Competition Act

Competition Act

LAW PROJECT

Need for Competition Act in an era of globalization where the world at large is a single platform for carrying out trade and commerceUnder the Guidance ofProf. CONCLUSIONSURVEY SAYSCOMPARISON WITH AUSTRALIA AND CHINACONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONINDEXCONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONINTRODUCTIONCompetition is an evasive term.Level of competition does not depend upon number of players in an industry but degree of contestability.Benefits:Companies: Efficiency, cost-saving operations, better utilization of resources, etc.Consumer: Wider choice of goods at competitive prices.Government: Generates revenue

CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONMRTP ACT, 1969 MRTP (Monopolistic and Restrictive Trade Practice) Act 1969 came into force from 01st June 1970.

The MRTP Act was extended to the whole of India except Jammu and Kashmir.

CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONMRTP ACT, 1969OBJECTIVES OF THE MRTP ACT Prevention of concentration of economic power Control of monopolies Prohibition of Monopolistic Trade Practices (MTP) Prohibition of Restrictive Trade Practices (RTP) Prohibition of Unfair Trade Practices (UTP)

Monopolistic Trade PracticesLimiting or controlling production, supply or distribution of goods or services. Maintaining price of goods or charge or service at an unreasonable price.Unreasonably preventing or lessening competition.Unreasonably increasing prices and cost of goods or services.CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONMRTP ACT, 1969Restrictive Trade PracticesRefusal deal (Newspaper)Tie-up sale (Toothbrush & Toothpaste)Exclusive dealings (Coke & Mc.D)Price discriminations (Lawyer)Resale price maintenance Area restriction CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONMRTP ACT, 1969Unfair Trade PracticesFalse representation False offer of bargain priceFree gifts offer and price schemes Non-compliance of prescribed standards HoardingsCase: Chevrolet ForesterCONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONMRTP ACT, 1969Components of COMPETITION ACT, 2002Anti-Competitive agreements (Sec 3)Abuse of Dominance (Sec 4)Regulation of Combinations (Sec 5,6)Competition Advocacy (Sec 49)CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITION ACT, 2002Anti-Competitive agreements (Sec 3)Horizontal agreements Vertical agreements

CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITION ACT, 2002Horizontal agreements Same stage of production chainSubstitute productsDirectly or indirectly determines pricesMost pernicious form-cartelization Eg: price fixing, bid riggingCONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITION ACT, 2002Vertical agreementsDifferent stages of the production chain Rule of reason Refusal to dealTie in agreementsEg: printer along with paperCase : Govt. of India vs Ms. Puja Enterprises

CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITION ACT, 2002Abuse of Dominance (Sec 4)Dominance product market : substitute products or services Geographic market : products can be supplied at little above the current pricesPredatory pricing Unfair pricing Entrance to other marketsCase : Belaires Owners Association vs DLF & OthersCONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITION ACT, 2002Regulation of Combinations (Sec 5,6)CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITION ACT, 2002Combinations include mergers, amalgamations and acquisition of control, shares, voting rights or assets.

Entering into a combination which causes adverse effect on competition within the relevant market in India is prohibited

Types Of Combination.Horizontal CombinationVertical CombinationConglomerate Combination

Case : Jet Airways Vs. EtihadIn India Applicable To Assets Turnover Individual Rs.1,500 cr. Rs.4,500 cr. Group Rs.6,000 cr. Rs.18,000 cr. In India & Outside Individual Parties Assets Turnover Total Minimum Indian Component Total Minimum Indian Component out of Total $750 m Rs.750 cr. $2,250 m Rs.2,250 cr. Group $3 bn Rs.750 cr. $ 9 bn Rs.2,250 cr. Thresholds for Combinations under the ActCONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITION ACT, 2002Competition Advocacy (Sec 49)CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITION ACT, 2002Foster conditions leading to competitive marketDevelop relationship with the Ministries and Departments of the GovernmentEncourage debate on competition and promote a better and more informed economic decision makingPrevent practices having adverse effect on competitionEnhanced by establishing good media relations CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONMRTP Vs. COMPETITIONMRTP ActCompetition Act1.Based on the pre-reforms scenarioBased on the post-reforms scenario2.Frowns upon dominanceFrowns upon abuse of dominance3.No regulation of combinationsProvides for regulation of combination 4.Has no advocacy roleProvides for advocacy5.No power to impose penaltyPower to impose penalty deterrence factor CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITON COMMISSION OF INDIA (CCI)Establishment14TH October 2003 perpetual succession and a common sealHead office decided by Central Government

CompositionChairperson & Minimum 2 and maximum 6 other Members appointed by the Central Government.Eligibility

Role of CCI

CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPETITON COMMISSION OF INDIA (CCI)

Infringement Fine/Penalty Who is liable? Anti-competitive agreements Penalties of up to 10% of turnover (or 3x cartelized profits) Enterprises who enter into an anti-competitive agreement Directors/officials also liable Abuse of dominance Penalties of up to 10% of turnover Division of dominant enterprise Enterprises abusing dominant position Directors/officials also liable Failure to notify a reportable combination Fine of up to 1% of combined turnover/assets Person or enterprise Directors/officials also liable Failure to comply with directions of CCI Fines and/or imprisonment as prescribed Compensation can also be awarded by Appellate Tribunal for loss/damage suffered by any person Person failing to comply Directors/officials also liable Consequences of Contravention of Competition Act, 2002CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCONSEQUENCES OF CONTRAVENTIONJURISDICTIONINDIACHINAAUSTRALIAREGULATORCompetition Commission of IndiaAnti-Monopoly CommissionThe Australian Competition and Consumer CommissionKey LegislationThe Competition Act, 2002.The Anti-Monopoly Law.The Competition and Consumer Act, 2010.

Key ProhibitionsAnti-Competitive AgreementsAbuse of DominanceRegulation of Combinations

Anticompetitive agreementsAbuse of dominanceAnticompetitive mergers and acquisitionsAnticompetitive mergers and acquisitionsAnticompetitive contracts, arrangements or understandingsProhibited forms of exclusive dealingMisuse of market power (monopolisation)

CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPARISON WITH OTHERSJURISDICTIONINDIACHINAAUSTRALIACivil/Criminal sanctions for cartelYes for civil sanctionsNo for criminal sanctions.Yes for civil sanctionsNo for criminal sanctions.

Yes for both.Leniency ProgrammeYesYesYesMerger control regime and whether voluntary or suspensoryYes, mandatory and suspensory.Yes, mandatory provided threshold in turnover is met.Yes, voluntary andnot suspensoryunless you file aformal mergerclearancenotification orapplication forauthorisation..CONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCOMPARISON WITH OTHERSSurveyCONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONSURVEY SAYSCONCLUSIONCONCLUSIONSURVEY SAYSCOMPARISON WITH U.S & U.KCONSEQUENCES OF CONTRAVENTIONCOMPETITON COMMISSION OF INDIA (CCI)MRTP Vs. COMPETITIONCOMPETITION ACT, 2002MRTP ACT, 1969INTRODUCTIONCONCLUSIONTHANK YOU!