• Capitalism is a widespread economic system globally that emerged in the 17th

century after the decline of mercantilism.

• It is characterized by minimal government intervention, private ownership of
means of production, and prices determined by market forces.
• Capitalism is believed to bring ef ciency and economic growth but has
drawbacks such as monopoly power, income inequality, and prioritizing
economic bene ts over social bene ts.
• The drawbacks lead to the need for regulating capitalism through state
intervention, balancing the regulation to avoid limiting economic freedom.
• Different models of capitalism vary in the degree of competition in markets and
the extent of state intervention.
•
Role of Competition:
• Competition in the marketplace, the rivalry among businesses for customers,
is a fundamental aspect of a dynamic market economy.
• It encourages innovation, cost reduction, and increased productivity among
competing producers, suppliers, or service providers.
• Economic agents are driven by self-interest, but the bene ts of competition
extend to society at large.
• Consumers bene t from a variety of quality products at affordable prices, while
businesses bene t from lower costs and increased competitiveness.
• The economy bene ts from the ef cient allocation of resources, fostering
innovation, dynamic ef ciency, increased productivity, and high economic
growth.
• Competitive markets contribute to improving the standard of living by
maximizing output and ef ciently using resources.
• Lack of competition, such as price- xing cartels or abuse of market power,
harms both the economy and consumers in the long term.

Competition Law:
• Competition is not automatically ensured in economies, especially those not
following a laissez-faire approach.
• In modern economies, distortions in the market often result from deliberate
strategies of market players rather than natural competitive forces.
• The state plays a crucial role in monitoring markets to identify and address
impediments and distortions.
• Competition Law, also known as antitrust law, is the set of rules created to
encourage and maintain market competition.
• A competition regulator is the institution responsible for overseeing market
functioning and ensuring fair competition.
• Competition Law is globally prevalent, with over 100 countries having regimes
and enforcement agencies.
• These laws aim to prohibit practices that restrict competition among
businesses and prevent behavior that harms consumer interests.
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
 • Businesses are obligated to follow competition laws, and it is essential for
them to understand and comply with these regulations.

History of Competition Law in India:

• In 1969, India enacted the Monopolies and Restrictive Trade Practices Act
(MRTP Act) as the rst legislation to curb abuse of market power.
• The MRTP Act aimed to prevent the concentration of economic power, control
monopolies, and prohibit monopolistic and restrictive trade practices.
• As India embraced economic reforms, including Liberalisation, Privatisation,
and Globalisation, the MRTP Act became outdated and was deemed
unsuitable to support the growth aspirations of the country's large population.
• In 1999, the Finance Minister, Shri Yashwant Sinha, acknowledged the
obsolescence of the MRTP Act and emphasized the need to shift focus from
curbing monopolies to promoting competition.
• A High-Level Committee on Competition Policy and Law, chaired by Mr.
Raghavan, was formed to examine the issues and propose a modern
Competition Law suitable for India's conditions.
• The Committee recommended replacing the MRTP Act with a modern
competition law to foster competition and eliminate anti-competitive practices.
• In 2000, the Committee submitted its report, leading to the introduction of the
Competition Bill in the Parliament in 2001.
• The Competition Act, 2002, emerged from the Competition Bill after
consultations with stakeholders.
• The preamble of the Competition Act outlines its purpose: to establish a
Commission preventing practices adversely affecting competition, promoting
and sustaining competition, protecting consumer interests, and ensuring
freedom of trade in India.
• The new system emphasizes the role of the market, supplemented by
regulation, with the goal of creating a favorable business environment in the
country.

Evolution and development of Competition Act

The Monopolistic and Restrictive Trade Practices Act, 1969

The Monopolies and Restrictive Trade Practices Act of 1969 (MRTP Act)
was the rst competition law established in India. The MRTP Act came
into effect on June 1st, 1970, with the goal of ensuring that the
functioning of the market structure did not result in the concentration of
fi
fi
the economy in a few hands. It also prohibited monopolistic and
discriminatory acts that are harmful to the public at large.
Economic liberalisation and the abolition of the MRTP Act in 1991

In 1991, economic liberalisation was introduced, which was a major

turning point for Indian markets in the globalised world. With the
elimination of trade barriers, the nation began to face competition from
both within and beyond the country. As a result, in order to pave the way
for globalisation, India implemented plenty of new economic plans,
reduced government interference, and progressively started opening
opportunities for industry and international investment. Among such new
provisions, plenty of changes were made to India’s competitive system,
such as:
Amendment to the Monopolies and Restrictive Trade Practices Act has
eliminated-

• the method of pre-entry critical examination of investment by

MRTP Industries,
• the scope of MRTP in mergers, acquisitions, and combination, and
• the precondition of government permission for spreading and
forming new enterprises.
Following economic liberalisation in 1991, it became essential to
establish a competition law system that was more relevant to domestic
economic forces and compatible with international practices.
Emergence of Competition Act, 2002

The Indian Parliament enacted the Competition Act in 2002 to govern

the anti-competitive behaviour of rms in the Indian market. It was
introduced to avoid behaviours that have an Appreciable Adverse Effect
on Competition (AAEC). The goal of the Competition Act, 2002 is to
develop and preserve an open, just, competitive, and creative
environment that will protect the interests of consumers and foster long-
term economic progress in the nation.

According to the Act, MRTP has become outdated and unnecessary as

a result of worldwide economic trends. Hence, there is a need to switch
from ‘curtailing monopolies’ to ‘supporting competition’.
fi
The Competition Act, 2002 was modi ed by the Competition
(Amendment) Act 2007, which came into effect on May 20, 2009, when
the Indian government noti ed some sections of the Competition Act
relating to anti-competitive agreements and abuse of dominant
positions.

After three more years, in June 2011, certain provisions related to

acquisition control came into force.

Article 39 of the Indian Constitution

Article 39 of the Indian Constitution, speci cally deals with the
provisions or principles of policy that shall be undertaken by the
state. Article 39 contains six sub-clauses, that are:

1. That all the citizens irrespective of their sex whether men

or women shall equally have the right to adequate means of
livelihood. [Article 39(a) of the Indian Constitution]

2. That the resources and the ownership of those resources

and materials shall be distributed in such a way that it ful ls the
common goal. [Article 39(b) of the Indian Constitution]
fi
fi
fi
fi
 3. That the economic system shall be executed in such a
way that the concentration of wealth and means of production shall
not result in a common detriment. [Article 39(c) of the Indian
Constitution]

4. That equal pay for equal work shall be promoted. [Article

39(d) of the Indian Constitution]

5. That the health and strength of workers irrespective of

whether men, women or children shall not be abused or
manipulated. Further, economic necessity/condition shall not be
the reason for entering such avocation that is unsuitable for
speci c age or strength. [Article 39(e) of the Indian Constitution]

6. That appropriate opportunities shall be given to children

that would help them in building in a healthy manner, and in the
condition of freedom and dignity. Further, childhood and youth
shall be protected from any kind of exploitation and against moral
and material abandonment. [Article 39(f) of the Indian Constitution]

Article 39(f) of the Indian Constitution,1950 was substituted

through the 42nd Constitutional Amendment Act, 1976 to expand
the scope of the said article. Previously, Article 39(f) stated
that “childhood and youth are protected or guarded against
exploitation or manipulation and against moral and material
abandonment.”
The sole purpose of this Article is to ensure that the people or the
citizens of India are provided with adequate means of livelihood,
fair distribution of wealth, equal pay for equal work, protection of
children and labour. The responsibility of ensuring all this is upon
the state.

The essence of Article 39 has been enumerated under sub-clauses

(b) and (c). Article 39(b) and (c) deals with ensuring a welfare
society and the promotion of an egalitarian society.
In Kesavananda Bharati v. The State of Kerala (1973) the Supreme
Court of India stated that in the process of development in any eld
like social, economic, and political, then such development shall
not be in contravention to the individual’s right to dignity. Hence,
here the Supreme Court observed that even the framers of the
fi
fi
Indian Constitution were of the opinion that to not have such a
society where the individuals have not ensured any sort of dignity.

In a landmark Supreme Court judgement of the State of Bihar v.

Kameshwar Singh AIR (1952) the Hon’ble Court explicitly held that
any legislation that aims at doing away with the concentration of
wealth/land in the hands of a few and promotes an egalitarian
approach would be bene cial for the society as a whole and this
would encourage an inclusive development that would further the
cause as enumerated under the Article 39(b) and (c) of the Indian
Constitution.

The Hon’ble Court under the Assam Sillimanite Ltd. v. Union of

India (1992) explained what is “material resources of the
community” that has been mentioned under Article 39(b) of the
Indian Constitution. The Court said, the above-mentioned term
means and includes all those things that are apt of creating wealth
for the community as a whole.

In the above-mentioned case, the Supreme Court held that any Act,
legislation, etc. which aims at expanding the production and
supply of the refractories in order to meet the crucial demand of
the iron and steel industry is well protected under Article 39(b) of
the Indian Constitution.

Moreover, the “material resources of the community” subsume not

only those resources which are already vested in the hands of the
state rather also those which are in the hands of private individuals
as laid down in the case of Sanjeev Coke Mfg. Co. v. Bharat Coking
Coal Ltd. (1982) and again reiterated in Tinsukhia Electric Supply
Co. Ltd. v. State of Assam (1989).

In the case of T.N v. L. Abu Kavur Bai (1983) and Jilubhai Nanbhai
Khachar v. State of Gujarat (1994) it was held that material
resources include movable as well as immovable resources like
land, building, etc. besides natural and physical resources.
Nationalisation of private enterprises or undertakings and services
by the states is eligible to be covered within the scope of material
resources; this approach was observed in the case of Assam
Sillimanite Ltd. v. Union of India (1992).
fi
Article 39(d) of the Indian Constitution aims at ensuring equal pay
among men and women for the same work. The Delhi High Court
relied on Article 39(d) while dealing with the case of Randhir Singh
v. Union of India (1982), Jeet Singh v. MCD (1986) and Delhi
Veterinary Assn. v. Union of India (1984). The Hon’ble Court
invalidated the disparities of pay scales of drivers in the Delhi
Police Force, the Delhi Administration and the Central Government.

In Jaipal v. State of Haryana (1988), the Hon’ble Court again relied

on Article 39(d) of the Indian Constitution and deplored the
discrepancies of pay scale among permanent and temporary
employees or workers including regular or casual workers as long
as they are performing similar work.

Through Supreme Court Employees’ Welfare Assn. v. Union of

India (1989) and Harbans Lal v. State of Himachal Pradesh (1989),
the Supreme Court gave the ruling that Article 39(d) is supported
via Article 14 and 16 of the Indian Constitution and all those
reasonable classi cations mentioned under these two Articles
shall not be made applicable in case of Article 39(d). Hence,
employees employed under various other establishments and
institutions cannot claim equality in the pay scale as a right as
observed in the case of Assam Sillimanite Ltd. V. Union of India
(1992). Furthermore, The Hon’ble Court under the State of Himachal
Pradesh v. P.D Attri (1999) stated that the employees/workers from
another state cannot claim equality of payment in that state where
such person happens to be or is employed

Under V. Markendeya v. the State of Andhra Pradesh

(1989) and Mewa Ram Kanojia v. All India Institute of Medical
Science (1989), the Court explicitly held that pay scale is subjected
to the educational quali cations of the employee.

If any housing facility is provided to one establishment and not to

the other, in that case, the court cannot issue a writ of Mandamus
concerning the allotment of houses to low-income employees in
that establishment because the other establishment is providing
the same. Moreover, the court cannot force such establishments to
allot houses on grounds of social welfare as held in Jagdish
Prasad v. MCD (1993).
fi
fi
 Competition policy

Competition policy is about applying rules to make sure

businesses and companies compete fairly with each other. This
encourages enterprise and ef ciency, creates a wider choice for
consumers and helps reduce prices and improve quality.

Low prices for all: the simplest way for a company to gain a high
market share is to offer a better price. In a competitive market,
prices are pushed down. Not only is this good for consumers -
when more people can afford to buy products, it encourages
businesses to produce and boosts the economy in general.

Better quality: Competition also encourages businesses to improve

the quality of goods and services they sell – to attract more
customers and expand market share. Quality can mean various
things: products that last longer or work better, better after-sales or
technical support or friendlier and better service.

More choice: In a competitive market, businesses will try to make

their products different from the rest. This results in greater choice
– so consumers can select the product that offers the right balance
between price and quality.

Innovation: To deliver this choice, and produce better products,

businesses need to be innovative – in their product concepts,
design, production techniques, services etc.

Better competitors in global markets: Competition within the EU

helps make European companies stronger outside the EU too –
and able to hold their own against global competitors.

Relation between Competition Policy and Competition Law

World Bank de nes competition as ‘a situation in a market in which
rms or sellers independently strive for buyers’ patronage in order
to achieve a particular business objective, for example pro t sales
or market share’. Competition introduces greater market ef ciency
in an economy by encouraging innovation, technical development,
fi
fi
fi
fi
fi
lower price and better quality of products and services for the
consumers. However, market can suffer from failures and
distortions, and players may indulge in anti-competitive activities
such as cartels and abuse of dominance, resulting in adverse
impact on economic ef ciency and social welfare. Hence, there is
need for competition law and policy, and an authority to enforce it.

