COMPETITION LAW

IMPORTANCE AND SIGNIFICANCE OF COMPETITION LAW:

• Competition law is set of legal rules, which are aimed at protecting the competitive
process with the ultimate goal of maximizing consumer welfare.
• Competition law exists to ensure that businesses operate in open and competitive
markets - the law aims to promote healthy competition and fair-trading.
• The core objective of competition law is to prohibit firms for engaging in conduct
which will distort the competitive process and harm competition by, for example,
preventing firms from indulging in anti-competitive agreements, preventing firms with
a powerful position on a market from abusing their market power, or dominant
position, and preventing firms from lessening competition by merging with their
competitors.
• Competition law exists to safeguard the free market system or to checkmate its
breakdown
• Objectives of Competition Law –
➢ To prevent practices which have an adverse effect on the competition, i.e.
other businesses/ companies losing profit and potentially going out of business
because they are not operating on an open playing field;
➢ To promote and sustain competition in markets. Without fair competition,
society would not get the best products and prices;
➢ To protect the interests of consumers. Consumers should pay a fair price for
the right product.

FUNCTIONS OR CONTRIBUTIONS OF COMPETITION LAW TO THE

ECONOMY:
• Competition policy encompasses more fundamental aspects of economic policy,
aiming at the promotion of market principles throughout the entire economy.
• It includes regulatory reform policy which eases market entry barriers and guarantees
equal business opportunities to market participants; injecting market principles into
the process of privatization of state-run enterprises; playing the role of competition
advocate in order to ensure sectorial policies follow market principles; and developing
 a culture of competition by instilling a competition mindset into the players in the
market.
• Competition law is necessary as it encourages enterprise and efficiency, creates a
wider choice for consumers and helps reduce prices and improve quality.
• Competition in the market economy acts as an incentive for companies to excel,
thereby fostering innovation, diversity of supply and attractive prices for consumers
and businesses alike - Competition thus stimulates growth and generates
substantial benefits for the community.
• Competitive markets are central to investment, efficiency, innovation, and growth; and
there is a need to regulate the competitive markets to ensure that competition is not
restricted or undermined in ways that are detrimental to the economy and society.

HISTORY AND EVOLUTION OF COMPETITION LAW:

• Competition Law has grown enormously since the 1990s – the growth has been
tremendous in terms of geographical regions that have adopted competition law as
well as in the increasing range of economic activities that are subject to competition
law.
• There has been increasing reliance on competition law and policy to address market
failures and distortions.
• The original concept of competition merely meant the absence of legal restraint on
trade.
• The modern economic theory, which stems in the late 19th century led to the first anti-
trust legislation, the Sherman Act in the USA in 1890.

ANTI-TRUST LEGISLATION IN USA:

• The US could be termed as a cradle for Antitrust Law as it was the first country to
introduce a coherent competition system.
• The Antitrust Laws comprise a “Charter of Freedom”, designed to protect the core
republican values regarding free enterprise in US.
• The legislative framework in US is made in three statutes –
i. The Sherman Act, 1890
ii. The Clayton Act, 1914
 iii. The Federal Trade Commission Act, 1914

• The Sherman Act of 1890 –

➢ Sherman Act, 1890 originated out of popular concern for the US economy
during a period when small number of corporations has accumulated a huge
amount of wealth – they grew as dangerous business establishments known as
“Trusts” – growing and suppressing competition.
➢ In order to curb the business excess and abuse while preserving the
competitive nature of the US economy, the Sherman Act 1890 was introduced.
➢ This Act attempts to sustain the competitive process.
➢ The Act makes it illegal to try to restrain trade, or to form a monopoly.
➢ It gives DOJ the mandate to go to Federal Court for orders to stop illegal
behavior or to impose remedies.
➢ The Sherman Act even had jurisdiction outside the American Shores – In the
case of Hartford Fire Insurance Co. v. California (1993), the court
explicitly recognized the extra territorial effect of the Sherman Act.
➢ However, inspite of the Sherman Act, monopolies and trusts continued to exist
well into the 1900s – illegal financial dealings of many conglomerates such as
Standard Oil, American Tobacco, etc., were busted and put the Sherman Act
under rigorous test.
➢ Loopholes in the Sherman Act –

✓ Many people claimed the Act to be ineffective, as it did not deal with
anti-competitive mergers or corporate amalgamations – it only forbid
collusion and monopolization.
✓ In passing of the Act, the Congress did not elaborate on the meaning of
“restraint of trade” and “attempt to gain monopoly”.
✓ Uncertainty prevailed about what is legal.

Standard Oil Co. v. United States (1911)

The Government alleged that Standard Oil did not solely benefit from the development of the
new trust formation and superior business practice but from “immoral acts – rebate taking,
local price-cutting, predatory pricing, conspiracy etc.” 

Held –
The Court held that Standard Oil was participating in “restrain of trade and commerce” in
petroleum and it stated that the term “restraint of trade” includes the formation of monopolies.

• The Clayton Act of 1914 –

➢ Stopping monopolies before they could ne conceived was the main agenda –
Clayton Act enacted in 1914
➢ This legislation aimed to prevent monopolies in US.
➢ With the Clayton Act, Congress increased the power of the Attorney General
and restricted the powers of the Courts in deciding a case on the basis of
whether restraints or actions were “reasonable”.
➢ The Act substantially addressed issues of price discrimination, tying and
exclusive dealing, mergers and acquisitions that were earlier not answered in
the Sherman Act.
➢ It also provided exemption to labor unions and agricultural organizations and
also provided for private enforcement.

Sherman Act, 1890 Clayton Act, 1914

Federal Law – General in nature An amendment to the Sherman Act –

Specific in nature

Prohibits contracts, trusts or conspiracy Prohibited specific actions that can be

in restrain of trade of interstate or foreign anti-competitive such as exclusive
states dealing, tie-in, and price discrimination.

It was meant to limit the power of cartels Provides for detailed mechanisms and
and monopolies exemptions

Did not expressly deal with mergers and Specifically dealt with mergers and
acquisitions acquisitions

Provides for both civil and criminal Provides for only civil remedies
remedies

DOJ is authorized Both DOJ and FTC are authorized

 • Federal Trade Commission Act, 1914 –
➢ This Act was passed to impose a general ban on "unfair' acts, practices and
methods of Competition - Declares unlawful, unfair methods of competition,
and deceptive acts or practices, in or affecting commerce.
➢ It establishes a commission, known as FTC, which is empowered to take
action against persons, partnerships, or corporations from using those unfair
methods or acts or practices.
➢ It is also empowered to take action against conduct that violates the Sherman
and the Clayton Act as well as anticompetitive practices that do not fall within
the scope of these Acts.

• The Robinson – Patman Act of 1936 –

➢ Amendment to the Clayton Act.
➢ This act was also called the Anti-Price Discrimination Act - made it illegal for
companies to engage in price discrimination - price discrimination is a practice
where a company will charge two different customers different prices for the
same good.

• Celler – Kefauver Act, 1950 –

➢ Also an amendment to the Clayton Act of 1914 - It reformed and strengthened
the Clayton Antitrust Act by prohibiting buying up a competitor’s assets if the
result of that activity reduced competition. 

➢ The object of the Act is to restrict anticompetitive mergers resulting in
acquisition of assets. 

➢ The Act empowers the government to prevent vertical mergers and
conglomerate mergers, which could limit competition.

• Hart – Scott – Rodino Antitrust Improvements Act of 1976 –

➢ Required that companies planning large mergers or acquisitions to notify the
government of their plans in advance 

➢ Established the Premerger Notification Program- with FTC & DOJ. 


HISTORY OF EUROPEAN UNION’S COMPETITION LAW:

• The idea of using law to protect the competitive process emerged in Europe in 1890s –
encourage economic growth and competitiveness.
• After the end of the Second World War, many European governments turned to
Competition Law as means of encouraging economic revival. 


• Initial Phase -
➢ The initial phase, which occurred in the late 1950s and early 1960s, is marked
by the agreement of the six member state governments to delegate powers in
the competition arena to the supranational level. 

➢ The European Economic Community (EEC) was established –
✓ To create an European common market
✓ To promote throughout the Community a harmonious development of
economic activities, an increased stability, rising of the standard of
living and closer relations between member states.
✓ To prevent a re-occurrence of a war in Europe, in order to unite the
people, at least economically.
➢ The Common Market was intended to create interdependence between the
States of Europe – hence, more competitive opportunities had to be created
throughout this 'integrated market'.
➢ Competition rules were included to assist in the creation of a unified
competitive environment and in an attempt to prevent companies from re-
erecting trade barriers.

• Second Phase –
➢ Establishment of DG COMP in mid 1980s.
➢ The supranational competition order suffered from various problems such as
long time taken to settle cases, lack of transparency, weak analyses of the facts,
and too much room for politicization. 

➢ The Modern Regulation of 2004 - more powers to the investigators and the
courts – resulted in decentralizing competition policies in EU.
➢ European Competition Network was set up – to coordinate national and EU
competition policies.
 • Four Pillars of EU Competition Law –
i. Antitrust – Control of collusion and other anticompetitive practices, which has
an effect on the EU.
ii. Mergers Control – Control of proposed mergers, acquisitions and joint
ventures involving companies, which have a certain, defined amount of
turnover in the EU.
iii. State Aid Control - Pertains to control of direct and indirect aid 
given by EU
Member States to companies - illegal
iv. Enforcement and Market Liberalization - Primary competence for applying
EU Competition Law is with European Commission and its DG for
Competition; introducing fresh competition in previously monopolistic sectors.

