Competition Laws by CA Rajkumar Adukiya

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An overview of provisions relating to competition

laws & consumers protection laws in India
CA Rajkumar S. Adukia
B.Com. (Hons.), FCA, ACS, AICWA,
LL.B, Dip.IFR (UK), DLL&LP,DIPR, MBA
098200 61049/093200 61049
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Index
1. Introduction
2. Historical background of Competition Law
3. Evolution of Competition law in India
4. Monopolies and Restrictive Trade Practices Act, 1969 – An overview
5. Consumer Protection laws in India
6. Competition Policy
7. Competition Act, 2002 – An overview
8. Analysis of key concepts and issues of competitive law
a. Anti-Competitive Agreements
b. Abuse of Dominant Position
c. Regulation of Combinations
d. Competition Advocacy
9. Competition Commission of India (CCI)
10. Competition Appellate Tribunal
11. Penalties
12. Important Cases
13. Competition legislations in other countries
14. Professional Opportunities
15. Important websites
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1. INTRODUCTION
“The main objective of the Competition Law is to promote economic

efficiencies using competition as one of the means of assisting the creation
of market responsive to consumer preferences.” – Supreme Court of India
Competition can be defined as a process wherein cost efficient production is

achieved in a structure having reasonable number of players (producers and
consumers) with simple entry and exit procedures and where exists a close
substitution between products of different players in a given industry.
Competition refers to a market situation in which sellers independently strive

for buyer's patronage in order to achieve the business objectives of profit, sales
turnover and market share. In other words, it is the act of competing by an
enterprise against other business enterprises for the purpose of achieving
dominance in the market or attaining a reward or goal. It is the foundation on
which a market system works. For market economy to function effectively, this
competition has to be free and fair. Such a competition stimulates innovation
and productivity and thus leads to the optimum allocation of resources in the
economy; guarantees the protection of consumer interests; reduces costs and
improves quality; accelerates growth and development and preserves economic
and political democracy.
In the absence of adequate safeguards, enterprises may undermine the market

by resorting to unfair practices for their short term gains. As a result, market-
distortionary practices and anti-competitive forces may restrict the working of
healthy competition in an economy. Thus, there arises the need to have a
proper regulatory environment which can ensure a healthy competition so that
all business enterprises can grow and expand and stimulate economic
development of the country. Legislation of an effective competition law should
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contain short term and long term policy options that can regulate the
competition leverage to run the economy on a safe track with sustaining speed.
Most competition laws seek to increase economic efficiency, enhance consumer

welfare, ensure fair trading, and prevent abuse of market power. The three
areas of enforcement that are provided for in most competition laws are–
(i) Anti-competitive agreements
(ii) Abuse of dominance, and
(iii) Mergers which have potential for anti-competitive effect.
The reasons for adoption of competition laws vary across countries; these are
usually on account of concerns about high level of market concentration,
formation of cartels, state monopolies, privatization and deregulation, meeting
with the requirements of bilateral and plurilateral trade agreements and in
addition, to take care of cross border competition dimensions and concerns.
Need for competition

 The ultimate objective of competition is to secure the interest of the
Consumer - it empowers the consumer and offers best guarantee for
consumer protection.
 It is a means of reducing cost and improving quality.
 It also implies an open market where shortages are rapidly eliminated
through the best allocation of resources.
 It accelerates growth and development; preserves economic and
political democracy.
Competition and Growth
There is a positive association between GDP growth and level or degree of

competition. Several studies suggest that competition enhances productivity at
industry level, generates more employment and lowers consumer prices.
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Competition and Democracy
The basic tenets of democracy and of market competition are ingrained in the
same value system - freedom of individual choice, abhorrence of concentration
of power, decentralized decision making and adherence to the rule of law.
While the nature of market mechanism is judged by its ‗allocative efficiency‘,
the democratic institutions are judged by the degree of equity they create.
Competitive markets and democratic governments are, therefore, considered
complementary and need to interact in a manner that maximizes the larger
public interest.
BENEFITS OF COMPETITION
IN THE MARKET FOR CONSUMERS FOR BUSINESS
 Promotes  Lower prices  Availability of inputs
efficiency  Improved quality at competitive price,
 Leads to higher  Better services  Level playing field,
productivity  Wider choices  Redressal against
 Punishes the denial of market
laggards access and other anti-
 Enhances choice, competitive
improves quality agreements. 5

 Reduces costs
 Facilitates better
governance
Competition Law in India
The market principles stipulating that enterprises must be prevented from

abusing their dominance in the marketplace is an old one, recognized from the
times of the rise of the great capitalist economies of the West. Along with this
realization came laws prohibiting unfair business practices in order to
encourage competition in the interests of the general public as well as smaller
businesses. John D. Rockefeller‘s Standard Oil Co. in the early 1900s and Bill
Gates‘ Microsoft Corp. towards the turn of the millennium are among the
famous players whose activities were questioned and penalized under various
laws relating to competition.
India has had its own version of such a law through the Monopolies and
Restrictive Trade Practices Act, 1969 (MRTP Act). But an updated new
legislation formulated for the liberalized and booming Indian economy, the
Indian Competition Act was passed in 2002.
While the Act was passed in 2002, it has been put into force in stages. In a
significant development, the government on 15th May, 2009 issued
notifications giving effect from 20th May, 2009 to, among others, the provisions
dealing with anti-competitive agreements (section 3) and abuse of dominance
(section 4) in the Act. These sections regulate all types of agreements which,
among other things, deal with production, supply, distribution, storage and
control of goods or services and regulate the abuse of dominance by an
enterprise or group.
Sections 5 and 6 (dealing with combination, mergers and acquisitions) came

into force from June 1st 2011 by notification S.O.479(E) dated 4th March 2011.
The Competition Commission of India (CCI) will have the power to initiate cases
against enterprises (i) where the ―enterprise‖ is involved in anti-competitive
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agreements; and (ii) where the ―enterprise‖ is indulging in abusing its/their

dominance in the relevant market.
The important components of the Competition Act, 2002 are:
 Anti-competitive agreements
 Abuse of dominance
 Regulation of combinations
 Competition Advocacy
The Competition Act provides that an anti-competitive agreement shall be void

and prohibits an enterprise or a person from entering 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 in India.
Abuse of dominant position has been defined in the Competition Act to include
directly or indirectly imposing unfair or discriminatory conditions or prices in
purchase or sale of goods or services; restricting or limiting production of
goods/services or market or limiting technical or scientific development
relating to goods or services to the prejudice of consumers; indulging in
practices resulting in denial of market access; using dominance in one market
to move into or protect other markets.
The Competition Act seeks to regulate ‗combinations‘ which include

acquisitions or mergers or amalgamations of enterprises. Acquisition of one or
more enterprise by one or more persons or merger or amalgamation of
enterprises is a combination if it meets the jurisdictional thresholds based on
total value of assets or turnover. Higher thresholds of assets or turnover have
been prescribed when parties to combination belong to ‗group‘ or have assets
or turnover outside India.
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The Competition Commission of India undertakes promotion of competition

advocacy and creation of awareness about competition issues in India and
abroad by programmes, activities etc. in this regard, by constituting Advocacy
Advisory Committee(s), by developing and disseminating advocacy literature,
by undertaking studies and market research for this purpose and also by
encouraging academic and professional institutions to include competition law
and policy in the curricula administered by them.
2. HISTORICAL BACKGROUND OF COMPETITION LAW
Law governing competition is found in over two millennia of history. Roman

