The COMPETITION ACT 2002

-SUPRIYA MAHESHWARI

Competition Act, 2002

The competition Act ,enacted in December 2002 following the recommendations of High level Committee on Competition Policy and law. With the coming into effect of Competition Act,2002 the MRTP Act 1969, ( Monopolies and Restrictive Trade Practices) was dissolved. The Act extends to whole of India except J&K

 Competition Act provides for establishment of a Competition Commission :

Competition Act provides that Competition Commission be established by Central Government , consist of a chairperson and not less than 2 and not more than 10 member (qualified to be judge of High Court).

Duties Of Commission:
Eliminate practices having adverse effect on Competition Promote & sustain competition Protect the interest of consumers Ensure freedom of trade carried by other participants , in market in India.
The central govt is empowered to replace the commission in certain situations such as commission is unable to discharge its functions or perform duties, etc.

ANTI COMPETITIVE AGREEMENTS

The Act declares void any agreements in respect of production, supply, distribution , storage , acquisitions or control of goods which causes or likely to cause adverse effect on competition within India: Anti Competitive Agreements include the following:
Any secret agreement which
- directly/indirectly determines purchase or sale prices -limits or control production/supply/technical development/investment -shares the market or source of production by way of allocation of geographical area of market , type of service or number of customers in market or similar ways -directly/indirectly results in bid rigging

 Any agreement which causes or likely to cause an appreciable effect on competition in India . -Tie in arrangement Exclusive supply agreements Exclusive distribution agreements Refusal to deal

Abuse of dominant Position

The act lays down that no enterprise shall abuse its dominant position. Following cases are regarded as abuse of dominant position:
1. directly /indirectly imposes unfair or discriminatory -condition in purchase or sale of goods Price in purchase or sale (including predatory price) of goods/services.

2. Limits or restricts -production of goods -Technical /scientific development relating to goods/services 3. Indulges in practice or practices resulting in denial of market access 4. Uses its dominant position in one market to enter into any market.

Regulations
Whenever the Commission finds that any agreement causes or is likely to cause an appreciable adverse effect on competition it may pass the following orders: Direct the party to discontinue the agreement and not to re-enter such agreement. Impose penalty which seems fit ( not more than 10% of avg of last 3 yrs turnover) Award compensation to parties in accordance with provisions contain in Act Direct that agreement shall stand modified according to manner specified Recommend to Central govt for division of enterprise enjoying dominant position Pass other order that seems fit.

Factors considered in Determining Dominant Position

Market share of enterprise Size & resources of enterprise Size and importance of competitors Economic power including commercial advantage over competitors Service network or sale of such enterprise Dependence of consumer on enterprise Market structure and size of market Entry barriers including as regulatory barriers etc Any other factors which commission may consider relevant

Regulations of Combinations
Section 5 of the act , deals with combinations( mergers). The commission is expected to regulate combinations having adverse effect on competition.

 Commision deals with combinations having: -For single enterprise

- Assets value > 1000 crores - Turn over > Rs 3000 crores

- For group of enterprises

- -Assets value > 4000 crores - Turn over > 12000 crore

1. Subject to above provisions , any enterprise entering into such agreements need to give notice to Commission . 2. If the commission thinks the combination does not have any adverse effect on competition approves the combination. 3. Where the Commission thinks the combination has adverse effect on competition , does not approves it.

Where commision thinks that if such adverse effect can be eliminated by modification in combination , it may propose modification.

The parties involved needs to accept the modification within the period specified by commission.
The parties may proposed amendments to the modification within 30 days.