HISTORY OF COMPETITION LAW IN UK:

• During the 1980s, there was growing pressure to strengthen UK competition
legislation and make it consistent with EU law.
• Competition law in UK remained unchanged until the arrival of Labor Government in
1997.
• New Competition Act received royal assent in 1998.
• Competition Commission established in 1999.
• A new prohibition based policy aimed to outlaw anti-competitive behavior and that
took effect from 2000.

• Restraint of Trade –
➢ Restraint of trade is a common law doctrine relating to the enforceability of
contractual restrictions on freedom to conduct business.
➢ Restraint of trade is a legal contract between a buyer and a seller of a business,
or between an employer and employee, that prevents the seller or employee
from engaging in a similar business within a specified geographical area and
within a specified period.
➢ It intends to protect trade secrets or proprietary information but is enforceable
only if it is reasonable with reference to the party against whom it is made and
if it is not contrary to public policy.
 • Doctrine of Restraint of Trade (Early Common Law Doctrine) –
➢ Under the early common law of England all contracts whereby a person bound
himself to abstain from the exercise of a particular trade, business or vocation,
were void, regardless of whether the restraint was general or special, as being
against public policy. 

➢ John Stuart Mill believed that the Restraint of Trade Doctrine was justified to
preserve liberty and competition.
➢ Contracts of restraint of trade were considered void as they were designed to
destroy or stifle competition, affect a monopoly and artificially maintain prices
– to enforce such a contract meant denying the tradesman the right to earn his
living.

Dyer’s Case (1414)

Dyer had entered into a bond not to do trade of dyer in a certain town for 2 months.
It was held that such an obligation was illegal and void as the common law at the time
prohibited all contracts in restraint of trade.
The court also held that any contract, which tended to strengthen natural monopoly, was void.

• Modern Doctrine of Restraint of Trade –

➢ Under the more recent rule, contracts in partial restraint of trade are generally
upheld as valid when they are reasonable.
➢ This type of clause in contracts is necessary in order to protect confidential
information, trade secrets and know-how.
➢ On the ground of strong commercial demand for valid clauses, the doctrine can
be reviewed to make modern commercial and economic sense.

Nordenfelt v Maxim Nordenfelt Guns and Ammunition Company (1894)

Facts –
The Appellant, Thorsten Nordenfelt, was a Swedish gun manufacturer with a valuable,
worldwide business. He sold the business to a company, the Respondents, and agreed to enter
into a restrictive covenant not to work for any rival business for a 25-year period in an
unlimited geographical area.
Later, he worked for a rival business.
The Respondents brought an action to enforce the restraint of trade clause.
Issue –
The Appellant argued that clause was a restraint of trade clause and had to be reasonable to be
upheld - He argued that a worldwide geographical limitation was unreasonable.
The Respondents argued that the restraint was only such as was necessary to protect
themselves.
Held –
Lord McNaughton said a clause by which someone restrains himself or herself from the
exercise of his trade was prima facie unlawful.
It was a principal of English law all trade should be free.
However, it would discourage trade if someone who has built up a valuable business could
not dispose of it to his best advantage.
Therefore, restraint of trade clauses would be upheld if they were reasonable.
Analysis –
This case represents a modern articulation of the doctrine of restraint of trade rather than
prohibiting the clauses outright - An attempt to balance freedom of contract and the freedom
of trade – Reasonableness began to find favor.

• The Franchise Model –

➢ Franchising is an agreement wherein one undertaking (the franchisor) grants to
the other (the franchisee), in exchange for direct or indirect financial
consideration, the right to exploit a package of industrial or intellectual
property rights (franchise) for the purposes of producing and/or marketing
specified types of goods and/or services.
➢ A special type of vertical relationship between two firms usually referred to as
the "franchisor" and "franchisee".
➢ Franchise agreements generally fall under the purview of competition laws,
particularly those provisions dealing with vertical restraints.
➢ Franchise agreements may facilitate entry of new firms and/or products and
have efficiency enhancing benefits.
➢ However, franchising agreements in certain situations can restrict competition
as well.

Protaprint PLC v. Landon Litho Ltd. (1987)

The relationship of franchisor and franchisee was described as being closer to that of vendor
and purchaser of a business rather than of employee and employer.
The franchisor has every right to protect their business interests by way of a reasonable
restraint of trade clause.

HISTORY OF INDIAN COMPETITION LAW:

• India has had a history of competitive markets.
• Articles 38 and 39 of the Constitution of India mandate that the government shall
secure and protect the society where people will get social, economic and political
justice and the State shall direct its policy as –
➢ The ownership and control of material resources are so distributed as best to
assist the common good. 

➢ The economic system does not operate as it creates a concentration of wealth
and means of common detriment. 

• India chose a centrally planned economic structure also referred to as the Nehruvian
socialism model - The Nehruvian model was a mixed economy model 


• Industrial (Department and Regulation) Act, 1951 [IRDA] –

➢ It empowered the government to regulate almost every aspect of the
functioning of the private sector – the private sector was allowed with limited
licensed capacity.
➢ Public sector were patronized to achieve growth and development of core
industries like coal, oil & natural gas, iron & steel, power & energy etc. – No
competitors in the market.
➢ Free competition in the market suffered a lot mainly because 
of Govt.
policies - High tariff & no proper license regime – Resulted in monopolies and
License Raj.

• Monopolistic and Restrictive Trade Practices (MRTP) Act, 1969 –

➢ MRTP commission was established – it was charged with investigating the
conduct of entities suspected of engaging in monopolistic, restrictive or unfair
trade practices.
➢ Three types of prohibited trade practices under this Act –
 i. Restrictive Trade Practices (RTP)
ii. Unfair Trade Practices (UTP)
iii. Monopolistic Trade Practices (MTP)
➢ All large companies or “dominant” companies were required to obtain licenses
or permit before engaging in mergers or takeovers, establishing new ventures
or substantially expanding old ones.
➢ Firms with assets more than INR 100 Crores were prohibited from expanding
into sectors not selected by Government.
➢ High Powered Expert (Sachar) Committee 1977 was established.
➢ Unfair trade practices such as false or misleading advertising etc. were
included in the list of prohibited activities.
➢ MRTP Act was amended in 1984 to prohibit monopolistic trade practices.
➢ 1991 Amendment of MRTP Act – removal of licensing requirement.
➢ Reasons for failure of MRTP Act –
✓ MRTP Act’s licensing requirement and strict regulation of growth
punished efficiency.
✓ MRTP Commission lacked the power to impose substantial penalties
for violations - Its primary tools were cease and desist orders, which
were often ignored.
✓ The Act was also excessively vague – failed to define many anti-
competitive acts such as unfair trade practices.
✓ MRTP Commission did not deal in pursuing cartels.

Brahm Dutt v. Union of India (2003)

The Competition (Amendment) Bill 2007 has been passed by the Parliament.
It is worth recalling how the Act was stuck up in litigation before it took off in the Supreme
Court.
The court decided on the writ petition in this case.
Essentially, the petition was for striking down Rule 3 of the Competition Commission of
India concerning selection of chairperson and other members of the commission. The
Competition Act as more of a judicial body having adjudicatory powers envisaged the
commission.
The thrust was on the basis of the well-established doctrine of separation of powers
recognized by the Constitution that CCI chairperson had to be a person connected with the
judiciary and he should not be a bureaucrat or appointed by the executive without reference to
the head of the judiciary.
The MRTP Act was repealed, the MRTP commission was dissolved and the Competition Act,
2002 came into force on 13th January 2003.

• Raghavan Committee –
➢ A high level committee on Competition Policy and Law, known as the
Raghavan Committee was established to evaluate the MRTP Act as the MRTP
Act bas become obsolete in certain areas in light of international economic
developments relating to competition laws.
➢ The Committee found that the MRTP Act was inadequate for fostering
competition in the market and reducing anti-competitive practices.
➢ Major Recommendations –
✓ To repeal the MRTP Act and to enact a new Competition Act for the
regulation of anti-competitive agreements and to prevent the abuse of
dominance and combinations including mergers.
✓ To eliminate reservation of products in a phased manner for the Small
Scale Industries and the Handloom Sector.
✓ To divest the shares and assets of the government in state monopolies
and privatize them.
✓ To bring all industries, the private as well public sector within the
proposed legislation

• Competition Act, 2002 –

➢ This Act was enacted as a tool to implement and enforce competition policy
and to prevent and punish anti-competitive business practices by firms and
unnecessary Government interference in the market.
➢ The Competition Act, 2002 was amended by the Competition (Amendment)
Act, 2007 and again by the Competition (Amendment) Act, 2009.
➢ The Act established the Competition Commission of India (CCI), which was
duty, bound to protect the interests of free and fair competition and as a
consequence, protect the interests of consumers.
➢ Duty of the CCI –
 ✓ To prohibit the agreements or practices that have or are likely to have
an appreciable adverse effect on competition in a market in India,
(horizontal and vertical agreements / conduct);
✓ To prohibit the abuse of dominance in a market;
✓ To prohibit acquisitions, mergers, amalgamations etc. between
enterprises which have or are likely to have an appreciable adverse
effect on competition in market(s) in India.
➢ Basic Definitions under the Act –
✓ Market – it is the sum total of all the buyers and sellers in the area or
region under consideration. The value, cost and price of items traded
are as per forces of supply and demand in a market. The market may be
a physical entity, or may be virtual. It may be local or global, perfect
and imperfect.
✓ Open Market – it is an economic system with no barriers to free market

activity. An open market is characterized by the absence of tariffs,
taxes, licensing requirements, subsidies, unionization and any other
regulations or practices that interfere with a naturally functioning free
market. 

