it was too archaic in its definitions of what is a
‘monopolistic practice’. Keeping the above purpose in mind the
Competition Act was introduced in Lok Sabha on 6 August 2001.
THE COMPETITION(AMENDMENT)
BILL 2012
• The Competition (Amendment) Bill, 2012 was introduced in the Lok Sabha
on December 10, 2012 by the Minister of Corporate Affairs, Sachin Pilot.
The Bill seeks to amend the Competition Act, 2002.
• The Competition Act, 2002 established the Competition Commission of
India (CCI) – an expert body regulating anti-competitive practices in the
country. The Act also establishes the Competition Appellate Tribunal to
hear and dispose of appeals against decisions made by the CCI.
• In 2011, the government constituted an expert Committee to examine the
Competition Act and recommend modifications. Based on these
recommendations, the government introduced the Competition
(Amendment) Bill, 2012.
 APPLICABILITY OF ACT
• The Competition Act prohibits any agreement that
adversely affects competition in India. However, the Act
cannot restrict rights conferred by certain laws like the
Copyright Act, Patent Act and the Designs Act. The Bill
extends the protection of rights to include any other
intellectual property rights.
• Currently, the Act prevents any enterprise or group to
abuse its dominant position. The Bill extends this by
preventing any enterprise or group, jointly or singly, to
abuse its dominant position.
 REGULATION OF
COMBINATIONS
• Combinations - the acquisition, merger or amalgamation of enterprises - are
defined and regulated by the Act. A ‘group’ is defined as two or more
enterprises where either enterprise can exercise 26% or more voting rights in
the other enterprise. The Bill raises the voting rights level to 50% or more.
• The Bill empowers the central government to specify different value of assets
and turnover for any class of enterprises to further examine and regulate
combinations.
• Any enterprise proposing to enter a combination has to notify the CCI. If the
CCI does not pass an order or issue a direction, within 210 days of the
notification, then the combination is considered to be approved. The Bill
reduces this time period to 180 days.
 SELECTION COMMITTEE
• Members of the CCI are appointed by the central
government on the recommendation of a Selection
Committee. Currently, the Selection Committee is a six
member body and includes two experts. The Bill reduces
the committee size to 5 members by including only one
expert.
 INQUIRY AND PENALTIES
• The CCI has the power to inquire into agreements and abuse of
dominant position. The Director General, appointed by the central
government, conducts the inquiry and submits a report to the CCI.
Currently, if the CCI does not agree with the report’s findings it can
launch a further inquiry. The Bill empowers the CCI to make
appropriate orders based on the report.
• Following an inquiry, the CCI can also impose penalties for anti-
competitive agreements and dominant position abuse. The Bill
amends the Act to ensure that no penalty can be imposed without the
concerned party having an opportunity to be heard.
 RAGHAVAN COMMITTEE
REPORT
• The Raghavan Committee Report, officially known as the
“Report of the High-Powered Expert Committee on
Competition Law and Policy,” was a significant milestone
in the evolution of competition law in India. The
committee, headed by Dr. Raghavan, was appointed by the
Government of India in 2000 to review and recommend
changes to the existing competition law framework in the
country.
 KEY RECOMMENDATIONS
• The Raghavan Committee Report made several significant recommendations, which
laid the foundation for the subsequent enactment of the Competition Act, 2002.
Some of the key recommendations were:

