UNIT-1 COMPETITION ACT 2002 & CCI

Vishesh Dahiya
Assistant Professor- Law
 INTRODUCTION
Competition Act 2002 is comprehensive and is enacted to meet
the requirements of economic growth and international
economic developments relating to competition laws.

It incorporates all the broadly accepted principles of anti-trust

such as provisions prohibiting anti-competitive agreements,
abuse of dominant position in the market and regulation of
mergers and acquisitions in Indian business markets.
 OBJECTIVES OF THE ACT
The Long Title to the statute reads as follows:

“An Act to provide, keeping in view of the economic

development of the country, for the establishment of a
Commission to prevent practices having adverse effect on
competition, to promote and sustain competition in markets,
to protect the interests of consumers and to ensure freedom
of trade carried on by other participants in markets, in India,
and for matters connected therewith or incidental thereto.”
So, the objectives of Competition Act 2002 are:
1. Ensure Fair Competition by prohibiting trade practices
which cause appreciable adverse effect on
competition in markets.
2. Promote and sustain competition in Market.
3. Protect the Interest of Consumers.
4. Ensure Freedom of Trade carried on by other
participants in market.
 FORM of THE ACT
Enactment- 13 January 2003
Enforcement- 31 March 2003
Total Sections- 66
Total Chapters- 9
Extent (Section-1)- Applicable to whole of India except
Union Territory of Jammu & Kashmir and UT of Ladakh.
Principal Authority under the Act- Competition
Commission of India
 REGULATIONS for IMPLEMENTATION OF
COMPETITION ACT 2002
CCI has from time to time, enacted certain regulations for the
implementation of the provisions of Competition Act 2002. Some of
these regulations are following:
1. CCI (General) Regulations 2009.
2. CCI (Procedure for Engagement of Experts and Professionals)
Regulations 2009.
3. CCI (Meeting for transaction of Business)Regulations 2009.
4. CCI (Determination of Cost of Production)Regulations 2009.
5. CCI (Lesser Penalty) Regulations 2009.
6. CCI (Manner of Recovery of Monetary Penalty) Regulations 2009.
 4 IMPORTANT COMPONENTS OF COMPETITION
ACT 2002
The Act has 4 important components which are dealt
with by the CCI. In order to regulate the competition and
realize the objectives of CA 2002, it is necessary for the
CCI to focus upon these 4 components.
1. Anti-Competitive Agreements (Section-3): These
agreements restrict freedom of trade and cause
consumer harm by way of limiting production and
distribution of G/S and fixing higher prices.
2. Abuse of Dominance (Section-4): A dominant firm through its position of
dominance may restrict market and set unfair and discriminatory conditions. CCI
has to check such abuse.

3. Combinations and its Regulation (Section-5 & 6): Mergers & Acquisitions of
large corporations can have very disruptive effect on positive competition in the
relevant market. CCI needs to assess whether such a combination is adverse to
market competition or not.

4. Competition Advocacy (Section-49): Competition Advocacy means those

activities which are conducted to promote a competitive environment for
economic activities. Raising the level of awareness among the public is an
important step towards creating a competition culture within the country.
 COMPETITION COMMISSION OF INDIA
CA 2002, provides for constitution of Competition Commission of
India to administer the provisions of CA 2002. This Commission
serves the role of Principal Regulatory Authority of Competition
in Indian markets.

Chapter-3: Establishment of CCI, Composition, Office

Conditions, Appointments and Removal/Resignation of Officials
of CCI.

Chapter-4: Duties, Powers and Functions of CCI.

 VISION and MISSION OF CCI
VISION of CCI:- To promote and sustain an enabling competition culture
through engagement and enforcement that would inspire businesses to be
fair, competitive and innovative; enhance consumer welfare; and support
economic growth.