✓ Regulated Market – it is a market over which government bodies exert
a level of oversight and control. The main objective with which the
regulated markets are formed is to eliminate illegal and unhealthy
marketing practices, to lessen marketing charges and to ensure fair
prices both to producers and consumers.
SCHOOLS OF THOUGHT [BATTLE FOR THE SOUL OF ANTITRUST]:
• Two opposing economic theories battled dominance during the modern antitrust era
namely –
i. Harvard School
ii. Chicago School
• The Harvard School dominated antitrust analysis during the activist era of antitrust
enforcement that extended from the middle of the twentieth century to the 1970s.
• However, by the late 1980s, the Chicago School revolutionized the approach to
antitrust in the federal courts and enforcement agencies.
• The Harvard School prohibited innovative forms of competition that could have
enhanced economic efficiency, while the Chicago School allowed competitors to
engage in certain conduct that harmed consumers in many domestic markets.

HARVARD SCHOOL (RULE PER SE):

• Edward Chamberlain, Edward Mason and Joe Bain.
• Harvard scholars applied the structural approach of the Harvard economists to
antitrust and argued that, when markets are concentrated firms are more likely to
engage in anticompetitive conduct - Harvard scholars opposed market concentration,
even when it might lower costs and prices, thereby benefiting consumers.
• Under the Harvard School approach, the courts and agencies presumed the illegality of
any mergers, joint ventures, or agreements that allowed firms to obtain, enhance, or
exercise market power, regardless of whether the conduct had the potential to benefit
consumers by lowering prices or increasing output.
• In United States v. Aluminum Co. of America, Learned judge found ALCOA liable
for monopolizing the aluminum manufacturing market – ALCOA was penalized
simply for engaging in aggressive competition that benefitted consumers.
• The Harvard School approach had a similar effect in deterring consumer – friendly
mergers like in the case of United States v. Philadelphia National Bank (1963).
• Advantages of Harvard School Approach –
➢ The courts were able to indulge in a presumption of illegality for many types of
conduct without engaging in a complicated analysis of the economic
circumstances in the relevant market.
 ➢ Since outcomes of trials were so predictable, business executives understood
the type of conduct they should avoid.
➢ Firms in concentrated industries were effectively deterred from transactions
that increased concentration levels in the relevant market.
• Disadvantages of Harvard School Approach –
➢ Harvard School jurists were too quick to find fault with aggressive
competition.
➢ The courts and agencies prevented large firms from engaging in competitive
conduct that could have benefited consumers and would have been perfectly
permissible for firms with lower market shares.
➢ The Harvard School prohibited innovative forms of competition that could
have enhanced economic efficiency.
• Harvard School found a per se approach attractive because it greatly enhanced the
effectiveness of antitrust enforcement – per se standards reduced the time and expense
of antitrust cases, provided clear guidance to businesses, and effectively deterred
anticompetitive conduct. 


THE CHICAGO SCHOOL (RULE OF REASON):

• By the late 1960s, a group of scholars at the University of Chicago had set forth an
opposing theory of antitrust analysis in a series of articles and treatises - Robert Bork,
Frank Easterbrook and Richard Posner.
• These scholars found no evidence that Congress's intent under the antitrust laws was
to protect individual competitors against large firms' exercise of market power - They
argued that antitrust laws were designed simply to increase the efficiency of the
American economy.
• Chicago School academics argued that the Harvard School misjudged the ways in
which firms continue to compete, even when they have relatively few rivals - They
believed that markets were likely to correct against any competitive imbalances on
their own, without intervention by antitrust regulators.
• Since markets are self-correcting in any event, the courts and enforcement agencies
should only intervene in the competitive process when it was clear, after thorough
study, that anticompetitive conduct was threatening consumer welfare.
• This approach led the courts and agencies to become more lenient in allowing firms to
acquire and exercise market power.
• In the case of Broad Music Inc. v. CBS (1979), the Court refused to presume
illegality of a price-fixing agreement among a group of musical composers (refusing
to apply the per se rule to agreement by musical composers to license their
copyrighted compositions at identical prices) and in the case of In re Boeing Co.
(1997-2001), the Federal Trade Commission (FTC) permitted the Boeing Company to
acquire the McDonnell Douglas Corporation in a transaction that gave Boeing and
Airbus a duopoly in the worldwide market for the manufacture of commercial
airliners.
• Advantages of Chicago School Approach –
➢ The Chicago School allowed competitors to engage in certain conduct that
benefited consumers in many domestic markets.
➢ The requirement of empirical analysis of actual competitive effects encouraged
innovative competition in the market.
• Disadvantages of Chicago School Approach –
➢ Chicago School economists believed that the courts and agencies were
ineffective in regulating competitive conduct - Yet in denying the
presumptions of illegality used by the Harvard School, the Chicago School left
judges, juries, and administrative agencies with even more responsibility in
antitrust cases.
➢ Fact finders found it impossible to make empirical economic decisions
required by the Chicago School and therefore rendered a series of conflicting
decisions in antitrust cases – these decisions confused antitrust practitioners
and business executives as to the applicable standards of conduct under the
antitrust laws. 

➢ Firms miscalculated by engaging in harmful conduct whose illegality would
have been clear under the Harvard School approach. 

➢ As a result, the antitrust laws lost their deterrent effect.

• Journey from Per Se Rule to Rule of Reason –

 ➢ In the case of US v. Arnold Schwinn (1967), non-price vertical restrictions
were per se illegal so long as the transaction in question involved the passage
of title 

➢ However the Supreme Court reversed the Schwinn judgment in the case of
Continental T.V. Inc. v. GTE Sylvania Inc. (1977) wherein the court
decided that non-price vertical restrictions should be judged by the rule of
reason - Courts will review the purpose of the restriction, the effect of the
restriction in limiting competition in the relevant market, the market share. 

➢ A steady erosion of the per se approach and an expanded use of the rule of
reason. 


• Merger and Joint Venture Cases –

➢ Harvard School Approach – Mergers and joint ventures are evaluated under
Section 7 of the Clayton Act, which prohibits any such transactions that may
"substantially lessen competition or tend to create a monopoly.“ – In Brown
Shoe Co. v. United States (1956), Brown Shoe Company wanted to merge
with another company which sold the same products and the objective behind
this agreement was to increase the efficiency of the products and sell at
cheaper prices in comparison to their individual prices - The courts invalidated
the merger, pointing out that it was more important to promote Congress's
objective of protecting small business against potential abuses of power by
larger firms:
➢ Chicago School Approach – Chicago School scholars began to criticize the
federal courts' market share presumption of illegality for mergers and joint
ventures. The presumption, these scholars asserted, precluded many efficiency-
enhancing transactions - In United States v. General Dynamic Corp., the
court held that a merger cannot be deemed illegal simply because the
defendants held high market shares. The Court expressed a willingness to
consider conditions that might affect the future market shares of the merging
parties.

California Dental Assn. v. FTC (1999)

Facts –
This case involved advertising restrictions imposed by the California Dental Association.
The restrictions precluded dentists from advertising their prices as "low" or of similar effect.
Held –
The Supreme Court concluded that a quick look analysis was not appropriate, because it was
not intuitively obvious that the advertising restrictions were likely to have anticompetitive
effects.
Instead of being divided into discrete categories, courts can engage in a variety of inquiries -
the quality of proof required should vary with the circumstances.
The Court recognized that the alternative to the quick look analysis need not necessarily be a
full rule of reason but can also be market power analysis. 


FOUR PILLARS OF COMPETITION LAW:

i. Prohibition of Anti-Competitive Agreements –

✓ The agreements that cause or are likely to cause appreciable adverse effect
on competition ("AAEC") are anti-competitive agreements.
✓ While doing business in India, parties are prohibited from executing anti-
competitive agreements.

ii. Prohibition of Abuse of Dominant Position –

✓ A company is considered to have a dominant position if it holds such market
power that it can act without giving any, or giving only limited, consideration
to its competitors, customers and suppliers.
✓ Such practices may harm consumers directly or indirectly, as conditions for
effective competition deteriorate.
✓ It is prohibited to abuse a dominant position, thus harming competition and
consumers.

iii. Regulation of Combinations (Merger control systems) –

✓ The worldwide term used for this concept is merger review/merger control,
which is done by competition regulators to prevent mergers and acquisitions
that are likely to reduce competition in the market and lead to higher prices,
lower quality goods or services, or less innovation.
 ✓ A merger may be restricted or prevented if it impedes competition significantly
and therefore adversely affects consumers.
✓ Entering into a combination, which causes or is likely to cause an appreciable
adverse effect on competition within the relevant market in India is prohibited
and such combination would be void.

iv. State Aid Control System –

✓ Competition policy analyses state aid measures such as airline subsidies to
ensure that such measures do not distort the level of competition in the market.
✓ Generally, national Governments do not provide for unfair assistance to
industries such as subsidies.
✓ However, there are some exceptions, including development aid for especially
poor regions, or where the social benefits of aid will not distort the operation
of the single market – for example, areas with very high unemployment.
SECTION 2 – DEFINITIONS:

• Relevant Market [Section 2(r)] –

➢ Section 2(r) states that relevant market means the market that may be
determined by the Commission with reference to the relevant product market
or the relevant geographic market or with reference to both markets.
➢ The notion of relevant market is used in order to identify the products and
undertakings that are directly competing in a business.
➢ Therefore, the relevant market is the market where the competition takes place.
➢ Relevant market is hence the intersection of relevant product market and
relevant geographic market.

