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Essay Topic- Eight Years of Competition Law Enforcement in India.

 Introduction

Competition law although not a very old concept but how it has ruled Indian market still is
glorifying. The need of the hour to bring competition law in India was seen when anti-
competitive practices began to take place. The first traceable event of origin of competition
law can be regarded as the book of “Wealth of Nations” by Adam Smith where he gave
the metaphor of the invisible hands.1 He truly said in his book that "People of the same
trade seldom meet together, even for merriment and diversion, but the conversation ends
in a conspiracy against the public, or in some contrivance to raise prices." 2 The ultimate
purpose of competition law is to provide solutions to situations in which free market system
breaks down.

In India, MRTP Act, 1969 was the first enactment to deal with the competition issues. It
was enacted in the era of licenses, permits and control. But however in the wake of
economic reforms since 1991, it was felt that MRTP Act has become obsolete in the light
of international economic developments which relate more particularly to competition laws
and thus, there was a need to shift the focus from curbing monopolies to promoting
competition. Therefore a High Level Committee on Competition Policy and Law was
constituted by the Central Government. In accordance with the recommendations of this
committee, the Competition Act, 2002 was passed.

The Competition Act, 2002 was enacted in view of the economic development that resulted
in opening up of the Indian economy, removal of controls and consequent economic
liberalization which required that the Indian economy be enabled to allow competition in
the market from within the country and outside.

It became fully functional in May 2009 with Dhanendra Kumar as its first Chairman
 Journey of competition law from its enforcement till now-

1. 2009-2010
With the appointment of the first chairperson Dhanendra Kumar and the other six full-
time members by the central government, the Competition Commission stands fully
constituted with effect from February 28 2009. The commission started to receive a
large number of complaints relating to allegations of abuse of dominance, as well as
anti-competitive agreements, and has referred most of them to the director general for
On 22nd December, 2009 the Competition (Amendment) Act, 2009 got its assent from
President but however till May 20, 2009 it remained largely on paper. The provisions
of Section 3 and 4 were introduced in this amended act. With the passing of this
Amendment Act the MRTP commission was dissolved and the MRTP Act stands
repealed w.e.f 14th October 2009.
The Act introduced the three enforcement areas usually found in modern competition
law regimes: prohibition of anticompetitive agreements, prohibition of abuse of
dominance and merger regulation. Many concepts of the new law are similar to those
found in other jurisdictions, such as European Union or US competition law.
In this year a major landmark judgment was given by the Supreme Court of India on
September 9, 2010 in Competition Commission of India v. Steel Authority of India
Ltd, inter alia, in which it has effectively defined the limits of exercise of power by
both the Competition Commission of India (CCI) and the Competition Appellate
Tribunal (“COMPAT”).
At the sixth Indo-US Economic Summit held on February 16 2010 in New Delhi, the
chairman of the Competition Commission said that the commission is considering
introducing pre-merger consultation clauses for vetting mergers under Sections 5 and
6 of the Competition Act, and that it is reasonable to expect that most M&A cases will
be cleared within 40 days. The commission is also expected to release soon the draft
merger regulations for public comment. The draft regulations will try to remove
uncertainties and unnecessary delays for clearance of transactions that have no material
impact on competition. The commission is expected to list all such possible innocuous
transactions in the draft regulations3.

The Economic Times and Financial Express, February 17 2010.