• Enactment of a New Competition Law: The committee recommended the repeal

of the Monopolies and Restrictive Trade Practices Act (MRTP Act) and the
introduction of a new competition law framework in India. This led to the
subsequent enactment of the Competition Act, 2002.
• Establishment of a Competition Commission: The committee recommended the
establishment of an independent regulatory body, the Competition Commission of
India (CCI), to enforce competition law, investigate anti-competitive practices, and
promote fair competition.
• Prohibition of Anti-Competitive Agreements and Abuse of
Dominant Positions: The committee recommended provisions to
prohibit anti-competitive agreements, cartels, and abuse of dominant
market positions. These provisions aimed to prevent practices that
could distort competition and harm consumer interests.
• Merger Control and Regulation of Combinations: The
committee recommended the introduction of provisions to regulate
mergers, acquisitions, and other combinations that may have an
adverse impact on competition. This led to the inclusion of provisions
related to merger control in the Competition Act, 2002.
• Consumer Protection: The committee emphasized the importance
of consumer welfare and recommended provisions to protect
consumer interests from unfair trade practices, misleading
advertisements, and deceptive conduct.
 CONCLUSION
• The Raghavan Committee Report was a significant milestone in
the evolution of competition law in India. Its recommendations
paved the way for the enactment of the Competition Act, 2002,
and the establishment of the Competition Commission of India
(CCI). The report emphasized the need for a comprehensive
competition law framework, the prohibition of anti-competitive
practices, and the protection of consumer interests. The legacy of
the Raghavan Committee Report can be seen in the enforcement
actions, regulatory measures, and jurisprudence that have shaped
the competition law landscape in India.
 INTERNATIONAL CO-OPERATION
FOR COMPETITION
• International cooperation in competition law is essential for managing the
globalized economy, where businesses operate across borders and their
activities can have significant international implications. Key aspects of
this cooperation.
• Bilateral and Multilateral Agreements:Countries enter into bilateral
agreements to cooperate on competition issues. For example, the US has
agreements with Canada, the EU, Japan, and others.Multilateral
cooperation is facilitated through organizations such as the International
Competition Network (ICN), the Organisation for Economic Co-operation
and Development (OECD), and the United Nations Conference on Trade
and Development (UNCTAD).
• Harmonization of Laws: Efforts are made to harmonize
competition laws to reduce conflicts and overlaps. The
EU’s competition law framework serves as a model for
many countries.
• Information Sharing: Authorities share information on
investigations and enforcement actions to better
coordinate efforts and avoid duplication. Tools such as the
European Competition Network (ECN) facilitate
information exchange among EU member states.
 THE UK AND EUROPE RULES

• The EU and UK competition rules focus on the following areas:

• prohibiting agreements or understandings between competitors that are likely
to prevent or restrict competition (unless they can be shown to give rise to
benefits to consumers which outweigh any restrictions of competition);
• prohibiting agreements or understandings between companies which are not
competitors (such as agreements between suppliers and customers) that are
likely to prevent or restrict competition (again, unless they can be shown to give
rise to benefits to consumers which outweigh any restrictions of competition);
• prohibiting certain so-called "abusive" practices by any business which enjoys a
very strong market position such that it can act without regard to its customers,
competitors or suppliers;
• prohibiting or modifying mergers, acquisitions of
businesses/assets or the creation of joint ventures where
the transaction is likely to prevent or restrict competition.
Such transactions may trigger the merger control powers
of the European Commission or the UK Competition and
Markets Authority (CMA) where the parties involved meet
certain thresholds;
• where competition across a particular market does not
appear to be functioning effectively, the authorities have
the power to review the whole market and investigate how
competitive conditions might be improved, even if no
specific competition infringements are suspected or
subsequently identified; and
 UNITED KINGDOM
LAWS
• The Competition Act 1998 and the Enterprise Act 2002 are
the most important statutes for cases with a purely national
dimension. However if the effect of a business' conduct would
reach across borders, the European Union has competence to
deal with the problems, and exclusively EU law would apply.
Like all competition law, that in the UK has three main tasks –
• Prohibiting agreements or practices that restrict free trading
and competition between business entities. This includes in
particular the repression of cartels;
• Banning abusive behaviour by a firm dominating a market, or
anti-competitive practices that tend to lead to such a dominant
position. Practices controlled in this way may include predatory
pricing ( very low level of price fixing), tying, price
gouging( charging with high price due to high demand), refusal
to deal and many others;
• Supervising the mergers and acquisitions of large corporations,
including some joint ventures. Transactions that are considered
to threaten the competitive process can be prohibited
altogether, or approved subject to remedies such as an
obligation to divest part of the merged business or to offer
licences or access to facilities to enable other businesses to
continue competing. The Office of Fair Trading (OFT) and the
Competition Commission are the two primary regulatory bodies
for competition law enforcement in United Kingdom
 EUROPEAN UNION LAWS
• European Community competition law regulates the
exercise of market power by large companies,
governments or other economic entities. In the European
Union, it is an important part of ensuring the completion
of the internal market, meaning the free flow of working
people, goods, services and capital in a borderless Europe.
Four main policy areas include-
• ∙Cartels, or control of collusion and other anti-competitive
practices which has an effect on the EU. This is covered
under Articles 81 of the Treaty of the European
Community (TEC).
• Monopolies or preventing the abuse of firms' dominant
market positions. This is governed by Article 82 of TEC.
• ∙Mergers, control of proposed mergers, acquisitions and
joint ventures involving companies which have a certain,
defined amount of turnover in the EU. This is governed by
the Council Regulation 139/2004 EC (theMerger
Regulation also known as ECMR).
• Antitrust rules prohibit agreements between market
operators that would restrict competition, and the abuse
of dominance. European Antitrust policy is developed
from two central rules set out in the Treaty on the
Functioning of the European Union:-
• Article 101 prohibits agreements between two or more
independent market operators, which restrict competition.
• The most flagrant example of illegal conduct infringing
Article 101 is the creation of a cartel between
competitors, which may involve price-fixing and/or market
sharing.
• Article 102 of the Treaty prohibits firms that hold a
dominant position on a given market to abuse that
position, for example by charging unfair prices, by limiting
production, or by refusing to innovate to the prejudice of
consumers.
 SHERMAN ACT