• Relevant Product Market [Section 2(t)] –

➢ Relevant Product Market (RPM) is defined as a market comprising all those
products or services, which the consumer, by reason of characteristics of the
products or services, their prices and intended use, regards as interchangeable
or substitutable.
➢ RPM identifies a product such that firms producing those products can defeat
each other’ attempts to raise the price above the competitive level.
➢ The RPM is determined according to the following criterion –
i. Reasonable Interchangeability of Use or Demand Substitute – Demand-
side substitution takes place when consumers switch from one product
to another in response to a change in the relative prices of the products.
ii. Cross Elasticity of Demand (SSNIP) – Small but Significant Non-
Transitory Increase in Price – whether a small but non-transitory
increase in price of Product A will cause buyers to buy sufficient of
Product B instead.

• SSNIP Test –
➢ This Small but Significant Non- Transitory Increase in Price can be taken as

5% or 
10%. Hence this test may also be known as the 5-10 percent test.
➢ The price of alternative products should remain the same.
➢ SSNIP test seeks to identify smallest market within which a hypothetical
 monopolist could profitably impose a Small but Significant Non-transitory
Increase in Price. 

➢ Steps for application of SSNIP Test –
i. Start with smallest possible market and ask if 5% price increase in
price is profitable.
ii. If not, then firm does not have sufficient market power to raise price.
iii. Next closest substitute is added to the relevant market and test is
repeated.
iv. Process continues until the point is reached where a hypothetical
monopolist could profitably impose a 5% price increase.
v. Relevant Market is then defined.

Hoffmann La Rocha v. Commission (1979)

Facts –
Hoffmann manufactures different types of vitamins –
Vitamin C – skin growth and development of body tissues
Vitamin E – immunity, anti – aging
Issue –
Whether both these vitamins fall under the same RPM?
Analysis –
From technical use point of view, the functions of both the vitamins were interchangeable as
these vitamins were used only as anti-oxidant and fermentation agent in food additives.
From a bio-nutritive use point of view, each vitamin constitutes a separate market as they
performed different function.
Held –
The court held that there was no sufficient degree of interchangeability and therefore ruled
that both constitute separate markets.

Hoffmann La Roche and Novartis v. AMOI (2018)

Facts –
Hoffmann La Roche granted a license to Novartis to market the medicinal (ophthalmological)
product Lucentis, which shared its clinical development with the medicinal (oncological)
product Avastin.
Hoffmann La Roche Avastin – market authorization for the treatment of tumorous disease.
Novartis Lucentis – market authorization for treatment of eye ailments.
However since 2005, doctors were prescribing Avastin for eye ailment (Off-label practice).
Held –
Based on the price and end use, the Court held that since both are prescribed and used to treat
the same ailments, they form part of the same relevant product market as being substitutes of
each other.

United States v. E.I. Du Pont De Nemours & Co. (1957)

Facts –
Plaintiff federal government brought suit against defendant for monopolizing, attempting to
monopolize, and conspiracy to monopolize interstate commerce in violation of Section 2 of
the Sherman Act.
Defendant produced 75 percent of the cellophane sold in the United States, which constituted
less than 20 percent of all flexible packaging material sales.
The district court held in defendant's favor.
The United States sought review.
Issue –
Whether automobile finished and fabrics constitute a different product market from that of the
market for general finished and fabrics?
Held –
The Court held that because the facts established that cellophane was functionally
interchangeable with other flexible packaging materials, there was no cellophane market
separate and distinct from other flexible packaging materials.

Nestle – Perrier Case (1993)

Facts –
On February 25, 1992, the Swiss company Nestlé (active in many sectors of nutrition)
notified to EEC Commission a public bid for 100% shares of Perrier, which is mainly active
in the manufacture and distribution of bottled waters.
Article 2 (3) of the Merger Regulation – A concentration that creates or strengthens a
dominant position as a result of which effective competition would be significantly impeded
in the common market or in a substantial part of it shall be declared incompatible with the
common market.
Nestlé submitted in its notification that there is no separate market for bottled source water,
and that the relevant market to assess the proposed concentration should be that of non-
alcoholic refreshment beverages, including both bottled source water and soft drinks.
Held –
Functional interchangeability or similarity in characteristics may not provide in themselves
sufficient criteria because the responsiveness of customers to relative price changes may be
determined by other considerations.

• Relevant Geographic Market [Section 2(s)] –

➢ Relevant Geographic Market (RGM) is the market comprising the area in
which the conditions of competition for supply of goods and services and
demand for goods and services are distinctly homogenous and can be
distinguished from the conditions prevailing in the neighboring areas.
➢ Identifying effective alternative sources for supply for customer needs.
➢ Interchangeability with the same product from elsewhere defines RGM.
➢ Determining Factors –
✓ Nature of alternative
✓ Price disadvantages arising from transport costs, tariffs, degree of
inconvenience in obtaining the goods
✓ Presence and absence of barriers to entry
✓ RGM could be local, national and international, depending upon the
product in question
➢ Thus, RGM is the area in which the reasonable consumer or buyer usually
covers his demands.

• After Sales Market (New Dimensions of Market) –

➢ The automotive aftermarket is the secondary market of the automotive
industry, concerned with the manufacturing, remanufacturing, distribution,
retailing and installation of all vehicle parts, chemicals, equipment and
accessories, after the sale of the automobile by the Original Equipment
Manufacturer (OEM) to the consumer.
➢ Aftermarket parts are divided into 2 categories –
 i. Replacement Parts – The replacement parts are automotive parts built
or remanufactured to replace the original equipment as they become
worn and damaged.
ii. Accessories – Accessories are parts made for comfort, convenience,
performance, safety or customization, and are designed for add-on after
the original sale of the automobile.

Shamsher Kataria v. Honda Siela and Ors. (2014)

Facts –
Shamsher Kataria (Informant) filed the information against Honda Siela Cars India Ltd.,
Volkswagen India Pvt. Ltd. And Fiat India Automobiles Pvt. Ltd., alleging anti-competitive
practices in respect of sale of spare parts of these companies.
There was complete restriction on availability of technological information, diagnostic tools
and software programs required for servicing and repairing the automobiles to independent
repair shops.
Further, informant contended that car manufacturers in India were charging higher prices for
spare parts and maintenance services than their counterparts abroad.
The opposite party contended that they were in no dominant position in the unified systems
market as the market was robust with several competitors – refuted the finding that consumers
were “locked-in” and that consumers exclusively purchased only from authorized dealers.
Held –
In this case the CCI defined the relevant markets as a market consisting of unique
replacement parts, post warranty service taking into account the possibility of customers’
whole life costing – each OEM is a 100% dominant entity in the aftermarket for its genuine
spare parts and repair services.
The Commission held that each OEM entered into a network of contracts, pursuant to which
they had become the sole supplied of their own brand of spare parts in the aftermarket.
CCI therefore, imposed a fine on the car manufacturers (OEMs) for restricting the sale and
supply of genuine spare parts in the open market.

• Enterprise [Section 2(h)] –

➢ Enterprise means a person or a department of the Government who or which is
engaged in any activity relating to production, storage, supply, distribution,
acquisition or control or articles or goods or services of any kind or investment
 or in the business or acquiring, holding, underwriting or dealing with shares,
debentures or other securities of any other body corporate, either directly or
through one or more of its units or divisions or subsidiaries, whether such unit
or division or subsidiary is located in the same place where the enterprise is
located or at a different place.
➢ A trade union, an association of employees etc., is regarded as an undertaking
or enterprise.

• Agreement [Section 2(b)] –

➢ An agreement includes any arrangement or understanding or action in concert,
whether or not such arrangement, understanding or action is formal or in
writing or whether or not such arrangement, understanding or action is
intended to be enforceable by legal proceedings
➢ Agreement refers to an explicit or implicit arrangement between firms
normally in competition with each other to their mutual benefit.
➢ Agreements to restrict competition may cover such matters as prices,
production, markets and customers.
SECTION 3 – ANTI COMPETITIVE AGREEMENTS:
• Agreements which may have the potential of restricting, distorting, suppressing,
reducing or lessening competition are known as Anti – Competitive Agreements. Such
agreements are void.
• Section 3 deals with economic regulation of the market power.
• Visible effect of the agreement is to be seen to determine whether an agreement has
AAE in India – it is irrespective of where the agreement or the understanding has been
arrived at, then the competition in India is affected – This is known is “Effects
Doctrine”.
• Effects Doctrine –
➢ Means domestic competition laws are applicable to foreign firms - but also to
domestic firms located outside the state’s territory, when their behavior or
transactions regarding supply of goods and provisions of services, produce an
"effect" within the domestic territory.
➢ Under Section 32 of the Act, CCI is empowered to take cognizance of an act
taking place outside India but having an adverse effect on competition within
India.
➢ Tests for application of Effects Doctrine – Timberlane Lumber Co. v. Bank
of America National Trust laid down a 3 part test for application of the
effects doctrine –
i. There must be some effect – actual or intended (direct or substantial)
on commerce – immediate, reasonably foreseeable and substantial;
ii. The effect must be sufficiently large to present cognizable injury; and
iii. Whether interests of all nations justify an assertion of extraterritorial
authority (Principle of Comity)

Harisdas Exports v. All India Float Glass Manufacturers Association and Ors. (2002)
Facts –
Alkali Manufacturers Association of India filed a complaint against American Natural Soda
Ash Corporation (ANSAC), consisting of six producer of natural soda ash. 

Issues –
- Can the MRTP commission pass orders against the parties who are not in India and who do
not carry on business here and where agreements are entered into outside India with no Indian
being a party to it? 

