COMPETITION ACT, 2002

A shift from MRTP to competition Act 2002

Historical background:

The competition act 2002, was enacted to replace monopolies and restrictive trade practices act 1969 (MRTP).
The MRTP Act focused more on curbing monopolies rather than encouraging competition. In 1991, India
shifted from a closed economy to a liberalized one, leading to significant changes in economic policies,
including deregulation and reduced government intervention. The MRTP Act became outdated in addressing
the needs of a globalized and competitive economy. The Indian government set up a high-level committee
chaired by S.V.S. Raghavan to review the competition laws in India and recommend reforms. The committee
highlighted the shortcomings of the MRTP Act, particularly its failure to address anti-competitive practices
like cartels, abuse of dominant position, and anti-competitive mergers. Based on the Raghavan Committee's
recommendations, the Competition Act, 2002 was introduced to replace the MRTP Act.

Discuss the Raghavan commission report

The Raghavan committee was set up to review the competition laws in India and make recommendations. It
reviewed & highlighted the shortcomings of the MRTP (monopolies & restrictive trade practices Act) 1969
and made the following recommendations:

1. A need for a comprehensive competition law to replace MRTP Act.

2. Establishment of CCI with investigative, adjudicatory and regulatory powers.

3. Need to curb anti-competitive practices like cartels, bid rigging, & price fixing.

4. Inclusion of provisions in the new law to ensure that the M & A do not result in concentration of market
power.

5. CCI empowered to impose fine & penalties for anti-competitive conduct.

Preamble/ objectives:

An Act to provide, keeping in view of the economic development of the country, for the establishment of a
Commission to prevent practices having adverse effect on competition, to promote and sustain competition in
markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants
in markets, in India, and for matters connected therewith or incidental thereto.

*Estb of CCI

*Prevent anti-competitive practices

*Promote and sustain competition

*Protect interest of consumers

*Ensure freedom of trade

Definitions:

2(a) Aquisition- “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.

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.

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.

2(f) consumer- any person who: (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 beneficiary 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 first-mentioned person whether such hiring or availing of services is for any commercial purpose or for
personal use.

2(h) enterprise- means a person or a department of the Government, including units, divisions, subsidiaries,
who or which is, or has been, engaged in any economic 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, 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, defense and space.

Explanation. - (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 office established for the provision of any service.

2(i) goods- means goods as defined in the Sale of Goods Act, 1930 (every kind of movable property other
than actionable claims and money, and it includes stock and shares, growing crops, grass, and things attached
to or forming part of the land which are agreed to be severed before sale or under the contract of sale)

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 (ka) party- includes a consumer or an enterprise or a person or an information provider, or a consumer

association or a trade association, or the Central Government or any State Government or any statutory
authority, as the case may be, and shall include an enterprise or a person against whom any inquiry or
proceeding is instituted; and any enterprise or person impleaded by the Commission to join the proceedings.

2(l) person includes-

(i) an individual;

(ii) a Hindu undivided family;

(iii) a company;

(iv) a firm;

(v) an association of persons or a body of individuals, whether incorporated or not, in India or outside India;

(vi) any corporation established by or under any Central, State or Provincial Act or a Government company
as defined in the Companies Act, 2013

(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 artificial juridical person, not falling within any of the preceding sub-clauses

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 financial institution- means public financial institution as defined in clause (72) of section 2 of
the Companies Act, 2013 and includes a State Financial Corporation, State Industrial Corporation or State
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 neighboring areas.

2(t) relevant product market- means a market comprising of all those products or services

(i) which are regarded as inter-changeable or substitutable by the consumer, by reason of characteristics of the
products or services, their prices and intended use; or

(ii) the production or supply of, which are regarded as interchangeable or substitutable by the supplier, by
reason of the ease of switching production between such products and services and marketing them in the
short term without incurring significant additional costs or risks in response to small and permanent changes
in relative prices.

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, financing, 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.

2(x) trade- means any trade, business, industry, profession or occupation relating to the production, supply,
distribution, storage or control of goods and includes the provision of any services.