MISSION of CCI:- Competition Commission of India aims to establish a

robust competitive environment through:
• Proactive engagement with all stakeholders, including consumers,
industry, government and international jurisdictions.
• Being a knowledge intensive organization with high competence level.
• Professionalism, transparency, resolve and wisdom in enforcement.
 ESTABLISHMENT OF CCI (Section-7)
As per Section-7, CCI is established by Central Government.
CCI was established with effect from October 14, 2003 with
its head office in New Delhi.
But, CCI could not assume functionality for long period of
time after its establishment owing to various writ petitions
being filed before Supreme Court and High Courts.
Issue: If CCI will exercise adjudicatory functions, then
Chairman of CCI must be appointed by CJI.
Supreme Court in “Brahm Dutt v. UOI” (2005) decided that in order
to uphold Doctrine of Separation of Powers between Judiciary and
Executive, Central Govt should create 2 separate bodies.
One with expertise for Advisory and Regulatory functions and other
for Adjudicatory functions.
Central Govt in 2007 added Section-53A to CA 2002 which
empowered Central Govt to establish Competition Appellate Tribunal
w.e.f 15 May 2009. Now, after amendment introduced by Finance
Act 2017, National Company Law Appellate Tribunal (NCLAT)
constituted under Section-410 of Companies Act 2013 shall serve as
the Appellate Tribunal under CA 2002.
 COMPOSITION of CCI (Section-8)
The Commission comprises a Chairperson and not less than 2 and not
more than 6 other members appointed by the Central Government.
Currently, there are 2 members of the Competition Commission of India
are:
1. Dr. Sangeeta Verma
2. Bhagwant Singh Bishnoi

The Chairperson and the other members shall be whole-time members of

the CCI.
FUNCTIONAL STRUCTURE OF CCI

Each division is headed by one Advisor; and each

division has professionals from economics, law and
finance backgrounds.
 ELIGIBILITY OF CCI MEMBERS
(Section-8)
According to Section-8 (2), every member of CCI shall fulfil following eligibility
criteria:

The Chairperson and every other Member

1. shall be a person of ability, integrity and standing; and
2. has been/is qualified to be a judge of a High Court,
or,
has special knowledge of, and professional experience of not less than
fifteen years in international trade, economics, business, commerce, law,
finance, accountancy, management, industry, public affairs, administration or
in any other matter which, in the opinion of the Central Government, may
be useful to the Commission.
 SELECTION COMMITTEE
(Section-9)

The members of CCI are appointed by Central Govt from the panel
of names recommended by a Selection Committee consisting of:
1. CJI/ his nominee----------- Chairperson
2. Secretary in Ministry of Corporate Affairs------Member
3. Secretary in Ministry of Law and Justice--------Member
4. 2 reputed experts having special knowledge of, and professional
experience in international trade, economics, business,
commerce, law, finance, accountancy, management, industry,
public affairs or competition matters including competition law
and policy-------------------------Member
 TERM OF OFFICE
(Section-10)
Chairperson and all members shall hold office for a term of 5 years from
the date on which they enter office.

• All members are eligible for reappointment.

• No member or Chairperson can hold office after turning 65 years of age.
Vacancy caused by removal/resignation/death/otherwise shall be filled by
fresh appointment under Section-9.

Vacancy in office of Chairperson due to resignation/death/otherwise, then

senior-most member in CCI shall serve this position till newly appointed
Chairperson enters the office.
 RESIGNATION
(Section-11)
Resignation- Chairperson/Member can resign by a notice
in writing under his hand and addressed to Central Govt.
Unless CG permits him to relinquish his office sooner,
such member shall continue to hold the office for 3
months from data of receipt of notice by Central Govt or
until newly appointed member enters the office or till
the completion of his term; whichever is earlier.
 REMOVAL (Section-11)
Removal- Central Govt by an order, can remove Chairperson/Member from his office.

Grounds of Removal
1. Adjudged as an Insolvent.
2. Engaged at anytime during office in any paid employment.
3. Convicted of any offence which in opinion of CG involves moral turpitude.
4. Acquired such financial/other interest which can likely affect his functions as a Member
prejudicially.
5. Abused his position as to render his continuance in office prejudicial to the public interest.
6. Physical/Mental Incapability of acting as Member.

For removal on grounds (4 or 5), Central Govt has to refer the matter to Supreme Court who
shall direct an inquiry to be held in accordance with procedure prescribed by Supreme Court.
Upon such inquiry if Supreme Court reports that member ought to be removed, Central Govt
can proceed to order such removal.
 OTHER EMPLOYMENT RESTRICTION
(Section-12)
After ceasing to hold office, Chairperson/Member cannot
accept any employment for a period of 2 years in or connected
with management/administration of any enterprise which has
been a party to a proceeding before CCI.

This rule does not apply where Chairperson/Member has

accepted employment under Central Govt/State Govt/Local
Authority/ any Corporation estd. Under Central/State or
Provincial Act or under a Government Company as defined
under Companies Act 2013.
 DUTIES OF CCI
(SECTION-18)
CCI performs following duties:
1. Eliminate trade practices which cause adverse effect on competition
in markets.
2. Promote and sustain competition in Market.
3. Protect the Interest of Consumers.
4. Ensure Freedom of Trade carried on by other participants in market.

Proviso to the section also enables CCI to enter into any memorandum
or arrangement with prior approval of the Central Govt, with any agency
of any foreign country.