Emperors and Medieval monarchs alike used tariffs to stabilize prices or support
local production. The formal study of "competition‖ began in earnest during
the 18th century with such works as Adam Smith's The Wealth of Nations.
Different terms were used to describe this area of the law, including
"restrictive practices", "the law of monopolies", "combination acts" and the
"restraint of trade‖.
An early example of competition law is the Lex Julia de Annona, enacted
during the Roman Republic around 50 BC. To protect the grain trade, heavy
fines were imposed on anyone directly, deliberately and insidiously stopping
supply ships. Under Diocletian in 301 AD an edict imposed the death penalty for
anyone violating a tariff system, for example by buying up, concealing or
contriving the scarcity of everyday goods.
More legislation came under the Constitution of Zeno of 483 AD, which can be
traced into Florentine Municipal laws of 1322 and 1325. This provided for
confiscation of property and banishment for any trade combination or joint
action of monopolies private or granted by the Emperor. Zeno rescinded all
previously granted exclusive rights. Justinian I subsequently introduced
legislation to pay officials to manage state monopolies. As Europe slipped into
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the dark ages, so did the records of law making until the Middle Ages brought
greater expansion of trade in the time of Lex mercatoria.
Legislation in England to control monopolies and restrictive practices were in
force well before the Norman Conquest. The Domesday Book of 1086 recorded
that "foresteel" (i.e. forestalling, the practice of buying up goods before they
reach market and then inflating the prices) was one of three forfeitures that
King Edward the Confessor could carry out through England. But concern for
fair prices also led to attempts to directly regulate the market. Under Henry III
an act was passed in 1266 to fix bread and ale prices in correspondence with
corn prices laid down by the assizes. A fourteenth century statute labeled
forestallers as "oppressors of the poor and the community at large and enemies
of the whole country." Under King Edward III the Statute of Laborers of 1349
fixed wages of artificers and workmen and decreed that foodstuffs should be
sold at reasonable prices. On top of existing penalties, the statute stated that
overcharging merchants must pay the injured party double the sum he received.
The English law of restraint of trade is the direct predecessor to modern
competition law. Its current use is small, given modern and economically
oriented statutes in most common law countries. Its approach was based on the
two concepts of prohibiting agreements that ran counter to public policy,
unless the reasonableness of an agreement could be shown. A restraint of trade
is simply some kind of agreed provision that is designed to restrain another's
trade. For example, in Nordenfelt v. Maxim, Nordenfelt Gun Co. a Swedish arm
inventor promised on sale of his business to an American gun maker that he
"would not make guns or ammunition anywhere in the world, and would not
compete with Maxim in any way‖.
The common law has evolved to reflect changing business conditions. So in the
1613 case of Rogers v. Parry a court held that a joiner who promised not to
trade from his house for 21 years could have this bond enforced against him
since the time and place was certain. It was also held that a man cannot bind
himself to not use his trade generally by Chief Justice Coke. This was followed
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in Broad v. Jolyffe and Mitchell v. Reynold where Lord Macclesfield asked,

"What does it signify to a tradesman in London what another does in
Newcastle?" In times of such slow communications, commerce around the
country it seemed axiomatic that a general restraint served no legitimate
purpose for one's business and ought to be void. But already in 1880 in
Roussillon v. Roussillon Lord Justice Fry stated that a restraint unlimited in
space need not be void, since the real question was whether it went further
than necessary for the promise's protection. So in the Nordenfelt case Lord
McNaughton ruled that while one could validly promise to "not make guns or
ammunition anywhere in the world" it was an unreasonable restraint to "not
compete with Maxim in any way." This approach in England was confirmed by
the House of Lords in Mason v. The Provident Supply and Clothing Co.
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. While other, particularly European, countries also had
some form of regulation on monopolies and cartels, the US codification of the
common law position on restraint of trade had a widespread effect on
subsequent competition law development. Both after World War II and after
the fall of the Berlin wall competition law has gone through phases of renewed
attention and legislative updates around the world.
The number of countries with Competition laws increased phenomenally in the
past 25 years from 32 in 1980 to 105 in 2008. Many more countries are in the
process of enacting competition laws and the numbers are slated to increase
further in the coming few years.
3. EVOLUTION OF COMPETITION LAW IN INDIA
Competition Law for India was triggered by Articles 38 and 39 of the

Constitution of India. These Articles are a part of the Directive Principles of
State Policy.
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 That the ownership and control of material resources of the community

are so distributed as best to subserve the common good; and
 That the operation of the economic system does not result in the
concentration of wealth and means of production to common detriment.
In 1964, when the Indian democracy was in its nascent stage, barely 17 years
old, the Government of India appointed the Monopolies Inquiry Commission to
inquire into the extent and effect of concentration of economic power in
private hands and the prevalence of monopolistic and restrictive trade
practices in important sectors of economic activity other than agriculture. The
Commission submitted its report along with The Monopolies and Restrictive
Trade Practices Bill, 1965, which was later passed by both the Houses of
Parliament and received the assent of the President on December 27, 1969. It
came into force on June 1st, 1970 as the Monopolies and Restrictive Trade
Practices Act, 1969. The object and reasons of the Act was to provide that the
operation of the economic system did not result in the concentration of
economic power to the common detriment, for the control of monopolies, for
the prohibition of monopolistic and restrictive trade practices and for matters
connected therewith and incidental thereto.
Since 1970, the Act had been amended several times to suit to the changing
circumstances. However, of late, particularly after the economic reforms of
early 1990s, it was felt that the MRTP Act had become obsolete in certain
respects in the light of international economic developments relating more
particularly to competition laws and there was a need to shift focus from
curbing monopolies to promoting competition.
On 27 February, 1999, Yashwant Sinha, Finance minister, made the following
announcement in his budget speech:
―The Monopolies and Restrictive Trade Practices Act has become obsolete in
certain areas in the light of international economic developments relating to
competition laws. We need to shift our focus from curbing monopolies to
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promoting competition. Government has decided to appoint a Committee to

examine this range of issues and propose a modern Competition Law suitable
for our conditions‖.
In October 1999, the Government of India appointed a High Level Committee

(Raghavan Committee) on Competition Policy and Competition Law to advise a
modern competition law for the country in line with international
developments and to suggest a legislative framework, which may entail a new
law or appropriate amendments to the MRTP Act. The Committee presented its
Competition Policy report to the Government in May 2000 and gave the
following recommendations:
 The MRTP Act was beyond repair and could not serve the purpose of the
new competitive environment.
 The Industries (Development and Regulation) Act, 1951 was no longer
necessary except for location (avoidance of urban-centric location), for
environmental protection and for monuments and National heritage
protection considerations etc.
 All trade policies should be open, non-discriminatory and rule-bound.
They should fall within the contours of the competition principles.
 All State monopolies and public enterprises will be under the
surveillance of Competition Policy to prevent monopolistic, restrictive
and unfair trade practices on their part. Any form of discrimination in
favour of the public sector and Government commercial enterprises
except where they relate to security concerns must be removed.
 The Industrial Disputes Act, 1947 and the connected statutes need to be
amended to provide for an easy exit to the non-viable, ill-managed and
inefficient units subject to their legal obligations in respect of their
liabilities.
 A new (Indian Competition Act) may be enacted, the MRTP Act may be
repealed and the MRTP Commission wound up.
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 Certain anti-competitive practices should be presumed to be illegal.

 Dominance needs to be appropriately defined in the Competition Law in
terms of ―the position of strength enjoyed by an undertaking which
enables it to operate independently of competitive pressure in the
relevant market and also to appreciably affect the relevant market,
competitors and consumers by its actions‖.
 Mergers need to be discouraged, if they reduce or harm
competition. Mergers beyond a threshold limit in terms of assets should
require pre-notification.
 The provisions relating to unfair trade practices (UTP) need not figure in
the Indian Competition Act as they were covered by the Consumer
Protection Act, 1986.
 The pending cases in the MRTP Commission may be transferred to the
concerned consumer courts under the Consumer Protection Act, 1986.
 The pending MTP (Monopolies and Restrictive Practices) and RTP
(Restrictive Trade Practices) cases in the MRTP Commission may be
taken up for adjudication by the Competition Commission of India (CCI)
from the stages they were in.
 The Competition Commission should be a multi-member body comprised
of eminent and erudite persons of integrity and objectivity from the
fields of Judiciary, Economics, Law, International Trade, Commerce,
Industry, Accountancy, Public Affairs and Administration. The
investigative, prosecutorial and adjudicative functions should be
separate.
The Competition Act, 2002 received assent of the President of India on January
13, 2003 and was published in the Gazette of India dated January 14, 2003.
Pursuant to the Act, the Competition Commission of India was established and
one Chairperson as also an Administrative Member of the Commission was
appointed on 14th October, 2003. However, before the Chairperson could
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enter office, public interest litigation was filed before the Supreme Court of
India on 30th October, 2003 inter alia challenging the appointment on the
grounds, amongst others, that since:
(a) The proposed Commission, to be headed by a bureaucrat, would

replace the MRTP Commission which had all along been headed by a
Judicial Member;
(b) Commission had adjudicatory functions which warranted that the