Section 3: anti-competitive agreements

A) Horizontal Agreements: these agreements are made between enterprises

operating at the same level of production or supply chain or cartels. Example,
agreements between manufacturer & manufacturer or supplier & supplier etc.
Section 3(3) presumes certain horizontal agreements to have an appreciable adverse
eeffect on competition making them void. They are as follows:
Price fixing agreements- these are the agreements that conspires to set prices either
directly or indirectly. This type of agreement is harmful as it prevents competitive pricing
thereby harming the consumers interests.
Express Industry Council of India v. Jet Airways, Indigo Airways, & Spice Jet Airways (2018) (Airline
surcharge cartel case)
The facts of this case were such that all three airlines fixed a fuel surcharge for transporting cargo which is a
component of the air cargo price; this surcharge was fixed at a uniform rate of INR 5/kg. It was found that
the levy of Fuel Surcharge was introduced as being an extra charge linked to fuel prices whereas fuel prices
were reduced but in correspondence to this there was no such decrease in Fuel Surcharge. It was further
examined that the Fuel Surcharge was increased again by the airlines at the same rate and on the same date.
An investigation by the Director-General in this regard found that there was no admissible evidence of
collusion among the airlines but the conduct of the airlines was not in conformity to the condition of fair
conduct, thereby CCI found this practice as anti-competitive and penalized the same.

Re: Aluminum Phosphide Tablets Manufacturers (2012) (Aluminum Phosphide cartel case)

In this case, it was held that bid-rigging is the form of practice where all bidders agree amongst themselves to
collaborate the response to the tender and it generally happens during government procurement. Participants
in bids do not compete with each other and they secretly collaborate and show their support to one bidder for
a particular tender which affects the price and later they can share a specific percentage of commission or
profit or they can bid next time as per their secret agreement on different occasions.

Fx Enterprise Solutions India Pvt. Ltd. vs. Hyundai Motor India Limited (2015): Hyundai was found to have
entered into anti-competitive agreements with its dealers, including exclusive supply and distribution
arrangements, tie-in arrangements, and RPM clauses. The CCI imposed a penalty on Hyundai for these
violations, which limited competition and restricted consumer choice.

Kaff Appliances India Pvt. Ltd. vs. Hafele India Pvt. Ltd. (2020): Hafele was accused of entering into

exclusive supply and distribution agreements with builders and kitchen retailers, which restricted other
competitors from supplying similar products. The CCI found these agreements to be anti-competitive, as
they created barriers to entry for other suppliers and limited consumer choice. Hafele was penalized for its
anti-competitive conduct.
Bayer Corporation vs. Competition Commission of India (2013): Bayer entered into a marketing agreement
with NATCO Pharma, allowing NATCO to manufacture and sell a generic version of Nexavar at a lower
price. This agreement was legal under Indian competition law, as it fell under the exception provided in
Section 3(5)(i) of the Competition Act, which allows for agreements that are made to protect intellectual
property rights. The CCI recognized that this agreement balanced the interests of protecting intellectual
property rights and ensuring access to affordable medicines.
FICCI Multiplex Association of India vs. United Producers/ Distributors Forum (2011): The case involved a
dispute between multiplex cinema owners and film producers/distributors over revenue-sharing agreements.
The multiplex owners had collectively decided to limit the number of screens allotted to films with high
revenue-sharing demands. The film producers saw this as an anti-competitive practice. The CCI examined
the case and concluded that the multiplex owners’ actions were not in violation of Section 3. The multiplex
owners argued that their actions were necessary for protecting their rights under the Copyright Act, 1957,
specifically the right to exhibit films. The CCI accepted this argument as a valid exception under Section
3(5)(i)(a) of the Competition Act.

(1) No enterprise or association of enterprises or person or association of persons shall enter into any
agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision
of services, which causes or is likely to cause an appreciable adverse effect on competition within India. (2)
Such agreement if made shall be void.

(3) Any agreement entered into between enterprises or associations of enterprises or persons or associations
of persons or between any person and enterprise or practice carried on, or decision taken by, any association
of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or
provision of services, which: -

(a) directly or indirectly determines purchase or sale prices; {Suppose several major cement manufacturers
agree to sell cement at a fixed price, regardless of production costs or market demand. This price-fixing
eliminates competition and ensures that consumers must pay the agreed-upon price, which could be higher
than the competitive market price}

(b) limits or controls production, supply, markets, technical development, investment or provision of
services; {If a group of smartphone manufacturers agrees to limit the production of a specific model to keep
prices high, it restricts supply, manipulates the market, and hinders technological advancement and investment
in new production techniques}

