Chapter-1
Introduction:Competition Commission of India:
Competition Commission of India is responsible for enforcing the Competition Act throughout
India and 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.
Organization and Function:-
Establishment
Competition Commission of India is a statutory body of the Government of India established on
14 October 2003 under the Competition Act 2002. It became fully functional in May 2009. The
Competition Act, 2002 was passed by the Parliament in the year 2002, to which the President
accorded assent in January, 2003. It was subsequently amended by the Competition
(Amendment)
Act,
2007.
In accordance with the provisions of the Amendment Act, the Competition Commission of India
and
the
Competition
Appellate
Tribunal
have
been
established.
Organisation
The Competition Commission of India is fully functional with a Chairperson and six members.
The provisions of the Competition Act relating to anti-competitive agreements and abuse of
dominant
position
were
notified
on
May
20,
2009.
Objective:
The objectives of Competition Act was further highlighted in a judgment delivered by the
Supreme Court India as: "The main objective of competition law is to promote economic
efficiency using competition as one of the means of assisting the creation of market responsive to
consumer preferences. The advantages of perfect competition are three-fold: allocative
efficiency, which ensures the effective allocation of resources, productive efficiency, which
ensures that costs of production are kept at a minimum and dynamic efficiency, which promotes
innovative
practices."
Functions:
To achieve its objectives, the Competition Commission of India endeavors to dothe following:
(i)
Make the markets work for the benefit and welfare of consumers.
(ii)
(ii) Ensure fair and healthy competition in economic activities in the country for faster
and inclusive growth and development of economy.
(iii)
Implement competition policies with an aim to effectuate the most efficient utilization of
economic resources.
(iv)
Develop and nurture effective relations and interactions with sectorial regulators to
ensure smooth alignment of sectorial regulatory laws in tandem with the competition
law.
(v)
Effectively carry out competition advocacy and spread the information on benefits of
competition among all stakeholders to establish and nurture competition culture in Indian
economy.
Competition Appellate Tribunal
Establishment: The Competition Appellate Tribunal is a statutory organisation established under
the
provisions
of
the
Competition
Act,
2002
Organisation
The Appellate Tribunal consists of a Chairperson and not more than two Members to be
appointed by the Central Government. The Chairperson of the Appellate Tribunal shall be a
person, who is, or has been a Judge of the Supreme Court or the Chief Justice of a High Court. A
Member of the Appellate Tribunal shall be a person of ability, integrity and standing having
special knowledge of, and professional experience of not less than twenty-five years in,
competition matters, including competition law and policy, international trade, economics,
business, commerce, law, finance, accountancy, management, industry, public affairs,
administration or in any other matter which in the opinion of the Central Government, may be
useful to the Appellate Tribunal. The Chairperson or a Member of the Appellate Tribunal shall
hold office for a term of five years and shall be eligible for re-appointment. Provided that no
Chairperson or other Member of the Appellate Tribunal shall hold office after he has attained the
age
of
sixty-eight
years
or
sixty-five
years
respectively.
The Central Government has set up the Appellate Tribunal on 15 th May, 2009 having its
Headquarter at New Delhi. Justice Arijit Pasayat, former Judge of Supreme Court, was appointed
as
the
First
Chairperson
of
the
Appellate
Tribunal
Function: The Competition Appellate Tribunal is established to hear and dispose of appeals
against any direction issued or decision made or order passed by the Competition Commission of
India. The Tribunal shall also adjudicate on claim for compensation that may arise from the
findings of the Competition Commission of India or the orders of the Appellate Tribunal in an
appeal against any findings of the Competition Commission of India and pass orders for the
recovery of compensation under the Act.
Mandate:
The Tribunal shall have, for the purposes of discharging its functions under the Competition Act,
the same powers as are vested in a civil court under the Code of Civil Procedure, 1908. It shall
not be bound by the procedure laid down in the Code of Civil Procedure , but shall be guided by
the principles of natural justice and, subject to the other provisions of this Act and of any rules
made
by
the
Central
Government.