In the US and Canada, competition law and policy have been in

existence since 1890s. However, in India, they are relatively new
concepts. Competition law is based on the fundamental premise
that market forces and their contracts need to be organized in a
competitive manner. Thus, Competition Law and authorities
intervene whenever commercial contracts are found to be
‘restrictive’ in nature.

The Government of India has regarded ‘competition’ a serious

policy issue. Following are some of the relevant excerpts from the
President’s Address to the Parliament on 7th June, 2004:

“Competition, both domestic and external, will be deepened across

industry…”

“…government will devolve full managerial and commercial

autonomy to successful, pro t-making companies operating in a
competitive environment”.

“…government believes that privatisation should increase

competition, not decrease it”

The major objectives of the reforms in policies undertaken by the

Government of India in the recent years have been to promote
sustained high level of economic growth, enhance productivity and
attain international competitiveness and generate employment
opportunities. Now there is an increased recognition that market
forces should play an important role in helping achieve these
objectives. However, increased role of market players may lead to
adoption of unfair means, ultimately resulting in market failure.
Distortions in the market may also arise from the policies and
practices of the government, and their implementation. The
preponderance of market-distortion causing practices, market
failures and government-induced anti-competitive outcomes
necessitates the need for appropriate measures to ensure
fi
fi
competitive outcomes. These measures come under the umbrella
of ‘Competition Policy’, which seeks to check impediments to
proper functioning of markets.

The foundation of the competition policy in India is laid on the

Articles 38 and 39 of the Constitution of India, which come under
the Directive Principles of State Policy. These articles direct that
the State shall channel its policies towards securing (a) “that the
ownership and control of material resources of the community are
so distributed as best to subserve the common good” and (b) “that
the operation of the economic system does not result in the
concentration of wealth and means of production to the common
detriment”.

Competition policy helps to promote and protect the competitive

process and provides a level playing eld for all enterprises. Fair
and effective competition contributes to improvements in
economic ef ciency, economic growth and development, as well as
consumer welfare.

Broadly speaking, competition policy can be de ned as a

government policy that helps maintain the level of competition in
markets. This includes governmental measures that directly affect
the behaviour of enterprises, as well as the structure of industries
and markets.

Competition policy basically covers:

· A set of policies that promote competition in local and

national markets, for example policies to eliminate restrictive trade
practices, favour market entry and exit, reduce unnecessary
governmental interventions and put greater reliance on market
forces; and

· A competition law that comprises speci c legislation and

regulations aimed at preventing anti-competitive agreements,
abuse of dominance and anti-competitive mergers.

Competition policy complements other government policies such

as trade policy, industrial policy and regulatory reform, and
accommodates other economic and social objectives to enhance
fi
fi
fi
fi
 technological advancement, industrial diversi cation and job
creation.

Introduction
The Parliament of India passed the competition Act 2002, on January
13, 2003, which repealed the Monopolies and Restrictive Trade
Practices Act,1969 It came into force on March 31st, 2003. The
Competition Act, 2002 was changed twice after its enactment, with the
Competition (Amendment) Act,2007 and the Competition (Amendment)
Act,2009 It was a result of India’s drive for globalisation and economic
liberalisation. The primary goal of the Act is to control the anti-
competitive behaviour of a rm or company that has a negative impact
on competition in India’s market. Furthermore, the Act seeks to
encourage and maintain market competition, safeguard the interests of
consumers, and safeguard market freedom in our country.The
Competition Act, 2002, was adopted in India to achieve the dual goals of
regulating anti-competitive conduct and lending support to the
agreements of the World Trade Organisation (WTO). The Act also
establishes the competition commission of India (CCI) as a market
controller for stopping and controlling anti-competitive behaviour in the
country. It also establishes the Competition Appellate Tribunal
(COMPAT), a quasi-judicial authority formed to listen to and decide on
appeals against any direction issued or decision taken by the CCI.

Importance of Competition Act, 2002

The Competition Act is concerned with enforcing rules to ensure that
rms and corporations compete effectively with one another. This
promotes entrepreneurship and productivity, increases customer choices
and helps reduce prices and enhance quality.

1. Low prices: Offering a lower price is the easiest approach for a

rm to achieve a large market share. Prices are driven down in a
competitive market. This is not simply bene cial to consumers;
where more people can afford to buy items, it motivates rms to
produce and helps the economy as a whole.
fi
fi
fi
fi
fi
fi
 2. Innovation: To develop high-quality products, rms must be
innovative in their product concepts, design, manufacturing
processes, services, and so on.
3. Better quality: The Competition Act encourages rms to enhance
the quality of their goods and services in order to attract more
consumers and extend their customer base. Quality can refer to a
variety of things, including items that last longer or perform better,
better after-sales or technical advice, and better service.
4. More options: In a competitive market, rms will seek to
differentiate their products from the competition. As a result,
consumers have more options, allowing them to choose the
product that provides the most value for money.
Features of Competition Act, 2002

The following are some of the main features of the Competition Act:

1. Anti-competitive agreements: The competition law forbids any

agreement involving two or more rms or individuals to maintain
market competition and serve the public interest in India.
2. Dominance-abuse prevention: Any rm that exploits its
dominating position will be penalised.
3. Anti-cartels: Any agreement between businesses or individuals
that harms competition is a civil offence.
4. Mergers and acquisitions: The Commission will only approve
mergers and acquisitions if they do not undermine market
competition.
5. Informative nature of this act: In order to provide clarity and
avoid misunderstandings between companies or people, a
business must notify CCI of any interactions that are likely to harm
market competition prior to adopting such action or engaging in
such an agreement.

International co-operation in competition

fi
fi
fi
fi
fi
Globalisation, the digital economy, the proliferation of competition
authorities and the increasing willingness of competition authorities, both
young and mature, to engage in cross border cases has increased the
number and scope of cross-border competition issues.

Co-operation between jurisdictions is needed to:

• ensure ef cient and effective enforcement of competition laws, and

avoid unnecessary inconsistencies and duplication of effort;
• develop and maintain trust and transparency between jurisdictions;
• support and facilitate ef cient and effective international business
compliance with competition laws; and

• improve and develop the techniques, tools and frameworks

needed for effective international competition enforcement.

OECD work on international co-operation

Since 2012, international co-operation has been one of the main areas
of work of the OECD Competition Committee.

The OECD work on international co-operation contributes to improving

co-operation for the bene ts of enforcers, businesses and consumers
by:
• considering existing informal and formal enforcement co-operation
by Member and non-Member agencies, using these to identify best
practices, tools and possible areas for future development;
• exploring and providing examples of models for co-operation,
including an inventory of provisions for bilateral or multilateral co-
operation agreements;

• exploring new and enhanced forms of co-operation that can help

improve the ef ciency and ef cacy of investigations by multiple
competition authorities; and

• providing fora and mechanisms to improve trust and transparency

between competition authorities and about their respective laws,
policies and practices.
fi
fi
fi
fi
fi
 De nitions under Competition Law

Section 2 (a) “acquisition” means, directly or indirectly, acquiring

or agreeing to acquire—

(i) shares, voting rights or assets of any enterprise; or

(ii) control over management or control over assets of any

enterprise;

Section 2(b) “agreement” includes any arrangement or

understanding or action in concert,—

(i) whether or not, such arrangement, understanding or action is

formal or in writing; or

(ii) whether or not such arrangement, understanding or action is

intended to be enforceable by legal proceedings;

Section 2(ba) “Appellate Tribunal” means the National Company

Law Appellate Tribunal referred to in sub-section (1) of section
53A;]

Section 2 (c) “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;

Section 2 (f) “consumer” means any person who—

fi
(i) buys any goods for a consideration which has been paid or
promised or partly paid and partly promised, or under any system
of deferred payment and includes any user of such goods other
than the person who buys such goods for consideration paid or
promised or partly paid or partly promised, or under any system

of deferred payment when such use is made with the approval of

such person, whether such purchase of goods is for resale or for
any commercial purpose or for personal use;

(ii) hires or avails of any services for a consideration which has

been paid or promised or partly paid and partly promised, or under
any system of deferred payment and includes any bene ciary of
such services other than the person who hires or avails of the
services for consideration paid or promised, or partly paid and
partly
promised, or under any system of deferred payment, when such
services are availed of with the approval of the rst-mentioned
person whether such hiring or availing of services is for any
commercial purpose or for personal use;

2 “enterprise” means a person or a department of the

Government, who or which is, or has been, engaged in any activity,
relating to the production,storage, supply, distribution, acquisition
or control of articles or goods,

or the provision of services, of any kind, or in investment, or in the

business of 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
at the same place where the enterprise is located or at a different
place or at different places, but does not include any

activity of the Government relatable to the sovereign functions of

the Government including all activities carried on by the
departments of the Central Government dealing with atomic
energy, currency, defence and space.

Explanation.-For the purposes of this clause,—

fi
fi
 (a) “activity” includes profession or occupation;

(b) “article” includes a new article and “service” includes a new

service;

(c) “unit” or “division”, in relation to an enterprise, includes

(i) a plant or factory established for the production, storage,

supply, distribution, acquisition or control of any article or goods;

(ii) any branch or of ce established for the provision of any

service;

2(i) “goods” means goods as de ned in the Sale of Goods Act,

1930 (8 of 1930) and includes—
(A) products manufactured, processed or mined;

(B) debentures, stocks and shares after allotment;

(C) in relation to goods supplied, distributed or controlled in

India,goods imported into India;

2(j) “Member” means a Member of the Commission appointed

under sub- section (1) of section 9 and includes the Chairperson;

2(l) “person” includes—

(i) an individual;

(ii) a Hindu undivided family;

(iii) a company;

(iv) a rm;

(v) an association of persons or a body of individuals, whether

incorporated or not, in India or outside India;

fi
fi
fi
(vi) any corporation established by or under any Central, State or
Provincial Act or a Government company as de ned in section 617
of the Companies Act, 1956 (1 of 1956);

(vii) any body corporate incorporated by or under the laws of a

country outside India;

(viii) a co-operative society registered under any law relating to co-

operative societies;

(ix) a local authority;

(x) every arti cial juridical person, not falling within any of the
preceding sub-clauses;

2(m) “practice” includes any practice relating to the carrying on of

any trade by a person or an enterprise;
2 (o) “price”, in relation to the sale of any goods or to the
performance of any services, includes every valuable
consideration, whether direct or indirect, or deferred, and includes
any consideration which in effect relates to the

sale of any goods or to the performance of any services although

ostensibly relating to any other matter or thing;

2(p) “public nancial institution” means a public nancial

institution speci ed under section 4A of the Companies Act, 1956
(1 of 1956) and includes a State Financial, Industrial or Investment
Corporation;

2 (r) “relevant market” means the market which may be determined

by the commission with reference to the relevant product market or
the relevant geographic market or with reference to both the
markets;

2(s) “relevant geographic market” means a market comprising the

area in which the conditions of competition for supply of goods or
provision of services or demand of goods or services are distinctly
homogenous and can be distinguished from the conditions
prevailing in the neighbouring areas;

2(t) “relevant product market” means a market comprising all those

products or services which are regarded as interchangeable or
fi
fi
fi
fi
fi
substitutable by the consumer, by reason of characteristics of the
products or services, their

prices and intended use;

2(u) “service” means service of any description which is made

available to potential users and includes the provision of services
in connection with business of any industrial or commercial
matters such as banking,

communication, education, nancing, insurance, chit funds, real

estate,transport, storage, material treatment, processing, supply of
electrical or other energy, boarding, lodging, entertainment,
amusement, construction,

repair, conveying of news or information and advertising;

2(v) “shares” means shares in the share capital of a company
carrying voting rights and includes—

(i) any security which entitles the holder to receive shares with
voting rights;

(ii) stock except where a distinction between stock and share is

expressed or implied;

2(w) “statutory authority” means any authority, board, corporation,

council, institute, university or any other body corporate,
established by or under any Central, State or Provincial Act for the
purposes of regulating

production or supply of goods or provision of any services or

markets therefor or any matter connected therewith or incidental
thereto;

Substantive Provisions of the Act

The Act focuses on the following four areas:

• Anti-competitive Agreement (Section 3)
fi
• Abuse of Dominance (Section 4)
• Regulation of Combinations (Section 5 & 6)
• Competition Advocacy and Reference (Section 49 and 21)
Anti-competitive agreements and abuse of dominance are considered
as potential impediments to free and fair competition in the markets and
penalty is imposed wherever the Commission concludes that the
enterprise has/ had indulged in anti- competitive practices resulting in
appreciable adverse effect on competition (AAEC). Regulation of
combinations aim at ex-ante screening of mergers and acquisitions for
possible anti-competitive effects. Competition advocacy is about
sensitizing the market players and other participants on the competition
issues and
creating awareness about the bene ts of competition. The Act provides
for a reference to/ by other Statutory Authorities (Regulatory
Institutions) and also with the Central or the State Government. These
provisions are discussed in detail below:
3.1 Prohibition of Anti-competitive Agreements (Section 3)
Section 3 provides that any agreement which restricts the production,
supply, distribution, acquisition or control of goods or provision of
services, which causes or is likely to cause an appreciable adverse
effect on competition (AAEC) within India, is prohibited and void. Anti-
competitive agreements may include Horizontal and Vertical
Agreements.
Figure 1: Horizontal and Vertical Agreement

Horizontal and vertical relationships

Manufacturer A Manufacturer B

Horizontal relationships
• Same level of Production process
• Competitors
• Substitute goods
Vertical relationship
• Different level of production • Complimentary goods

Value chain
fi
 Retailer A

Source: Price water house Coopers

1.1.1 Horizontalagreements(Section3(3)
“Horizontal Agreement” means an agreement between enterprises,
each of which operates at the same level in the production or
distribution chain.
De ned under Section 3(3) of the Act, horizontal agreements include
agreement which:
a) Directly or indirectly determine purchase or sale prices: Fixing of
prices by competitors is a horizontal agreement wherein competitors
conspire to raise, decrease, x or stabilize prices in a speci c market.
The prices in a competitive marketshouldbedetermined
freelyonthebasisofdemandandsupplyandnotas a result of an agreement
between the competitors. An understanding between the competitors
under which the competitors agree to take actions to raise, decrease.
x or stabilize prices would be anticompetitive. Such agreements are
often done in secret but can be unearthed through circumstantial
evidence.