Chairperson must be a Judicial Member.
The matter was finally disposed of by the Supreme Court of India in January
2005 noting that the Government of India was introducing an amendment to
the law to constitute a judicial appellate authority while leaving the expert
regulatory space to the Commission without answering the challenge.
In this backdrop, the Act was amended in September 2007 providing for setting
up of a Competition Appellate Tribunal ("the Appellate Tribunal") headed by a
Judicial Member to adjudicate appeals and the compensation claims arising out
of the decisions of Commission. Ever since its enactment in 2002, the provisions
of the Act have selectively been brought into effect. Some of the sections of
the Act were brought into force on March 31, 2003 and majority of other
sections on June 19, 2003. Section 3 dealing with anti-competitive agreements
and Section 4 dealing with abuse of dominance was notified on 15 th May 2009
and came into force on 20th May 2009.
The provisions relating to combinations were notified on 4th March 2011 and
came into effect from 1st June 2011.
The Commission and Appellate Tribunal became fully operational with effect
from 20.05.2009.
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Historical background of the Act in a nutshell
 1948 - The First Industrial Policy Resolution announced

 1951- Implementation Of The Industrial (Development And Regulation)
Act, 1951
 1955 - Hazari Committee Report on Industrial Licensing Procedure -
Working of the licensing system has resulted in disproportionate growth
of some big houses
 1964 - Mahalanobis Committee Report on Distribution And Levels Of
Income- Committee gave a finding that top 10 % of the population
cornered 40 % of income and big business houses were emerging because
of planned economy model
 1965 - Monopolies Inquiry Commission Report of Das Gupta, Government
of India appointed this Inquiry Commission ―to inquire into the existence
and effect of concentration of economic power in private hands.‖
Reported that there was concentration of economic power and a few
industrial houses were controlling a large number of companies and
there existed large scale RTP & MTP
 1969 - Monopolies & Restrictive Trade Practices Act was enacted
 1984 – MRTP - Major addition relating to Unfair Trade Practices
 1991 – MRTP - Provisions in respect of Concentration of Economic Power
were deleted by omitting Part A of Chapter III of the Act w.e.f.
27.09.1991
 In October 1999, the Government of India appointed a High Level
Committee on Competition Policy and Competition Law under
Chairmanship of S.V.S.Raghavan (former Union Commerce Secretary)
 The Committee presented its Competition Policy report to the
Government on May 22, 2000
 The Competition Bill, 2002 introduced in Lok Sabha on 6 th August 2001
and passed on 16th December 2002
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 The Competition Bill, 2002 passed by Rajya Sabha on 12th December
2002
 The Competition Bill, 2002 received President‘s assent on 13 th December
2002
 The Competition (Amendment) Bill, 2006 was introduced in the Lok
Sabha on March 9, 2006.
 June 5, 2006 - Planning Commission constituted a Working Group on
Competition Policy
 The Parliamentary Standing Committee on Finance [Chairperson: Maj.
Gen. (Retd.) Bhuwan Chandra Khanduri] submitted its report on
December 12, 2006.
 The Competition Amendment Bill, 2006 was withdrawn and replaced by
the Competition Amendment Bill, 2007 on Aug 29, 2007
 The Competition Amendment Bill, 2007 was passed by Lok Sabha on 6 th
September, 2007
 The Competition Amendment Bill, 2007 was passed by Rajya Sabha on
10th September, 2007
 The Bill was passed by the President on 24th September 2007
 There were 50 amendments by Competition (Amendment) Act 2007
 15th May, 2009 – Government issued notifications giving effect from 20th
May, 2009 to, among others, the provisions dealing with anti-competitive
agreements (section 3) and abuse of dominance (section 4) in the
Competition Act.
 4th March 2011 – Notified provisions relating to Combinations with effect
from 1st June 2011
List of Rules and Regulations under the Competition Act, 2002
Sl.No. Rules / Regulations

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1 Competition Commission of India (Procedure in regard to the

transaction of business relating to combination) Regulation 2011
2 The Competition Commission of India (Manner of Recovery of

Monetary Penalty) Regulations, 2011
3 The Competition Commission of India (Procedure for

Engagement of Experts and Professionals) Regulations, 2009
4 The Competition Commission of India (General) Regulations,

2009
5 The Competition Commission of India (Meeting for Transaction

of Business) Regulations, 2009
6 The Competition Commission of India (Lesser Penalty)

Regulations, 2009
7 The Competition Commission of India (Determination of Cost of

Production) Regulations, 2009
8 Competition Commission of India (Salary, Allowances and other

Terms and Conditions of Service of Chairperson and other
Members) Rules, 2003
9 Competition Commission of India (Oath of Office and of Secrecy

for Chairperson and other Members) Rules, 2003
10 Competition Commission of India (Term of the Selection
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Committee and the Manner of Selection of Panel of Names)

Rules, 2008
11 Competition Commission of India (Return on Measures for the

promotion of Competition Advocacy, awareness and training on
Competition Issues) Rules, 2008
12 Competition Commission of India (Form and Time of Preparation

of Annual Report) Rules, 2008
13 Competition Commission of India (Number of Additional, Joint,

deputy of Assistant Director-General other officers and
employees, their manner of appointment, qualification, salary,
allowances and other terms and conditions of service) Rules,
2009
14 Competition Commission of India (Form of Annual Statement of

Accounts) Rules, 2009
Competition Commission of India (salary, allowances, other

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terms and conditions of service of the Secretary and officers
and other employees of the Commission and the number of such
officers and other employees) Rules, 2009
The Competition Commission of India (Director-General)
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Recruitment Rules, 2009
Competition Appellate Tribunal (Procedure) Regulations, 2011
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Competition Appellate Tribunal (Salaries and Allowances and

18
other Terms and Conditions of Service of the Chairperson and
Other Members) Rules, 2009
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Competition Appellate Tribunal (Form and fee for filing an

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appeal and fee for filing compensation applications) Rules, 2009
Competition Appellate Tribunal (Recruitment, salaries & other
20
terms & conditions of service of officers and other employees)
Rules, 2010
4. MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969 – AN

OVERVIEW
The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was an
Act that provided that the operation of the economic system does not result in
the concentration of economic power to the common detriment, for the
control of monopolies, for the prohibition of monopolistic and restrictive trade
practices and for matters connected therewith or incidental thereto.
The MRTP Act was amended repeatedly in 1974, 1980, 1982, 1984, 1985, 1986,
1988 and 1991. The effect of these amendments was to render the provisions
governing monopolies virtually inoperative, but bring unfair trade practices
within the purview of the Act. The Act was ‗restructured‘ in 1991 by omitting
Sections 20 to 26 and shifting the provisions contained in Chapter IIIA regarding
restrictions, acquisition and transfer of shares to the Companies Act, 1956.
Areas focused under the MRTP Act
 Prevention of concentration of economic power to the common
detriment
 Control of monopolies
 Prohibition of monopolistic trade practices (MTP)
 Prohibition of restrictive trade practices (RTP)
 Prohibition of unfair trade practices (UTP)
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Objectives of MRTP Act

The principal objectives sought to be achieved through the MRTP Act were:
(a) Prevention of concentration of economic power to the common
detriment;
(b) Control of monopolies;
(c) Prohibition of monopolistic trade practices;
(d) Prohibition of restrictive trade practices;
(e) Prohibition of unfair trade practices.
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Out of these five, the first two were de-emphasized, after the 1991
amendment to the Act. The emphasis not only shifted to the last three
mentioned objectives but they were re-emphasized to the extent that
monopolies tend to bring about monopolistic trade practices and the Act
provides for their surveillance. Briefly, the Act was designed to guard against
different aspects of market imperfections. For instance, a merger, which can
increase the dominance of the combine or has resulted in a large share in the
market, can be looked at in terms of the provisions of the Act and the
objectives governing them.
Restrictive Trade Practices (RTPs)
A restrictive trade practice is generally one which has the effect of preventing,
distorting or restricting competition. In particular, a practice which tends to
obstruct the flow of capital or resources into the stream of production is an
RTP. Likewise, manipulation of prices, conditions of delivery or flow of supply
in the market which may have the effect of imposing on the consumer
unjustified costs or restrictions are regarded as restrictive trade practices.
Certain common types of restrictive trade practices enumerated in the Act