Every order made by the Appellate Tribunal shall be enforced by it in the same manner as if it
were a decree made by a court in a suit pending therein. If any person contravenes, without any
reasonable ground, any order of the Appellate Tribunal, he shall be liable for a penalty of not
exceeding rupees one crore or imprisonment for a term up to three years or with both.
Chapter-2
Duties & Powers of CCI
The Competition Act 2002 provides a provision to establish a commission called Competition
Commission of India (CCI) for execution of provisions of this act. Also act was amended in 2007
to create an appellate tribunal called CAT to hear appeal against decisions of CCI but only in
defined cases.
It shall be the duty of CCI to sustain competition in markets, protect freedom of
trade and interests of consumers in markets.
To sustain competition in markets, CCI has power to make inquiries in case of any certain
agreement, abuse of dominant position or any combination by any person or body
corporate on its own or on receipt of complaint by consumer or by reference of govt or
any authority.
The CCI has powers to inquire into any of acts outside India that causes adverse
impacts on competition within India.
The Chairperson shall constitute benches to exercise powers of CCI and a bench shall
consist of at least 2 members include at least 1 judicial member (qualified to be a judge of
High Court. The Bench where Chairperson presides is known as Principal bench and
others are known as additional benches.
The CCI has power to make inquiry (either Suo Motto or on request of any person,
consumer or trade association) and pass order for any certain agreement, abuse of
dominant position or any combination that cause adverse effect on competition within
India.
The CCI can impose penalties on enterprises or on persons which shall not be > 10% of
turnover of enterprise or person in case of any offence as provided under this act. Also
CCI can order to any enterprise or person to pay compensation to person or enterprise
who suffered from acts of that person or enterprise.
The CCI can advise central govt for division of a dominant enterprise to ensure that it
does not abuse its position. Consequently, govt can take action either same as advised by
CCI or in other form as case may be.
The CCI has power equivalent to a civil court while discharging its functions in
matters such as summoning, producing evidences etc. Also has power to regulate its own
procedure such as place of sittings, timings etc.
Any person or enterprise can appeal to Supreme Court against order of CCI within
60 days from date of order. But no appeal shall be allowed if order passed by CCI
involves consent of both parties.
No Civil court can exercise jurisdiction on any matter under this act or any matter on
which CCI is empowered to exercise jurisdiction.
Chapter-3
Penalties imposed by the Competition commission of India
If any enterprise or person not complies with any order of CCI shall liable for punishment
of imprisonment up to 1 year or/and fine which shall not be > 10 lakh.
If any person fails to comply with any direction given by CCI or Director General such as
ignore summons etc. shall be liable for penalty of Rs 1 lakh per day during such failure
continues.
If any person or enterprise (party to a combination) provides any false information or
hide any considerable information shall liable for penalty of not less than 50 lakhs and
may be extended up to 1 crore.
Also every person of an enterprise (contravenes any provisions of act) who was
responsible to company for conduct of particular business shall be tried and punished as
may be determined by CCI.
The duties of the Competition Commission have been specifically explained in Section
18 of the Act which are as under : (a) to eliminate practices having adverse effect on
competition; (b) to promote and sustain competition; (c) to protect interests of consumers;
and (d) to ensure freedom of trade carried on by other participants, in markets in India.
3.2 It may be pointed out that the duties of the MRTP Commission were not explicitly
indicated under the MRTP Act which have now been prescribed by law for the
Commission. A proviso to Section 18 empowers the Commission to enter into any
memorandum or arrangement with the prior approval of the Central Government, for
purposes of discharging the duties and functions under this Act with any agency of any
foreign country. This will enable the CCI to exercise extra territorial reach effectively by
exchange of information and enforcement of its order. It may be noted that such provision
does not exist under the MRTP Act.
Control of Central Govt over CCI
The Central Govt has power to exempt any number of enterprises from provisions of
act as it may deems fit for security or interests of country or public.
The Central can issue directions to CCI and CCI is bound to follow that directions.
The Central Govt can suspend & take charge over the CCI for period not exceeding 6
months in circumstances such as default made by CCI or situation beyond control of CCI
or in public interest etc. The Govt shall reconstitute CCI after that period by fresh
appointments may be differed from previous one.
