Competiton Act 2002

What is Competition Act 2002 ?

The Competition Act, 2002 was enacted by the Parliament of India and governs Indian
competition law. ... Under this legislation, the Competition Commission of India was
established to prevent the activities that have an adverse effect on competition in India. The
Competition Act, 2002 was enacted by the Parliament of India and governs Indian
competition law. It replaced the archaic The Monopolies and Restrictive Trade Practices Act,
1969. This act extends to whole of India except the State of Jammu and Kashmir.

Objective of this Act ?

The main objectives of the Competition Act, 2002 are: to provide the framework for the
establishment of the Competition Commission. to prevent monopolies and to promote
competition in the market. to protect the freedom of trade for the participating individuals and
entities in the market.

Why did this act replace MRTP act ?

MRTP Act was enacted to deal with monopolistic, restrictive and unfair trade practices, but
due to certain limitations, Competition Act was introduced, which changed the focus from
curbing monopolies to promoting competition. ... In other words, Competition Act is an
improvement over the MRTP Act.
Difference between Competition Act 2002 vs MRTP Act 1969

Competition act expesely defined. Competition concepts not defined clearly.

Provision for regulation of combination. No provision for regulation of combination.

Power to impose penalty. No power to impose penalty.

Based on post reform scenario. Based on pre reform scenario.

Based on structure as factor. Based on size as factor.

Penelties for offences. No penalties for offences.

Proactive & Flexible. Reactive and rigid.

 Act define unfair trade as :-
False representation and misleading advertisement of goods and services
Falsely representing second-hand goods as new.
Misleading representation regarding usefulness, need, quality, standard, style etc of goods and services.
False claims or representation regarding price of goods and services.
Giving false facts regarding sponsorship, affiliation etc. of goods and services.
Giving false guarantee or warranty on goods and services without adequate tests.
Punishment under Competition Act.
In case the person breaches the orders and directions of the Competition Act 2002 under sub section (2) of Section 42, then he
shall be punished with an imprisonment for a term which may extend up to three years and /or with a monetary penalty of
twenty-five crores.