Example 1:
Businessman 1: Every shop in the mall is slashing their
prices. Businessman 2: Now we have to lower our prices too.
Businessman 1: Look, we'll all end up making less if we go on like this.
Why don’t we talk to other owners and stop the price war? Let's x the
prices together. Then we can keep our margin.
Businessman 2: That sounds like a smart plan. Let's talk to other
owner Businessman 3: Smart Plan? If you’re smart, you'll know this is
against the
Competition Law.
Businessman 1: Come on! No one cares about small businesses like
us.
Businessman 3: That’s not right! It's got nothing to do with the business
size. Price xing is wrong. I am not going to do anything illegal.
Inference: Price- xing is serious anti-competitive conduct under the
Competition Law. No business, big or small, should agree with their
competitors to x prices. Don’t cheat. Compete.
fi
fi
fi
fi
fi
fi
fi
fi
b) Limit or control output, technical development, services etc:
Production control involves competitors agreeing to limit the quantity of
goods or services available in the market. Competitors agreeing to
specialise in certain products, ranges of products or in particular
technologies could also be deemed to be anti- competitive.

Example 2:
Producer 1: None of us have really been doing well recently. We must
think of something to boost the pro t. I've been thinking to reduce the
supply together. When there's less supply, we can raise the price.
Things are only precious when they are rare.
Producer 2: Ok. You are right. Things are only precious when they are
rare. You're the industry leader. We'll take our cue from you.
Producer 3: Have you considered the implication of such agreement?
This is an illegal act and in contravention of the competition laws
Inference: Output restriction agreed between competitors is serious
anti- competitive conduct under the Competition Law. Businesses
should make independent commercial decisions and never collude with
each other to restrict output
c) Share or divide markets: This could include competitors agreeing to
allocate customers between themselves or agreeing to stay out of each
other's geographic territory or customer base.

Example 3:
Businessman 1: I didn't know that operating bus services for business
units was
so lucrative.
Businessman 2: Smartly, We agreed among ourselves to send out
quotations to different business units respectively. Now they don't really
have a choice. And we will virtually monopolize the shuttle bus
business. We can charge whatever we like!
Businessman 1: Even if your clients ask me for quotation, I am not
going to reply.
Businessman 2: So, how are we going to share those estates this
year? Businessman 1: Same as usual, let's split the districts between
us. I'll send you
the list when it's done.
fi
 After a month:
Businessman 1: No wonder the bus fares are getting higher and higher.
It's all
because of our agreement to share the market!
Inference: Such agreement is in contravention of the law and is
considered as a serious anti-competitive conduct under the
Competition Law.

d). Indulge in bid-rigging or collusive bidding:

Taking turns to win competitive tender contracts is an example of bid-
rigging. This could include:
◦ parties agreeing to submit cover bids (high) that are intended not
to be successful – where the unsuccessful bidders may get kick-
backs;

◦ bid suppression where parties agree that only one of them will
submit a bid for the contract;

◦ bid rotation where the parties to the agreement take turns to win
contracts.
More than one of these bid-rigging practices can occur at the
same time. For example, if one party to the agreement is
designated to win a particular contract, the other parties could
avoid winning either by not bidding (”bid suppression”) or by
submitting a high bid (”cover bidding”).This is an arrangement
between competitors whereby one of them agrees to refrain from
bidding, in exchange of acting as a sub-contractor
Example 4:
Company XYZ: Let's invite bids. We need to procure pipes.
Employee XYZ: All the bids are in! It is so strange... They all have
similar prices and they're all very high too. We have compared all
the tender submissions. Only ABC Enterprises quoted the lowest
price.
Company XYZ: Alright then, we'll go for ABC Enterprises!
Employee XYZ calls ABC Enterprises and informed that he had
won the
tender!
ABC Enterprises call other bidders: It is celebration time! We won
the bid. Thanks guys for jacking up your prices; we'll be making a
huge pro t from this contract.
Other bidders: Don't be silly! We are partners – we all win from
fi
 this!
ABC Enterprises: That's right; it'll be your turn to win next time! I
will not submit my bid next time. We're in this together, and we'll
all make pro t from this!
Newspaper headlines: CCI Fined ABC Enterprises and other
companies for Bid-Rigging. Directors Disquali ed.
Inference: Bid rigging is a violation of the Competition Law.
Businesses might appear to win by not competing with each
other, but they too can become victims.

◦ VerticalAgreements(Section3(4)
Vertical Agreements are agreements between rms at different levels of
the manufacturing or distribution processes. For example, an agreement
between the manufacturer and a distributor is a vertical agreement.
De ned by Section 3(4) of the Act, vertical agreements include:

a) Tie-in arrangements- Tying occurs when customers buy a product

they want (the tying product) but are required (forced) to buy a product
(the tied product) from a different market that they may not want. Tying
would be anti-competitive as it would restrict access to the tied product
market by competitors. Bundling could be distinguished from tying, as
bundling would normally involve products from the same market which
consumers generally would buy together. For example, a car which is
sold (bundled) together with tyres.

Example 5:

Hospital XYZ: Our new contract negotiation with ABC Enterprises is

under way. But they request for an additional clause specifying that if we
want to buy the medical device that only ABC Enterprises makes, we
must buy other medical supplies including medical masks, gloves,
syringes etc. as well.

Employee XYZ: But our current suppliers of these equipment offer lower
prices and better quality. There's no reason for us to switch to ABC
Enterprises.
fi
fi
fi
fi
Hospital XYZ: But if we do not agree, ABC Enterprises will not sell us
their medical device and we can't provide proper care without this
device. That leaves us no choice at all.

Employee XYZ: Calm down. This tying clause might contravene the
Competition

Law. ABCEnterprisescannotmakesuchrequest.

Inference: Tie-in agreement are anti-competitive as per Section 3 (4) of

the Competition Act and thereby punishable with penalty under Section
27.

b) Exclusive distribution agreements- In an exclusive distribution

agreement, the supplier agrees to sell his products only to one
distributor for resale in a particular territory. At the same time, the
distributor is usually limited in his active selling into other exclusively
allocated territories.

Example 6: Enterprise X is a producer of laptops who distributes

throughout India through its distributors. However, it gives only one
distributorship for East, West, North and South India and it does not
allow distributors to sell in each other's territory. Such an arrangement
by enterprise X will prevent competition among distributors.

Inference: Exclusive distribution agreement are considered to impinge

on competition.
c) Refusal to deal- It means restricting by any method any person/
classes of persons to whom goods are sold. Businesses have the right
to use their discretion in choosing whom to do business with. However, if
this choice is made through a conspiracy with another competitor,
business, or individual, they will likely be in contravention of the law. A
refusal to deal is a violation of competition law because it harms the
boycotted business by cutting them off from a facility, product supply, or
market. By harming the boycotted business in this way, the competing
businesses controls or monopolizes the market by unreasonably
restricting competition.

Example 7: Enterprise A is an enterprise in the market for lead used to

make pencils. Enterprise B is a major manufacturer of pencil in the
market but its production is dependent on supply of lead by enterprise A.
Enterprise A suddenly refuses to supply lead to B because a new
company, C has entered the pencil market in direct competition to B and
though A can supply to both B and C, A refuses to deal with B on entry
of C in market. In such situation B can approach the Commission with
information led under Section 3 (4).

Inference: Refusal to deal is Anti-competitive.

d) Resale price maintenance- It means selling goods with condition on

resale at stipulated prices. It generally occurs when an upstream seller
(Producer) imposes a xed or a minimum price that a downstream buyer
(Distributor or Retailer) must resell. For example, a manufacturer sets
the price for which its products are sold at the retail level. The result is
that resellers (e.g. retailers) do not compete on price. This is considered
to be anti-competitive.
Example 8:

Producer: What brings you here? Is there any problem with my

products?

Chain Store Owner: It’s not about your products. I'm just not happy with
the small competitors! If I sell something for Rs.500 in my chain stores,
smaller retailers sell the same for Rs.400, then my customers all ask me
for discount.
Producer: Why don't you x a resale price for each product and make
sure that all the retailers will sell your products at your xed prices. So
everyone can make a pro t, the customers don't have to shop around
and we don't have to get into a price war.

Chain Store Owner: My business is built on reputation and integrity. I

won't play dirty tricks to get business.

Inference: Resale price maintenance may restrict competition by

preventing businesses setting their prices independently.

•
Horizontal Versus Vertical Agreement
The Act treats horizontal agreements differently when
compared with vertical agreements. There is a
presumption in the Act that the four types of horizontal
fi
fi
fi
fi
fi
agreements mentioned above are presumed to have
adverse effect on competition which is similar to per se
rule.18 In other words, they are per se illegal and the
burden of proof will be on the defendant to prove that the
agreement in question is not causing an appreciable
adverse effect on competition.
The presumptive rule is not applicable to vertical
agreements which are subject to the rule of
reason19 analysis i.e. the positive as well as the negative
impact of such agreements on competition will have to be
taken into account before coming to any conclusion. This
also applies to agreements entered into by way of joint
ventures that increase ef ciency in production, supply,
distribution, storage etc. It is to be noted that Section 3(5)
recognizes and protects intellectual property rights,
permitting imposition of reasonable restrictions by their
owners. Also agreements relating to exports to the extent
to which they relate exclusively to the production, supply,
distribution or control of goods or services are exempted.

Factors considered for Inquiring into Agreements20

The Commission while determining whether an
agreement has an appreciable adverse effect on
competition under section 3, gives due regard to all or any
of the following factors, namely:-
1. (a) creation of barriers to new entrants in the market;
2. (b) driving existing competitors out of the market;
3. (c) foreclosure of competition by hindering entry into
the market;
fi
 4. (d) accrual of bene ts to consumers;
5. (e) improvements in production or distribution of
goods or provision of services;
6. (f) promotion of technical, scienti c and economic
development by means of production or distribution
of goods or provision of services
3.1.5 Important Cases of Anti-competitive Agreements
Bid Rigging by Insurance Companies, Case. No. 02 of
201421
CCI imposed a Rs. 671 crore penalty on four state-run
insurance companies— National Insurance, New India
Assurance, Oriental Insurance and United India Insurance
for cartelisation and indulging in anti-competitive
practices. It was observed that the four companies
colluded with each other and manipulated the tendering
process initiated by the Kerala government by forming a
cartel and quoting higher premium rates.
Bid Rigging in LPG Cylinder, Case No. 03 of 201122
The Commission initiated suo moto proceedings against
LPG cylinder manufactures who were found to be
involved in bid rigging in supplying LPG cylinders to M/s
Indian Oil Corporation Ltd. pursuant to a tender oated by
it. It was noted by the Commission that the identical price
quotations submitted by the opposite parties therein
pursuant to the impugned tender were actuated by mutual
understanding/ arrangements. The Commission apart
from issuing a cease and desist order imposed a penalty
upon each of the contravening party @ 7% of the average
turnover of the company. In COMPAT's 2013 judgment,
fi
fi
fl
 the CCI's order was upheld on its merits and CCI was
directed to reconsider the penalties it had imposed on the
manufacturers

Prohibition of Abuse of Dominance (Section 4)

The Act prohibits a dominant player from abusing its market power by
either restricting competition or by imposing unfair terms and conditions
on its customers. A company has a dominant position if it enjoys a
position of economic strength (and market power) to behave independently of its
competitors, customers, and consumers to an appreciable extent. In other words, dominant
position is a position of strength enjoyed by a rm which enables it to behave/act independently
of the market forces i.e. in the determination of price of the product. A dominant position in it self
is not illegal. However, abuse of dominances . Dominant companies have a special responsibility
to behave responsibly. They have to comply with special rules that are designed to protect
competitors, customers and market structure from abusive behaviour. Abuse of dominance is
violation of section 4 of the Competition Act.

The Act speci es a number of factors such as market share, size and
resources of the rm, market structure etc. that should be taken into
account while determining whether an enterprise is dominant or not. For
example: very large market shares, maintained stable for a long time
can be considered as evidence for the existence of a dominant position
in the relevant market.

Relevant market23 is de ned on the basis of geographical and product

market. Relevant geographic market24 is a geographical territory in
which competition conditions in a relevant market of a product are
suf ciently the same for all participants in such market and therefore this
territory can be separated from other territories. The relevant geographic
market is affected by factors like consumption and shipment patterns,
transportation costs, perishability and existence of barriers to the
shipment of products between adjoining geographic areas. For example,
in view of the high transportation costs in cement, the relevant
geographical market may be the region close to the manufacturing
facility.
fi
fi
fi
fi
fi
Relevant product market25 is de ned in terms of substitutability. It
comprises of all those products and/or services which are regarded as
interchangeable or substitutable by the consumer by reason of the
products' characteristics, their prices and their intended use. The market
for cars, for example, may consist of separate 'relevant product markets'
for small cars, mid-size cars, luxury cars etc. as these are not
substitutable for each other on a small change in price.