- Whether the principle of “effects doctrine” has any application in India? 

Held –
The MRTP Commission held that the foreign firms were indulged in predatory pricing, thus
resulting in competition in India.
The Supreme Court with regard to the first issue said that the MRTP Act has no
extraterritorial operation.
With regard to the second issue, the Supreme Court held that if any restrictive trade practice
as a consequence of outside agreement is carried out in India then the MRTP Commission
shall have jurisdiction under section 37(1) of the Act if it comes to the conclusion that the
same is prejudicial to public interest - this “effects doctrine” will clothe the MRTP
commission with jurisdiction to pass an appropriate order even though a transaction has been
carried outside the territory of India if the effect of that has resulted in restrictive trade in
India.

• Appreciable Adverse Effect on Competition (AAEC) –

➢ Adverse effects on competition refers to various economic factors, some of
which have been laid out under Section 19 of the Act such as “creation of
barriers of new entrants in the market, driving existing competitors out, accrual
of consumer benefits, etc.”
➢ While determining whether an agreement has an AAE on competition, CCI has
to look into the following factors under Section 19(3) –
✓ 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.
➢ Insignificant Market Share to test AAEC – it was suggested that for vertical
restrictions, shares below 1 per cent were likely to be ‘insignificant’ while
 above 5 per cent, the effect was likely to be appreciable and Anti-trust regime
will likely to trigger.
➢ Accrual of benefits to consumers to test AAEC – In the case of M.P.
Mehrotra v. Kingfisher Airlines Ltd. (2012) [Jet Airways – Kingfisher],
Information shared by informant (Sh. MP Mehrotra) against Jet Airways India
Ltd & Kingfisher Airlines Ltd stated that they have entered in to an anti
competitive agreement involving code sharing, joint fuel management,
common ground handling, joint network rationalization, etc. which is adversely
affecting the competition in the market and is violating Sections 3 & 4 of the
Act. It was found that such agreements are common practices in the airline
industry – thus, no violation of Section 3 and 4 of the Act. Accrual of benefits
to consumers is an important consideration.

Ajay Devgan Films v. Yash Raj Films (2012)

Facts –
Ajay Devgan filed a complaint to the CCI that Yash Raj Films abused its dominance to deny
enough single screen theatres for his film.
Held –
The CCI stated that YRF’s agreement with theatre owners did not affect competition, nor did
it create barriers or drive out competitors.
The decision taken by the single screen theatres was a legitimate commercial decision in their
own interest as they were aware that other films would be released during Diwali. 

Other single screen theatres, which did not enter into this agreement, were free to exhibit any
films of their choice including that of the Yash Raj. 

Therefore, There was no Appreciable Adverse Effect. 


• Section 3(1) – Prohibits an enterprise or person or their associations from entering

into an agreement (in respect of production, supply, distribution, storage, acquisition
or control of goods or services), which causes or likely to cause AAE on competition
in India.
• What is prohibited is the agreement or the arrangement to control and dominate trade
and commerce in a commodity coupled with power & intent to exclude competitors to
a substantial extent. 

• Two Types of Anti – Competitive Agreements –
 i. Horizontal Agreements
ii. Vertical Agreements

HORIZONTAL AGREEMENTS [SECTION 3(3)]:

• Agreements between two or more enterprises that are at the same stage of the
production/supply chain & in the same market.
• For example: agreements between producers, between retailers dealing in similar kind
of products, agreements fixing purchase or sale prices, limiting or controlling the
production. For sharing the markets by territory, type, size of customers, collusive
tendering etc.
• These agreements are between competitors operating at the same level in the
economic process, i.e., enterprises engaged or operating in broadly similar activity.
• These agreements are presumed to be anti – competitive – presumed to have
AAEC – hence, these agreements are subject to Per Se Rule.
• Agreements between enterprises or persons engaged in trade of identical or similar
products (including cartels) are presumed to have AAEC if they –
➢ Fix prices;
➢ Limit output;
➢ Share markets/customers;
➢ Indulge inn bid-rigging or collusive bidding.
• In Northern Pacific Railways Co. v. United States (1958), it was held that there are
certain agreements or practices, which, because of their harmful effect on competition
and lack of any redeeming virtue, are conclusively presumed to be unreasonable, and
therefore, illegal without elaborate enquiry as to the precise harm they have caused or
the business excuse for their use.
• Types of Horizontal Agreements –
i. Agreements that directly or indirectly determine purchase or sale price –
agreements that create potential power to regulate market and to fix arbitrary
and unreasonably high prices are to be held unreasonable or unlawful
restraints, without the necessity of detailed inquiry whether a particular price is
reasonable or unreasonable.
 ii. Limits or controls production, supply, markets, technical development,
investment or provision of services – production limiting agreements may lead
to price rise of the concerned product – similarly technical development
limiting agreements may affect consumer’s interest.
iii. Shares the market or source of production or provision of services by way of
allocation of geographical area of market, or type of goods or services, or the
number of customers in the market or any other similar way – these
agreements may either be to share markets geographically or in respect of
consumers or particular categories or consumers or types or goods or services
in any other way – considered any-competitive as they limit the choice
available to consumers in a competitive market.
iv. Directly or indirectly results in Bid Rigging or Collusive Bidding – Section
3(3)(d) defines bid rigging as any act which has the effect of eliminating or
reducing competition for bids or adversely affecting or manipulating the
process for bidding.

• Bid Rigging or Collusive Bidding –

➢ Bidding in intended to enable the procurement of goods or services on the
most favorable terms and conditions.
➢ Bid rigging contravenes the very purpose of inviting tenders and is inherently
anti-competitive.
➢ Big rigging agreement is a combination of dealers who agree inter alia, not to
bid in conjunction with one another.
➢ It is clear that a bid rigging agreement hinders the process of competitive
bidding, as the winner of the bid to be submitted is already decided amongst
the parties.
➢ Bid rigging occurs in various ways such as –
a. Agreements to submit identical bids;
b. Agreements as to who shall submit the lowest bid, 

c. Agreements not to bid against each other, 

d. Agreements on common norms to calculate prices or terms of bids 

e. Agreements to squeeze out outside bidders 

f. Agreements designating bid winners in advance on a rotational basis,
or on a geographical or customer allocation basis
 g. Agreement as to the bids which any of the parties may offer at an
auction for the sale of goods or any agreement through which any party
agrees to abstain from bidding for any auction for the sale of goods,
which eliminates or distorts competition.
➢ Forms of Bid Rigging –
i. Bid Suppression – one or more competitors who otherwise would be
expected to bid, or who have previously bid, agree to refrain from
bidding or withdraw a previously submitted bid so that the designated
winning competitor’s bid will be accepted.
ii. Complementary Bidding – Complementary bidding (‘cover’ or
‘courtesy’ bidding) occurs when some competitors agree to submit bids
that are either too high to be accepted or contain special terms that will
not be acceptable to the buyer.
iii. Bid Rotation – In bid rotation schemes, all conspirators submit bids but
take turns to be the lowest bidder.
iv. Subcontracting – Subcontracting arrangements are often part of a bid-
rigging scheme. Competitors, who agree not to bid or to submit a losing
bid, frequently receive subcontracts or supply contracts in exchange
from the successful bidder.
➢ Under Section 19, the CCI has the power to conduct inquiry into alleged
contravention with respect to bid rigging.
➢ The CCI can also pass orders after such inquiry under Section 27.

Delhi Jal Board v. Grasim Industries Ltd. & Ors. (2017)

Facts –
The Informant alleged that the Opposite Parties (Aditya Birla Chemicals India Limited,
Grasim Industries Limited, Punjab Alkalies and Chemicals Limited, Kanoria Chemicals and
Industries Limited) were bidding collusively by quoting similar prices with a difference of
INR 200-400 for certain quantity of Poly Aluminum Chloride (PAC) from the year 2006-07,
till the year 2012 – for tenders of Delhi Jal Board.
Held –
The CCI stated that price competition is the keystone of an effective and well-functioning
market - Such an action resulted in bid rigging/ collusive bidding in terms of provisions
contained in Section 3(3)(d) of the Act.
M/S Excel Crop Care Ltd. V. Competition Commission of India & Ors. (2013)
Facts –
All parties in this case were engaged in business of supply of Aluminum Phosphide (ALP)
tablets & were only manufacturers in country. 

Issue –
Question arose as to whether the act of boycotting tenders by all Applicants amounted to bid
rigging?
Held –
It was held that the act of boycotting tenders could not be mere coincidence – it could have
been matter of simple calculation that total boycott would bring FCI on their knees and FCI
being helpless in matter would give orders for supply to all concerned manufacturers at
negotiated price as dictated by them.
By boycotting tenders, they created limitation on supply and therefore boycotting of tenders
amounted to bid rigging. 


