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Competition Law

Book · January 2019

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M. Z.M. Nomani Faizanur Rahman

Aligarh Muslim University Jamia Millia Islamia
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 Content

Preface
List of Abbreviations
List of Cases

Unit 1
Evolution of Competition Laws in India
Learning Objectives
1.1 Introduction
1.2 Genesis of the Competition Law
1.3 Legislative History of the Competition Act, 2002
1.3.1 Historical Developments to the Enactment of MRTP Act, 1969
1.3.2 Shift from MRTP Act 1969 to Competition Act 2002
1.3.3 Competition Act 2002 vis-a-vis MRTP Act 1969
1.4 Efficacy of Competition
1.5 Significance of Competition
1.6 Components of Competition Act
1.7. Object of the Competition Act, 2002
1.7.1 Scope of the Competition Act 2002
1.7.2 Non-applicability of Competition Act
1.8 Administrative Mechanism & Structure
1.8.1 Competition Commission of India
1.8.2 Appellate Tribunal
1.9 Scope and Exercise of Jurisdiction
1.9.1 Concurrent Jurisdiction
1.9.2 Extra-Territorial Jurisdiction
1.10 Power to Make Regulation
1.11. Competition Policy
1.12 Competition Advocacy
1.13 Summary
Lesson Roundup
Self-Test Questions

Unit 2
Indian Competition Law Framework
Learning Objectives
2.1 Introduction
2.2 Evolution of Competition Law in India
2.3 Competition Act, 2002: An Overview
2.3.1 Difference between Competition Act, 2002 and MTRP Act, 1969
2.4. Key features of Competition Act, 2002
2.4.1 Important Definitions under the Act
 2.4.2 Key Concepts of the Act
2.4.3 Administrative Structure Provisions of Competition Act
2.5 Proposed Changes to the Competition Act
2.6 Regulations under Competition Act
2.7 Summary
Lesson Roundup
Self-Test Questions

Unit 3
Components of Competition Act, 2002
Learning Objectives
3.1 Introduction
3.2 Anti-Competitive Agreements
3.2.1 Definition of Competition
3.2.2 Meaning of Agreement
3.2.3 Horizontal and Vertical Agreements
3.2.4 Bid Rigging
3.3 Intellectual Property Rights Issues in Competition Law
3.3.1 Importance of Protection
3.3.2 Competition in Market Place
3.3.3 Conflict between IPR and Competition Law
3.3.4 Applicability of Competition Law on IPR Statutes
3.3.5 Intellectual Property and Monopoly
3.3.6 Reasonable Conditions
3.3.7 Offences and Penalties Provisions
3.4 Abuse of Dominant Position
3.4.1 Meaning of Abuse
3.4.2 Predatory Pricing
3.4.3 Process of Dealing with Abuse of a Dominant Position
3.5 Regulations of Combinations
3.5.1 Meaning of Combination
3.5.2 Thresholds for Combinations under the Act
3.5.3 Directions of the CCI
3.5.4 Procedural Details
3.5.5 Areas of Concern
3.5.6 Post Enquiry Measures
3.6 Summary
Lesson Roundup
Self-Test Questions

Unit 4
Administrative Mechanism & Structure
Learning Objectives
4.1 Introduction
4.2 Competition Commission of India (CCI)
4.2.1 Principles of CCI
4.2.2 General Provisions Regarding CCI
 4.2.2.1 Establishment of CCI
4.2.2.2 Composition of CCI
4.2.2.3 Selection Committee for Chairperson and members of CCI
4.2.2.4 Term of Office of Chairperson and Other Members
4.2.2.5 Resignation, Removal and Suspension of Chairperson and Other Members
4.2.2.6 Restriction on Employment of Chairperson and other Members
4.2.2.7 Administrative Powers of Chairperson
4.2.2.8 Salary and Allowances and other Terms and Conditions of Service of
Chairperson and other Members
4.2.2.9 Vacancy, etc. not to invalidate proceedings of Commission
4.2.2.10 Appointment of Director General
4.2.2.12 Appointment of Secretary, Experts, Professionals and Officers and other
Employees of Commission
4.2.3 Duties, Powers and Functions of Commission
4.2.3.1 Duties of the Commission
4.2.3.2 Powers and Functions of the Commission
4.2.4 Private Enforcement
4.2.5 Post-Decisional Options
4.3 Competition Appellate Tribunal (COMPAT)
4.3.1 Formation of COMPAT
4.3.2 Functioning of COMPAT
4.3.3 Powers of COMPAT
4.3.4 Awarding Compensation by COMPAT
4.4 COMPAT to NCLAT: Finance Act, 2017
4.5 Offence and Penal Provisions
4.5.1 Orders by Commission After Inquiry into Agreements or Abuse of Dominant
Position
4.5.2 Nature of Provisions of Section 27 of the Act
4.5.3 Power of Commission to Impose Penalty for Contravention
4.5.4 Interpretation of term Turnover
4.5.5 Consequences for Non-Compliance of Order Passed by the Commission
4.5.6 Penalty for Contravention of Orders of Commission
4.5.7 Compensation in Case of Contravention of Orders of Commissions
4.5.8 Penalty for Failure to Comply with Directions of Commission and Director General
4.5.9 Power to Impose Penalty for Non-Furnishing of Information on Combinations
4.5.10 Penalty for Making False Statement or Omission to Furnish Material Information
4.5.11 Penalty for offences in relation to furnishing of information
4.5.12 Crediting sums realized by way of penalties to Consolidated Fund of India
4.5.13 Contravention by Companies
4.5.14 Leniency
4.6 Summary
Lesson Roundup
Self-Test Questions