TheCommission while determining the“relevant geographic market26”,

gives due regard to all or any of the following factors, namely:-
regulatory trade barriers; local speci cation requirements; national
procurement policies; adequate distribution facilities; transport costs;
language; consumer preferences; need for secure or regular supplies or
rapid after-sales service. In case of “relevant product market”27, the
Commission gives due regard to all or any of the following factors,
namely:- physical characteristics or end-use of goods; price of goods or
service; consumer preferences; exclusion of in-house production; existence of specialized
producers; classi cation of industrial products.

The Act applies only to abuse by the dominant rms because the
presumption is that a small rm will lose its customers to its competitors
if it charges excessive prices. Customers might have nowhere to turn if a
dominant rm charges an excessive price.

The abuse of dominant position is broadly classi ed into exploitative and

exclusionary practices. The following are examples of abuse under each
of the practices:

3.2.1 ExploitativePractices

a. Directly or indirectly imposing unfair or discriminatory prices in

purchase or sale of goods or service

• Discriminatory pricing: Price discrimination occurs when customers in

different market segments are charged different prices for the same
good or service, for reasons unrelated to costs.

• Predatory pricing: selling a product or service below cost to drive

competitors out of the market or create barriers to expansion for such
competitors or to create barriers to entry for potential new competitors.

Example 9: Suppose Delhi is divided into two parts and both the areas
are inaccessible to one another. Suppose rm X is dominant in the
fi
fi
fi
fi
fi
fi
fi
fi
market of tyres. Since it can easily segregate the market it may charge
higher prices in one part and lower prices from other consumers for the
same tyre in spite of its cost being same in both the markets.

Example 10: Enterprise A, a manufacturer of pens is a dominant

enterprise in the pen market. Earlier it used to charge a price of INR10
per pen . However, it has recently started selling its pen at a loss making
price of INR 6 knowing that its competitors will not be able to match its
price as their cost of production is higher than Rs.6. As a result of this,
A's competitors would be forced to exit the market, after which, A, as a
monopolist, would be free to charge any price that it wants. This is an
example of a monopoly abusing its dominance by indulging in predatory
pricing.

• Excessive pricing: charging excessive prices due to lack of

competition. Since the rm has has no competition, it can charge higher
prices.

b. Directly or indirectly, imposes unfair or discriminatory condition in

purchase or sale of goods or service.

The imposition of unfair or discriminatory condition has a negative effect

on the consumer welfare.

Example: XYZ abused its dominant position in the market of 'high end'
residential accommodation, in Mumbai by imposing unfair and one-
sided conditions in agreement, say by changing the layout plan without
buyer consent. Imposition of such conditions is violation of section 4 of
the Act.

3.2.2 ExclusionaryPractices

c. Limiting production of goods or provision of services or limiting or

restricting technical or scienti c development

The dominant rm can restrict the production of its goods and services
in order to create arti cial scarcity in the market. As a result of which
demand will be greater than supply and hence the price of the product
would increase. Moreover, the dominant rm can also restrict scienti c
and technical innovations as it has no incentive to indulge in it. Other
fi
fi
fi
fi
fi
fi
competitive companies innovate to achieve dominance but this is not the
case with dominant rm as it might have no or very less competition.

d. Indulges in practice or practices resulting in denial of market access

A dominant rm in order to maintain its dominance may indulge in

practices which results in denial of market access to its competitors. For
instance: it can create entry barriers like by pricing below cost (predatory
pricing). It can also indulge in lobbying with government to create/modify
regulations which may restrict new entry. Denial of market access by the
dominant rm has a negative impact on consumer welfare as it limits
competitive prices and product choices.

e. Imposing conditions which are irrelevant to the contract entered into

According to it, a dominant rm imposes conditions which impose an

unnecessary onus on the other party to the contract which may be
completely irrelevant.

f. Using its dominant position in one relevant market to enter into, or

protect, other relevant market

According to it, a dominant rm would condition the purchase of the

product by the consumer with another product. The two products would
have different relevant markets.

Example : Suppose Arun purchases a luxury at from XYZ builders in a

high end residential accommodation. Also, XYZ has a dominant position
in the high end residential accommodation market. Further, XYZ
imposes an unnecessary condition on Arun that he can't rent his at to
students but he can rent it to families. This condition is completely
irrelevant to the contract entered into and is hence a violation of section
4 of the Act.

Example : A printer manufacturer who is dominant in the printer market

would force the consumer to also buy ink toner from him. Since, printer
and toner are different products; they have a separate relevant market.
Consequently, the competition in the ink market gets affected as ink
producers would lose their customers to the printer manufacturer.

3.2.3 Factors considered for Inquiring into Section-428

fi
fi
fi
fi
fi
fl
fl
The Commission while inquiring whether an enterprise enjoys a
dominant position or not under section 4, gives due regard to all or any
of the following factors, namely:— (a) market share of the enterprise; (b)
size and resources of the enterprise; (c) size and importance of the
competitors; (d) economic power of the enterprise including commercial
advantages over competitors; (e) vertical integration of the enterprises
or sale or service network of such enterprises; (f) dependence of
consumers on the enterprise; (g) monopoly or dominant position
whether acquired as a result of any statute or by virtue of being a
Government company or a public sector undertaking or

otherwise; entry barriers including barriers such as regulatory

barriers, nancial risk, high capital cost of entry, marketing entry barriers,
technical entry barriers, economies of scale, high cost of substitutable
goods or service for consumers; (i) countervailing buying power; (j)
market structure and size of market; (k) social obligations and social
costs; (I) relative advantage by way of the contribution to the economic
development, by the enterprise enjoying a dominant position having or
likely to have an appreciable adverse effect on competition; (m) any
other factor which the Commission may consider relevant for the inquiry

3.2.4 ImportantcasesonAbuseofDominance

1. BelaireOwner'sAssociation and DLFLimited:CaseNo.19of201029

DLF abused its dominant position in the market of 'high-end' residential

accommodation, in Gurgaon by imposing unfair and one-sided
conditions in agreement. These includes unilateral changes can be
made by the builder without the buyers' consent, builder has the right to
change the layout plan without buyer consent , can unilaterally change
inter se areas for different uses like residential, commercial, etc, without
informing anyone etc. CCI levied a penalty of Rs.630 crore because of
its anti-competitive behaviour. TheSupreme Court up held the decision
of CCI and has asked DLF to deposit the penalty.

2. MCX Stock Exchange Ltd and the National Stock Exchange (NSE),
Case No. 13 of 200930

Competition Commission of India (CCI) directed the National Stock

Exchange (NSE) to pay a penalty of Rs 55 crore for the alleged abuse of
its dominant position. via indulging in unfair practices. The case traces back to 2009
when MCX Stock Exchange moved the CCI against NSE's decision to offer currency derivatives
fi
 trading free of cost to investors. It argued that NSE enjoyed a dominant position, which was
abused.

Note: Section 4 can only apply to rms which enjoy a dominant position
in the market and are abusing their position. Dominance is necessary
but not a suf cient condition to invite violation of section 4.

Combination Regulation (Section 5 & 6)

Combinations mean mergers, amalgamations of companies or
acquisitions of control, shares, voting rights or assets of one company
by another company or group. Good combinations lead to a more
ef cient business which passes on some of those ef ciency savings to
its customers. On the other hand, bad mergers lead to a situation where
one or more businesses have the power to raise their prices to their
customers. That is, they substantially lessen competition.

3.3.1 Ex-anti regulation of Combinations

Combination review is based on age-old dictum, 'Prevention is better

than cure' and therefore ex-ante in nature.

Rationale for Ex-ante regulation of Combinations (Mergers &

Acquisitions):

• Combinations should not be permitted to create, enhance, or

entrench market power or to facilitate its exercise

• Combinations enhances market power if it is likely to encourage

one or more rms to raise price, reduce output, diminish
innovation, or otherwise harm consumers as a result of diminished
competitive constraints or incentives

• Unilateral effects - Firms can enhance market power simply

because of elimination of competition through merger or
acquisition.

• Coordinated effects - merger can also result in increased risk of

joint dominance through coordinated, accommodating, or
concerted behavior among remaining market players in relevant
market
fi
fi
fi
fi
fi
 • Post-combination, unscrambling a merger may also involve high
socio- economic costs.
• Regulation of combination provides legal certainty to business, had
the combining enterprises taken clearance after ling noti cation
The Act provides for mandatory ling of notice with CCI regarding
the combination based on asset/turnover. The failure to notify and
obtain required approval attracts penalties (up to 1% of total
turnover or the assets, whichever is higher) under Section 43A of
the Act. The Commission also has the power to take suo-moto
action by calling for notice from parties to the mergers, which do
not comply with the mandatory ling requirements. The transaction
would be rendered void, if the CCI

subsequently determines that the combination has an 'appreciable

adverse effect on competition in India'. Provisions of ‘Regulation of
Combinations’ in the Act intend to ensure that the rms do not acquire
such a degree of market power in the market so as to harm the interest
of consumers, the economy and society as a whole.
If a rm ‘A’ merges with rm 'B' then such post-merger entity A+B will capture almost the whole
market thereby impinging on the competition in the market. Such market power may incentivize
the businesses in exploiting the consumers. The Competition Commission's role is to screen
mergers for potential anti-competitive effects. The Commission decides whether the combination
should be approved, prohibitedor approved with modi cations to the combination. The
modi cations are made on the basis of how the anti-competitive effects could be alleviated. In
competition parlance such modi cations are termed as 'Remedies'. Remedies can either be: a)
Structural; or b) Behavioural.31
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
 3.3.2 Thress holds for Combinations

Current thresholds as enhanced vide Govt. Noti cation dated 4th March
2016 for the purpose of Section 5 of the Act are as follows:

Forms for Filing notice for a Combination

The acquirer has the obligation to le the notice in Form I32 or Form
II17, as the case may be. Form I is simple, short & relatively user
friendly requiring basic information on the Combination. Form II is a
detailed form requiring much more information. The Commission
recommends this form to be used in cases where the transaction involve
parties that have:

• - A horizontal overlap with combined market shareof over 15%

• - Vertical relationship with market share of over 25% in respective

product / market
Any share subscription or nancing facility or any acquisition by a
public nancial institution, foreign institutional investor, bank or
venture capital fund, pursuant to any covenant of a loan agreement
or investment agreement are exempted from ling notices
regarding combination under the Competition Act. However, the
CCI is required to be noti ed within 7 days of such share
subscription or nancing facility or acquisition by a public nancial
institution, foreign institutional investor, bank or venture capital
fund in Form III17.
3.3.3 Timelines and Framework for Assessment
The Competition Act, 2002 provides a timeline of 210 days to CCI
to take a decision on a Combination ling.
Pre-Investigation phase: The commission has to form a prima facie
opinion within 30 days as to whether the combination is likely to
fi
fi
fi
fi
fi
fi
fi
fi
fi
 cause an appreciable adverse effect on competition. In pursuance
of this provision, most lings are likely to be approved in this
shorter time frame. Only few lings with serious competition
concerns are likely to go beyond this period to the second stage of
investigation. These will be deemed cleared at the end of 210
days, if no order is passed.
Investigation phase: If Commission is of the Prima-facie opinion
that the combination is likely to cause or has caused Appreciable
Adverse Effect on Competition (AAEC) within the relevant market
in India and investigation in terms of Section 29 of the Act then the
Commission by its order can either

• Approve the Combination if there is No likelihood of AAEC

• Approve with modi cations33 - Structural (divestiture) and/or

Behavioral remedies (price ceiling etc.) if the AAEC concerns are
addressed through such remedies

• Not approve, in case the Commission considers that there is

suf cient likelihood of AAEC and the same can't be addressed
through modi cations.

Factors considered for Inquiring into Combination34

For the purposes of determining whether a combination would
have the effect of or is likely to have an appreciable adverse effect
on competition in the relevant market, the Commission gives due
regard to all or any of the following factors, namely:-

(a) (b) (c) (d) (e)

(f) (i)
(j) (k) (I) (m)

actual and potential level of competition through imports in the

market 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
fi
fi
fi
fi
fi
 combination being able to signi cantly and sustainably increase
prices or pro t margins;
extent of effective competition likely to sustain in a market; (g)
extent to which substitutes are available or arc likely to be
available in the market;
market share, in the relevant market, of the persons or enterprise
in a combination, individually and as a combination;
likelihood that the combination would result in the removal of a
vigorous and effective competitor or competitors in the market;
nature and extent of vertical integration in the market;
possibility of a failing business;
nature and extent of innovation;
relative advantage, by way of the contribution to the economic
development, by any combination having or likely to have
whether the bene ts of the combination outweigh the adverse
impact of the combination, if any.