which do not have an element of competition are:
a) Refusal to deal;
b) Tie-up sales;
c) Full line forcing;
d) Exclusive dealings;
e) Concert or collusion-cartel;
f) Price discrimination;
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g) Re-sale price maintenance;
h) Area restriction;
i) Predatory pricing.
Unfair Trade Practices (UTPs)
Unfair trade practice means a trade practice which, for the purpose of
promoting the sale, use or supply of any goods or for the provision of any
service adopts any unfair method or unfair or deceptive practice. (Section 36A
of MRTP Act)
Essentially unfair trade practices fall under the following categories:
a) Misleading advertisement and false representation;
b) Bargain sale, bait and switch selling;
c) Offering of gifts or prizes with the intention of not providing them and
conducting promotional contests;
d) False representation of the product‘s safety standards;
e) Hoarding or destruction of goods.
Making false or misleading representation of facts disparaging the goods,

services or trade of another person is also an unfair trade practice under MRTP
Act.
Monopolistic Trade Practices (MTPs)
Monopolistic Trade Practice is a trade practice which has or is likely to have

the effect of:
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i. maintaining the prices of goods or charges for the services at an

unreasonable level by limiting, reducing or otherwise controlling the
production, supply or distribution of goods or the supply of any services
or in any other manner;
ii. unreasonably preventing or lessening competition in the production,

supply or distribution of any goods or in the supply of any services;
iii. limiting technical development or capital investment to the common

detriment or allowing the quality of any goods produced, supplied or
distributed, or any services rendered, in India to deteriorate;
iv. increasing unreasonably:
a. the cost of production of any goods; or
b. charges for the provision, or maintenance of any services;
v. Increasing unreasonably:
a. the prices at which goods are, or may be, sold or re-sold, or the
charges at which the services are, or may be, provided; or
b. the profits which are, or may be, derived by the production,

supply or distribution (including the sale or purchase) of any goods
or in the provision or maintenance of any goods or by the
provision of any services;
vi. preventing or lessening competition in the production, supply or

distribution of any goods or in the provision or maintenance of any
services by the adoption of unfair methods or unfair or deceptive
practices.
Merger and amalgamation
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The MRTP Act did not prohibit mergers, amalgamations or takeovers but seeked
to ensure that the arrangement served the public interest. Before the 1991
amendment, the Act frowned upon expansion of giant undertakings so as not to
permit them to acquire power to put a stranglehold both on the market as well
as on consumers and further industrial expansion of the country. After the 1991
amendment, the Act was restructured and pre-entry restrictions with regard to
prior approval of the Government for amalgamation, merger or take-over were
removed. But in relation to concentration of economic power, the law retained
provisions relating to the power of the Government to direct division of an
undertaking and severance of interconnection between undertakings if the
working of an undertaking is prejudicial to public interest or is likely to lead to
the adoption of any monopolistic or restrictive trade practices. While the
power to conduct an enquiry in this regard was vested with the MRTP
Commission, the order for division of undertaking or severance of
interconnection could be passed only by the Government. Thus, the role of the
Commission was advisory.
MRTP Commission
For enforcement of the provisions of the MRTP Act, the Monopolies and
Restrictive Trade Practices Commission was established. It consisted of a
Chairman and not less than two and not more than eight members, appointed
by the Central Government. The Chairman was always a person who is or has
been qualified to be a judge of the Supreme Court or of a High Court. The
Commission was assisted by the Director General of Investigation & Registration
(DG) and as many Additional, Joint, Deputy or Assistant Director General of
Investigation and Registration for carrying out investigations or maintaining a
register of agreements and for undertaking carriage of proceedings during the
enquiry before the MRTP Commission.
24
Comparison between the MRTP Act and Competition Act
S. No. MRTP Act Competition Act

1 Arrangement and language of The language and arrangement of
the MRTP Act was more sections in the Competition Act is
complex. simple and clear.
2 Registration of agreements There is no requirement for
was compulsory. registration of agreements under the
Competition Act.
3 There was no regulation of Combinations are regulated beyond a

combinations under the threshold limit under the Competition
MRTP Act. Act.
4 The Commission was The Competition Commission is

appointed by the selected by a Search Committee.
Government under the MRTP
Act.
5 No competition advocacy Competition Commission has been
role for the MRTP entrusted with the function of
Commission. competition advocacy.
6 Unfair trade practices were Unfair trade practices are not covered
covered under the MRTP Act. under the Competition Act.
Henceforth it will be covered under
the Consumer Protection Act, 1986.
25
5. CONSUMER PROTECTION LAWS IN INDIA
Consumer protection laws or Consumer Laws are designed to ensure fair

competition and the free flow of truthful information in the marketplace.
Consumer Protection laws are a form of government regulation which aim to
protect the interests of consumers.
The Consumer movement in India is a socio-economic movement which seeks to
protect the rights of the consumers in relation to the goods purchased and
services availed.
The Department of Consumer Affairs under the Ministry of Consumer Affairs,
Food and Public Distribution is responsible for the formulation of policies for
consumer cooperatives, monitoring prices, availability of essential
commodities, Consumer Movement in the country and Controlling of statutory
bodies like Bureau of Indian Standards (BIS) and Weights and Measures.
Legislations related to consumer protection in India

The Consumer Protection Act, 1986 is the main legislation pertaining to
Consumer protection.
Other Legislations governing Consumer Protection include:
 The Consumer Protection Rules, 1987
 Consumer Welfare Fund Rules, 1992
 The Consumer Protection Regulations, 2005
 Bureau of Indian Standards (Recognition of Consumers‘ Associations)

Rules, 1991
26
 The Essential Commodities Act, 1955
 Prevention of Black-marketing and Maintenance of Supplies of Essential

Commodities Act, 1980
 Consumer Protection (Amendment) Bill, 2011
Consumer Protection Act, 1986
The Consumer Protection Act, 1986 is a social welfare legislation which was
enacted as a result of widespread consumer protection movement. It was
enacted to provide a simpler and quicker access to redressal of consumer
grievances. The main object of the Act is to provide for the better protection
of the interests of the consumer and to make provisions for establishment of
consumer councils and other authorities for settlement of consumer disputes
and matter therewith connected.
The Consumer Protection Act, 1986, applies to all goods and services, excluding
goods for resale or for commercial purpose and services rendered free of
charge and under a contract for personal service. The provisions of the Act are
compensatory in nature. It covers public, private, joint and cooperative sectors.
The Act enshrines the rights of the consumer such as right to safety, right to be
informed, right to be heard, and right to choose, right to seek redressal and
right to consumer education.
Important terms under the Consumer Protection Act -
Consumer: According to Section 2(d) of the Consumer Protection Act, 1986,

consumer means 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
27
paid or partly promised, or under any system of deferred payment when such
use is made with the approval of such person, but does not include a person
who obtains such goods for resale or for any commercial purpose; or (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;
Explanation — For the purposes of the sub-clause (i), ―commercial purpose‖

does not include use by a consumer of goods bought and used by him
exclusively for the purpose of earning his livelihood, by means of self-
employment.
According to this definition, a person to be a consumer of goods should satisfy

that –
o The goods are bought for consideration.

o Any person who uses the goods with the approval of the buyer
is a consumer.
o Any person who obtains the goods for resale or commercial
purposes is not a consumer.
o Person buying goods for self employment is a consumer.
A person is a consumer of services if –
o The services are hired or availed of.

o Consideration must be paid or payable.
o Beneficiary of services is also a consumer.
28
Goods: Goods mean any movable property and also include shares, but do not
include any actionable claims.
Service: Service means service of any description which is made available to

potential users and includes, but not limited to, the provision of facilities in
connection with banking, financing insurance, transport, processing, supply of
electrical or other energy, board or lodging or both, housing construction,
entertainment, amusement or the purveying of news or other information, but
does not include the rendering of any service free of charge or under a
contract of personal service. (Sec.2 (1) (o))
Defect: Defect means any fault, imperfection or shortcoming in the quality,

quantity, potency, purity or standard which is required to be maintained by or
under any law for the time being in force under any contract, express or
implied or as is claimed by the trader in any manner whatsoever in relation to
any goods. (Sec.2 (1) (f))
Deficiency: Deficiency means any fault, imperfection, shortcoming or inade-

quacy in the quality, nature and manner of performance which is required to
be maintained by or under any law for the time being in force or has been
undertaken to be performed by a person in pursuance of a contract or
otherwise in relation to any service.
Nature of complaint that can be made under the Consumer Protection Act,
1986
 Any unfair trade practice or restrictive trade practice adopted by the

trader
 Defective goods
 Deficiency in service
 Excess price charged by the trader
 Unlawful goods sale, which is hazardous to life and safety when used.
29
Relief that can be granted under the Consumer Protection Act, 1986
(a) Repair of defective goods
(b) Replacement of defective goods
(c) Refund of the price paid for defective goods or service
(d) Removal of deficiency in service
(e) Refund of extra money charged
(f) Withdrawal of goods hazardous to life and safety
(g) Discontinue the unfair trade practice or the restrictive trade