(c) shares the market or source of production or provision of services by way of allocation of geographical
area of market, or type of goods or services, or number of customers in the market or any other similar
way; {Two major airlines agree to divide the market by allocating specific routes to each other, preventing
competition on those routes. For instance, Airline A agrees to operate only in the northern region, while Airline
B operates in the southern region}

(d) directly or indirectly results in bid rigging or collusive bidding. (“Bid rigging” means any agreement,
between enterprises or persons engaged in identical or similar production or trading of goods or provision of
services, which has the effect of eliminating or reducing competition for bids or adversely affecting or
manipulating the process for bidding)

Proviso: Provided that nothing contained in this sub-section shall apply to an agreement entered into between
an enterprise and an end consumer.

{In a tender for road construction, Company X, Y, and Z agree beforehand that Company X will submit the
lowest bid for one project, while Company Y and Z will submit higher bids or refrain from bidding. For the
next project, they rotate this arrangement, ensuring each company wins certain contracts without genuine
competition}

Shall be presumed to have an appreciable adverse effect on competition.

Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint
ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or
control of goods or provision of services.

Provided further that an enterprise or association of enterprises or a person or association of persons though
not engaged in identical or similar trade shall also be presumed to be part of the agreement under this sub-
section if it participates or intends to participate in the furtherance of such agreement.

(4) Any other agreement amongst enterprises or persons including but not restricted to agreement amongst
enterprises or persons at different stages or levels of the production chain in different markets, in respect
of production, supply, distribution, storage, sale or price of, or trade in goods or provision of services,
including: - (vertical)

(a) tie-in arrangement- includes any agreement requiring a purchaser of goods or services as a condition of
such purchase, to purchase some other distinct goods or services. {A printer manufacturer sells printers on the
condition that the buyer must also purchase ink cartridges from the same manufacturer}

(b) exclusive dealing agreement- includes any agreement restricting in any manner the purchaser or seller in
the course of his trade from acquiring or selling or otherwise dealing in any goods or services other than those
of the seller or purchaser or any other person as the case may be.{A beverage company enters into an
agreement with a retailer that the retailer will only stock and sell beverages from that company and not from
any competitors}

(c) exclusive distribution agreement- includes any agreement to limit, restrict or withhold the output or supply
of any goods or services or allocate any area or market for the disposal or sale of the goods or services. {A
cosmetic company appoints a distributor with the condition that the distributor will not sell cosmetics from
any other brands and will limit sales to a specific geographical area}

(d) refusal to deal- includes any agreement which restricts, or is likely to restrict, by any method the persons
or classes of persons to whom goods or services are sold or from whom goods or services are bought. {A
group of wholesalers agrees not to supply goods to a particular retailer who refuses to adhere to their pricing
policies or other conditions}

(e) resale price maintenance- includes in case of any agreement to sell goods or provide services any direct or
indirect restriction that the prices to be charged on the resale by the purchaser shall be the prices stipulated by
the seller unless it is clearly stated that prices lower than those prices may be charged. {A manufacturer of
electronic goods sells products to retailers on the condition that the retailers must sell the products at a price
fixed by the manufacturer, without allowing any discounts}

Shall be an agreement in contravention of sub-section (1) if such agreement causes or is likely to cause an
appreciable adverse effect on competition in India.

Exception:

(5) Nothing contained in this section shall restrict-

(i) the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be
necessary for protecting any of his rights which have been or may be conferred upon him under the Copyright
Act, 1957, the Patents Act, 1970, the Trade and Merchandise Marks Act, 1958 or the Trade Marks Act, 1999,
the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999), the Designs Act,
2000, the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000), any other law for the
time being in force relating to the protection of other intellectual property rights.

(ii) the right of any person to export goods from India to the extent to which the agreement relates exclusively
to the production, supply, distribution or control of goods or provision of services for such export.

Section 4: abuse of dominant position

(1) No enterprise or group shall abuse its dominant position. (2) There shall be an abuse of dominant position
if an enterprise or a group.

(a) directly or indirectly, imposes unfair or discriminatory-

(i) condition in purchase or sale of goods or service; or

(ii) price in purchase or sale (including predatory price) of goods or service.