3.3.5 Important Cases on Combinations

Acquisition of Bina Power Supply Limited (BINA/SPV) by JSW
Energy Limited (JSWEL)35
The Proposed Transaction relates to an acquisition of a 100%
stake (i.e. all securities including equity shares and non-convertible
debentures) in the SPV by JSWEL. The Proposed Transaction is,
therefore, in the nature of an acquisition of shares within the
meaning of Section 5(a) of the Act. The relevant market in relation
to the Proposed Transaction is “the market for generation of power
in India” However, currently the SPV is not involved in any
business operation. The combination was approved by the
commission under section 31(1) of the Act.

Important Cases on Combinations

Acquisition of Bina Power Supply Limited (BINA/SPV) by JSW Energy
Limited (JSWEL)35

The Proposed Transaction relates to an acquisition of a 100% stake (i.e.

all securities including equity shares and non-convertible debentures) in
fi
fi
fi
 the SPV by JSWEL. The Proposed Transaction is, therefore, in the
nature of an acquisition of shares within the meaning of Section 5(a) of
the Act. The relevant market in relation to the Proposed Transaction is
“the market for generation of power in India” However, currently the SPV
is not involved in any business operation. The combination was
approved by the commission under section 31(1) of the Act.

PVR’s acquisition of DT Cinema’s multiplexes/single screen theatres in

Delhi NCR and Chandigarh36

The proposed combination relates to the acquisition by PVR of DLF's

lm exhibition business 'DT Cinemas’, comprising 39 screens (29
existing and 10 upcoming) as a going concern on a slump-sale basis.
For the purpose of competition assessment of the proposed
combination, the Commission de ned the relevant geographic markets
as Gurgaon, South Delhi, North, West and Central Delhi, Noida, and
Chandigarh. The relevant product market was de ned as the market for
multiplexes and high end single screen theatres. The commission
observed that the proposed combination is likely to cause AAEC in the
relevant markets of Noida, Gurgaon and South Delhi and hence
subjected the deal to public scrutiny. During the course of the inquiry,
behavorial remedies were offered by the Acquirer, However, the
commission approved the proposed combination under section 31(7)
with certain modi cations by offering structural remedies, which inter alia
include exclusion of DT Savitri (one screen) and DT Saket (six screens)
from the proposed combination to address anti-competitive concerns.

Case Details: XYZ (Con dential) v. Alphabet Inc.

Citation: [2022] 145 taxmann.com 43 (CCI)

Judiciary and Counsel Details

• Ashok Kumar Gupta, Chairperson, Ms Sangeeta
Verma & Bhagwant Singh Bishnoi, Member
• Sajan Poovayya, Jayant Mehta, Sr. Advs. Karan Chandhiok, Ms
Deeksha Manchanda, Ms Raksha Aggarwal, Ms Avaantika
Kakkar, Kaustav Kundu, Ms Ruchi Verma, Tarun Donadi, Ms
Auraellia Wang, Thomas Bohnett, Ms Smita Ann Andrews, Ms
fi
fi
fi
fi
fi
 Sonam Mathur, Ms Dinoo Muthappa, Abir Roy, Dhruv
Dikshit, Mark Buse, Vivek Pandey, Advs. & Tom Thomas for the
Appellant.
CCI imposes penalty of Rs. 936.44 Cr. on Google for abuse of
dominance in market for licensable OS for smartphones & in
market for app store for Android

Facts of the Case

The CCI found that Google had abused its dominant position in
contravention of several provisions of the Competition Act, 2002 as
under –

• Google was found to be in violation of the provisions of Section

4(2)(a)(i) of the Act by making access to the Play Store, for app
developers, dependent on mandatory usage of the Google Play
Billing System (GPBS) for paid apps and in-app purchases which
constitute an imposition of an unfair condition on app developers.
• Google was found to be in violation of Section 4(2)(a)(i) and 4(2)(a)
(ii) of the Act by following discriminatory practices by not using
GPBS for its own applications such as YouTube. This also
amounts to an imposition of discriminatory conditions and pricing
on other apps that are required to use the system.
• Google was found to be in violation of Section 4(2)(b)(ii) of the Act
due to the mandatory imposition of the Google Play Billing
System, which disrupts innovation incentives and limits the ability
of payment processors and app developers to innovate and
undertake technical development in the market for in-app payment
processing services.
• The mandatory imposition of GPBS by Google, has resulted in the
denial of market access for payment aggregators and app
developers, in violation of Section 4(2)(c) of the Act.
• The practices followed by Google resulted in leveraging its
dominance in the market for licensable mobile operating systems
and app stores for Android to protect its position in the downstream
markets, in violation of Section 4(2)(e) of the Act.
• Google’s use of different methodologies to integrate its own UPI
app with the Play Store compared to rival UPI apps resulted in the
violation of Sections 4(2)(a)(ii), 4(2)(c) and 4(2)(e) of the Act.
CCI Held
The CCI observed that the prohibitions laid down in section 4 of the
Competition Act are straightforward and any abuse of dominant position
in terms of the imposition of unfair conditions, denial of market access,
leveraging, imposition of supplementary obligations etc. is prohibited.

The CCI held that Google, after imposing unfair conditions as well as
engaging in other conducts violating Section 4 of the Act, cannot take a
plea that it lacked anti-competitive intent. The dominant undertakings
are expected to comply with the provisions of the Act. Thus, the plea
raised by Google was devoid of any merit and the same was rejected.

Further, the CCI imposed a penalty of Rs. 936.44 crores upon Google
for violating Section 4 of the Act and directed Google to deposit the
penalty amount within 60 days of the receipt of this order.

Also, the CCI directed Google to cease and desist from indulging in anti-
competitive practices that have been found to be in contravention of
Section 4 of the Act.

Rohit Arora v. Zomato (P.) Ltd.

Citation: [2022] 137 taxmann.com 68 (CCI)

Judiciary and Counsel Details

• Ashok Kumar Gupta, Chairperson, Ms Sangeeta
Verma & Bhagwant Singh Bishnoi, Member
OP i.e. Zomato, and another online intermediary for food ordering
and delivery i.e. Swiggy, were competing with each other in same
segment on various parameters, prima facie Zomato did not appear
to hold a dominant position and complaints of abuse of dominance
and bundling/tying of food ordering services with food delivery
services were to be dismissed

Facts of the Case

In the instant case in the matter of Mr Rohit Arora v. Zomato Private
Limited (now Zomato Limited) [2022] 137 taxmann.com 68 (CCI), an
information was led by an Informant under Section 19(1)(a) of the
Competition Act, 2002 (Act) against Zomato Private Limited (OP)
alleging contravention of provisions of Sections 3(4) and 4 of the Act.
The Informant is stated to be a consumer of Zomato for a long and has
been ordering regularly from its platform since 2018.
fi
The Informant alleged that Zomato abused its dominant position by
raising food delivery charges and by charging unfair, discriminatory, and
exorbitant delivery charges from its consumers. It was further alleged
that Zomato vertically restrained restaurants from delivering food
themselves and is restricting food delivery from unfavoured restaurants
by not assigning delivery executives.

In order to support the complaint, the Informant mentioned three

incidents:

First Incident: Zomato had canceled the order stating it could not
deliver the order, as the customer was unavailable to collect the food at
the mentioned address and your phone was unreachable. Since the
restaurant had prepared your order and denied to refund the amount for
this order
The Informant later checked the terms of service on the OP’s app and
found that as per Term XIII, any cancellation will be treated as an
authorization breach for which Zomato is entitled to levy liquidated
damages which it may determine at its discretion. The imposition of such
an arbitrary cancellation policy was alleged to be abusive conduct on the
part of the OP.

Second Incident: The second incident was related to spillage of food,

Zomato and replied that Zomato Valet has delivered perfect orders in the
last week and he is rated 4.9 out of 5 stars. We’ll treat this mistake as an
exception from his end and share feedback with him. According to the
Informant, this amounted to an abuse of dominant position by Zomato.

Third Incident: This incident was related to the non-refund of money on

the cancellation of order. Zomato refunded only 50% of the order
amount citing that the restaurant had begun preparing the food ordered.
The Informant compared the cancellation policy of Zomato with other
platforms such as Swiggy, Talabat.com, Deliveroo, Food Panda, etc. to
demonstrate that the cancellation policy of the former is abusive.

Zomato’s reply
In its reply, Zomato, at the outset, as regards the rst incident, stated
that, the Informant placed an order through Zomato, then directly
contacted the delivery partner asking him to contact him on his landline
number and not on his registered mobile number when delivering the
fi
order. When such instructions are communicated through Zomato, its
customer service executives ensure that such instructions reach the
delivery partner. But in the present circumstances, when the instructions
were directly passed on to the delivery partner, it would have been unfair
for Zomato to provide the Informant a full refund since the delivery
partner had spent time, energy, and fuel to pick up and transport the
order.

With regard to the second incident, Zomato had stated that its customer
support executive asked the Informant to select the item that was
spilled. However, the Informant did not proceed with the complaint and
did not provide a photo of the spill which prima facie shows that the
Informant was just interested in getting a quick refund, and when he
realised that this will not happen, he did not proceed with the complaint
and is now twisting the facts by stating that Zomato did not ask him to
provide photographic evidence of the spill. As per Zomato, had it been a
genuine case, the Informant should have raised the issue with the
customer support team or contacted them through email, attaching
photographic evidence of the spillage.

As regards the third incident, Zomato had refuted the Informant’s claim
that he cancelled the order dated 30.10.2020 ‘within 30—40 seconds’.
As per Zomato, the Informant had placed the order at 11.09 A.M. and
had reached out for cancellation at 11.11 A.M., which was two minutes
after placing the order. Even then, contrary to the Informant’s allegation,
he was provided a full refund for the order, a fact which the Informant
has wilfully and fraudulently failed to disclose.

CCI Held
CCI ruled that with respect to the three personal incidents of abuse
alleged by the Informant, the Zomato sought to negate the same with
evidence on record, which was not refuted by the Informant
substantively, and thus, the Commission found no instance of abuse has
been made out against the Zomato

The Commission observed that the Informant had delineated two

separate relevant markets as online food ordering services provided by
food aggregator apps in India and food delivery services in India, which
Zomato had disputed. Based on the facts and circumstances of the
case, the Commission believed that there exists no prima facie case of
contravention of the provisions of the Act against the OP, and the
Information led is directed to be closed forthwith under Section 26(2) of
the Act.

What is the Competition Commission of India?

· It is a statutory body established under the Competition Act,
2002, tasked with ensuring a fair and healthy competition in economic
activities of the country.

· It is to act as an antitrust watchdog and ensure that there is

no abuse of dominant position by a company in the market.

Need for CCI

· Protection against market distortions.

· Promotion of free enterprise system.

· Ensure no abuse of dominance by big players in the market.

· Promotion of domestic industries.

· Establishment of a regulative control over economic activities.

Composition of CCI
· It is a quasi-judicial body which as one chairperson and six
other members.

· They will all be appointed by the Central Government.

· The Chairperson and members shall be a person of ability,

integrity and standing and who, has been, or is quali ed to be a judge of
a High Court, or, has special knowledge of, and professional experience
of not less than fteen years in international trade, economics, business,
commerce, law, nance, accountancy, management, industry, public
affairs, administration or in any other matter.

Functions of CCI
· Eliminate practices that have an adverse impact on
competition.
fi
fi
fi
fi
· Secure the interest of consumers and ensure that
their welfare is not compromised.

· Undertake competition advocacy, create public awareness

and impart training on competition issues.

· Ensure smooth alignment of sectoral regulatory laws and

competition laws.

· Ensures that foreign companies abide by the country’s

competition laws.

· It guarantees that no enterprise abuses their 'dominant

position' through the control of supply, manipulating purchase prices, or
adopting practices that deny market access to other competing rms.

· Please note: the appeals from CCI goes to National Company

Law Appellate Tribunal (NCLAT) constituted under the Companies Act,
2013.

Evaluation of the Working of CCI

· The CCI has been fairly successful in its functioning and has
been a de nite improvement from its predecessor under the Monopolies
and Restrictive Trade Practices Act, 1969.

· It has prevented the cartelization of cement companies,

imposed penalties on the BCCI for the abuse of dominant position,
ordered for an anti-trust probe against Google and has prevented
cartelization in the telecom sector.

· It has undertaken several measures to increase public

awareness about competition issues and has undertaken competition
advocacy too.

· It has ensured that there is proactive engagement with all

stakeholders, including consumers, industry, government and
international jurisdictions.

Competition Commission of India (CCI) is a statutory body of

the Government of India responsible for enforcing the Competition
Act, 2002, it was duly constituted in March 2009.
fi
fi
· The Monopolies and Restrictive Trade Practices Act, 1969
(MRTP Act) was repealed and replaced by the Competition Act,
2002, on the recommendations of Raghavan committee.

· Competition Commission of India aims to establish a robust

competitive environment.

o Through proactive engagement with all stakeholders, including

consumers, industry, government and international jurisdictions.

o By being a knowledge intensive organization with high

competence level.

o Through professionalism, transparency, resolve and wisdom in

enforcement.

·
In May 2022, the nance minister participated in the 13th Annual Day
commemoration of the CCI.

Finance Minister also inaugurated the regional of ce at Kolkata and

launched an upgraded website of CCI.
o

What is the Competition Act, 2002?