Unit 5
Extraterritorial Application of the Competition Laws
Learning Objectives
5.1 Introduction
5.2 Overview of Extraterritorial Jurisdiction
5.3 Principle of Extraterritoriality
5.3.1 Subject Matter Jurisdiction
5.3.1.1 Nationality Principle
5.3.1.2 Territoriality Principle
5.3.2 Principle of Extraterritoriality and India
5.3.3 Enforcement Jurisdiction
5.4 Resistance to Extraterritoriality
5.5 Extraterritorial Application of Competition Law in Different Jurisdictions
5.5.1 US Competition Law
5.5.2 EU Competition Law
5.5.3 UK Competition Law
5.5.4 Indian Competition Law
5.6 Internationalization of Competition Law & Policy
5.6.1 Tools of International Cooperation on Competition
5.6 Summary
Lesson Roundup
Self-Test Questions

Unit 6
Competition Law & Intellectual Property Rights
Learning Objectives
6.1 Introduction
6.2 Intellectual Property Rights & Laws
6.3 Competition Law & Policy
6.4 Objectives of Competition Laws and Intellectual Property Laws
6.5 Relationship between Competition Law & IPR
6.5.1 Complementing Approach of IPR & Competition Law
6.5.2 Conflicting Approach of IPR & Competition Law
6.6 Laws on Competition and IPR interface in Different Jurisdictions
6.6.1 United States
6.6.2 European Union
6.6.3 India
6.7 Summary
Lesson Roundup
Self-Test Questions

Bibliography
 Preface

The business thrives on intense competition and dynamic of market environment. The
Liberalization Privatization Globalization (LPG) reduced governmental control and
witnessing aggressive competition and economic efficiency.1 This necessitated rehabilitation
of monopolies and restrictive trade practices laws in India and fostered the competition law.
India’s Competition Act, 2002, enacted to fulfill the twin objectives of regulation of anti-
competitive practices and give effect to the World Trade Organization (WTO) Agreements.
The post WTO resulted in shift from monopolistic and restrictive trade practices regime to
highly competitive and liberalized environment. The enactment of Competition Act, 2002
prevented practices having adverse effect on competition to promote and sustain competition
in markets. It also protects the interests of consumers and to ensure freedom of trade carried
on by other participants in markets. The Act cast duty of the Commission to eliminate
practices having adverse effect on competition, promote and sustain competition, protect the
interests of consumers and ensure freedom of trade carried on by other participants, in
markets in India’.2 A combined reading of the preamble and Section 18 of the Act envisage
Competition Commission of India and the Enforcing tribunal.3 In the words of the Supreme
Court, the objectives of Competition Law appear as under:

The main objective of competition law is to promote economic efficiency using

competition as one of the means of assisting the creation of market responsive to
consumer preferences. The advantages of perfect competition are three-fold:
allocative efficiency, which ensures the effective allocation of resources,
productive efficiency, which ensures that costs of production are kept at a
minimum and dynamic efficiency, which promotes innovative practices.4

The court understanding of three-fold advantage seems progressive in bringing changes in

behavioural approach and structural approach followed under previous legal regime. The
regulation of Merger and Amalgamation (M&A) has returned to the scope of Indian
competition law, although the new law sets rather high turnover thresholds for combinations

1
Poorvi Chothani & Madhooja Mulay, “Competition Law and Intellectual Property Laws,” available at:
<http://www.legalserviceindia.com/article/l307-Competition-Law-and-Intellectual-Property-Laws.html> (last
visited on 5.2.2018)
2
Competition Act, 2002, s. 18.
3
Vinod Dhall (ed.), Competition Law Today 499-525(Oxford University Press, New Delhi, 2007).
4
Competition Commission of India v. Steel Authority of India & Anr. (Civil Appeal No. 7999 of 2010)
 to fall under its purview. The new law has extraterritorial reach. This provision is based on
‘effects doctrine’ in preference to ‘conduct doctrine’. Thus, actions or practices taking place
outside India but having an appreciable adverse effect on competition in the relevant market
in India would come within the ambit of the Act.5
The new competition law, the Competition Act, 2002, is arguably a better piece of legislation
as compared to its predecessor, the MRTP Act. The new law provides for a modern
framework of competition is typically concerned with three issues: firstly, anti competitive
agreements that have the object or effect of preventing, restricting or distorting competition;
secondly, abusive behaviour by a monopolistic or dominant firm with significant market
power that could be harmful to consumer welfare; and thirdly mergers that would reduce
rivalry between firm in the market, again with detrimental consequences for consumer
welfare.6 The extended feature of the system of competition law is the establishment of a
‘competition advocacy’ role for competition authorities to create public awareness on the
benefits of competition and the role of competition law.
The present book aims to provide a holistic picture of the evolution and developments of
competition law and examines anti-competitive agreements, abuse of dominance,
acquisitions, and mergers to have a successful competition regime in India.

5
Pradeep S Mehta and Manish Agarwal, ‘Time for a Functional Competition Policy and Law in India:
Mainstreaming competition principles into policy and legal framework is pro-development,’ CUTS
International 2006, available at: http://www.cuts-international.org/pdf/compol.pdf (last visited on
05.02.2018).
6
Richard Whish, ‘Control of Cartels and other Anti-Competitive Agreements.’ In Vinod Dhall (ed.),
‘Competition Law Today,’ 39 (Oxford University Press, New Delhi, 2007).

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