practice or not repeat it
(g) Compensation for the loss or injury suffered by the consumer due to
negligence of the opposite party
(h) Adequate cost of filing and pursuing the complaint
Unfair Trade Practice and Restrictive Trade Practice under the Consumer
Protection Act, 1986
According to Section 2(1)(r) "unfair trade practice" means a trade practice

which, for the purpose of promoting the sale, use or supply of any goods or for
the provision of any service, adopts any unfair method or unfair or deceptive
practice including any of the following practices, namely;—
(1) the practice of making any statement, whether orally or in writing or by

visible representation which,—
(i) falsely represents that the goods are of a particular standard,

quality, quantity, grade, composition, style or model;
30
(ii) falsely represents that the services are of a particular standard,

quality or grade;
(iii) falsely represents any re-built, second-hand, renovated,

reconditioned or old goods as new goods;
(iv) represents that the goods or services have sponsorship, approval,

performance, characteristics, accessories, uses or benefits which such
goods or services do not have;
(v) represents that the seller or the supplier has a sponsorship or

approval or affiliation which such seller or supplier does not have;
(vi) makes a false or misleading representation concerning the need

for, or the usefulness of, any goods or services;
(vii) gives to the public any warranty or guarantee of the performance,

efficacy or length of life of a product or of any goods that is not based
on an adequate or proper test thereof; Provided that where a defence is
raised to the effect that such warranty or guarantee is based on
adequate or proper test, the burden of proof of such defence shall lie on
the person raising such defence;
(viii) makes to the public a representation in a form that purports to

be—
(i) a warranty or guarantee of a product or of any goods

or services; or
(ii) a promise to replace, maintain or repair an article or

any part thereof or to repeat or continue a service
until it has achieved a specified result, if such
purported warranty or guarantee or promise is
materially misleading or if there is no reasonable
prospect that such warranty, guarantee or promise
will be carried out;
31
(ix) materially misleads the public concerning the price at which a

product or like products or goods or services, have been or are,
ordinarily sold or provided, and, for this purpose, a representation as to
price shall be deemed to refer to the price at which the product or
goods or services has or have been sold by sellers or provided by
suppliers generally in the relevant market unless it is clearly specified to
be the price at which the product has been sold or services have been
provided by the person by whom or on whose behalf the representation
is made;
(x) gives false or misleading facts disparaging the goods, services or

trade of another person.
Explanation. - For the purposes of clause (1), a statement that is—
(a) expressed on an article offered or displayed for sale,

or on its wrapper or container; or
(b) expressed on anything attached to, inserted in, or

accompanying, an article offered or displayed for
sale, or on anything on which the article is mounted
for display or sale; or
(c) contained in or on anything that is sold, sent,

delivered, transmitted or in any other manner
whatsoever made available to a member of the
public,
shall be deemed to be a statement made to the public

by, and only by, the person who had caused the
statement to be so expressed, made or contained;
(2) permits the publication of any advertisement whether in

any newspaper or otherwise, for the sale or supply at a bargain
price, of goods or services that are not intended to be offered
for sale or supply at the bargain price, or for a period that is,
32
and in quantities that are, reasonable, having regard to the

nature of the market in which the business is carried on, the
nature and size of business, and the nature of the
advertisement.
Explanation.—For the purpose of clause (2), "bargaining price"

means—
(a) a price that is stated in any advertisement to be a

bargain price, by reference to an ordinary price or
otherwise, or
(b) a price that a person who reads, hears or sees the

advertisement, would reasonably understand to be a
bargain price having regard to the prices at which the
product advertised or like products are ordinarily sold;
(3) permits—
(a) the offering of gifts, prizes or other items with the

intention of not providing them as offered or creating
impression that something is being given or offered free
of charge when it is fully or partly covered by the
amount charged in the transaction as a whole;
(b) the conduct of any contest, lottery, game of chance or

skill, for the purpose of promoting, directly or indirectly,
the sale, use or supply of any product or any business
interest;
(3A) withholding from the participants of any scheme offering

gifts, prizes or other items free of charge, on its closure the
information about final results of the scheme.
Explanation. — For the purposes of this sub-clause, the

participants of a scheme shall be deemed to have been
informed of the final results of the scheme where such results
33
are within a reasonable time, published, prominently in the

same newspapers in which the scheme was originally
advertised;
(4) permits the sale or supply of goods intended to be used, or

are of a kind likely to be used, by consumers, knowing or
having reason to believe that the goods do not comply with the
standards prescribed by competent authority relating to
performance, composition, contents, design, constructions,
finishing or packaging as are necessary to prevent or reduce
the risk of injury to the person using the goods;
(5) permits the hoarding or destruction of goods, or refuses to

sell the goods or to make them available for sale or to provide
any service, if such hoarding or destruction or refusal raises or
tends to raise or is intended to raise, the cost of those or other
similar goods or services.
(6) manufacture of spurious goods or offering such goods for

sale or adopts deceptive practices in the provision of services.
According to Section 2(1) (nnn) of the Consumer Protection Act, 1986,

“restrictive trade practice” means a trade practice which tends to bring
about manipulation of price or conditions of delivery or to affect flow of
supplies in the market relating to goods or services in such a manner as to
impose on the consumers unjustified costs or restrictions and shall include—
(a) delay beyond the period agreed to by a trader in supply of

such goods or in providing the services which has led or is
likely to lead to rise in the price;
(b) any trade practice which requires a consumer to buy, hire

or avail of any goods or, as the case may be, services as
condition precedent to buying, hiring or availing of other goods
or services;
34
On analysis of the above definition, it can be understood that where sale or

purchase of a product or service is made conditional on the sale or purchase of
one or more other products and services, it amounts to restrictive trade
practice.
Technically, this type of arrangement is called ‗tie-up sales‘ or ‗tying

arrangement‘. The effect of such an arrangement is that a purchaser is forced
to buy some goods or services which he may not require along with the goods
or services which he wants to buy. Thus where a buyer agrees to purchase
product ‗X‘ upon a condition that he will also purchase product ‗Y‘ from the
seller, the sale of product ‗Y‘ (tied product) is tied to the sale of product ‗X‘
(tying product).
The buyer has to forego his free choice between competing products. This
results in neutralizing healthy competition in the ‗tied‘ market.
For example: A, a gas distributor insisted his customers to buy gas stove as a
condition to give gas connection. It was held that it was a restrictive trade
practice - Re. Anand Gas RTPE 43/1983 (MRTPC).
However when there is no such precondition and the buyer is free to take
either product, no tying arrangement could be alleged event though the seller
may offer both the products as a single unit at a composite price.
For example: A is a furniture dealer. He is selling Sofa at Rs. 20,000 and Bed
at
Rs. 15,000. He has an offer that whoever will buy Sofa and Bed both, he will
charge Rs. 30,000 only. Here the choice is open to the customer to buy the
products single or composite. This is not a restrictive trade practice.
Consumer Courts
35
The Consumer Protection Act, 1986 provides for a three tier approach in
resolving consumer disputes. There are 3 levels of consumer courts namely:
a) National Consumer Dispute Redressal Commission or National

Commission: Value of claims above Rs.1 crore
b) State Consumer Dispute Redressal Commission or State Commission:
Value of claims from Rs.20 lakhs to Rs.1 crore
c) District Consumer Disputes Redressal Forum or District Forum: Value of
claims upto Rs.20 Lakhs
District Forum and State Commission are formed by States with the permission
of the Central Government while the National Commission is formed by the
Central Government. Presently there are 34 State Consumer Disputes Redressal
Commissions in India.
Complaint
A complaint, hand written or typed, can be filed by a consumer, a registered

consumer organisation, central or state Government and one or more
consumers, where there are numerous consumers having the same interest.
The complaint should be filed with the appropriate Commission depending
upon the value of the claim. No stamp or court fee is required. The nature of
complaint must be clearly mentioned as well as the relief sought by the
consumer. It must be in quadruplicate in district forum or state commission.
Normally, complaints should be decided within 90 days from the date of notice
issued to the opposite party. Where a sample of any goods is required to be
tested, a complaint is required to be disposed of within 150 days; although it
may take more time due to practical problems.
Consumer Protection Councils
36
Councils have been setup in all states and at the center to promote and protect
the rights and interest of consumers. These councils are advisory in nature and
can play important role in recommending consumer oriented policies to the
state and central Government.
Consumer Protection (Amendment) Bill, 2011
The Government has introduced the Consumer Protection (Amendment) Bill,

