The Competition Act, 2002

Replaced the Monopolies and

Restrictive Trade Practices
(MRTP) Act, 1969
 Objectives
a. To prevent practices having adverse
effect on competition
b. To promote and sustain competition in
the market
c. To protect the interests of consumers
d. To ensure freedom of trade carried on by
other participants in Indian markets
Extends to the whole of India
 Definitions (sec 2)
Acquisition (sec 2 (a))
• Directly or indirectly acquiring or agreeing
to acquire shares, voting rights or assets
of an enterprise; or
• Control over mgmt or control over assets
 Agreement (sec 2 (b))
• Any arrangement or understanding or
action in concert,
i. Whether such is formal or in writing; or
ii. Whether such is intended to be
enforceable by legal proceedings
 Consumer (sec 2 (f))
• Any person who:
i. Buys any goods for a consideration
ii. User of goods other than the buyer
iii. Hires or avails of any services for a
consideration
iv. Includes a beneficiary of services other
than the hirer
 Enterprise (sec 2 (h))
• A person or department of the govt. who
is or has been or is proposed to be
engaged in any activity relating to:
i. production, storage, supply, distribution,
acquisition or control of articles or goods;
or
ii. The provision of services of any kind; or
iii. Investment or business of acquiring,
holding, underwriting or dealing with
shares, debentures or securities of other
body corporate directly or through its
subsidiaries ……..contd….
Enterprise does not include activities of the
govt. pertaining to strategic and
sovereign functions
Enterprise includes:
a. Activity – profession or occupation
b. Article and service – both new
c. Unit or division – plant, factory
established for production, storage,
supply…. Or branches for providing
services
 Price (sec 2 (o))
• Includes every valuable consideration:
direct, indirect or deferred
• Includes sale of any goods or performance
of any services relating to any other matter
or things
 Relevant market (sec 2 (r))
• Determined by the Competition
Commission with reference to relevant
product market or geographic market or
both
 Trade (sec 2 (x))
• Any trade, business, industry, profession
or occupation relating to the production,
supply, distribution, storage or control of
goods and includes provision of services
 Turnover (sec 2 (y))
• Includes value of sale of goods or services
 Prohibition of agreements
• Sec 3 prohibits entering into anti-competitive
agreements – production, supply, storage,
distribution, control….of goods which causes
an adverse effect on competition
• Sec 4 prohibits abuse of dominant position by
any enterprise – imposition, unfair purchase
or selling prices and practices which results
in denying market access to other
competitors
• Sec 5 deals with combination of enterprises
and persons – which causes an adverse
effect on competition
 Anti- competitive agreements
• Agreement void
• Adverse effect on competition
-Directly or indirectly determines purchase
or sale prices.
-Limits or controls production, supply,
markets, technical development,
investment or provision of services
-shares the market or source of production
 - Provision of services by way of allocation
of geographical area of market, or type of
goods or services, or number of
customers in the market or any other
similar way.
- Directly or indirectly results in bid rigging or
collusive bidding
Cartel (Sec.3(3)) 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.
The following agreements cause an
appreciable adverse effect on
competition,
• Tie- in agreements
• Exclusive supply agreement
• Exclusive distribution agreements
• Refusal to deal
• Resale price maintenance.
• Tie-in agreement – an agreement
requiring a purchaser to purchase some
other goods as a condition to purchase
• Exclusive supply agreement – an
agreement restricting the purchaser from
acquiring or dealing in goods other than
that of the seller’s
• Exclusive distribution agreement – an
agreement to restrict or withhold the
supply of goods or an area of the market
for sale of goods
• Refusal to deal – an agreement which
restricts persons or classes of persons
from/ to whom goods are bought or sold
• Resale price maintenance – an agreement
to sell goods on condition that the
purchaser, on resale will sell goods at a
price stipulated by the seller
 Prohibition of abuse of dominant
position
• Abuse of dominant position sec.4
- Directly or indirectly imposes unfair or
discriminatory condition or price on purchase or
sale of goods or services
- Limits or restricts production/ technical
development of goods or services
- Indulges in practices that denies market access
- Makes conclusion of contracts with parties who
have no connection with the subject of the
contract
- Uses its dominant position in one market to
access or protect another market
 Regulation of Combinations
• Combination Sec 5
A. Acquisition of control, shares, voting rights or
assets:
If parties have:
i. In India assets > Rs. 1000 cr; turnover > Rs.