• The Sherman Antitrust Act of 1890[1] (26 Stat. 209, 15 U.S.C. §§ 1–7)
is a United States antitrust law which prescribes the rule of free
competition among those engaged in commerce and consequently
prohibits unfair monopolies. It was passed by Congress and is named
for Senator John Sherman, its principal author.
• The act aimed to promote economic fairness and competitiveness
while regulating interstate commerce. The Sherman Antitrust Act
was the U.S. Congress' first attempt to address the use of trusts as a
tool that enables a limited number of individuals to control certain
key industries.
 KEY TAKEAWAYS
• The Sherman Antitrust Act is a law the U.S. Congress passed to
prohibit trusts, monopolies, and cartels.
• Its purpose was to promote economic fairness and competitiveness
and to regulate interstate commerce.
• Ohio Sen. John Sherman proposed and passed it in 1890.
• The act signaled an important shift in American regulatory strategy
toward business and markets.
• The Sherman Act was amended by the Clayton Antitrust Act in 1914,
which addressed specific practices that the Sherman Act did not ban.
• At the time, public hostility was growing toward large
corporations like Standard Oil and the American Railway
Union, which were seen as unfairly monopolizing certain
industries. Consumers felt they were hit with exorbitantly
high prices on essential goods, while competitors found
themselves shut out because of deliberate attempts by
large corporations to keep other enterprises out of the
market.
• This signaled an important shift in the American
regulatory strategy toward business and markets. After
the 19th-century rise of big business, American lawmakers
reacted with a drive to regulate business practices more
strictly. The Sherman Antitrust Act paved the way for
more specific laws .
 PENALTIES FOR VIOLATING THE
SHERMAN ACT
• Those found guilty of violating the Sherman Act can face a
hefty punishment. It is also a criminal law, and offenders
may serve prison sentences of up to 10 years. Beyond
that, there are also fines, which can be up to $1 million for
an individual and up to $100 million for a corporation.
 SECTIONS UNDER SHERMAN
ACT
• Section One: Anti-competitive practices that restrain trade
One of the provisions of the Sherman Antitrust Act makes all anti-competitive
practices that restrain trade between states illegal. Some of the practices may
include agreements to fix prices, exclude certain competitors, and limit
production outputs, as well as combinations to form cartels.
• Section 2 : Prohibits monopolization or attempts to monopolize trade or
commerce
The second provision prevents monopolization or attempts to monopolize trade in
the United States. Such conduct may include mergers and acquisitions that
concentrate too much power in the hands of one entity to the disadvantage of the
smaller enterprises.
• Section Three: District of Columbia and US Territories
The third section of the Sherman Act extends the provisions
provided in sections one and two to the District of Columbia
and US territories.
 WORLD TRADE
ORGANISATION
• INTRODUCTION:-
The World Trade Organization (WTO) is the only global international
organization dealing with the rules of trade between nations. At its heart are
the WTO agreements, negotiated and signed by the bulk of the world’s
trading nations and ratified in their parliaments. It superseded the 1947
General Agreement on Tariffs and Trade (GATT) created in the wake of World
War II.
The WTO is based on agreements signed by a majority of the world’s trading
nations. The main function of the organization is to help producers of goods
and services, as well as exporters and importers, protect and manage their
businesses.
• On 26 February 2024, at the 13th Ministerial Conference in Abu Dhabi, Comoros and
Timor Leste were approved to became the 165th and 166th members.
• The WTO is essentially an alternative dispute or mediation entity that upholds the
international rules of trade among nations. The organization provides a platform that
allows member governments to negotiate and resolve trade issues with other
members. The WTO’s main focus is to provide open lines of communication
concerning trade among its members. WTO-appointed trade experts can render
binding judgments. When one member files a complaint against another, the countries
must first attempt to resolve the issue through consultation, and only if that fails is a
panel chosen by the WTO’s Dispute Settlement Body to hear the case.
• KEY TAKEAWAYS:-
1. The World Trade Organization (WTO) oversees global trade rules among nations and
mediates disputes.
2. The WTO has been a force for globalization, with both positive and negative effects.
3. Big businesses tend to support the WTO for its positive impact on international
economic growth.
4. Skeptics see it as increasing the wealth gap and hurting local workers and
communities.
 OBJECTIVES OF WTO :
• 1. To improve the standard of living of people in the member
countries.

