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Competition Law in India (NEW)

The Competition Act of 2002 in India aims to promote competition, protect consumer interests, and ensure freedom of trade by prohibiting anti-competitive agreements and abuse of dominant positions. It empowers the Competition Commission to investigate and impose penalties for practices that adversely affect competition, including cartels and market manipulation. The Act emphasizes the need for healthy market conditions to foster innovation and efficiency among producers.

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Shruti Varshney
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34 views22 pages

Competition Law in India (NEW)

The Competition Act of 2002 in India aims to promote competition, protect consumer interests, and ensure freedom of trade by prohibiting anti-competitive agreements and abuse of dominant positions. It empowers the Competition Commission to investigate and impose penalties for practices that adversely affect competition, including cartels and market manipulation. The Act emphasizes the need for healthy market conditions to foster innovation and efficiency among producers.

Uploaded by

Shruti Varshney
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Overview of Competition Law in

India
I Sridhar
Introduction to Competition Act, 2002

Why do we need competition in the market?


Competition is now universally acknowledged as the best means of ensuring that
consumers have access to the broadest range of services at the most competitive
prices. Producers will have maximum incentive to innovate, reduce their costs
and meet consumer demand. Competition thus promotes allocative and
productive efficiency. But all this requires healthy market conditions and
governments across the globe are increasingly trying to remove market
imperfections through appropriate regulations to promote competition.
Objectives of Competition Act

 Prevent Practices having adverse effect on competition


 Promote & Sustain competition in markets
 Protect Interest of consumers
 Ensure freedom of trade carried on by other participants in the market
 Competition advocacy
Prohibition of Anti Competitive Agreements
Section 3(1)
 No enterprise shall enter into any agreement in respect of production,
supply, distribution, storage, acquisition, control of goods / services
which causes or likely to cause appreciable adverse effect on
competition.

 Under the law the whole agreement is void.


Prohibition of Anti Competitive Agreements Section 3(2)

Agreements which
 directly or indirectly determine purchase or sale price,
 limits or controls production, supply, markets, technical development,
investment or provision of services,
 shares the market or source of production by way allocation of geographical
area or type of goods or service,
 directly or indirectly results in bid rigging or collusive bidding shall be
presumed to have appreciable adverse effect on competition
Prohibition of Abuse of Dominant Position (Section – 4)

 No enterprise shall abuse its dominant position

Dominant position means position of strength which enables to:


 operate independently of competitive forces
 affect its competitors or consumers or the relevant market its favour
Inquiry into certain agreements and dominant
position of enterprise
For determining the “relevant geographic market”, the Commission
shall have due regard to all or any of the following factors,
namely:─
 regulatory trade barriers;
 local specification requirements;
 national procurement policies;
 adequate distribution facilities;
 transport costs;
 language;
 consumer preferences;
‘Relevant product market’ the Commission shall have due regard to
all or any of the following factors namely;

 physical characteristics or end-use of goods;


 price of goods or service;
 consumer preferences;
 exclusion of in-house production;
 existence of specialized producers;
 classification of industrial products.
Inquiry into Anti-competitive agreements / Abuse of dominance

 Suo motu inquiry


 On receipt of complaint
 On receipt of a reference
 Commission has suo motu power to enquire whether a combination
causes or is likely to cause an appreciable adverse effect on
competition.
Powers of Commission
 Cease & desist order
 Impose penalty upto 10% of turnover
 In case of Cartel, penalty can be 10% of turnover or 3 times of profit illegally gained
from cartel activity, whichever is more
 Recommend to Govt the division of dominant enterprise
 Various penalties ranging from Rs. 1lakh upto Rs. 1 crore are also provided for failure
to comply with direction / order of Commission
THANK YOU

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