• Cartels [Section 2(c)] –

➢ Cartelization is one of the horizontal agreements that shall be presumed to have
appreciable adverse effect on competition under Section 3 of the Act.
➢ As defined under Section 2(c) of the Act, 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.
➢ Cartels are agreements between enterprises not to compete on price, product
(including goods and services) or customers – a cartel is said to exist when two
or more enterprises enter into an explicit or implicit agreement to fix prices,
to limit production and supply, to allocate market share or to engage in bid-
rigging in one or more markets – Agreement must be established held in the
Deutsche Bank Case (2009).
➢ The objective of a cartel is to raise price above competitive levels, resulting in
injury to consumers and to the economy.
➢ Cartels are per se bad. It not only includes acts preventing or restraining the
trade or competition, but also any attempt to do such type of restrains.
 ➢ Indian markets evidence cartels mainly in the cement, steel, tyre sectors at the
domestic level and in petrol, soda ash, bulk vitamins etc., at the international
level.
➢ Section 27(b) of the Act provides for penalty for formation of cartels – cartel
formation is a pernicious offence under the Act.
➢ ITC Ltd. v. MRTP Commission (1996) - Three essential factors have been
identified to establish the existence of a cartel –
i. Agreement by way of concerted action suggesting conspiracy;
ii. The fixing prices, controlling production, distribution, supply; and
iii. The intent to gain a monopoly or restrict or eliminate competition.
➢ The Leniency Provision/Programme –
✓ The Act provides for imposition of lesser penalty by the CCI where a
person makes FULL, TRUE and VITAL disclosure of a cartel to the
CCI.
✓ The Leniency System is targeted at cartel participants and seeks to
induce participants to break rank and turn approver against other cartel
members.
✓ A first, second and third applicants can avail the benefit of a reduction
in penalty of up to 100% or 50% or 30% respectively.
✓ Confidentiality is the bedrock of an effective leniency regime.

Brushless DC Fans Case (2014)

Facts –
Cartelization was seen between the manufacturers and the suppliers of brushless fans, in
relation to tenders floated by the Indian Railways and Bharat Earth Movers Limited for the
supply of brushless fans and other electrical items. 

Held –
Complete immunity was not granted to the applicant and penalty reduction was capped at
75% - This is because the CCI was already in possession of evidence.

Carbon Dry-Cell Batteries Case (2017) – Cartelization in the Flashlight Market

Facts –
A leniency application filed by Panasonic Energy India Co Ltd (Panasonic) triggered an
investigation by the CCI into cartelization of dry-cell batteries between Panasonic, Eveready
and Nippo - Subsequently, the Association of Indian Dry Cell Manufacturers (AIDCM) was
also included within the scope of the investigation.
Held –
The DG is reported to have conducted search and seizure operations on the premises of
Panasonic, Eveready and Nippo and examined fax and email communications and other
documents - The CCI granted Panasonic full immunity.

Cartelization in relation to tenders for broadcasting rights of Sporting Events (2013)

Facts –
Globecast India Pvt. Ltd. and Globecast Asia Pvt. Ltd. (Globecast) disclosing a cartel with
Essel Shyam Communication Limited (ESCL) to rig tenders for procurement of broadcasting
services of various sporting events in India filed leniency application.
Globecast submitted that there was an exchange of commercially sensitive information
between Globecast and ESCL resulting in bid rigging.
Held –
Globecast was granted 100% immunity.

VERTICAL AGREEMENTS [SECTION 3(4)]:

• Any agreement amongst enterprises or persons at different stages or levels of the
production chain in different markets, in respect of production, supply, distribution,
storage, sale or price of, or trade in goods or provision of services shall be an
agreement in contravention of Section 3(1), if such agreement causes or is likely to
cause an appreciable adverse effect on competition in India.
• Vertical agreements are those agreements that are entered in between
i. Supplier and distributor;
ii. Manufacturer and supplier;
iii. Distributor and manufacturer
• According to the Section 3(4), the following are vertical agreements:

a. Tie-in arrangement (Tying and Bundling) – Section 3(4)(a) –

➢ Any agreement requiring a purchaser of goods, as a condition of such
purchase, to purchase some other goods.
➢ E.g. Cars + Lubricants; DTH Services + Set Top Box, etc.
 ➢ In the case of Microsoft Corporation v. United States, Microsoft has
violated the Sherman Act by bundling its browser software with its
Windows Operating System.
➢ Three part test for Illegal Tying –
i. The seller must possess power in the tying product market.
ii. The tying arrangement is likely to erect significant barriers to
entry into the tied product market.
iii. There must be a coherent basis for treating the tying and tied
product as distinct.

b. Exclusive Supply Agreement – Section 3(4)(b) –

➢ Any agreement restricting in any manner the purchaser in the course of
his trade from acquiring or otherwise dealing in any goods other than
those of the seller or any other person.

c. Exclusive Distribution Agreement – Section 3(4)(c) –

➢ Any agreement to limit, restrict or withhold the output or supply of any
goods or allocate any area or market for the disposal or sale of the
goods.

d. Refusal to deal – Section 3(4)(d) –

➢ Any agreement, which restricts, or is likely to restrict, by any method
the persons or classes of persons to whom goods are sold or from
whom goods are bought.
➢ In RRTA v. Bata India Ltd. (1976), Bata engaged in the manufacture
of leather and rubber footwear – entered into agreements with small-
scale manufacturers for purchase of footwear to be sold by it under its
own brand. This agreement prohibited these manufacturers from
purchasing raw materials and components from parties other than those
approved by Bata. The CCI held that these conditions imposed by Bata
is restrictive trade practice and prejudicial to public interest.

e. Resale price maintenance – Section 3(4)(e) –

➢ Any agreement to sell goods on condition that the prices to be charged
 on the resale by the purchaser shall be the prices stipulated by the seller
unless it is clearly stated that prices lower than those prices may be
charged.
➢ Through price maintenance a supplier can exercise some control over
the product market.

• Vertical agreement is made between a seller and a buyer where a retailer can buy
products from a manufacturer, but in the agreement is restricted from buying from a
competing manufacturer.
• Vertical Agreements call for application of Rule of Reason.

Re: M/S Fx Enterprise Solutions India Pvt. Ltd. v. M/S Hyundai Motor India Ltd.
(2014)
Appealed case – CCI v. Hyundai Motor India Ltd.
Facts –
Hyundai Motors India Ltd. was charged with the following allegations –
✓ Clause 5(iii) of the Dealership Agreement stated that the dealers of the ‘Hyundai
Motor’ could not take dealerships of competitors of Hyundai, even if the dealership
was a completely separate entity from the dealership of the ‘Hyundai Motor’ - Clause
5(iii) of the Dealership Agreement amounted to “refusal to deal” and is in
contravention of the provisions Section 3(4)(d) of the Act.
✓ Further it was alleged that Hyundai Motors imposed a “Discount Control Mechanism”
through which dealers were only permitted to provide a maximum permissible
discount and the dealers were not authorized to give discount which is above the
recommended range, and the same amounted to “resale price maintenance”, in
contravention of Section 3(4)(e) of the Act.
✓ Hyundai designated sources of supply for complementary goods for dealers, which
results in a “tie-in” arrangement in violation of Section 3(4)(a) of the Act.
CCI on Refusal to Deal –
The Commission was of the opinion that the impugned clause 5(iii) of the agreement, which
prohibited the dealer from investing in any other business, particularly in dealerships with
competitors of Hyundai keeps OEMs empowered to ensure that their dealers remain
financially viable.
Clause 5 does not provide for de jure exclusivity.
Thus, the Commission was of the opinion that Clause 5(iii) does not impose an exclusive
supply obligation in contravention of Section 3(4)(b) or a refusal to deal in contravention of
Section 3(4)(d) read with Section 3(1) of the Act.
CCI on Resale Price Maintenance (RPM) –
The arrangements put in place by the Hyundai resulted in creation of barriers to the new
entrants in the market as they also took into consideration the restrictions on their ability to
compete in price competition in the intra-brand competition of Hyundai brand of cars.
Therefore, the Commission was of the opinion that the OP has contravened the provisions of
Section 3(4)(e), read with Section 3(1) of the Act.
CCI on Tie-In Agreements –
Hyundai had contravened the provisions of Section 3(4)(a) read with Section 3(1) of the Act
in mandating its dealers to use recommended lubricants/ oils and penalizing them for use of
non-recommended lubricants and oils.

Timken Roller Bearing Co. v. United States

A British and French Corporation entered into an agreement whereby they allocated trade
territories according to which neither of the corporations were allowed to trade in that area
where the other corporation had its right to trade.
In this way they fixed the prices.
Hence it was held as anti competitive according to Sherman Act.

Ola and Uber Case (2019) [RPM case]

Ola/Uber through its vertical agreement with its drivers imposed a floor price (RPM)
Drivers have no liberty with regard to these prices and offer prices lower than this.
CCI said that the pricing was different for each rider and trip ‘wing to the interplay of large
data sets based on algorithm’.

EXCEPTIONS UNDER ANTI – COMPETITIVE AGREEMENT [SECTION 3(5)]:

1. Intellectual Property Right (IPR) Protection –

➢ The bundle of rights that are subsumed in IPR should not be disturbed in the
interests of creativity and innovative power of the human mind.
 ➢ However, any unreasonable conditions forming part of protection or
exploitation of IPR is not covered under Section 3(5)(i).
➢ Unreasonable Conditions –
i. Patent Pooling
ii. Tie-in Agreements
iii. Prohibiting licensee to use technology from rival company
iv. Price-fixation for selling licensed products, etc.

Entertainment Network (India) Ltd. V. Super Cassette Industries Ltd.

In this case, the Supreme Court observed that even thought the copyright holder has full
monopoly but the same is limited in the sense that if such monopoly created disturbance in
smooth functioning of the market will be in violation of competition law and same was in
relation to refusal of license.
IPR owners can enjoy the fruits of their labor via royalty by issuing licenses but the same is
not absolute.