• 2. To ensure full employment and broad increase in effective demand.

• 3. To enlarge production and trade of goods.

• 4. To increase the trade of services.

• 5. To ensure optimum utilization of world resources.

• 6. To protect the environment.

• 7. To accept the concept of sustainable development

 FUNCTIONS OF WTO
• 1.
To implement rules and provisions related to trade policy review
mechanism.

• 2. To provide a platform to member countries to decide future strategies

related to trade and tariff.

• 3. To provide facilities for implementation, administration and operation of

multilateral and bilateral agreements of the world trade.

• 4. To administer the rules and processes related to dispute settlement.

• 5. To ensure the optimum use of world resources.

• 6. To assist international organizations such as, IMF and

IBRD for establishing coherence in Universal Economic
Policy determination.
 WTO AGREEMENTS:
• The WTO’s rule and the agreements are the result of negotiations
between the members. The current sets were the outcome to the
1986-93 Uruguay Round negotiations which included a major
revision of the original General Agreement on Tariffs and Trade
(GATT).
• GATT is now the WTO’s principal rule-book for trade in goods. The
complete set runs to some 30,000 pages consisting of about 30
agreements and separate commitments (called schedules) made
by individual members in specific areas such as, lower customs
duty rates and services market-opening.
• Through these agreements, WTO members operate a non-
discriminatory trading system that spells out their rights
and their obligations. Each country receives guarantees
that its exports will be treated fairly and consistently in
other countries’ markets.
• These agreements are often called the WTO’s trade rules,
and the WTO is often described as “rules-based”, a system
based on rules. But it’s important to remember that the
rules are actually agreements that governments
negotiated.
 WTO AGREEMENTS
• These agreements and annexes deal with the following specific sectors
or issues:
• (a) Goods:
• It all began with trade in goods. From 1947 to 1994, GATT was the forum for
negotiating lower customs duty rates and other trade barriers; the text of the
General Agreement spelt out important, rules, particularly non-discriminations
since 1995, the updated GATT has become the WTO s umbrella agreement for
trade in goods.
• It has annexes dealing with specific sectors such as, agriculture and textiles
and with specific issues such as, state trading, product standards, subsidies
and action taken against dumping.
• (b) Services:
• Banks, insurance firms, telecommunication companies, tour
operators, hotel chains and transport companies looking to do
business abroad can now enjoy the same principles of free and fair
trade that originally only applied to trade in goods.
• (c) Intellectual Property:
• The WTO’s intellectual property agreement amounts to
rules for trade and investment in ideas and creativity. The
rules state how copyrights, patents, trademarks,
geographical names used to identify products, industrial
designs, integrated circuit layout designs and undisclosed
information such as trade secrets “intellectual property”
should be protected when trade is involved.
• (d) Dispute Settlement:
• The WTO’s procedure for resolving trade quarrels under the
Dispute Settlement Understanding is vital for enforcing the rules
and therefore, for ensuring that trade flows smoothly.
• Countries bring disputes to the WTO if they think their rights under
the agreements are being infringed.
• After that Judgments by specially appointed independent experts
are based on interpretations of the agreements and individual
countries’ commitments.
• (e) Policy Review:
• The Trade Policy Review Mechanism’s whose purpose is to improve
transparency, to create a greater understanding of the policies that
countries are adopting and to assess their impact. Many members
also see the reviews as constructive feedback on their policies.