· The Competition Act was passed in 2002 and has been
amended by the Competition (Amendment) Act, 2007. It follows the
philosophy of modern competition laws.

o The Act prohibits anti-competitive agreements, abuse of

dominant position by enterprises and regulates combinations
(acquisition, acquiring of control and M&A), which causes or likely to
cause an appreciable adverse effect on competition within India.

o In accordance with the provisions of the Amendment Act, the

Competition Commission of India and the Competition Appellate
Tribunal have been established.
fi
fi
o Government replaced Competition Appellate Tribunal (COMPAT)
with the National Company Law Appellate Tribunal (NCLAT) in 2017.

What is the Composition of CCI?

· The Commission consists of one Chairperson and six
Members as per the Competition Act who shall be appointed by the
Central Government.

· The commission is a quasi-judicial body which gives

opinions to statutory authorities and also deals with other cases. The
Chairperson and other Members shall be whole-time Members.

· Eligibility of members: The Chairperson and every other

Member shall be a person of ability, integrity and standing and who, has
been, or is quali ed to be a judge of a High Court, or, has special
knowledge of, and professional experience of not less than fteen years
in international trade, economics, business, commerce, law, nance,
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.

What are the Functions and Roles of CCI?

· 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.
· 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 Competition Commission of India takes the following

measures to achieve its objectives:

o Consumer welfare: To make the markets work for the bene t and
welfare of consumers.

o Ensure fair and healthy competition in economic activities in

the country for faster and inclusive growth and development of the
economy.
fi
fi
fi
fi
 o Implement competition policies with an aim to effectuate the
most ef cient utilization of economic resources.

o Develop and nurture effective relations and interactions with

sectoral regulators to ensure smooth alignment of sectoral
regulatory laws in tandem with the competition law.

o Effectively carry out competition advocacy and spread the

information on bene ts of competition among all stakeholders to
establish and nurture competition culture in Indian economy.

· The Competition Commission is India’s competition regulator,

and an antitrust watchdog for smaller organizations that are unable to
defend themselves against large corporations.

· CCI has the authority to notify organizations that sell to

India if it feels they may be negatively in uencing competition in India’s
domestic market.

· The Competition Act guarantees that no enterprise abuses

their 'dominant position' in a market through the control of supply,
manipulating purchase prices, or adopting practices that deny market
access to other competing rms.

· A foreign company seeking entry into India through

an acquisition or merger will have to abide by the country’s
competition laws.
o Assets and turnover above a certain monetary value will bring the
group under the purview of the Competition Commission of India (CCI).

What are the Judgements of CCI?

· CCI imposed a ne of ₹63.07 billion (US$910 million) on 11
cement companies for cartelisation in June 2012. It claimed
that cement companies met regularly to x prices, control market share
and hold back supply which earned them illegal pro ts.

· CCI imposed a penalty of ₹522 million (US$7.6 million) on

the Board of Control for Cricket in India (BCCI) in 2013, for misusing
its dominant position.

o The CCI found that IPL team ownership agreements were unfair
and discriminatory and that the terms of the IPL franchise agreements
fi
fi
fi
fi
fl
fi
fi
were loaded in favor of BCCI and franchises had no say in the terms of
the contract.

· CCI imposed a ne of ₹10 million upon Google in 2014 for

failure to comply with the directions given by the Director General (DG)
seeking information and documents.

· CCI imposed a ne of ₹258 crores upon Three Airlines in

2015.

o Competition Commission of India (CCI) had penalized the three

airlines for cartelisation in determining the fuel surcharge on air cargo.

· CCI ordered a probe into the functioning of Cellular

Operators Association of India (COAI) following a complaint led
by Reliance Jio against the cartelization by its rivals Bharti Airtel,
Vodafone India and Idea cellular.

· The commission ordered an antitrust

probe against Google for abusing its dominant position with Android to
block market rivals. This probe was ordered on the basis of the analysis
of a similar case in the EU where Google was found guilty and ned.

· CCI issued letters to handset makers in 2019, seeking details

of terms and conditions of their agreement with Google.

o This is to ascertain if Google imposed any restrictions on them for

using the company's apps in the past 8 years from 2011.

What are the Functions and Role of CCI?

· To eliminate practices having adverse effects on
competition, protect the interests of consumers and ensure freedom of
trade in the markets of India.

· To give opinion on competition issues on a reference

received from a statutory authority

· To undertake competition advocacy, create public

awareness and impart training on competition issues.

· Consumer Welfare, to make the markets work for the bene t

and welfare of consumers.
fi
fi
fi
fi
fi
· Ensure fair and healthy competition in economic
activities in the country for faster and inclusive growth and development
of the economy.

· Implement competition policies with an aim to effectuate

the most ef cient utilization of economic resources.

· Effectively carry out competition advocacy and spread the

information on bene ts of competition among all stakeholders to
establish and nurture competition culture in the Indian economy.

What are the Achievements of CCI till now?

· The Commission has adjudicated more than 1,200 antitrust
cases i.e., case disposal rate is 89 % in antitrust cases.

· It has also reviewed more than 900 mergers and

acquisitions till date, cleared most of them, within a record average
time of 30 days.

· The Commission has also come up with several innovations

like the ‘Green Channel’ provision for automated approval on
combinations/transactions and cleared more than 50 of such
transactions.

What are the Challenges?

· Challenges Posed by Digitization: As we didn’t have a
robust digital economy at the time of enactment of the Act (2002), CCI
should understand the technological nuances of the new digital era.

· Need For New Market De nition: India’s Commission needs

to update its de nition of market now. Since there are no boundaries in
the digital space, de ning relevant markets has been a tough task
for regulators around the globe.

· Threat From Cartelization: There is a possibility of threat

from cartelization. Since there is a global shortage of commodities due
to the pandemic, and now, following the war in Eastern Europe, the
supply chain has been adversely affected.

o There is a need to look into these and ensure that there are no
monopolistic/duopolistic tendencies leading to price rises and supply
side manipulations.
fi
fi
fi
fi
fi
INTRODUCTION
One of the black days which India can never forget is the economic
crises of 1991. In 1991, the country landed in a situation where it was
unable to make repayment of its loan to the foreign countries. Foreign
exchange reserves , which we generally maintain to import petroleum
and other important items, dropped to levels that were not suf cient for
even a fortnight.

India received loan from the International Bank for Reconstruction

and Development (IBRD) and the International Monetary Fund (IMF)
to manage its crises. However, these agencies require India to liberalise,
open its economy for globalisation, and remove restrictions over the
private sectors. Therefore, the P.V. Narasimha Rao’s government in
1991 introduced the New Economic Policy (NEP).

With the advent of liberalization, privatization and globalization in India,

the competition increased not only among the domestic market but also
from the international companies. To avoid forming monopolies and
unhealthy trade practices, the Parliament of India in 2002 enacted the
Competition Act, 2002. In 2009, the Competition Commission of India
was established by the Government of India under the Competition Act,
2002 for the administration, enforcement and implementation of the Act.
COMPETITION APPELLATE TRIBUNAL (COMPAT)

Prior to 2007, if a party was not satis ed with the decision of the
Competition Commission of India (CCI), It had to le an appeal in the
Supreme Court of India, thereby increasing the pendency of cases in the
Court. However, after the Competition (Amendment) Act, 2007, the
Competition Appellate Tribunal (COMPAT) was established. It provided
the provided the parties with a proper channel for appeal and changed
the hierarchy of appeal. After the establishment of the Competition
Appellate Tribunal (COMPAT), the appeal from Competition Commission
of India lies in front of the Appellate Tribunal and a further appeal goes
to the Supreme Court.

NATIONAL COMPANY LAW APPELLATE TRIBUNAL (NCLAT)

fi
fi
fi
However, the establishment of Competition Appellate Tribunal
(COMPAT) was found not to be as effective as it was hoped would be.
There were a number of con icts between CCI and COMPAT related to
their sharing of power.[3] The result of this con ict was that in 2017 an
amendment was made through which the provision of Part XIV of
Chapter VI of the Finance Act, 2017 came into operation. After such
amendment the Competition Appellate Tribunal (COMPAT) ceased to
exist. In place if it the National Company Law Appellate
Tribunal (NCLAT) was constituted. Accordingly, Sections 2(ba) and
53A of the Competition Act and Section 410 of the Companies Act,
2013 have been appropriately amended and various other provisions of
the Competition Act dealing with the Competition Appellate Tribunal
(COMPAT) have been omitted.

Previously, all appeals against speci ed orders of the Competition

Commission of India (CCI) would lie to the Competition Appellate
Tribunal (COMPAT) whereas the National Competition Law Appellate
Tribunal (NCLAT) dealt with, inter alia, appeals arising out of orders of
the National Company Law Tribunal (NCLT) under the Companies Act,
2013 as well as the Insolvency and Bankruptcy Board of India (IBBI)
under the Insolvency and Bankruptcy Code, 2016.

HOW TO FILE AN APPEAL?

The Section 53B of the Competition Act, 2002 provides for ‘Appeal to
Appellate Tribunal’.
· Clause 1 of Section 53B

Section 53B(1) states that –

“The Central Government or the State Government or a local authority

or enterprise or any person, aggrieved by any direction, decision or
order referred to in clause (a) of section 53A may prefer an appeal to the
Appellate Tribunal.”

This clause of Section 53B provides for the persons who can le an
appeal before the Appellate Tribunal. According to it, when any direction,
decision or order is passed as per Section 53A of the Act, the Central
Government or the State Government or a local authority or enterprise
or any person, if aggrieved, can le an appeal before the Appellate
Tribunal.
fl
fi
fi
fl
fi
 · Clause 2 of Section 53B

Section 53B(2) states that –

“Every appeal under Sub-section (1) shall be led within a period of sixty
days from the date on which a copy of the direction or decision or order
made by the Commission is received by the Central Government or the
State Government or a local authority or enterprise or any person
referred to in that sub-section and it shall be in such form and be
accompanied by such fee as may be prescribed:

Provided that the Appellate Tribunal may entertain an appeal after the
expiry of the said period of sixty days if it is satis ed that there was
suf cient cause for not ling it within that period.”

This clause of Section 53B provides for the time limit within which the
appeal shall be led. According to this section, every appeal shall be
led within a period of sixty days from the date on which a copy of the
direction or decision or order made by the commission is received by
speci ed parties. It is also provided that the Appellate Tribunal if
satis ed that the applicant was prevented by suf cient cause from ling
the appeal shall be allowed to le the appeal after the expiry of the said
period i.e., 60 (sixty) days.

LANDMARK CASES

· Brahm Dutt v. Union of India

Establishment of the Competition Appellate Tribunal (COMPAT)

This judgement resulted in the establishment of the Competition

Appellate Tribunal (COMPAT) through an amendment under the
Competition Act, 2002. In this case, the issue was brought upon whether
the Competition Commission of India (CCI) was acting in contravention
of the rule of separation of powers. Truly, the Competition Commission
of India (CCI) has multiple roles – advisory, regulatory, and adjudicatory.
Thus, it was considered that while Competition Commission of India
(CCI) is an expert body which should continue ful lling all of these roles,
there was a need for a separate appellate body which will perform
primarily judicial functions. It will keep a check on the judicial functions
of Competition Commission of India (CCI), and can ensure that a fair
and justi ed ruling is provided by the Competition Commission of India
(CCI) in all cases.
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
 · Competition Commission of India vs. Steel Authority of
India Ltd.

Con ict between Competition Commission of India (CCI) and

Competition Appellate Tribunal (COMPAT) regarding sharing of
power

In this case, a complaint was led to the CCI by Jindal against SAIL and
Indian Railways, accusing them of abuse of dominance and anti-
competitive agreements. CCI referred the matter to the Director General,
waiting for his enquiry. However, before the Director General could even
start his investigation, SAIL led an appeal in COMPAT, accusing CCI of
violating the rules of natural justice. An interim order was passed by the
COMPAT, staying the investigation, which was appealed by the CCI to
the Supreme Court. The Supreme Court contended that not all of the
orders that were passed by the CCI were subject to appeal to the
COMPAT. As the case was still in the stage of an investigation by the
CCI, it did not violate any rule of natural justice by not granting hearing
to the parties, which was the gist of the accusation of SAIL. Thus, it was
held that the appeal to COMPAT, in this case, was unauthorized.

· Ambuja Cements Limited v. Competition Commission of

India

The rst case decided by NCLAT

This case came up in appeal for a second time. In the prior appeal, the
COMPAT had remanded the case for re-hearing by the CCI on the
grounds of violation of principles of natural justice by the CCI. The
NCLAT upheld the second order of the CCI nding 11 cement
companies to have entered into anti-competitive agreement and xed
cement prices, limited and controlled the production and supply in the
market. The NCLAT also indorsed the highest ever, cumulative penalty
in India of INR 6300 crore in this case. The NCLAT analysed the price,
production and dispatch data of the cement companies while af rming
the CCI’s decision.

