The Competition Act, 2002

Replaced the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969

Objectives
a. To prevent practices having adverse effect on competition b. To promote and sustain competition in the market c. To protect the interests of consumers d. To ensure freedom of trade carried on by other participants in Indian markets Extends to the whole of India

Definitions (sec 2)
Acquisition (sec 2 (a)) Directly or indirectly acquiring or agreeing to acquire shares, voting rights or assets of an enterprise; or Control over mgmt or control over assets

Cartel
Includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit control or attempt to control the production, distribution, sale or price of , or trade in goods or provision of services

Agreement (sec 2 (b))

Any arrangement or understanding or action in concert, i. Whether such is formal or in writing; or ii. Whether such is intended to be enforceable by legal proceedings

Consumer (sec 2 (f))

i. ii. iii. Any person who: Buys any goods for a consideration User of goods other than the buyer Hires or avails of any services for a consideration iv. Includes a beneficiary of services other than the hirer

Enterprise (sec 2 (h))

A person or department of the govt. who is or has been or is proposed to be engaged in any activity relating to: i. production, storage, supply, distribution, acquisition or control of articles or goods; or ii. The provision of services of any kind; or iii. Investment or business of acquiring, holding, underwriting or dealing with shares, debentures or securities of other body corporate directly or through its subsidiaries ..contd.

Enterprise does not include activities of the govt. pertaining to strategic and sovereign functions Enterprise includes: a. Activity profession or occupation b. Article and service both new c. Unit or division plant, factory established for production, storage, supply. Or branches for providing services

Price (sec 2 (o))

Includes every valuable consideration: direct, indirect or deferred Includes sale of any goods or performance of any services relating to any other matter or things

Relevant market (sec 2 (r))

Determined by the Competition Commission with reference to relevant product market or geographic market or both

Trade (sec 2 (x))

Any trade, business, industry, profession or occupation relating to the production, supply, distribution, storage or control of goods and includes provision of services

Turnover (sec 2 (y))

Includes value of sale of goods or services

Prohibition of agreements
Sec 3 prohibits entering into anti-competitive agreements production, supply, storage, distribution, control.of goods which causes an adverse effect on competition Sec 4 prohibits abuse of dominant position by any enterprise imposition, unfair purchase or selling prices and practices which results in denying market access to other competitors Sec 5 deals with combination of enterprises and persons which causes an adverse effect on competition

Anti- competitive agreements

Agreement void Adverse effect on competition -Directly or indirectly determines purchase or sale prices. -Limits or controls production, supply, markets, technical development, investment or provision of services -shares the market or source of production

- 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 or any other similar way. - Directly or indirectly results in bid rigging or collusive bidding

Cartel (Sec.3(3)) includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or trade in goods or provision of services.

The following agreements cause an appreciable adverse effect on competition,

Tie- in agreements Exclusive supply agreement Exclusive distribution agreements Refusal to deal Resale price maintenance.

 Tie-in agreement an agreement requiring a purchaser to purchase some other goods as a condition to purchase Exclusive supply agreement an agreement restricting the purchaser from acquiring or dealing in goods other than that of the sellers Exclusive distribution agreement an agreement to restrict or withhold the supply of goods or an area of the market for sale of goods

 Refusal to deal an agreement which restricts persons or classes of persons from/ to whom goods are bought or sold Resale price maintenance an agreement to sell goods on condition that the purchaser, on resale will sell goods at a price stipulated by the seller

Prohibition of abuse of dominant position

Abuse of dominant position sec.4 - Directly or indirectly imposes unfair or discriminatory condition or price on purchase or sale of goods or services - Limits or restricts production/ technical development of goods or services - Indulges in practices that denies market access - Makes conclusion of contracts with parties who have no connection with the subject of the contract - Uses its dominant position in one market to access or protect another market

Regulation of Combinations
Combination Sec 5 A. Acquisition of control, shares, voting rights or assets: If parties have: i. In India assets > Rs. 1000 cr; turnover > Rs. 3000 cr; or ii. In India or outside assets > US $ 500 million or turnover > US $ 1500 million; or iii. Any group belonging to such group has acquired: a. India - assets > Rs. 4000 cr; turnover > Rs. 12000 cr; or b. In India or outside assets > US $ 2 billion or turnover > US $ 6 billion

B. Acquisition of control over production, distribution or trading.

i. i. ii. a. b. Enterprise acquired along with which acquirer already has control: In India assets > Rs. 1000 cr; turnover > Rs. 3000 cr; or In India or outside assets > US $ 500 million or turnover > US $ 1500 million; or Group which has acquired: India - assets > Rs. 4000 cr; turnover > Rs. 12000 cr; or In India or outside assets > US $ 2 billion or turnover > US $ 6 billion

C. Merger or amalgamation
The enterprise created as a result of merger has: In India assets > Rs. 1000 cr; turnover > Rs. 3000 cr; or i. In India or outside assets > US $ 500 million or turnover > US $ 1500 million; or ii. Group or its constituent has: a. In India - assets > Rs. 4000 cr; turnover > Rs. 12000 cr; or b. In India or outside assets > US $ 2 billion or turnover > US $ 6 billion

Competition Commission of India

establishment, duties, powers and functions Establishment of Commission (Sec 7 to 17) Corporate body Composition of Commission (Sec 8) Selection of chairperson & other members (Sec 9)

 Term of office of chairperson & other members (Sec 10) Resignation, removal and suspension of chairperson & other members (Sec 11) Restriction on employment (Sec 12) Salary & allowances (Sec 14) Vacancy etc. not to invalidate proceedings of the commission (Sec 15)

 Appointment of Director-General (Sec 16) Registrar & officers & other officers of the commission (Sec 17) DUTIES, POWERS & FUNCTIONS OF COMMISSION Duties of commission (Sec 18) Inquiry into certain agreements & dominant position of enterprise (Sec 19)

a. Consideration of factors which cause adverse effect on competition b. Inquiry whether an enterprise enjoys dominant position
Inquiry into combination by Commission (Sec 20) a. Inquiry into acquisition, control & combination b. Factors having effect on combination


a. b. c. d. e. f.

Benches of Commission (Sec 22) Distribution of business amongst commission & Benches (Sec 23) Procedure for deciding a case where members of a bench differ in opinion (sec 24) Procedure for inquiry on complaints under sec 19 (Sec 26)
Direction to director general to investigate Report within specified time Dismissal of complaint Rebuttal of findings Comments Further inquiry

 Orders by Commission after inquiry into agreements or abuse of dominant position (Sec 27) Division of enterprise enjoying dominant position. (Sec 28) Procedure for investigation of combinations (Sec 29) Inquiry into disclosures under Sec 6 (2) (Sec 30)

 Orders of Commission on certain combinations (Sec 31) Power to grant interim relief (Sec 33) Power to award compensation (Sec 34) Appearance before Commission (Sec 35) Power of Commission to regulate its own procedure (Sec 36)

 Review of orders of the commission (Sec 37) Appeal (Sec 40) Power of CG to supersede Commission (Sec 56)