2011, in Lok Sabha on December 16, 2011, to facilitate quicker disposal of
cases and to widen and amplify the scope of some of the provisions of the Act.
The Bill has been referred to the Standing Committee on Food, Consumer
Affairs and Public Distribution.
The enactment of the Consumer Protection Act, 1986, was an important

milestone in the field of consumer protection. In terms of the Act, consumer
disputes redressal agencies have been set up at the 629 District, 35 State and
National levels to render simple, inexpensive and speedy justice to consumers
in respect of complaints against defective goods, deficient services and
unfair/restrictive trade practices. With a view to faster redressal of complaints
and to rationalize procedure of appointments in consumer disputes redressal
agencies, it has been felt necessary to amend the Act.
Some of the proposed amendments –
 On line filing of consumer complaints

 Enforcement of orders as a Decree of Civil Court
 Payment to be made for non-compliance of the order
 Powers to District Forum
 Powers to State Government in selection process
 Experience for members
 Powers to National Commission / State Commission to direct any one to
assist the case
37
 Monitoring system of pending cases
6. COMPETITION POLICY
Competition Policy means government measures, policies, statutes, and

regulations including a competition law, aimed at promoting competitive
market structure and behavior of entities in an economy. Competition policy is
a critical component of any overall economic policy framework. Competition
Policy is intended to promote efficiency and to maximize consumer/social
welfare. It also helps to promote creation of a business environment which
improves static and dynamic efficiencies, leads to efficient resource allocation
and in which abuse of market power is prevented / curbed.
The Government of India is in the process of finalizing a National Competition
Policy. The Ministry of Corporate Affairs had constituted a Committee under
the Chairmanship of Shri Dhanendra Kumar, Former Chairperson of Competition
Commission of India, for framing of National Competition Policy and related
matters. The committee submitted a draft National Competition Policy and the
Ministry had invited comments from all stakeholders on the policy. The policy
will provide a framework to promote greater competition across sectors and
unleash the full growth potential of the Indian economy.
The Policy is aimed at laying down an overarching policy framework for
infusing competition principles in various policies, statutes and regulations
and promoting a competitive market structure in the economy, thereby
striving to achieve maximum economy efficiency in various spheres, and
public welfare.
The draft policy talks about various instruments to promote competition in
markets to ensure protection of consumer interests, while at the same time
protecting the rights of market players to fair competition. It also aims to
remove overlapping jurisdiction of various regulators and streamline laws
38
aimed at fostering competition. The Draft National Competition Policy stresses

on the need for undertaking Competition Assessment of new and existing
policies and laws at the national, regional and local level.
According to the draft policy, CCI (Competition Commission of India) will also
have powers to look into matters at state level, such as agriculture and power,
but impact large section of the country‘s population. The proposed
Competition Policy also provides for an effective prevention mechanism for
anti-competitive conduct, transparent and non-discriminatory market processes.
National Competition Policy is necessitated, as an overarching Policy

framework, in continuation of the 1991-reforms, to infuse greater competition
across sectors, and unleash fuller growth potential of the Indian economy.
Faced with dynamic market realities, there is a need for promoting economic
democracy, the forces of competition and transparency in markets in keeping
with the rapidly changing market conditions to ensure the protection of
consumer interests, while at the same time protecting the rights of market
players to free and fair competition. Competition has a two-way linkage with
various policies of the Government such as: fiscal policy, trade policy,
investment policy, labour policy, consumer policy, environment policy, policy
on intellectual property rights, sectoral regulatory policies etc.
The basic premise of the National Competition Policy (NCP) is to unlock fuller
growth potential of Indian economy, which among other things could also help
in tapping the opportunities arising from the demographic dividend in our
country. It would seek to inculcate a competition culture across various sectors
to induct greater efficiency and dynamism, bringing in innovation and
technology, delivering goods and services which are competitive, thus
contributing to accessibility for consumers and consumption and thereby
accelerating economic development, global competitiveness, unleashing
39
entrepreneurial energy, creating more jobs and opportunities to raise the living
standards of people, thus ensuring inclusive growth.
National Competition Policy may also help to promote good governance by

transparency, accountability through competing responses and avoidance of
rent seeking. It would also have a positive co-relation with other strategic
national objectives like employment, R&D efforts and environmental
objectives. It also respects the sovereign functions of the State like defence
and security etc, and would seek to encourage competition related measures
only in matters having economic impact on the market.
The National Competition Policy will endeavor to:

a) Preserve the competition process, to protect competition, and to
encourage competition in the domestic market so as to optimize
efficiency and maximise consumer welfare. This would also make
domestic firms competitive globally,
b) promote, build and sustain a strong competition culture within the
country through creating awareness, imparting training and consequently
capacity building of stakeholders including public officials, business,
trade associations, consumers associations, civil society etc.,
c) achieve harmonisation in policies, laws and procedures of the Central
Government, State Government and sub-State Authorities in so far as the
competition dimensions are concerned with focus on greater reliance on
well-functioning markets,
d) ensure competition in regulated sectors and to ensure institutional
mechanism for synergised relationship between and among the sectoral
regulators and/or the CCI and prevent jurisdictional grid locks,
e) strive for single national market as fragmented markets are impediments
to competition, and
40
f) ensure that consumers enjoy greater benefits in terms of wider choices

and better quality of goods and services at competitive prices.
The principles of the National Competition Policy are:

 Fair market process
 Institutional separation between policy making, operations and
regulation
 Competitive neutrality
 Fair pricing and inclusionary behaviour
 Third party access to ‗essential facilities‘
 Public Policies and programmes to work towards promotion of
competition in the market place
 National, regional and international co-operation
7. COMPETITION ACT, 2002 – AN OVERVIEW
As the Indian economy moved from a regulated regime towards an open market
regime, there was an urgent requirement to enact legislation for fostering
competition and preventing anti-competition activities. In line with the
international trend and to cope up with the changing realities, the existing
Monopolies and Restrictive Trade Practices Act, 1969 was repealed and the
Competition Act, 2002 was enacted. Subsequently certain amendments were
made to the Act in 2007 by The Competition (Amendment) Act, 2007.
The objective of Competition Act, 2002 is to position the competition policy

with pragmatic options to promote the spirit of competition and harmonize the
conflicts caused by the volatility of globalised markets. The Act provides for a
regulatory framework of rules covering the critical areas of competition
namely:
41
 Anti competitive agreements among enterprises

 Abuse of dominant position in the market
 Combinations / mergers between enterprises
Competition Act, 2002 aims at promoting free and fair competition in India and
to protect the interests of consumers. The act provides for the establishment
of a regulatory body called the ―Competition Commission of India‖ with the
basic functions of administration and enforcement of law and competition
advocacy.
Competition Act, 2002 is a comprehensive enactment addressing contemporary

concerns of competition and future possibilities that impact the sustainable
economic development. The Act consists of 66 sections dealt with more than
nine chapters covering the following areas:
I. Preliminary (Sections 1 & 2)

II. Prohibition of certain agreements, abuse of dominant position and
regulation of combinations (Sections 3 to 6)
III. Competition Commission of India (Sections 7 to 17)
IV. Duties, Powers and Functions of Commission (Sections 18 to 40)
V. Duties of Director General (Section 41)
VI. Penalties (Sections 42 to 48)
VII. Competition advocacy (Section 49)
VIII. Finance, Accounts and Audit (Sections 50 to 53)
VIIIA Competition Appellate Tribunal (Sections 53A to 53U)
IX. Miscellaneous (Sections 54 to 66)
Apart from dealing with the competition misconduct, the Act also envisages a
promotional role. The Competition Commission of India has an advocacy role in
42
advising Government and creating awareness and imparting training on

competition issues.
Important definitions
"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. (Sec.2 (a))
"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. (Sec.2 (b))
―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. (Sec.2 (c))
"Consumer" means 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
43
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. (Sec.2 (f))
"Enterprise" means a person or a department of the Government, who or which

is, or has been, engaged in any 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, whether such unit or division or subsidiary is located
at the same place where the enterprise is located or at a different place or at
different places, 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, defence and space. (Sec.2 (h))
Explanation.-—For the purposes of this clause,—

