COMPETITION

ACT,2002
ACT NO. 12 OF 2003
MPE Div: C
Batch 2009 – 2011 [13th January, 2003.]
Submitted by:
 

Swapnali Nalavde 176

Anil Naik 173
Venkat Raghavan 165
Shrawan Sureka 154
Amit Shrimankar 144
Nikhil Talreja 180
 Index
Aim and Object
Features
Competition commission of India
Composition of Commission
Duties, Powers, Functions & Penalties
Finance
Competition Appellate Tribunal
Distinction between MRTP & Competition act
Merits & demerits
Case on Ackruti V/S Reliance Infrastructure
TAFI V/s Lufthansa Airlines
Introduction & Objective
 The Competition Act 2002 which has replaced the MRTP Act, 1969
 The MRTP Act. 1969 had become obsolete and was choking the economy.
 The Competition Commission of India was established on the 14th October, 2003 but
could not be made functional due to filing of a writ petition
 Competition Act, 2002 has finally been made effective from 20th May 2009. Most of
the provisions of Competition Act, 2002 (as amended by Amendment Act, 2007)

Objectives: An act to provide, keeping in view of the opening of the Indian economy
development of the country
 Establishment of a commission to prevent practices having adverse effect on
competition
 To promote and sustain competition in markets,
 To protect the interests of consumers and to ensure freedom of trade carried on
by other participants in markets,
 In India, and for matters connected there with or incidental thereto.
Prohibition of agreements

Overall scheme of Competition Act (Purposes)

 
Prohibition of Anti-competitive agreements (Section 3)
Prohibition of abuse of dominant position (Section 4)
Regulation of combinations (Sections 5 and 6)
Competition advocacy (Section 49)
Prohibition of Anti-competitive agreements
Two Types: Horizontal & Vertical

 Agreements between Competitors(Horizontal agreements) Including Cartels

Presumed to have appreciable adverse effect on competition

 Any agreement entered into in breach of the provision contained shall be

avoids

 Price Fixing, Sharing of Market, Limiting Production supply, Bid Rigging

Collusive bidding

 Other Horizontal agreements and Vertical agreements: subject to rule of

reason; burden of proof lies with prosecutor

 Tie-in arrangements, exclusive supply / distribution agreements, refusal to

deal, resale price maintenances
Prohibition of Anti-competitive agreements
Any agreement between two entities at any stages or levels of the production
chain in different markets, production, supply, distribution, storage, sale or
price, provision of services shall be an agreement of breach likely to cause an
appreciable adverse effect on competition in India

 Tie-in arrangement: Any agreement requiring a purchaser of goods, as a condition of

such purchase, to purchase some other goods

 Exclusive supply agreement; restricting the purchaser during the trade from Buying
other than those of the seller or any other person goods

 Exclusive distribution agreement; includes an agreement to limit, the output of any

goods at any area market for the disposal or sale of the goods

 Refusal to deal; which restricts by any method the persons to whom goods are sold
or from whom goods are bought

 Resale price maintenance: Agreement to sell goods on condition that the prices to
be charged on the resale by the purchaser shall be the prices Fixed by the seller
Abuse of Dominant Position Sec 4
No enterprise or group shall abuse its dominant position.
a) directly or indirectly, imposes unfair or discriminatory
condition in purchase or sale of goods or service
price in purchase or sale (including predatory price) of goods or
service.
b) Limitations or Restrictions s
production of goods or provision of services or Markets
technical or scientific development relating to goods or services
unfair for consumers
indulges in practice unfair for the market structure
uses its dominant position in one relevant market to enter into,
or protect, other relevant markets
Competition Commission of India
Establishment of commission
 Central Government has appointed CCI as a governing Body

 The Commission shall be a body corporate by the name

aforesaid having perpetual succession and a common seal
with power, subject to the provisions of this Act, to acquire,
hold and dispose of property, both movable and immovable,
The head office of the Commission shall be at such place as
the Central Government may decide from time to time (New
Delhi)
CCI may also assign office in other places in India
Composition of Commission
The Chairperson and other Members of the Commission shall be appointed
by the Central Government
Selection Committee includes Chief Justice of India or his nominee,
Secretary in the Ministry of Corporate Affairs, Secretary in the Ministry of
Law and Justice, two experts of repute who have special knowledge.
The Commission shall consist of a Chairperson and not less than two and
not more than six other Members to be appointed by the Central
Government.
The Chairperson and every other Member shall be a person of ability,
integrity and standing and who has special knowledge of, and such
professional experience of not less than 15 years in
( International trade, economics business, commerce, law, finance,
accountancy, management industry, public affairs or competition
matters, including competition law and policy) which in the opinion of
the Central Government, may be useful to the Commission
The Chairperson and other Members shall be whole-time Members
Competition Commission of India Structure
Duties, Powers, Functions & Penalties
Eliminate practices having adverse effect on competition
Promote and sustain competition
Protect the interest of customers
Ensure freedom of trade carried by other participants, in
markets in India
The Commission may inquire into any alleged contravention of
the provisions accompanied by such fee as may be determined
by regulations
Power to award compensation (Sec.34)
Power of commission to regulate its own procedure
Duties
Creation of barriers to new entrants in the market driving
existing competitors out of the market foreclosure of competition
by hindering entry into the market accrual of benefits to
consumers
Improvements in production or distribution of goods or provision
of services;
Promotion of technical, scientific and economic development by
means of production or distribution of goods or provision of
services.
Duties
 The Commission shall, while inquiring whether an enterprise enjoys a
dominant position
 Economic Power / market share / size /resource Importance of the
enterprise; vertical integration /sale or service network of such enterprises;
dependence of consumers on the enterprise;
 Countervailing buying power; market structure and size of market;
social obligations, social costs;
 Relative advantage, by way of the contribution to the economic development,
by the enterprise enjoying a dominant position having or likely to have an
appreciable adverse effect on competition; any other factor which the
Commission may consider relevant for the inquiry.
"relevant geographic market", regulatory trade barriers; local specification
requirements; national procurement policies; adequate distribution facilities;
transport costs;
Penalties
If any person, without reasonable clause, fails to comply
with the orders or directions of the Act, he shall be
punishable with fine which may extend to rupees 1 Lac for
each day during which such non-compliance occurs,
subject to a maximum of rupees 10 Cr, as the Commission
may determine