· Hyundai Motors Ltd. v. Competition Commission of India

& Ors

In this case the CCI found Hyundai in violation of Section 3 (4)7 of the
Competition Act for its resale price maintenance policy and tie-in
fl
fi
fi
fi
fi
fi
fi
arrangement, vis a vis its dealers. The NCLAT however set aside the
order and directed a refund of the penalty as the CCI had based its
decision only on the opinion expressed by the Director General (DG) in
his report – which is merely an investigation report and had not
undertaken any analysis of the evidence to arrive at its nding of
contravention. As such, the NCLAT emphasized that the CCI is required
to apply its mind when arriving at a nding, however the impugned order
lacked evidence as well as analysis.[12]

CONCLUSION

After the introduction of the Liberalization, Privatization and

Globalization (LPG) by the then government of India, the competition in
the Indian markets increased. In order to prevent unhealthy trade
practices and formation of monopolies, the parliament of India enacted
the Competition Act, 2002. This Act replaced the already existing
Monopolies and Restrictive Trade Practices Act, 1969. Soon in 2009, the
Competition Commission of India (CCI) was established. Later on, in
order to reduce the pendency of competition cases in the Supreme
Court, the Competition Appellate Tribunal (COMPAT) was created. Soon
it was found that COMPAT is not as effective as it hoped to be, and there
were a number of con icts between CCI and COMPAT related to their
sharing of power. This results in the creation of National Competition
Law Appellate Tribunal (NCLAT) by replacing COMPAT. The Section 53B
of the Competition Act, 2002. The right to le for an appeal before
NCLAT is same as it was before COMPAT.

ROLE OF CCI

The Competition Commission of India (CCI), a statutory body set up

under the Competition Act, 2002 with the primary purpose of regulating
competition in the market, plays a signi cant role in protecting the
interests of consumers.

What the CCI does has assumed great signi cance amid the rapid
growth of technology and e-commerce domains as well as increasing
mergers and acquisitions (M&As) across industries. Moneycontrol takes
a detailed look at CCI’s functions.
fl
fi
fi
fi
fi
fi
Anti-trust watchdog

CCI became functional in 2009, seven years after the Competition Act
was passed in 2002 with the aim of promoting healthy competition. The
body, which is often called the anti-trust watchdog, is required to protect
the Indian markets against activities among players which may have
appreciable adverse effects on competition.

This essentially means that any agreement among similarly-placed

market actors or an agreement among various hierarchical stages of
supply chain that may result in an undue adverse impact on the market
ought to be prevented, deterred and punished by the body.

The CCI is a statutory body corporate that was established by the

government on 14th October 2003. So it is an arti cial person that has
perpetual succession. The Central Government will appoint all its six
members and the Chairperson forming the Board.

Now the main aim of the CCI is to implement the modern competition
laws and philosophy of the Competition Act, 2002. It ensures that there
are no unfair practices in the market that have a negative impact on
healthy competition. This is because healthy competition is good for the
consumers of a market. Monopolistic competition or other unfair
practices have an adverse effect on economic growth.

Objectives of the CCI

· Prevent policies and practices which have an adverse effect
on constructive competition in the economy

· Promote and help sustain healthy competition in the market

· Look after the interest of the consumers

· Create awareness and advocate for fair competition practices

· And nally, ensure freedom of trade in the market

Role of the CCI

The preamble of the Competiton Act focuses on the development of the
economy and the country by avoiding unfair competition practices
and promoting constructive competition. To achieve these objectives, the
CCI attempts to do the following activities and practices,
fi
fi
· Ensure that the markets work for the bene ts of
the consumers, so the welfare of the consumers is the main priority.

· Economic activities are promoting fair competition in the

market for growth and prosperity.

· Implement the competition practices and policies of the

Competition Act. The aim is the best possible utilization of resources by
embracing these policies.

· Another role of the CCI is to ensure interaction and

cooperation with the other regulating authorities in the economy. This
will ensure that the sectoral regulatory laws are in agreeable with the
competition laws.

· One important role of the CCI is to carry out advocacy about

competition and competition laws. It aims to educate ministries, state
governments, regulators, and other authorities about the modern
concepts of competition. And it does so by conducting workshops,
seminars, publishing papers, etc.

Role of CCI as a Business Facilitator

Any economy thrives when there are free trade and fair competition in
the market. Unfair competition practices like monopolies, cartels, etc.
thwart the growth of smaller rms and businesses which are essential to
the growth of an economy. The CCI protects such businesses from
unfair competition and its adverse effects. It also ensures that the
companies at fault are penalized and discouraged from such practices in
the future.

By promoting competition it also bene ts the consumers. The CCI will

ensure there is no dominance of a few rms on the market. And both the
small and big rms can co-exist peacefully in the economy.

Role of CCI –
The Competition Commission of India plays a vital role in sustaining
healthy competition in the Indian Markets. They have certain role to play
which are similar to the duties of the Commission. They are-
fi
fi
fi
fi
fi
 · The Commission has the role to eliminate the practices which
are having negative impact on the competition and ensure freedom of
trade within the markets

· They can also give their views on competition issues while

receiving the reference from statutory authority established under the
law.

· The Commission also focuses on ful lling their objectives

such as keeping the markets fair for the consumers in such a way that it
is bene cial for both producers and consumer. This also helps in the
overall economic development of the country.

· The competition policies should be enforced and executed

properly for optimum utilization of resources
· The Commission also works on effective and smooth
alignment of the sectoral regulatory laws working in acquiescence with
the competition law

· The Competition Commission acts as the watchdog of the

smaller organizations who are working hard to sustain in the market
among with the bigger stakeholders and companies

· The Commission also has the authority to notify and warn the
organizations who are selling in the Indian markets, if they feel it is
negatively affecting the competition of the Indian markets.
· As per the Competition Act, it has been guaranteed that no
enterprise or rm shall be permitted to abuse their dominant position in
the market by manipulating their purchase prices and controlling their
supply which might directly affect the market.

· In case there is foreign company which is interested in

participating in Indian markets via acquisition or mergers, shall have to
abide by the country’s competition laws and even the assets and
turnover of a particular company or enterprise when cross a particular
monetary value, they are brought under the purview of the Commission.

Recent Penalties Imposed By CCI –

In case of violation of the provisions of the Competition Act 2002, the
Commission is authorized to impose penalties in form of compensation
fi
fi
fi
to the faulty rms or companies. Some of the recent penalties imposed
by the Commission on major enterprises are-

The Competition Commission of India had imposed ne of Rs 63.07

billion on 11 cement companies for cartelisation of prices in June 2012
and the claim made by the Commission was that these alleged
companies met on a regular basis to x the prices of the cement and
keep the prices of cement under control in market and even held their
supplies which earned them illegal pro ts. Then there was penalty
imposed on Board of Control of Cricket in India (BCCI) in 2013 of Rs
522 million for misusing their dominant position with regard to the IPL
team agreements which were unfair and biased and even the terms and
conditions mentioned under the IPL agreements were found to be in
favour of BCCI and there was minimum say of franchises in the
agreement.
Further, the CCI has also imposed monetary ne of Rs 10 million on
Google in 2014 as it failed to adhere to the direction of Director General
for seeking the information and documents. There were also cases of
imposition of ne on three Airlines in 2015 of Rs 258 crores again for the
reason of cartelisation (colluding to control the prices) of the fuel
surcharge on Air cargo. There has been recent complaint led by the
Reliance Jio for the matter of cartelisation by its rivals Bharti Airtel,
Vodafone India and Idea Cellular. So, the Commission has asked the
Cellular Operators Association of India (COAI) to take a look into the
matter. Thus, there have been many such cases where such nes are
imposed by the Commission in order to protect the ef ciency of the
market.

Need of CCI –
It is often questioned as to what is the need of the Commission to look
after the market, but there are some solid reasons which make it vital for
the establishment of this Commission in accordance to the provisions of
the Competition Act. First of all, competition laws are described as the
Magna Carta or Bible for free enterprise and it is very important to have
healthy competition ways or else it can affect the entire economic
freedom as well as the free enterprise.

The competition laws were originally implemented because the market

was functioning in negative manner and there were unfair practices
made by the bigger rms and enterprises making it a monopolistic
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
competition and obstructing the working of smaller enterprises. Various
players of the market were resorting to anti-competitive activities such
as cartelisation, misuse of their dominant position in market which not
only affected smaller enterprises but also the consumer welfare. Thus,
there was pressing need for enacting some regulative force on these
manipulative players of market to establish effective control and welfare
of all within the market.

In the recent times, especially when the functioning of economies is also

changing and the economies are getting open and reaching out to all
different places, there has to be regulatory body governing and
controlling the competition to ensure the viability of domestic and small-
scale industries and maintain balance between the big players and
foreign investment along with adequate promotion of domestic rms.

Conclusion –
The Competition Commission of India works as one of the primary
statutory bodies working on the primary objective to protect and sustain
healthy competition within the Indian markets and ensure consumer’s
welfare as well. It is quasi-judicial body as they have been conferred
with right to conduct proceedings as well as impose the faulty
companies with stated nes to be given to the aggrieved parties. As
stated above, Competition Commission plays a vital role in controlling
the working of the markets, as it helps in preventing all sorts of unfair
trade practices often carried out by the big players such as cartelisation,
misuse of dominant position, monopolization of their product etc.

CCI
The Commission also educates and promotes healthy competitive
agreements among the parties and aids in resolving the market related
issues. This commission not only saves the market but it also gives a
boost to the Indian economy in every way by sustaining an equilibrium
between the foreign investment and domestic companies, while
adhering to the needs and wants of the consumers. Thus, Competition
Commission of India is one of the most ef cient and essential bodies of
the Indian government.

Introduction –
fi
fi
fi
The main purpose behind enacting the Competition Commission of India
was to ease trade practices within India as well as overseas, as one of
the major ways to grow an economy is by enhancing the trade and
commerce of that country. The companies should be allowed to enter
the market freely and promote their goods and services without any
unnecessary hurdles given by the government. But at the same time, it
is also essential to protect the market from unfair trade practices or else
it can lead to the collapse of the entire market.

The Competition Commission of India ensures that there are no unfair

practices moving along the market and even imposes penalties, if found
any. The Commission was formed with the backing of the Competition
Act 2002 at the time when Vajpayee government was in rule. As India
had adopted economic liberalisation and globalization, it was equally
important to ensure healthy competition in the market without any
prejudices and biases, through legislation.

The Competition Commission of India is a statutory body which was

established as per the provisions of the Competition Act 2002 and the
primary goal of this Commission is to apply and administer the
provisions of the Competition Act 2002. The Commission is also
responsible for avoiding any sort of anti-competitive agreements being
realised. The Commission focuses on application of the modern
competition laws and its respective philosophies with regard to the Act of
2002. With the Commission, it is easier to track any unfair trade
practices which might affect the market adversely as well as the
consumers. The Commission even prevents monopolistic competition,
as it is not in favour of producers as well as consumers.

The Competition Act 2002 was enacted by repealing and replacing the
Monopolies and Restrictive Trade Practices 1969 based on the
recommendations and suggestions made by the Raghavan Committee.
The main aim of the Act was to set a healthy competitive environment
for all the rms and companies by engaging everyone including the
stakeholders, consumers, government etc. The Commission is driven by
the ideals of professionalism, wisdom and transparency by being a
knowledge intensive organization professing higher competence level in
the Indian markets. The Commission was established on 14th October
2003 and came into operation from May 2009.

Objectives of CCI –
fi
 There are certain objectives of Competition Commission of India which
need to be kept in mind while administering the trade practises. They
are-

· To avoid enactment of any practices or policies which may

affect the constructive competition in the Indian market in any negative
manner

· To safeguard and protect the freedom of trade within the

markets of India

· To secure the interests of the consumers by meeting their

wants and ends

· To maintain and sustain productive competition in the Indian

markets
· To promote and create awareness on just, fair and healthy
competitive practices within the Indian markets.

These are some of the common yet essential objectives of the

Commission, which need to be worked upon by the Commission.

Composition of CCI –
The composition of Competition Commission of India consists of one
Chairperson and six other members as mentioned in the Competition
Act 2002 and all of them shall be appointed by the Central Government.
As the commission is quasi-judicial body and has been rendered the
status of statutory authority, as it gives opinions to the other Authorities
and also deals with the cases with respect to unfair trade practices, the
chairperson and the other members are full-time members of the
Commission.

The eligibility criteria of the members as well as the Chairperson shall

be; the person should be person of ability, integrity and standing who
has been quali ed to be Judge of High Court or the person has speci c
knowledge of or professional experience which shall be not less than 15
years in International trade, economics, commerce, law, business,
nance, industry-related or management and public affairs or any other
matter which is bene cial for the Commission as per the views of the
Central government.
fi
fi
fi
fi
Powers and Obligations of CCI –
As we know the Competition Commission of India was established
based on the Chapter III and Section 7 provisions of the Competition Act
2002. The Act not only, mentions the establishment of the Commission
but also speci es the powers and duties of the Commission, which it is
supposed to adhere to. The Commission shall confer upon its powers so
as to ensure that their duties are being met as well. The powers of the
Commission are-

· The Commission has the power to make inquiries regarding

certain agreement as well as about the dominant position of the
enterprises. This can be understood that the Commission has the power
to, by its own authority or with help of any information which is alleged to
contravene the provision of anti-competitive regulations to launch the
inquiry for determining the same.

· The commission also has the power to inquire about any

acquisition or any combination if it is alleged that such an acquisition or
combination can adversely affect the constructive competition in the
Indian market.

· The commission further has the power to regulate their own

procedures, in their own manner following the basic principles of justice,
equity and good conscience.

· The Commission can also impose monetary penalties on the

faulty companies and parties in case of any contravention to the
provisions of the Competition Act 2002.

· The commission also has the power to pass an interim order

for any Act that is explicitly considered to be anti-competitive in their
agreement form or there is abuse of position of the dominant parties
which effect the working of the smaller producers as well as the
competition within the market.

