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Presentation on
COMPETITION ACT 2002
Prepared By
Group 13
Shabi Aziz (49)
Hussain Ahmed (47)
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COMPETITION ACT, 2002
The Competition Act, 2002 came into existence in January2003.
However, the Act could not be notified due to legal hassles.
Finally, the Parliament in September, 2007 passed the
Competition (Amendment) Act, 2007 and the Act becameoperational.
CCI (Competition Commission of India)came into existenceon 1st March, 2009.
Provisions were notified on May 20, 2009. The provisions relating to Combinations were notified w.e.f
1st of June, 2011.
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PREAMBLE OF COMPETITION ACT,2002
To prevent practices having adverse effect oncompetition.
To promote and sustain competition in markets.
To protect the interests of consumers.
To ensure freedom of trade carried on by otherparticipants in markets in India.
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Properties of the Act
The Act deals with following kind of agreements.Horizontal Agreements
Agreement to limit production and/or supply;
Agreement to allocate markets;
Agreement to fix price;
Bid rigging or collusive bidding;
Vertical Agreements
Tie-in arrangement;
Exclusive supply / distribution arrangement;
Resale price maintenance;
Refusal to deal.
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ABUSE OF DOMINANCE
Abuse of dominant position includes: Imposing unfair conditions or price.
Predatory pricing.
Limiting production/market or technicaldevelopment.
Creating barriers to entry.
Applying dissimilar conditions to similar transactions.
Denying market access, and
Using dominant position in one market to gainadvantages in another market.
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Combinations
MRTP Act
Provisions of the MRTP Act regarding registration ofundertakings, establishment of new undertakings, take-
overs, mergers and amalgamation were criticized on theground that they were based on an impractical anduntenable proposition that BIG is BAD
Ultimately, these provisions were repealed in 1991
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Combinations
Competition Act The Competition Act seeks to regulate any acquisition,
acquiring of control, mergers or amalgamations if itresults in assets or turnover exceeding specified monetarylimits
Concept of voluntary notice is introduced. On receipt ofsuch notice, Competition Commission can inquire and approve the combination, or
direct that the combination shall not take effect, or
propose modifications
If no such Order is passed within a time-bound frame, thecombination is DEEMED TO HAVE BEEN APPROVED.
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Combinations
Powers of Competition Commission
It can :
issue a Show Cause Notice to the parties
direct the parties to publish details of the combination invite members of the public to file written objections
pass appropriate Orders
Two questions are worth considering :
Is this just a back-door entry of earlier provisions of the MRTP Act?
Will monetary limits fixed five years ago remain relevant fiveyears hence ?
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Case Studies
Columbia AVIANCA, Columbias largest airline planned a merger with
the countrys second largest airline, ACE.
Justifications given for the merger were :
AVIANCA had huge accumulated losses, and the mergerwould be a potential answer to its financial problems The merged airline could effectively compete with foreign
carriers in the international market HELD : Merger would be anti-competitive : The merged
airline would be FOUR times the size of its nearest domesticrival.
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Case on Competition Act
http://mrtpc2.pdf/http://mrtpc2.pdf/8/2/2019 LAB Group Presentation
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Thank You