If any person does not comply with the orders or directions
issued, or fails to pay the fine imposed be punishable with
imprisonment for a term which may extend to 3 years, or
with fine which may extend to rupees 25 Cr
Penalties
Power to impose penalty for non-furnishing of
information on combinations a penalty which may
extend to 1% of the total turnover or the assets,
whichever is higher, of such a combination

Penalty for making false statement or omission to

furnish material information: 50 Lacs to 1 Cr as
may be determined by the Commission.
Regulation of Combinations
Acquisition
 Being the acquirer and the enterprise, whose control, shares, voting rights or
assets have been acquired or are being acquired jointly
 In India assets of above 1000 Cr or Turnover of above 3000 Cr
 In India or outside India assets of the value of Above 500 million US dollars,
including at least rupees 500 Cr in India, or turnover more than 1500 US dollars,
including at least rupees 1500 Cr in India
 Acquiring of control by a person over an enterprise when such person has already
direct or indirect control over another enterprise engaged in production,
distribution or trading of a similar or identical goods
Any Merger or amalgamation
 Any person / enterprise who proposes to enter into a combination may, at his or
its option, give notice to the Competition Commission which causes appreciable
adverse effect on competition within the relevant market in India and such a
combination shall be void
 Should Intimate the commission and Pay the fees within 30 days
 Either in India asset of value of above 1000 Cr or more
COMPETITION ADVOCACY
 The Central Government may, including review of laws related to competition
in formulating a policy on competition as the case may be, make a reference to
the Commission for its opinion on possible effect of such policy on competition
and on the receipt of such a reference, the Commission shall, within sixty days
of making such reference, give its opinion to the Central Government, or the
State Government, as the case may be, which may thereafter take further action
as it deems fit.

 The opinion given by the Commission shall not be binding upon the Central
Government or the State Government, as the case may be in formulating such
policy.

 The Commission shall take suitable measures for the promotion of competition
advocacy, creating awareness and imparting training about competition issues
Finance
 The Central Government may, after due appropriation made by Parliament by
law in this behalf, make to the Commission grants of such sums of money as
the Government may think fit for being utilised for the purposes of this Act.
Constitution a Fund is called “Constitution of Fund’

 All Government grants & fees received by the Commission;

 the interest accrued on the amounts
 Funds can also be used for meetings salaries and allowances payable to the CCI
COMPETITON APPELLATE TRIBUNAL
 to hear and dispose of appeals against any direction issued or decision made or
order passed by the Commission
 to adjudicate on claim for compensation that may arise from the findings of
the Commission or the orders of the Appellate Tribunal in an appeal against
any finding of the Commission and pass orders for the recovery of
compensation under
 Every appeal shall be filed within a period of 60 days from the date on which a
copy of the direction or decision or order made by the Commission is received
by the Central Government or the State Government or a local authority or
enterprise accompanied by such fee as may be prescribed
 Condemnation of delay
Distinction between MRTP and
Competition Act
Competition act MRTP
Competition concepts expressly defined Competition concepts not expressly
defined

Provision for regulation of combinations No regulations of combinations

Power to impose penalty factor No power to impose penalty
Statutory authority can seek CCI’s opinion No provision for statutory authorities to
seek opinion.
Government department within its ambit Government department outside its ambit
Merits
Anti-competitive Agreement.
Clearly explains and composes the commission of the
Act.
Explains the procedure of the selected chairperson and
other members.
Explains the duties, powers and functions.
Explains the penalties and Legal procedures.
Approval by Central Government .
Clearly explains the Offences and penalties.
Demerits
Difficult to understand the Rules and Regulation.
Directly and indirectly effect to the AOA and FOA.
Vast Judicial procedure for wrong doer.
TAFI V/s Lufthansa Airlines
The Travel Agents Federation of India (the complainant) has filed a complaint against
the Lufthansa Airlines (the Respondent) alleging unfair trade practices on the grounds of
differential tariff published for a given destination for same inventory of seats in class of
service by the respondent.
The complainant has further alleged that the respondent is adopting the practice of dual
or multi pricing intentionally to attract passengers directly in order to stem the legitimate
earnings of the travel agents who are members of the complainant association
Certain costs elements are not present in booking process when undertaken online, and as
such a different and perhaps lower cost structure applies to it.
The Respondent (Lufthansa Airlines) further pointed that a guaranteed quote which is
made available to the members of Complainant (TAFI) incorporates several costs,
including infrastructure costs, marketing costs etc. They stressed that some of these costs
are eliminated when tickets are sold online through the respondent’s (Lufthansa Airline)
website, this benefit is passed to purchasers who pay a lower price.
The respondent also pointed that being in highly competitive market all the stakeholders
attempt to maximize sales & earnings through innovative marketing and sales strategies.