Chapter-4
POWERS AND FUNCTIONS OF THE COMMISSION
Inquiry into certain agreements and dominant position of enterprise
Duties of Commission The duties of the Competition Commission have been specifically
explained in Section 18 of the Act which are as under : (a) to eliminate practices having adverse
effect on competition; (b) to promote and sustain competition; (c) to protect interests of
consumers; and (d) to ensure freedom of trade carried on by other participants, in markets in
India. It may be pointed out that the duties of the MRTP Commission were not explicitly
indicated under the MRTP Act which have now been prescribed by law for the Commission. A
proviso to Section 18 empowers the Commission to enter into any memorandum or arrangement
with the prior approval of the Central Government, for purposes of discharging the duties and
functions under this Act with any agency of any foreign country. This will enable the CCI to
exercise extra territorial reach effectively by exchange of information and enforcement of its
order. It may be noted that such provision does not exist under the MRTP Act.
POWERS AND FUNCTIONS OF THE COMMISSION
Inquiry into certain agreements and dominant position of enterprise The Commission may
inquire into any agreement entered into by any enterprise or association of enterprises or
business or association or person in respect of production, supply, distribution, storage,
acquisition or control of goods or provisions of services which causes or is likely to cause an
appreciable adverse affect on competition in markets in India. The Commission may also inquire
into any abuse of dominant position by an enterprise which amounts to violation of Section
4(1).The Commission may make an inquiry into anti-competitive agreements or abuse of
dominant position on its own motion or on
(a) receipt of a complaint, accompanied by prescribed fee, from any person, consumer or
consumer association or trade association; or
(b) a reference made to it by the Central Government or State Government or a statutory
authority. The Director General is not vested with a right to move an application for institution of
an enquiry relating to restrictive agreements or abuse of dominance as is the case under the
MRTP Act, 1969.
The terms person and statutory authority have been defined under Sections 2(l) and 2(w)
respectively. The term person has been given wide connotation and includes an individual, a
HUF, a company, a firm, an association of persons, any corporation established under any
Central, State or Provincial Act or a Govt. company, a cooperative society, a local authority and
every artificial juridical person. Thus, now a trader or a competitor can also file a complaint
directly in its name and can pursue the same as a party to the proceedings. The term Consumer
includes buyer of goods or a person who avails of services for consideration irrespective of
fact whether the purchase of goods or services are availed for own use or commercial purpose.
The term Enterprise includes department of the Government rendering non-sovereign
functions and also excludes departments dealing with atomic energy, currency, defence and
space.
Section 19(3) provides that while determining whether an agreement has appreciable adverse
effect on competition, the Commission shall give due regard to all or any of the following
factors, namely :
(a) creation of barriers to new entrants in the market;
(b) driving existing competitors out of the market;
(c) foreclosure of competition by hindering entry into the market;
(d) accrual of benefits to consumers;
(e) improvements in production or distribution of goods or provision of services;
(f) promotion of technical, scientific and economic development by means of production or
distribution of goods or provision of services. Adverse appreciable affect on competition is a
key factor while adjudicating an enquiry under the Act.
For the purpose of determining whether an enterprise enjoys the dominant position or not
under Section 4, the Commission shall have 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;
(h) entry barriers including barriers such as regulatory barriers, financial 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;
(l) 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.
The terms relevant market and relevant geographic market have been defined in Section 2 (r)
and 2(t) of Act. For determining the relevant geographic market, the Commission shall have
due regard to all or any of the following factors, namely :
(a) regulatory trade barriers;
(b) local specification requirements;
(c) national procurement policies;
(d) adequate distribution facilities;
(e) transport costs;
(f) language;
(g) consumer preferences;
(h) need for secure or regular supplies or rapid after-sales services.
Similarly while determining relevant product market the Commission shall have due regard to
all or any of the following factors namely :
(a) physical characteristics or end-use of goods;
(b) price of goods or service;
(c) consumer preferences;
(d) exclusion of in-house production;
(e) existence of specialized producers;
(f) classification of industrial products