2. Export Cartels –
➢ Right of any persons to export goods from India to the extent if agreement
related exclusively to the production, supply, and distribution of goods.
SECTION 4 – ABUSE OF DOMINANT POSITION:
• The Act defined dominant position (dominance) in terms of a position of strength
enjoyed by an enterprise, in the relevant market in India, which enable it to –
➢ Operate independently of the competitive forces prevailing in the relevant
market; or
➢ Affect its competitors or consumers or relevant market in its favor.
• Dominance is not considered bad per se but its abuse is.
• Factors determining Dominance –
➢ The market share;
➢ The size and resources of the enterprise;
➢ Size and importance of competitors;
➢ Economic power of the enterprise;
➢ Vertical integration;
➢ Dependence of consumers on the enterprise;
➢ Extent of entry and exit barriers in the market; etc.
• Section 4 deals with Abuse of Dominance or Dominant Position and it prohibits the
use of market controlling position to prevent individual enterprises or a group from
driving out competing businesses from the market as well as from dictating prices –
use of dominant position in the relevant market in an exclusionary or exploitative
manner.
• An enterprise is said to abuse dominant position in the market when –
a) It directly or indirectly imposes unfair and discriminatory conditions on
purchase of sale of goods or services or on the price of purchase or sale;
b) It limits or restricts the production of goods or services in the market or
technical or scientific development relating to goods or services to the
prejudice of the consumers;
c) Indulges in practices resulting in denial of market access;
d) Uses its dominant position in one relevant market to enter into, or protect,
other relevant markets.
• Exclusionary Abuse –
➢ Refusal to Deal – refusal to deal results from contracts between dominant
undertakings and its customers or suppliers (Exclusive dealing).
➢ Raising competitors cost – Legal harassment
 ➢ Cross-Subsidization
➢ Structural Abuse – practices that produce immediate change in the structure of
the market to the detriment of competition.
• Exploitative Abuses –
➢ Refers to those practices engages in by dominant undertakings which, while
not directly harming competitors in the market, reduce the welfare of
consumers.
➢ Pricing Practices – price squeezing, price discrimination
➢ Excessive pricing
➢ Imposing unfair trading conditions
➢ Limiting production, markets or technical developments
➢ Discriminatory practices

Belaire Owners Association v. DLF Limited (2010)

Facts –
DLF announced the launch of a Housing Complex, named Belaire comprising five multi-
storied residential buildings to be constructed in DLF City, Gurgaon, Haryana. DLF however
imposed highly arbitrary, unfair and unreasonable conditions on the owners of apartments in
the complex in their buyer agreements.
The Belaire Owners’ Association brought these unfair conditions to the notice of the CCI.
Issues –
- Determination of Dominant Position
- Determination of Abuse of Dominance by DLF.
CCI Held –
Determination of Dominant Position –
With respect to the first issue, DLF had the highest market share (45%) - Due to this, there
were no competitive constraints on DLF. DLF also had the early mover’s advantage in the
real estate sector, which naturally has entry barriers due to high cost of land and brand value
of incumbent market leaders.
The CCI’s analysis concluded that DLF was way ahead of its competitors and faced almost no
threat in the market due to low market concentration by virtue of its level of vertical
integration, brand value and financial strength.
Determination of Abuse of Dominant Position –
With respect to the second issue, it ruled that DLF had violated Section 4 of the Competition
Act, 2002 and thereby imposed a fine and issued a cease and desist order against DLF.

• Predatory Pricing –
➢ Predatory Pricing under Explanation (b) of Section 4 means the sale of goods
or services, at the price which is below the cost of production, with a view to
reduce competition or eliminate the competitors.
➢ Predation is exclusionary behavior and can be indulged in only by enterprises
holding dominant position in the relevant market.
➢ Determination of Predatory Pricing (Tests) –
✓ Establishment of dominant position of the enterprise in the relevant
market.
✓ Pricing below cost for the relevant product in the relevant market by
the dominant enterprise.
✓ Intention to reduce competition or eliminate competitors – Predatory
Intent Test – In the case of Re Johnson and Johnson Ltd. (1988) it
was held that the essence of predatory pricing is pricing below one’s
cost with a view of eliminating a rival.
✓ Able to recoup the losses after the exclusion of the competitors or
foreclosing the competition.

MCX Stock Exchange v. National Stock Exchange of India Ltd., DotEx International
Ltd. and Omnesys Technologies Pvt. Ltd. (2011)
The CCI defined predatory pricing as the conduct where a dominant undertaking incurs losses
or forgoes profits in the short terms, with the aim of foreclosing its competitors.
The CCI was of the opinion that NSE obtained undeniable advantages from its operations in
other markets, allowing them to provide stock exchange services for free, thereby occupying a
dominant position in the market.
Zero pricing was adopted by NSE – clear method of leveraging done with the intention to
impede future market access to potential competitors and foreclose existing competition.
This case also laid down the Areeda – Turner Test, which is based on the economic concept
that a firm cannot price its products or services below marginal cost of production, otherwise
it will prefer to shut down its production in the short run to minimize losses, unless and until
it has some other intent – the Average Variable Cost used as a proxy to Marginal Cost.
AKZO Case
Facts –
AKZO was the first EU case in which predatory pricing was discussed.
AKZO was a multinational corporation, which produced benzoyl peroxide, for use within the
plastics sector.
AKZO’s competitor (one of), ECS, decided to expand upon its use of the aforementioned
product into the plastics sector, capturing one of AKZO’S largest clients as a result.
The retaliation was to offer large discounts to ECS’ flour customers.
An appeal was subsequently raised by ECS, citing predatory pricing as an abuse of dominant
position.
Held –
The Commission, in this instance, found predatory pricing was occurring to force ECS from
the plastics sector.
AKZO were fined ECU 10 million and were also ordered to terminate the infringement.
This judgment provided new definition for predatory pricing.
It was contrary to the criteria laid down in the Areeda- Turner Test, clearly distinguishing the
courts’ approach from the test.
AKZO Test – According to this test,
✓ Prices below Average Variable Cost are presumed to be predatory.
✓ Prices above Average Variable Cost but below Average Total Costs are not presumed
predatory, but can be presumed predatory if they are part of a plan to eliminate a
competitor.

• Essential Facilities Doctrine (EFD) –

➢ When a dominant enterprise in the relevant market controls an infrastructure or
a facility that is necessary for accessing the market and which is neither easily
reproducible at a reasonable cost in the short tern nor interchangeable with
other products or services, the enterprise may not refuse to share it with its
competitors at reasonable cost.
➢ Conditions –
✓ A dominant firm in the relevant market must control the facility.
✓ Competing enterprises should lack a realistic ability to reproduce the
facility.
 ✓ Access to the facility is necessary in order to compete in the relevant
market.
✓ It must be feasible to provide access to the facility.
➢ Section 4(2)(c) of the Act provides a remedial order to be passed under which
the dominant enterprise must share an essential facility with its competitors in
the downstream markets.

• Collective or Joint Dominant Position –

➢ “Collective Abuse” refers to when two or more enterprises, which are
connected in some way (economic link), abuse their concentrated market
dominance.
➢ Three Elements –
i. The entities must be independent economic entities.
ii. The undertakings must be united through economic links – contractual
links, structural links, etc.
iii. By virtue of these economic links, the undertakings must together hold
a dominant position.
➢ In India, there is absence of collective dominance concept under the Act. The
same was noted in the cases Sanjeev Rao v. Andhra Pradesh Hire Purchase
Association (2013) and Meru Travels Solutions Pvt. Ltd. v. M/S ANI
Technologies Pvt. Ltd. (Ola), M/S Uber India Systems Pvt. Ltd.
➢ Later in 2007 Amendment to the Competition Act, the concept of group or
collective dominance was introduced.

Dhanraj Pillai & Ors. v. M/S Hockey India (2011)

Facts –
The informants in this case were a group of former Olympians and professional Indian hockey
players including the likes of Dhanraj Pillai, Gurbax Singh Grewal and V. Baskaran (the
“Informants”).
The opposite party, HI, was formed in May 2009, and is the apex governing body for the
sports of men and women’s hockey in India and has the sole mandate to govern and conduct
all related activities.
HI is also the national sports federation for the sport of hockey in India and is affiliated to the
Indian Olympic Association (“IOA”), Asian Hockey Federation (“AHF”), the FIH
(International body governing hockey) and the Indian Hockey Federation (IHF).
FIH had set some regulations for conducting a league WSH and noting these regulations, HI
formulated and modified its Code of Conduct Agreement with the players to include clauses
related to disciplinary action in case of participation in any unsanctioned events - The
disciplinary action for any player participating in any unsanctioned event was disqualification
from selection to the Indian national team.
Against these modifications itself, the Informants filed before the CCI for inquiring into
alleged anti-competitive activities of HI.
Arguments of the Informants –
✓ HI was misusing its regulatory powers to promote its own hockey league to the
exclusion of the WSH, and was thus engaging in practices resulting in denial of
market access to rivals, which was an abuse of dominant position under S. 4(2)(c) of
the Act.
✓ HI was using its dominance in conducting international events in India to enter into
the market of conducting a domestic event in India, a contravention under S. 4(2)(e) of
the Act.
Arguments of Hockey India –
HI placed reliance on the pyramid structure for governing international sport, which is
mandated by the Olympic movement, to defend its monopoly position with regard to the
regulation of hockey in India - Pyramid structure of governance refers to a single national
sport association per sport and member state, which operates under the umbrella of a single
continental federation and a single worldwide federation, which is at the top of the pyramid.
The HI contended that such a structure ensures the integrity of the sport, and helps in ensuring
the primacy of international competitions through adequate regulation of the sporting
calendar.
CCI Held –
With respect to the allegation under S. 4(2)(e), that HI was using its dominance in conducting
international events in India to enter into the market of conducting a domestic event in India,
the Commission defined the relevant market differently to the definition adopted by the
Informants.
It distinguished between representative events and private professional leagues, and was
neutral to the definitions of domestic and international events in the FIH Regulations.
Accordingly, the Commission found no validity in the allegations that HI was using its
dominant position in one relevant market to enter into, or protect, another relevant market.
In its order, the CCI exonerated HI from all allegations of entering into anti-competitive
agreements and abuse of dominant position and also held that HI had not contravened any of
the provisions of the Act.
SECTION 5 AND 6 – COMBINATION AND REGULATION OF COMBINATION;

• Section 5 states that an acquisition, merger or amalgamation which meats the relevant
asset or turnover threshold stipulated under the Competition Act is a Combination.
• Broadly, combination under the Act means –
a) Acquisition of control, shares, voting rights or assets – Section 5(a) –
✓ Acquired to enable to exercise control
✓ If as a result, the value of assets or turn over of the combined
enterprises exceeds the prescribed thresholds, then the combination is
deemed to have an AAEC in India.
b) Acquisition of control by a person over an enterprise engaged in competing
businesses –
✓ Controlling the affairs or the management by one or more enterprises –
company’s business.
✓ Possibility of exercising decisive influence.
c) Mergers and Acquisitions –
✓ M&A have the potential of affecting the competition even if their total
assets and turn over exceeds the prescribed thresholds.