Explanation: the unfair or discriminatory condition in purchase or sale of goods or service and unfair or
discriminatory price in purchase or sale of goods (including predatory price) or service shall not include such
discriminatory condition or price which may be adopted to meet the competition; or

(b) limits or restricts-

(i) production of goods or provision of services or market therefor; or

(ii) technical or scientific development relating to goods or services to the prejudice of consumers; or

(c) indulges in practice or practices resulting in denial of market access 5 [in any manner]; or

(d) value of any transaction, in connection with acquisition of any control, shares, voting rights or assets of an
enterprise, merger or amalgamation exceeds rupees two thousand crore.

Provided that the enterprise which is being acquired, taken control of, merged or amalgamated has such
substantial business operations in India as may be specified by regulations.

(e) notwithstanding anything contained in clause (a) or clause (b) or clause (c), where either the value of assets
or turnover of the enterprise being acquired, taken control of, merged or amalgamated in India is not more
than such value as may be prescribed, such acquisition, control, merger or amalgamation, shall not constitute
a combination under section 5.

Explanation:

(a) control- means the ability to exercise material influence, in any manner whatsoever, over the management
or affairs or strategic commercial decisions by (i) one or more enterprises, either jointly or singly, over another
enterprise or group; or (ii) one or more groups, either jointly or singly, over another group or enterprise.

(b) group- means two or more enterprises where one enterprise is directly or indirectly, in a position to (i)
exercise twenty-six per cent. or such other higher percentage as may be prescribed, of the voting rights in the
other enterprise; or (ii) appoint more than fifty per cent. of the members of the board of directors in the other
enterprise; or (iii) control the management or affairs of the other enterprise.

(c) turnover- means the turnover certified by the statutory auditor on the basis of the last available audited
accounts of the company in the financial year immediately preceding the financial year in which the notice is
filed under sub-section (2) or sub-section (4) of section 6 and such turnover in India shall be determined by
excluding intra-group sales, indirect taxes, trade discounts and all amounts generated through assets or
business from customers outside India, as certified by the statutory auditor on the basis of the last available
audited accounts of the company in the financial year immediately preceding the financial year in which the
notice is filed under sub-section (2) or sub-section (4) of section 6.

(d) value of transaction- includes every valuable consideration, whether direct or indirect, or deferred for any
acquisition, merger or amalgamation.

(e) the value of assets shall be determined by taking the book value of the assets as shown, in the audited
books of account of the enterprise, in the financial year immediately preceding the financial year in which the
date of proposed combination falls and if such financial statement has not yet become due to be filed with the
Registrar under the Companies Act, 2013 then as per the statutory auditor's report made on the basis of the
last available audited accounts of the company in the financial year immediately preceding the financial year
in which the notice is filed under sub-section (2) or sub-section (4) of section 6, as reduced by any depreciation,
and the value of assets shall include the brand value, value of goodwill, or value of copyright, patent, permitted
use, collective mark, registered proprietor, registered trade mark, registered user, homonymous geographical
indication, geographical indications, design or layout-design or similar other commercial rights under the laws
provided in sub-section (5) of section 3.

(f) where a portion of an enterprise or division or business is being acquired, taken control of, merged or
amalgamated with another enterprise, the value of assets or turnover or value of transaction as may be
applicable, of the said portion or division or business or attributable to it, shall be the relevant assets or turnover
or relevant value of transaction for the purpose of applicability of the thresholds under section 5.

Section 5: combination

This section provides a threshold and criteria is to determine whether a combination should be reviewed by
the Competition Commission of India (CCI) to assess its impact on competition.

Combination Criteria:

The acquisition of enterprises, mergers, or amalgamations will be considered a combination if certain financial
thresholds related to assets and turnover are met:

(a) Acquisition of Control, Shares, Voting Rights, or Assets:

• (i) Parties involved in the acquisition (acquirer and the acquired enterprise):
o In India: The combined value of their assets exceeds ₹1,000 crores or their turnover exceeds
₹3,000 crores.
o Globally (including assets or turnover in India): The combined value of assets exceeds USD
500 million (with at least ₹500 crores in India) or their turnover exceeds USD 1,500 million
(with at least ₹1,500 crores in India).

(ii) The Group (post-acquisition):

 • In India: The combined value of assets exceeds ₹4,000 crores or their turnover exceeds ₹12,000 crores.
• Globally (including assets or turnover in India): The combined value of assets exceeds USD 2
billion (with at least ₹500 crores in India) or their turnover exceeds USD 6 billion (with at least ₹1,500
crores in India).