(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.
44
"Goods" means goods as defined in the Sale of Goods Act, 1930 (3 of 1930) 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. (Sec.2 (i))
"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 section 617 of the
Companies Act, 1956 (1 of 1956);
(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
cooperative societies;
(ix) a local authority;
(x) every artificial juridical person, not falling within any of the
preceding sub-clauses; (Sec.2 (l))
"Practice" includes any practice relating to the carrying on of any trade by a

person or an enterprise. (Sec.2 (m))
"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
45
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. (Sec.2 (o))
"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. (Sec.2 (u))
"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. (Sec.2 (x))
"Turnover" includes value of sale of goods or services. (Sec.2 (y))
Important provisions under the Competition Act, 2002
Prohibition of Anti-Competitive Agreements
The Act assertively prohibits agreements which cause or are likely to cause an
appreciable adverse effect on competition within India. Anti competitive
agreements fall under two major categories namely Horizontal Agreements and
Vertical Agreements.
1. Horizontal Agreements
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Horizontal agreements are agreements among competitors which are at the

same stage of production and in the same market. The following acts come
under Horizontal agreements:
 Price fixing
 Limited production, supply
 Bid rigging / collusive bidding
 Market Sharing
2. Vertical Agreements
Vertical agreements on the other hand, denote an actual or potential

relationship of buying or selling to each other which are at different stages or
levels of production chain and therefore in different markets. It is not
necessary that agreements in question should be a formal or written
agreement. Proof of circumstantial evidence is sufficient. The following is a list
of Vertical agreements:
i. Tie-in-agreements – requiring the purchaser of goods to purchase

different goods not required by the purchaser. (Sec.3(4)(a))
ii. Exclusive supply agreements – restraining any dealing in goods other than
those of seller. (Sec.3(4)(b))
iii. Exclusive distribution agreements – limits or restricts output or supply of
goods, allocation of area or market (Sec.3(4)(c))
iv. Refusal to deal – restricts the classes of customer or sellers (Sec.3(4)(d))
v. Resale price maintenance – price stipulated by seller to the purchaser on
onward resale. (Sec.3(4(e))
3. Cartels
Cartels are bad per se and pose grave threat to competition by distorting free
trade. Cartels affect the developing countries more as favorable conditions
47
exist when there are few competitors; products are uniform and leave little
scope for competition; existence of communication chances between members;
market is hit by either excess capacity or general recession.
Sec.2(c) of the Competition Act, 2002 defines Cartel as – ―an association of

producers, sellers, distributors, traders or service providers who by agreement
among themselves limit, control or attempt to control production, distribution
sale or price of trade in goods or provision of services.‖
Anti competitive agreements among cartels engaged in identical or similar

trade of goods or provision of services in the following areas are prohibited.
(Sec.3(3))
 Determining purchase or sale prices (Sec.3(3a))

 Limiting or controlling production / supply markets technical
development, investment or provision of services (Sec.3(3b))
 Sharing of market / sharing of source of production by allocation of
geographical areas, number of customer or types of goods or services
(Sec.3(3c))
 Resorting to bid rigging or collusive bidding (Sec.3(3d))
Prohibition of abuse of dominant position
Abuse of dominant position refers to the market power of an enterprise to

exercise leverage through exploitative and protective business practices. If an
enterprise indulges in maneuvers of imposing unfair or discriminatory pricing
and imposes barriers for new entrants into relevant market, it attracts the
penal provisions of the Act. Sec.4 of the Act explicitly prohibits the abuse of
dominant position. There will be an abuse of dominant position, if an
enterprise or group acts in the following manner:
i. Conditioning purchase or sale of goods or service;

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ii. Predatory pricing of goods or services;

iii. Restricting production of goods or provision of services or market
there for;
iv. Restricting technical or scientific development relating to goods or
services to the prejudice of consumers;
v. Indulging in practice or practices resulting in denial of market access;
vi. Concluding contracts subject to acceptance by other parties of
supplementary obligations which, by their nature or according to
commercial usage, have no connection with the subject of such
contracts;
vii. Using its dominant position in one relevant market to enter into, or
protect, other relevant market.
"Dominant position" means a position of strength, enjoyed by an enterprise, in

the relevant market, in India, which enables it to -
(i) Operate independently of competitive forces prevailing in the
relevant market; or
(ii) Affect its competitors or consumers or the relevant market in its
favour.
Predatory price means the sale of goods or provision of services at a price

which is below the cost, as may be determined by regulations, of production of
goods or provision of services, with a view to reduce competition or eliminate
the competitors.
"Group" means two or more enterprises which, directly or indirectly, are in a

position to - (i) exercise twenty-six per cent. or more 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;
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Regulation of combinations
Sec.5 of Competition Act, 2002 provides for pre-empting the potential abuse of
dominance. A combination is required to be notified to the Competition
Commission of India for its approval. For this purpose, the combinations are
classified into two groups.
i. Acquisition of one or more enterprises

ii. Merger or amalgamation
The test of validity of acquisition is based on the size of assets and turnover of
the parties:
Group I – Parties to the acquisition have assets of more than rupees one
thousand crores or turnover more than rupees three thousand crores,
(Sec.5(a)(i)(A), or assets of the value of more than Five hundred million US
dollars, including at least Rupees Five hundred crores in India or turnover more
than fifteen hundred million US dollars, including at least Rupees fifteen
hundred crores in India. (Sec.5(a)(i)(B).
Group II - Assets of the value of more than rupees four thousand crores or
turnover more than rupees twelve thousand crores (Sec.5 (a)(ii)(A), or, assets
of the value of more than two billion US dollars, including at least Rupees five
hundred crores in India or turnover more than six billion US dollars, including at
least Rupees fifteen hundred crores in India. (Sec.5(a)(ii)(B).
The test of validity of merger is based on the size of assets and turnover of the
parties:
Group I – Acquisition value of assets of more than rupees one thousand crores
or turnover more than rupees three thousand crores after acquisition,
50
(Sec.5(c)(i)(A), or, after acquisition jointly owned assets of five hundred
million US dollars, including at least Rupees five hundred crores in India or
turnover more than fifteen hundred million US dollars, including at least
Rupees fifteen hundred crores in India, (Sec.5(c)(i)(B).
Group II – Assets of value of more than rupees four thousand crores or turnover
more than rupees twelve thousand crores, (Sec.5(c)(ii)(A), or, assets of value
more than two billion US dollars including at least Rupees five hundred crores
in India or turnover more than six billion US dollars including at least Rupees
fifteen hundred crores in India, (Sec.5(c)(ii)(B).
Overview of Rules and Regulations under the Competition Act, 2002

1. The Competition Commission of India (Manner of Recovery of
Monetary Penalty) Regulations, 2011
This regulation deals with the manner of recovery of monetary penalty.
Penalty means a monetary penalty or fine or any other sum imposed by
the Commission and realizable under the Competition Act, 2002. The
various modes of recovery of penalty has been enumerated under this
Regulation.
2. Competition Commission of India (Procedure in regard to the

transaction of business relating to combination) Regulation 2011
This regulation deals with the procedure with regard to the transaction
of business relating to combinations. It deals with categories of
transactions not likely to have appreciable adverse effect on
competition in India, form of notice for proposed combination, filing of
details of acquisition, mode and payment of fees, procedure for filing
notice etc.
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3. The Competition Commission of India (General) Regulations, 2009
This Regulation deals with the procedure to be followed by the
Competition Commission. The contents of the information or reference
to the Commission and the procedure for filing the same are enumerated
in the General Regulations. Powers and functions of the Secretary of the
Commission are given in detail. The procedure for investigation by the
Director General and inquiry by the Commission is also mentioned under
the regulations. Procedure for taking evidence and other powers of the
Commission have been enumerated in detail. Procedure for imposition of
penalty is also mentioned.
4. The Competition Commission of India (Determination of Cost of
Production) Regulations, 2009
This Regulation deals with determination of cost of production to derive
about anti-competitiveness of an agreement, dominant position of an
enterprise and combinations.
5. The Competition Commission of India (Lesser Penalty) Regulations,

2009
This Regulation deals with conditions for lesser penalty, grant of lesser
penalty and procedure for grant of lesser penalty in case of cartels.
6. The Competition Commission of India (Meeting for Transaction of

Business) Regulations, 2009
Meetings of the Commission for transaction of business and their
procedure have been dealt with under this Regulation.
7. The Competition Commission of India (Procedure for Engagement of

