Competition Law (Final)

REGULATION OF UNFAIR TRADE PRACTICES UNDER COMPETITION ACT 2002

S U B M I T T E D B Y: Y: ANNU BAHL L L . M ( B U S I N E S S L AW AW ) I V TH  S E M E S T E R AIALS

TABLE OF CONTENTS Introduction Chapter-1:Competition Chapter-1:Competition Law in India Chapter-2:Application Chapter-2:Application of Competition Act. Chapter-3:Regulatory Chapter-3:Regulatory framework Chapter-4:Unfair Trade Practices Chapter-5:Regulation Chapter-5:Regulation of Unfair Trade Trade Practices Conclusion and Suggestion

INTRODUCTION In the wake of economic liberalization and widespread economic reforms, the Competition Act 2002 was enacted . The Competition Act has  been designed to deal with matters relating to the existence and regulation of competition and monopolies.



COMPETITION LAW IN INDIA



Historical background for Competition Law.



Need of Competition Law.



Competition Policy



Repealing of MRTP Commission.

HISTORICAL BACKGROUND 







Law governing competition is found in over two millennia of history. The formal study of "competition” began in earnest during the 18th century.

Modern competition law begins with the competition law enacted by Canada in 1889 followed by the United States legislation of the Sherman Act of 1890 and the Clayton Act of 1914. Articles 38 and 39 of the Constitution of India triggered to Competition Law in India.

NEED OF COMPETITION LAW 





India has become one of the world’s  fastest growing economies. MRTP Act, 1969 had become obsolete in certain respects in the light of international economic developments. Raghavan Committee recommended competition policy in India.

for

the

new

REPEALING OF MRTP COMMISSION 





By the Competition (Amendment) Ordinance, 2009, the  powers MRTP Commission was ceased. This Ordinance amended Section 66 of the Competition Act. A period of 2 years was set to continue to exercise  jurisdiction and powers of MRTP Commission.

APPLICATIONS OF COMPETITION ACT 

Anti competitive agreements. (Section-3)



Abuse of dominance. (Section-4)



Combinations regulation. (Section-5 & 6)



Competition advocacy. (Section-49)

ANTI COMPETITIVE AGREEMENTS 



An agreement in respect of the production, supply, distribution, storage, acquisition or control of goods etc, which causes an "appreciable adverse effect on competition within India, is an 'anti-competitive agreement'. The Competition Act prohibits anti-competitive agreements and declares that such agreements shall be void.

ABUSE OF DOMINANCE 





An enterprise is free to grow as large as it pleases or achieve as big a market share as it can. Abuse of a dominant position occurs when a dominant firm in a market is intended to eliminate a competitor. The Competition Act does not frown on dominance as such.

COMBINATIONS REGULATION 





The term 'combination' for the purposes Competition Act is defined very broadly.

of

the

Combination includes acquisition of shares, control, voting rights or assets, mergers and amalgamations. Sections 5 and 6 of the Competition Act are to regulate 'combinations‘ and require prior notification and approval where such provisions are applicable.

COMPETITION ADVOCACY 



The ability of the competition office to provide advice, influence and participate in government economic and regulatory policies in order to promote more competitive industry structure is called Competition Advocacy. The provisions for Competition Advocacy are given under Section 49 of the Competition Act.

REGULATORY FRAMEWORK 

Establishment of Competition Commission.



Constitution.



Powers and Duties.



Competition Appellate Tribunal.

COMPETITION COMMISSION: CONSTITUTION, POWERS & DUTIES 





To achieve the objectives of the Competition Act the Competition Commission of India has been established from 14 October 2003. CCI consists of a Chairperson and 6 Members appointed  by the Central Government. The duty of the Commission is 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.

COMPETITION APPELLATE TRIBUNAL 



The Central Government has set up the Appellate Tribunal on 15th May, 2009 to hear and dispose of appeals against any decision made or order passed by the Competition Commission of India. Its Headquarter is at New Delhi.

UNFAIR TRADE PRACTICES (SEC-36 A) A trade practice which, for the purpose of promoting any sale, use or supply of any goods or services, adopts unfair method.

MTP & RTP 

Monopolistic trade practices [Section-2(i)] An MTP is a trade practice which has 

 



maintaining the prices of goods at an unreasonable level by limiting, reducing or otherwise controlling the production or unreasonably preventing or lessening competition in the production or limiting technical development or capital investment to the common detriment .

Restrictive trade practices [Section-2(o)] A practice which tends to obstruct the flow of capital or resources into the stream of production is an RTP.

REGULATION OF UNFAIR TRADE PRACTICES



Regulations for merger control



Part Enforcement without Merger Control

REGULATIONS FOR MERGER CONTROL 





The Combination Regulations are to take effect from June 1, 2011 to supplement the notification of Sections 5 and 6 of the Competition Act, 2002. Mergers are a normal activity within the economy and are a means for enterprises to expand business activity. The administration of merger control is generally carried out by specialist statutory bodies, often being entrusted to quasi judicial specialist tribunals in conjunction with courts of general jurisdiction.

PART ENFORCEMENT WITHOUT MERGER CONTROL





Section 5 explains the types of acquisitions, mergers and amalgamations that are ‘combinations’ for the purpose of the Act. Section 6 prohibits combinations which causes or is likely to cause an appreciable adverse effect on competition

CONCLUSION & SUGGESTIONS 

Competition is accepted worldwide as the life blood of the market economy. It spurs innovation and higher  productivity leading to accelerated economic growth; to the consumers it brings the benefit of lower prices, wider choices and better services. But competition should be done in a fair manner and necessary reforms in the legal system with regard to competition law should be appreciated.



Thank you