A group is defined as two or more enterprises where one enterprise has:

• At least 26% voting rights in the other enterprise.

• The ability to appoint more than 50% of the board of directors.
• Control over the management or affairs of the other enterprise.

(b) Acquisition of Control over an Enterprise Already Controlled by the Acquirer:

• If the acquirer already controls another enterprise engaged in similar or substitutable goods or services,
and:
o In India: The combined assets exceed ₹1,000 crores or turnover exceeds ₹3,000 crores.
o Globally: The combined value of assets exceeds USD 500 million (with at least ₹500 crores in
India) or their turnover exceeds USD 1,500 million (with at least ₹1,500 crores in India).

For the group (post-acquisition): @In India: The combined value of assets exceeds ₹4,000 crores or their
turnover exceeds ₹12,000 crores. @ Globally: The combined value of assets exceeds USD 2 billion (with at
least ₹500 crores in India) or their turnover exceeds USD 6 billion (with at least ₹1,500 crores in India).

(c) Merger or Amalgamation:

• The enterprise resulting from the merger or amalgamation:

o In India: Assets exceed ₹1,000 crores or turnover exceeds ₹3,000 crores.
o Globally: The combined assets exceed USD 500 million (with at least ₹500 crores in India) or
turnover exceeds USD 1,500 million (with at least ₹1,500 crores in India).
• For the group (post-merger):
o In India: The combined value of assets exceeds ₹4,000 crores or turnover exceeds ₹12,000
crores.
o Globally: Assets exceed USD 2 billion (with at least ₹500 crores in India) or turnover exceeds
USD 6 billion (with at least ₹1,500 crores in India).

d) Transaction Value:

• If the value of any transaction (involving acquisition, merger, or amalgamation) exceeds ₹2,000 crores
and the enterprise has substantial business operations in India (as defined by regulations), it will be
considered a combination.
Section 6: regulation of combination

Subsection (1): It states that any combination (such as mergers, acquisitions, or amalgamations) that causes
or is likely to cause a significant adverse effect on competition within the relevant market in India is prohibited
and will be considered void.

Subsection (2): This provision mandates that any person or enterprise proposing to enter into a combination
must notify the Competition Commission of India (CCI) before the combination is consummated. This notice
must be given after either:
 • (a) The board of directors of the concerned enterprises approves the merger or amalgamation proposal.
• (b) An agreement or document related to the acquisition or control is executed.
Explanation in Subsection (2): The term "other document" is clarified as any document that conveys an
agreement or decision to acquire control, shares, voting rights, or assets. This includes public announcements
made under SEBI regulations.

Subsection (2A): A combination cannot come into effect until 150 days have passed since the notice was
given to the CCI, or until the CCI has passed an order under Section 31, whichever happens earlier.

Subsection (3): The CCI must deal with the notice it receives according to the procedures laid out in Sections
29, 29A, 30, and 31 of the Act.

• Subsection (4): If a combination meets specific criteria and is not exempted, a notice may be given in
a prescribed form. Upon acknowledgment by the CCI, the combination is deemed to be approved,
eliminating the need for a separate notice under Subsection (2).
• Subsection (5): Upon filing such a notice and receiving acknowledgment, the combination is
automatically deemed approved, and no further approval is required.

Subsection (6): If the CCI finds that the combination does not meet the required criteria or if the information
provided is incorrect or incomplete, the deemed approval can be declared void from the beginning. The CCI
may pass appropriate orders, but only after giving the parties a chance to be heard.

Exemptions for Certain Combinations:

• Subsection (7): Certain categories of combinations may be exempted from the requirement to notify
the CCI under the specified subsections, based on criteria that may be prescribed.

Exemptions for Financial Institutions:

• Subsection (9): Specific exemptions are provided for share subscriptions, financing facilities, or
acquisitions by public financial institutions, foreign portfolio investors, banks, or Category I alternative
investment funds, under certain conditions. These institutions are not required to comply with the
combination notification requirements.
• Explanation in Subsection (9): Definitions are provided for "Category I alternative investment fund"
and "foreign portfolio investor," linking them to the relevant SEBI regulations.