These were some of the important powers of the Commission. But there
are certain duties as well which need to be performed by the
Commission, in order to sustain healthy competition in the market and
help in the economic growth of the country. Some of the major
obligations or duties of the Commission are-
fi
· The Commission should ensure that the interest of the
consumers is protected in the market and they are not being subjected
to unfair trade practices

· They have to adhere to the provisions and policies as

enumerated in the Competition Act 2002.

· The Commission is also responsible for advocating,

promoting and educating the other government bodies about the
Competition Act 2002 such as the state governments and Ministries, to
maintain the equilibrium of the market

· The Commission should strongly profess fair and productive

competition practices in the markets to keep it just for all

· The Commission should prevent the realization of any anti-

competitive agreements

· In order to cooperate with the other regulatory government

bodies and make them work ef ciently, there should be continuity of free
and fair market

National company law tribunal

BACKGROUND:

In the evening of 1st June, 2016, came a pleasant surprise. The

National Company Law Tribunal and National Company Law Appellate
Tribunal were nally constituted by the Central Government. The
National Company Law Tribunal (NCAT) and National Company Law
Tribunal are quasi-judicial body in India, that adjudicates issues relating
to the Companies in India. The NCLT and NCLAT were established
under the Companies Act 2013 and were constituted on 1st June 2016.
fi
fi
 The constitution of the aforesaid Tribunals is in exercise of the powers
conferred by Sections 408 and 410 respectively of the new Companies
Act, 2013.

JOURNEY/SNAPSHOT OF IMPLEMENTATION OF NCLT: The Ministry

of Corporate Affairs ('MCA') on 1st June 2016 noti ed the constitution of
National Company Law Tribunal ('NCLT') and National Company Law
Appellate Tribunal ('NCLAT') in exercise of powers conferred under
Section 408 and Section 410 of the Companies Act 2013 ('Companies
Act'). This noti cation has been in abeyance for almost 14 years, since it
was rst introduced by the Companies (Second Amendment) Act 2002
based on the recommendations of Eradi committee. However, in recent
times the Government of India has been emphasizing on easing the
process of carrying out business in India. Thus, in recent times, various
legal reforms have been carried out and the constitution of the NCLT
and the NCALT is one most important step in this direction.

The genesis of setting up of specialized tribunals can be traced in the

Supreme Court judgment in Sampath Kumar case. In this case while
adopting the theory of alternative institutional mechanism, the Supreme
Court refers to the fact that since independence, the population
explosion and the increase in litigation had greatly increased the burden
of pendency in the High Courts, therefore, to reduce the burden of High
Courts and to ful ll the growing need for empowering the Company Law
Board, they felt the need to constitute a highpower Tribunal, which could
take up all matters relating to Company Law and other Corporate Laws
at one Forum.

POWERS OF NCLT & NCLAT:

The establishment of the National Company Law Tribunal (NCLT),

consolidates the corporate jurisdiction of the following authorities: 1. The
Company Law Board. 2. The Board for Industrial and Financial
Reconstruction (BIFR) 3. The Appellate Authority for Industrial and
Financial Reconstruction including those pending under the Sick
Industrial Companies (Special Provisions) Act, 1985. 4. Jurisdiction and
powers relating to winding up, restructuring, reduction of share capital
and other such provisions, vested in the High Courts. With the
establishment of the NCLT and NCLAT, the Company Law Board under
the Companies Act will stand dissolved. While provisions relating to the
investigation of a company's accounts, freezing of assets, class action
fi
fi
fi
fi
 suits, conversion of a public company to a private company,
compromise, amalgamation and capital reduction will now be governed
by the NCLT, and appeal there from would be before NCLAT instead of
High Court.

WHY NCLT & NCLAT REQUIRED

: The constitution of NCLT and NCLAT was a step towards to improving

the ease of doing business by bringing all aspects of Company law
matters under one roof. Some of most important advantages are as
under:

a. Single Window: The most important bene t that the tribunals will act
as a single window for settlement of all Company law related disputes
effectively. It shall avoid unnecessary multiplicity of proceedings before
various authorities or courts.
b. Speedy Process: The NCLT and the NCLAT are under a mandate to
dispose of cases before them as expeditiously as possible. In this
context, a time limit of three (3) months has been provided to dispose of
cases, with an extension of ninety (90) days for suf cient reasons to be
recorded by the President or the Chairperson, as the case maybe. The
speedy disposal of cases will save time, energy and money of the
parties.

c. Reduction of work of High Court: The number of pending cases

with High Court is too high and now the matters in respect to
compromise, arrangement, amalgamations and winding-up transferred
to NCLT. Accordingly, NCLT and the NCLAT will reduce the work of
overburdened High Courts. Hence, with the constitution of NCLT and
The NCLAT, we do hope that not only the corporate would obtain its
bene ts but stakeholders would also be bene tted.

Competition Commission of India

Competition Commission of India is a body corporate and independent

entity possessing a common seal with the power to enter into contracts
fi
fi
fi
fi
and to sue in its name. It is to consist of a chairperson, who is to be
assisted by a minimum of two, and a maximum of six, other members. 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.

Commission has the power to inquire into unfair agreements or abuse of

dominant position or combinations taking place outside India but having
adverse effect on competition in India, if any of the circumstances exists:

• An agreement has been executed outside India

• Any contracting party resides outside India

• Any enterprise abusing dominant position is outside India

• A combination has been established outside India

• A party to a combination is located abroad.

• Any other matter or practice or action arising out of such

agreement or dominant position or combination is outside India.

To deal with cross border issues, Commission is empowered to enter

into any Memorandum of Understanding or arrangement with any
foreign agency of any foreign country with the prior approval of Central
Government.

Procedure for Investigation into Combination by CCI

Step 1

The CCI will issue a notice to the parties to the combination to reply
within 30days of such combination for not declaring it as Void The CCI
will direct the Director General to submit a report on combination, on
receipt of such report, If the CCI is satis ed that the combination has an
Adverse effect on competition, it can pass the following order

Step 2
fi
(Section 31) • It can direct the combination shall not be in effect • If the
Adverse effect can be recti ed by suitable modi cation the CCI will order
such modi cation should be performed by the parties. ( In this case the
parties shall submit the modi ed combination within 30 Working days if
the CCI agrees with the modi cation, It can accept the Combination)

Step 3

If the CCI is not satis ed by the modi cation effected by the parties, It
can grant 30 Days further to the party to accept that modi cation
proposed by the commission

Step 4

If the part still falls to accept the modi cation the commission can
declare the combination as void as well as it can impose such penalties
mentioned in the Act ( 1 % of Turnover).

Powers and Function of CCI

The CCI can exercise power subject to the Act and the Rules. It should
be guided by the principles of natural justice and provisions of the act

1. The Commission shall have the powers to regulate its own procedure.
[Section 36 (1)]

2. Commission has a power of civil court [ Section 36 (2) ]

A. Summon & Enforcing Attendance of any person on oath

B. Requiring the Discovery and production of Document

C. Receiving evidence as af davit

D. Issue commission for examination of witness or documents

E. Requisitioning any public record on document or copy of such

document form any of ce

F. Power to conduct enquiry

3. Commission may call the experts on respective eld i.e Economics’,

Commerce, Accountancy which may be necessary [ Section 36 (3)]

4. Direct any person [ Section 36 (4)]

fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
fi
I. Produce Book , Accounts or other documents

II. Furnish information about trade in procession of such persons 16

5.Issue cease and desist orders

6. Impose nes and penalties (Section 27)

7. Declare agreement having Appreciable adverse effect on competition

(AAEC) void

8. Pass orders modifying agreement

The Competition Act provides for the formation of a CCI. It acts as the
regulator of competition in the Indian market. The commission was
founded in 2003, but it did not become fully operational until 2009. The
central government appoints a chairman and six members to the CCI. It
is the commission’s responsibility to eradicate anti-competitive activities,
encourage and maintain competition, safeguard consumer rights, and
guarantee free trade in India’s marketplaces. It is a quasi-judicial body
tasked with the following duties:

1. Prevent practices that have a negative effect on competition.

2. Encourage and maintain market competition.

3. Safeguard the interests of all consumers.

4. Safeguard commercial liberty.

5. Investigate problems related to or ancillary to trade

Competition Advocacy

INTRODUCTION

Competition advocacy connotes all the activities, endeavors undertaken

by an antitrust agency to reach out to stakeholders in order to establish
a robust competition culture through dissemination of information about
extant competition laws, bene ts of competition and implications of
resorting to anticompetitive practices. It refers to those activities
conducted by a competition authority with the ultimate objective of
fi
fi
promotion of culture of compliance in all spheres of economic, by means
of nonenforcements.

Competition advocacy can also be looked at as enforcement of law

without intervention. It yields maximum positive impact in the concern
stakeholders with least intervention and an effective way to garner
support to attain competition policy objectives. Successful
implementation of competition law and policy largely depends upon the
willingness of the people to accept these. Advocacy plays a vital role in
achieving this goal. It reinforces the value of competition by educating
citizens, businesses and policy makers.

Competition Advocacy in India

Importance given to competition advocacy in India can be gauged from

the fact that it is only the Competition Act, amongst all the statutes,
which has a speci c provision under section 49 for advocacy. In an
economy like India with shadows of control and regulation, making in-
roads for implementation of competition culture is a formidable task.
Besides, competition law is an economic law which cuts across all the
sectors. As such it becomes imperative to enhance outreach among all
the stakeholders, more so, given the size and diversity of the
country.Section 49(3) of the Act envisages taking suitable measures for
the promotion of competition advocacy, creating awareness and
imparting training about sector/industry speci c competition issues. In
this pursuit, the Commission proactively engages with various
stakeholders through well-structured customized advocacy programmes.
This, while creating awareness about competition law resolves doubts/
queries harbored by target stakeholders group on one hand, it also
supplements Commission’s enforcement efforts on the other.

Competition advocacy initiatives in India are primarily focused -

To help enterprises to pre-empt violation of law

To supplement and lend credibility to the enforcement To enhance

acceptability of law

To garner support from government industry and other stakeholders

To facilitate establishment of sustainable competition culture

Advocacy with Stakeholders

fi
fi
 Central / State Governments and PSUs

Recognizing that the Central/State Government and PSUs are the

biggest procurers of goods and services; the Commission proactively
conducts advocacy programmes with them. The Commission conducts
various workshops, seminars, roadshows and other interactive sessions
with senior government and PSU functionaries to enable them to evolve
competition compliant policies and design tenders to have best value for
money. Keeping in view the fact that the states in India have their own
policies emanating from peculiarities on account of language,
geographical location, state of economy etc., the Commission makes
special endeavor to reach out to various state governments for
competition advocacy to address various competition issues/ concerns
that may exist due to inadvertent anticompetitive components prevailing
in their various legislations, policies, laws and regulations. In this pursuit,
the Commission has held meetings with Chief Secretaries of States and
many workshops have been conducted in past and are being conducted
on regular basis with key functionaries of state governments involved in
framing economic policies and in matters of public procurement. To
institutionalize the mechanism of advocacy with state governments,
nodal of cers have been appointed in each States.

Trade Chambers/Associations

Since trade chambers and associations play an active and vital role in
formulation of various economic policies, it has been the endeavor of the
Commission to interact with them on regular basis. Interaction with them
is very useful as not only they are in a position to in uence the
behaviour of their individual members but also play a vital role in policy
making as pressure groups.

Recognizing that there are some sector/industry speci c competition

issues, having their own peculiarities, the Commission reaches out to
them to address the same and encourages them to have competition
compliant policies. Utility of interaction with such groups goes beyond
mere telling them about competition law, as many doubts and
misconceptions are resolved and fears are allayed in such interactions.
Importantly more often than not the forum of Trade Associations is used
by their members as platform for sharing crucial information on price,
market share etc. which undermine and disrupt the competition in
markets. These aspects are discussed with them and members of
fi
fl
fi
 associations are warned of rami cations if they resort to anti-competitive
practices. Certain cases, wherein such forums have been used by the
competitors to indulge in anti-competitive practices resulting in
imposition of penalties by the CCI are also brought to their notice to
dissuade them from adopting such practices.
Academia
The Commission regularly deputes its of cers to various universities/
institutes to participate in their various events to train and educate
students on various aspects of competition law. In this regard the
Commission has also been sponsoring moot court competitions in
various law universities of the country. Besides, to afford students
deeper insights into various aspects of competition law and functioning
of the Commission, the Commission provides internship to the students
of universities/institutes across the country pursuing courses in Law,
Management, Finance and Regulatory Governance. The internship is
offered for a calendar month during which the students work on a
speci c competition related topic under respective guides to bring out
newer ideas in the realm of competition law. Also to enable to explore
newer vistas and to encourage path-breaking research in the realm of
competition law & practice, the Commission offers internship to students
pursuing Ph.D. in competition law. This programme has in-built exibility,
in as much as, the candidate has choice to choose tenure of internship
from the prescribed options that suits his/her magnitude and depth of
research that proposed topic entails.

Conclusion
Even though Competition Advocacy may not have the punitive force
that penal provisions through enforcement measures may have, yet its
strength lies in its ef cacy to create awareness among the stakeholders
and people at large in a proactive manner for building a competition
compliant culture for the bene t of entire economy. An effective
competition compliance programme while obviates enforcement
measures against enterprises, it also accrues static, productive and
dynamic ef ciency for them, translating into overall economic
development of the country.
fi
fi
fi
fi
fi
fi
fl