3000 cr; or
ii. In India or outside assets > US $ 500 million or
turnover > US $ 1500 million; or
iii. Any group belonging to such group has
acquired:
a. India - assets > Rs. 4000 cr; turnover > Rs.
12000 cr; or
b. In India or outside assets > US $ 2 billion or
turnover > US $ 6 billion
 B. Acquisition of control over
production, distribution or trading.
• Enterprise acquired along with which acquirer
already has control:
i. In India assets > Rs. 1000 cr; turnover > Rs.
3000 cr; or
i. In India or outside assets > US $ 500 million or
turnover > US $ 1500 million; or
ii. Group which has acquired:
a. India - assets > Rs. 4000 cr; turnover > Rs.
12000 cr; or
b. In India or outside assets > US $ 2 billion or
turnover > US $ 6 billion
 C. Merger or amalgamation
The enterprise created as a result of merger has:
In India assets > Rs. 1000 cr; turnover > Rs. 3000
cr; or
i. In India or outside assets > US $ 500 million or
turnover > US $ 1500 million; or
ii. Group or its constituent has:
a. In India - assets > Rs. 4000 cr; turnover > Rs.
12000 cr; or
b. In India or outside assets > US $ 2 billion or
turnover > US $ 6 billion
 Competition Commission of India
• establishment, duties, powers and
functions
• Establishment of Commission (Sec
7 to 17)
Corporate body
Composition of Commission (Sec 8)
Selection of chairperson & other members
(Sec 9)
• Term of office of chairperson & other
members (Sec 10)
• Resignation, removal and suspension of
chairperson & other members(Sec 11)
• Restriction on employment (Sec 12)
• Salary & allowances (Sec 14)
• Vacancy etc. not to invalidate proceedings
of the commission (Sec 15)
• Appointment of Director-General (Sec 16)
• Registrar & officers & other officers of the
commission (Sec 17)
DUTIES, POWERS & FUNCTIONS OF
COMMISSION
Duties of commission (Sec 18)
Inquiry into certain agreements & dominant
position of enterprise (Sec 19)
a. Consideration of factors which cause
adverse effect on competition
b. Inquiry whether an enterprise enjoys
dominant position
Inquiry into combination by
Commission (Sec 20)
a. Inquiry into acquisition, control &
combination
b. Factors having effect on combination
• Benches of Commission (Sec 22)
• Distribution of business amongst commission
& Benches (Sec 23)
• Procedure for deciding a case where members
of a bench differ in opinion (sec 24)
• Procedure for inquiry on complaints under sec
19 (Sec 26)
a. Direction to director general to investigate
b. Report within specified time
c. Dismissal of complaint
d. Rebuttal of findings
e. Comments
f. Further inquiry
• Orders by Commission after inquiry into
agreements or abuse of dominant position
(Sec 27)
• Division of enterprise enjoying dominant
position. (Sec 28)
• Procedure for investigation of
combinations (Sec 29)
• Inquiry into disclosures under Sec 6 (2)
(Sec 30)
• Orders of Commission on certain
combinations (Sec 31)
• Power to grant interim relief (Sec 33)
• Power to award compensation (Sec 34)
• Appearance before Commission (Sec 35)
• Power of Commission to regulate its own
procedure (Sec 36)
• Review of orders of the commission (Sec
37)
• Appeal (Sec 40)
• Power of CG to supersede Commission
(Sec 56)