COMPETITION COMISSION OF INDIA

 1. What are anti-competitive agreements?
2. Discuss the establishment, composition and duties and powers of competition commission of
India.
3. Discuss the procedure for enquiry under Section 19 of Competition Act.
4. Write on Competition Fund OR Meetings of the Commission.
5. Appointment of Director General
6. What is abuse of dominant position? Difference between exploitative abuse and exclusionary
abuse? What is the procedure for inquiry into abuse of dominant position.
7. Discuss the salient features of Competition Act 2002?
8. What do you mean by combination? Write the procedure for investigation of combination/ how
are they regulated?
9. Write a note on competition appellate tribunal- functions, powers and procedure.
10. A manufacturing company signed an agreement with supplier with a provision that it will distribute
the goods exclusively at a particular price identify the kind of agreement and the procedure to be
followed by Competition Commission of India to decide whether it has appreciable adverse effect on
competition or not?
11. what are tie in arrangements? why are they considered to be anticompetitive?
12. there are two companies A&B both are involved in the process of manufacturing garments. A operates
in Delhi and B operates majorly in Mumbai, both the companies enter into an agreement among
themselves not to sell their products in each other cities and also not to solicit each other's customers
identify the kind of anticompetitive.
13. white rock Inc is an American based consultancy from having assets of $ three billion. it is planning
to acquire 40% shares in an Indian consultancy firm named grand Burton India limited which has
assets worth rupees 4000 crores in India. both companies want to combine their synergies and expand
their client base over the world. will the provisions dealing with regulations under the Competition
Act apply in this case? Why? discuss the legal effects of the same.
14. Discuss the Raghavan committee report
15. Restraint of trade under Indian contract Act

Elaborate on penalties that CCI can impose.

1. For Anti-Competitive Agreements and Abuse of Dominant Position- The CCI may impose a penalty that
can be up to 10% of the average turnover of the contravening enterprise for the three preceding financial
years. In case of a cartel, the penalty may extend to three times the profit for each year of the continuance of
the cartel or 10% of its turnover, whichever is higher.

2. Failure to Comply with Directions or Furnish Information- For failure to comply with directions or furnish
required information, the penalty may extend to ₹1 lakh for each day during which the failure continues,
subject to a maximum of ₹1 crore.
3. Penalties Related to Combinations- If a person or enterprise fails to give notice of a combination as required
under Section 6(2), the CCI can impose a penalty of up to 1% of the total turnover or the assets of the
combination, whichever is higher.

4. False Statements or Omission of Material Information- Making false statements or omitting material
information during proceedings or investigations can attract a penalty of up to ₹1 crore.

Competition fund

Section 51 of the Competition Act, 2002 establishes the Competition Fund as a financial mechanism to
support the functioning of the Competition Commission of India (CCI). It comprises the following sources of
income:

1. Government Grants: Grants provided by the Central Government for the functioning of the CCI
(Clause (a)).
2. Fees Received: All fees collected under the provisions of the Competition Act, such as filing fees for
cases or applications before the Commission (Clause (c)).
3. Interest Accrued: Any interest earned on the money credited to the Fund.

Application of fund:
1.Salaries and Allowances: Payment of remuneration and benefits to:

• Chairperson and Members of the Commission.

• Director General, Additional, Joint, Deputy, and Assistant Directors General.
• Registrar and other officers and employees of the Commission.
2.Administrative and Other Expenses: Covering the operational and administrative costs required to
discharge the Commission’s functions.

Situational questions:

1. The government of India liberalized its FDI policy and set a 49% cap for foreign investments in civil
aviation sector in India. In 2013 Etihad a company incorporated in UAE a national Arline of UAE
proposed to acquire 24% in jet a listed company incorporated in India. Etihad is wholly owned by govt
of Abu Dhabi and is primarily engaged in business of international air passengers transport service,
commercial holiday & transport services. It is also stated to hold 29.21% equity in Air berlin, 40%
equity in Seychelles, 10% equity in virgin Australia, & 2.9 percent equity in air Lingus, jet on the similar
lines is primarily engaged in the business of providing low cost & full-service air passenger transport
services to/from India along with cargo, maintenance, repairs & overhaul services, & ground handling
services.
1.Determine whether this combination can be said to have adverse impact on the economy or not?
Combination refers to Acquistion, merger or amalgamation.
A combination that causes or is likely to cause an adverse effect of competition in India can be allowed to take
place.
The following factors are considered to determine whether a combination has/may have adverse effect on
competition India. They are as follows-
1. whether the combination leads to increased barriers to entry for the new entrants?
2. Will it result in considerable reduction in competition?
3. Is it dominant entity relevant market?
4. Whether the benefits outweigh the adverse effects etc.?
Considering the present facts the combination may have AAEC. As it seems that both the airlines jet & Etihad
are dominant entities in the relevant market. This could result in reduced competition or barriers to entry in
aviation sector in India. However, if the benefits outweigh the adverse effects, it may not be considered to
have AAEC in India.
2. Define the term relevant market. Considering the above case what would be the relevant market?
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.
Relevant product market- market comprising of interchangeable or substitutable products/services.
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.
In this case, the relevant market might be the market for air passenger transport services in India and
international air transport services to/from India.

2. Google runs it core business of search and advertising in a discriminatory, manner causing harm to
advertisers & indirectly to the consumers. It was alleged that google is creating an uneven playing field
by favoring Google's own services & partners. Through manually manipulating its search results to the
advantage of its vertical partners. Google also provides a large number of vertical services such as
YouTube, google maps etc. It has been averred that in order to promote Google's own vertical search
sites it started mixing many of its vertical results into its organic search results. Therefore, when a user
searches a name of a song, he receives a link to YouTube (owned by Google) for it.
1.Whether the above-mentioned facts constitute abuse of dominant position or not?
As per S.4 An enterprise is said to have abused its dominant position when it-
1. Directly or indirectly imposes unfair/discriminatory conditions/prices on sale of goods or services or
2. Limits the production of goods or services;
3. Practices denial of market access;
4. Uses its position to enhance its position in unrelated markets.
Google’s manipulation of search results to favor its vertical services (e.g., YouTube, Maps) creates an unfair
advantage over competitors and denies market access to competitors. Thus, the facts constitute Abuse of
dominant position.
Similar facts were involved in case of Google LLC versus Competition Commission of India, a complaint
was filed under section 19 against the Google for abusing its dominant position in Android based smartphone
markets as it had apps like Google search, Chrome and play store mandatorily preinstalled on Android devices.
the CCI imposed a penalty of 1337.76 Cr for engaging in anti-competitive practices and was directed to change
its practices as it denied market access for competing search apps.
2. What will be the recourse taken by CCI in case of abuse of dominant position?
CCI can inquire into it Suo moto u/s.19
The CCI can take the following recourse to stop the abuse:
1. Cease & desist order to discontinue the abusive practice
2. Imposition of penalty of not more than 10% of its average turnover for the last three preceding financial
years.
3. Direct division of dominant enterprise
4. Mandate corrective measures/modifications

3. The government of Kerala had invited tenders for the implementation of certain health insurance
schemes Rastriya swasthya bima yojana and comprehensive health insurance scheme. the successful
bidder would be eligible to provide insurance under the schemes for the period of 2010 to 13. In 2009
seven insurance companies had submitted tender documents out of the seven insurers that had
submitted bids only OICL and UIICL had qualified for the financial ground of the tendering from the
technical round conducted by technical evaluation committee constituted by the government. Bid
submitted by UIICL was accepted since it was the lowest bidder. An anonymous informant informed
the Commission that PSIC’s had rigged the bidding process further it was alleged that a cartel was
formed by PSIC’s and higher premiums were being sought by them for insurance services.
Whether the conduct of two public section insurance companies (PSIC’s) can be held to be violative of
provisions of the Act or not?
Bid rigging is a horizontal type of anti-competitive agreement. Horizontal agreements are presumed to have
AAEC in India. Thus, the conduct of the PSIC’s can be held violative of provisions of the Act.
Define the term Bid rigging.
Bid rigging” means any agreement, between enterprises or persons engaged in identical or similar production
or trading of goods or provision of services, which has the effect of eliminating or reducing competition for
bids or adversely affecting or manipulating the process for bidding.

4. Peru and track call cab both radio taxi services contended that canola is providing radio taxi services
and it has abused its dominant position in the market of Kerala by offering heavy discounts to
passengers and incentives two cab drivers which amounts to predatory pricing and has affected other
competitors in the market who cannot offer similar discounts incentives to commuters or drivers?