• Regulation of Combinations (Section 6) –

➢ Combination – market dominance of a group in and outside India –
combination of non-Indian enterprises, business carried and merger completed
and approved outside India, can be subject to Competition Act, 2002.
➢ Notice is then to be sent to CCI, disclosing the details of the proposed
combination.
➢ The CCI shall, after receipt shall deal with such notice in accordance with
provisions of Section 29, 30 and 31.
➢ Section 29 – Procedure for Investigation of Combinations – where the CCI is
of the opinion that a combination is likely to cause, or has caused an
appreciable adverse effect on competition within the relevant market in India,
it shall issue a notice to show cause to the parties to combination calling upon
them to respond within thirty days of the receipt of the notice, as to why
investigation in respect of such combination should not be conducted.
 ➢ After receipt of all information, CCI to deal with the case in accordance with
the provisions contained in Section 31.
➢ Section 31 – Order of CCI on Combinations –
✓ Where the Commission is of the opinion that any combination does
not, or is not likely to, have an appreciable adverse effect
on competition, it shall, by order, approve that combination.
✓ Where the Commission is of the opinion that the combination has, or is
likely to have, an appreciable adverse effect on competition, it shall
direct that the combination shall not take effect.

• Combination – Prescribed Threshold –

➢ The Act provides for sufficiently high thresholds in terms of assets/turnover,
for mandatory notification to the Commission.
➢ The Act also provides for revision of the threshold limits every two years by
the government, in consultation with the Commission, through notification,
based on the changes in Wholesale Price Index (WPI) or fluctuations in
exchange rates of rupee or foreign currencies.
➢ As per the 2016 Notification, the prescribed thresholds are –
✓ Individual – (In India) – Either the combined assets of the enterprises
would value more than INR 2000 Cr. in India or the combined turnover
of the enterprise is more than INR 6000 Cr. in India.
(Outside India) – Either the combined assets of the enterprises would
value more than INR 1000 Cr. in India or a total of USD 1 Billion, or
the combined turnover of the enterprise is more than INR 3000 Cr. in
India or a total of USD 3 Billion.
✓ Group – (In India) – the group to which the enterprise whose control,
shares, assets or voting rights are being acquired would belong after the
acquisition or the group to which the enterprise remaining the merger
or amalgamation would belong has either assets of value of more than
INR 8000 Cr. in India or turnover more than INR 24,000 Cr. in India.
✓ (Outside India) – where group has presence in India as well as outside
India, the group is to have assets more than INR 1000 cr. in India or
USD 4 Billion, or turnover more than INR 3000 Cr. in India or USD 12
Billion.
• Review Process for Combinations –
➢ The review process for combination under the Act involves mandatory pre-
combination notification to the Commission.
➢ Any person or enterprise proposing to enter into a combination shall give
notice to the Commission in the specified form disclosing the details of the
proposed combination within 30 days of the approval of the proposal relating
to merger or amalgamation by the board of directors or of the execution of any
agreement or other document in relation to the acquisition, as the case may be.
➢ In case, a notifiable combination is not notified, the Commission has the power
to inquire into it within one year of the taking into effect of the combination.
➢ The Commission also has the power to impose a fine, which may extend to one
per cent of the total turnover or the assets of the combination; whichever is
higher, for failure to give notice to the Commission of the Combination.
➢ Factors to be considered by CCI while analyzing transactions [Section 20(4)] –
✓ Extent of barriers to entry into the market;
✓ Level of combination in the market;
✓ Degree of countervailing power in the market;
✓ Likelihood that the combination would result in the parties to the
combination being able to significantly and sustainably increase prices
or profit margins;
✓ Extent of effective competition likely to sustain in the market.
• Statutory Exemptions of Combinations [Section 6(4)] –
➢ Acquisitions by pubic financial institutions, banks, venture capital funds and
foreign institutional investors pursuant to an investment agreement or a loan
agreement are excluded from the prior notification requirement.
➢ De-Minimus Exemption –
✓ Acquisitions and mergers or amalgamations, where the value of assets
being acquired, merged or amalgamated is not more than INR 350 Cr.
in India or turnover is not more than INR 1000 Cr. are exempted from
the provisions of Section 5 of the Act (2017 De-Minimus Financial
Thresholds).
✓ Exemption in such cases is for a period of 5 years.
Sun Pharma – Ranbaxy Case (2014)
The boards of India’s two leading pharmaceutical companies, Sun Pharmaceuticals and
Ranbaxy Laboratories, announced their merger in April 2014 - one of the biggest M&A deals
in the Indian market, estimated at US$4 billion.
The proposed combination would also result in acquisition of 46.79% equity share capital of
Zenotech by Sun Pharma from Ranbaxy.
CCI initially formed a prima facie opinion that the proposed combination is likely to cause
AAEC.
The CCI then approved the acquisition of Ranbaxy by Sun Pharma on December 5, 2014 on
the precondition that seven brands, constituting less than 1% of total revenues of the
combined entity in India, be divested in order to prevent the merger from negatively
impacting competition in the domestic market.

• Proposed Changed to CCI’s Merger Control Regime by Draft Competition

Amendment Bill, 2020 –
➢ Central Government’s power to notify new thresholds for merger control –
✓ Section 6(a) of the Draft Amendment Bill, 2020 seeks to give power to
the Central Government (in consonance with the CCI) to notify new
criteria of determining thresholds.
➢ Change in the definition of Control –
✓ The current definition of control is the ability of a group or an
enterprise to control the management or affairs of the company.
✓ Section 6(b) of the Draft Amendment Bill, 2020 seeks to completely
replace the existing definition and define it as ‘singular or joint ability
of an enterprise or a group to exercise material influence over the
management or affairs or strategic commercial decisions.
➢ Speedier Process of Approval –
✓ The Draft Amendment Bill seeks to decrease the assessment timeline
from 210 days to 150 days.
➢ Inclusion of technology and new age markets – digital markets, hub and spoke
arrangement, etc.
➢ Introduce wide range of powers to DG and well as CCI – establishment of
Governing body.
COMPETITION COMMISSION OF INDIA (CCI):
• Competition Commission of India is a statutory body of the Government
of India responsible for enforcing The Competition Act, 2002 and
promoting competition throughout India and to prevent activities that have an
appreciable adverse effect on competition in India.
• It is the 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 in the markets of India.
• The Commission is also required to give opinion on competition issues on a reference
received from a statutory authority established under any law and to undertake
competition advocacy, create public awareness and impart training on competition
issues.
• The Raghavan Committee had recommended that the Commission should be
independent from political and budgetary controls of the Government – independent
functioning of the members needs to be ensured.

• Composition of CCI –
➢ The Competition Commission shall consist of a Chairperson and not less than
two and not more than ten other members to be appointed by the Central
Government.
➢ The Chairperson and the members are appointed by the Central Government
from the panel of names recommended by the selection committee consisting
of –
✓ The Chief Justice of India or his nominee (Chairperson of the
Committee);
✓ Secretaries in the Ministries of Corporate Affairs and Law and Justice;
✓ Two experts of repute having special knowledge of and professional
experience in international trade, economics, business, commerce, law,
finance, accountancy, management, industry, public affair or
competition matters including competition law and policy.
✓ RBI Governor.
➢ A Director General (DG) appointed by the Central Government shall assist the
CCI.
• Powers and Functions of the CCI –
➢ Section 18 – Duties of CCI – The Commission has duty to –
✓ Eliminate the practices having adverse effect on competition,
✓ Promote and sustain competition in the market,
✓ Protect the consumer interests and to ensure freedom of trade carried
on by other participants in the market in India.
✓ For the purpose of discharging its duties or performing its functions,
the Commission may enter into any memorandum or arrangement with
the prior approval of the Central Government, with any agency of any
foreign country.
➢ Section 27 – Orders by CCI after inquiry onto agreements or abuse of
dominant position.
➢ Section 28 – Division of enterprise enjoying dominant position.
➢ Section 31 – Orders of CCI on combinations.
➢ Section 36 – Power of CCI to regulate its own procedure.
➢ Section 38 – Rectification of orders.
➢ Section 39 – Execution of orders of CCI imposing monetary penalty.

• Duties of the Director General (Section 41) –

➢ DG to investigate contravention – DG shall assist the CCI in investigating into
any contravention of the provisions of the Act or any rules or regulations made
thereunder.
➢ DG to have all powers as conferred upon the commission under Section 36(2).