1.Whether it amounts to abuse of dominant position or not?

As per S.4 An enterprise is said to have abused its dominant position when it-

1. Directly or indirectly imposes unfair/discriminatory conditions/prices on sale of goods or services or

2. Limits the production of goods or services;
3. Practices denial of market access;
4. Uses its position to enhance its position in unrelated markets.
The allegation hinges on whether Canola holds a dominant position in the market for radio taxi services in
Kerala. As per Section 4 Explanation (a), dominance is the ability to operate independently of competitive
forces or affect competitors or the market in its favor. Dominance depends on factors like market share,
economic power, and consumer dependency. If Canola holds a dominant position and its pricing strategy is
proven predatory, it amounts to abuse of dominant position.

2. what is meant by favorite predatory pricing?

Predatory pricing is defined under Section 4 Explanation (b) of the Competition Act as:

• Selling goods or services at prices below cost (as determined by regulations).

• Intent: To eliminate competitors or reduce competition in the relevant market.

5. In the case the informant alleged that according to the agreement with Hyundai dealers were
mandated to procure all automobile parts and accessories from Hyundai or through their vendors only.
while collaborating on an alleged anti-competitive practice of Hyundai the informant stated that
Hyundai imposed a discount control mechanism whereby the dealers were only permitted to provide a
maximum permissible discount and dealers were also not authorized to give discount beyond the
recommended range thereby amounting to resale price maintenance in contravention of Section 3(4)(e)
of the Act.
Whether laying down such condition by an automotive manufacturing company amount to resale price
maintenance or not?
RPM is a vertical type of agreement. includes in case of any agreement to sell goods or provide services any
direct or indirect restriction that the prices to be charged on the resale by the purchaser shall be the prices
stipulated by the seller. Hyundai’s conduct constitutes resale price maintenance under Section 3(4)(e). The
restriction on discount flexibility indirectly fixes a floor price.

Competiton commission of India National company law appellate tribunal

1.It has the power to make regulations consistent 1.It can punish for its contempt u/53U
with the Act. -------------------------------------------------------------
------------------------------------------------------- 2.Appeal against the decision of NCLAT can be
It has the duty to maintain proper accounts. made to SC u/s 53T with 60 days. An appeal
-------------------------------------------------------- against the decision of CCI can be made before
It has the power to rectify its own orders to rectify NCLAT within 60 days.
apparent mistakes on record. -------------------------------------------------------------
------------------------------------------------------------- 3. contraventions of its orders without any
It has the power to direct any person to produce reasonable ground is punishable with penalty not
before director general any information, books or exceeding 1 cr. Or imprisonment extending three
documents required for examination. years or both. 53Q
For the purpose of discharging its functions it has ----------------------------------------------------------
the powers vested in Cpc in matters of- 4. not bound by CPC but guided by principles of
▪ Summoning & enforcing attendance of any natural justice & has the power to regulate its own
person and examining him on oath. procedure.
▪ Discovery & production of documents. Procedure: same powers as vested in CPC with
▪ Receiving evidence on affidavit. respect to matters namely-
 ▪ Issuing commissions for the examination of ▪ Summoning & enforcing attendance of any
witness or documents. person and examining him on oath.
▪ To call experts ▪ Discovery & production of documents.
It has the power to regulate its own procedure. ▪ Receiving evidence on affidavit.
It has the power to issue interim orders to restrain ▪ Issuing commissions for the examination of
contravening act. witness or documents.
------------------------------------------------------------- ▪ Reviewing its decisions
It has the power to prohibit & inquire into the ▪ Dismissing representations for default or
allegations of anti-competitive practices such as deciding ex-parte.
ani-competitive agreement, abuse of dominant ▪ Setting aside ex-parte orders or dismissal
position, combinations having AAEC in India. order for default.
-------------------------------------------------------------
To promote & sustain competition ❖ Power to adjudicate & settle compensation
To ensure freedom of trade claims arising from findings of CCI or its
To protect interest of consumers orders in an appeal before it.
--------------------------------------------------------------
To regulate combinations
To promote competition advocacy

Competition advocacy- refers to promoting competition principles. It is dealt u/s. 49. The central or state
government can seek opinion of CCI when formulating or reviewing policies/laws relating to competition.
The cci has to provide its opinion within 60 days of receiving the reference.