Experts and Professionals) Regulations, 2009
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The Commission can engage experts and professionals in the fields of

economics, law, business or other disciplines related to competition.
The functions, qualification, experience, classification, remuneration
and procedure for selection of experts and professionals have been
enumerated in the regulations.
8. Competition Commission of India (Salary, Allowances and other Terms

and Conditions of Service of the Chairperson and other Members)
Rules, 2003
Salary, allowances and other terms and conditions of service like leave,
travel allowance, medical facilities etc. of the Chairperson and other
Members of the Competition Commission are dealt with under this Rule.
9. Competition Commission of India (Oath of Office and of Secrecy for

Chairperson and other Members) Rules, 2003
This Rule deals with the procedure for oath of office and secrecy of the
Chairperson and Members of the Competition Commission.
10. Competition Commission of India (Term of the Selection Committee

and the Manner of Selection of Panel of Names) Rules, 2008
This Rule deals with the term of the Selection Committee, manner of
selection and the functions of the Committee.
11. Competition Commission of India (Return on Measures for the

promotion of Competition Advocacy, awareness and training on
Competition Issues) Rules, 2008
On completion of every year, return and statements containing details of
measures taken for competition advocacy, creating awareness and
capacity building in competition matters should be submitted to the
Central Government.
53
12. Competition Commission of India (Form and Time of Preparation of

Annual Report) Rules, 2008
The Commission should submit once in every year an annual report to
the Central Government. The annual report should contain details of
investigations and inquiries conducted by the Commission, orders passed
by the Commission, execution of orders, appeals, matters received
regarding combinations, references by Central or State Governments,
competition advocacy and administration and establishment matters.
13. Competition Commission of India (Number of Additional, Joint,

deputy of Assistant Director-General other officers and employees,
their manner of appointment, qualification, salary, allowances and
other terms and conditions of service) Rules, 2009
Salary and allowances of the Director General, Additional, Joint, Deputy
or Assistant Director-General and officers and other employees of the
office of Director General, their conditions of service, official visits
abroad, procedure for recruitment, qualifications etc have been detailed
in this Rule.
14. Competition Commission of India (Form of Annual Statement of

Accounts) Rules, 2009
The Commission should prepare the annual statement of accounts
containing the balance sheet, income and expenditure account and
receipt and payment account. The same should be forwarded to the
Comptroller and Auditor General of India for the purpose of audit.
15. Competition Commission of India (salary, allowances, other terms and

conditions of service of the Secretary and officers and other
54
employees of the Commission and the number of such officers and

other employees) Rules, 2009
Salary, allowances and other terms and conditions of service of the
Secretary, officers and employees of the Competition Commission are
dealt with under this Rule.
16. The Competition Commission of India (Director-General) Recruitment

Rules, 2009
This Rule deals with the method of recruitment, eligibility, pay scale,
disqualification of Director-General.
17. Competition Appellate Tribunal (Salaries and Allowances and other

Terms and Conditions of Service of the Chairperson and Other
Members) Rules, 2009
Salary, allowances and other terms and conditions of service like leave,
travel allowance, medical facilities etc. of the Chairperson and other
Members of the Competition Appellate Tribunal are dealt with under this
Rule.
18. Competition Appellate Tribunal (Procedure) Regulations, 2011

This Rule deals with the procedure to be followed by and before the
Tribunal.
19. Competition Appellate Tribunal (Form and fee for filing an appeal and
fee for filing compensation applications) Rules, 2009
This Rule deals with the procedure for filing an appeal before the
Competition Appellate Tribunal.
20. Competition Appellate Tribunal (Recruitment, salaries & other terms

& conditions of service of officers and other employees) Rules, 2010
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Salary, allowances and other terms and conditions of service of the

officers and employees of the Competition Appellate Tribunal are dealt
with under this Rule.
8. ANALYSIS OF KEY CONCEPTS AND ISSUES OF COMPETITION LAW
The Competition Act, 2002 deals with four major concepts namely:
 Anti - Competitive Agreements
 Abuse of Dominant position
 Regulation of Combinations
 Competition Advocacy
I. ANTI-COMPETITIVE AGREEMENTS
Firms enter into agreements, which may have the potential of restricting
competition. Agreements which cause or are likely to cause appreciable
adverse effect on competition are anti-competitive agreements. Anti-
competitive agreements are prohibited under the Competition Act, 2002.
An agreement includes any arrangement or understanding or action in

concert which need not be formal or in writing and where such an
arrangement is intended to be enforceable by legal proceedings or not.
(Sec.2 (b) of Competition Act, 2002)
Further the provisions relating to anti-competitive agreements apply to

all enterprises. "Enterprise" means a person or a department of the
Government, who or which is, or has been, engaged in any 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
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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, whether such unit or division or subsidiary is located at
the same place where the enterprise is located or at a different place or
at different places, 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, defence and space. (Sec.2 (h))
Explanation.-— for the purposes of this clause,—
(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.
Anti-competitive agreements fall under two major categories namely

Horizontal Agreements and Vertical Agreements. Horizontal agreements
are those among competitors while vertical agreements are those
relating to an actual or potential relationship of purchasing or selling to
each other. Anti-competitive agreements i.e. prohibition of certain
agreements is dealt with under Section 3 of the Competition Act, 2002.
Horizontal Agreements
Agreements between two or more enterprises that are at the same stage
of the production chain and in the same market constitute the horizontal
variety. An example of such agreement is the one between enterprises
dealing in the same product or products. If parties to the agreement are
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both producers or retailers (or wholesalers) they will be deemed to be at

the same stage of the production chain.
The Competition Act presumes that the following four types of
agreements between enterprises, involved in the same or similar
manufacturing or trading of goods or provision of services have an
appreciable adverse effect on competition :
 Agreements regarding prices - These include all agreements that
directly or indirectly fix the purchase or sale price. This is also
known as Price-fixing. (Sec.3(3)(a))
"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.
The prices can be fixed by buyers or sellers. The term price
includes many components of price consisting of discounts,
rebates, delivery charges, special fees etc. So an agreement
concerned with any of these components of price amounts to
price fixing. Price fixing requires a conspiracy between two or
more sellers or buyers; the purpose is to coordinate pricing for
mutual benefit of the traders.
 Agreements regarding quantities - These include agreements

aimed at limiting or controlling production, supply, markets,
technical development, investment or provision of services.
(Sec.3(3)(b))
An agreement to restrict production or output is illegal because
reducing the supply of a product will ultimately result in increase
in its price.
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 Agreements regarding market sharing - These include

agreements for sharing of markets or sources 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. (Sec.3(3)(c))
Competitors in order to make more benefits, agree with each
other to divide the markets by territory or on the basis of the
customers. Such agreements between competitors are illegal by
nature.
 Agreements regarding bids (collusive bidding or bid rigging) -

These include tenders submitted as a result of any joint activity
or agreement. (Sec.3(3)(d))
However there is an exception that the presumption would not apply to

a joint venture agreement which increases efficiencies in production,
supply, distribution, storage, acquisition or control of goods or provisions
of services.
Bid Rigging
Bid rigging is defined as 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. (Explanation to Section 3(3))
In simple words, bid rigging is a form of fraud in which a commercial
contract is promised to one party even though for the sake of
appearance, several other parties also present bids. The bids end up
suiting a single player. Besides affecting the end-consumer‘s interest,
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these anti-competitive practices take a toll on the public exchequer as

public money is flushed out to wrong hands.
Cartels
Cartel as defined under Section 2(c) of the Competition Act, 2002
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.
Cartels are created by anti-competitive horizontal agreements among
business enterprises. They pose a great threat to competition and
ultimately tend to destroy the free trade. In fact cartels are secret
agreements between business firms with the sole objective of fixing
prices or sharing markets between them.
The important characteristics that constitute a Cartel are:
 an agreement which includes arrangement or understanding;
 agreement is amongst producers, sellers, distributors, traders or

service providers i.e. parties are engaged in identical or similar
trade of goods or provision of service, and
 agreement aims to limit, control or attempt to control the

production, distribution, sale or price of, or, trade in goods or
provision of services
Vertical agreements
Vertical agreements are those agreements between enterprises at
different stages of the production chain. For example, an agreement
between the manufacturer and a distributor is a vertical agreement. It is
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not necessary that the agreement should be a formal or written

agreement. Proof of circumstantial evidence is sufficient.
The various types of Vertical agreements envisaged under the
Competition Act, 2002 are:
a) Tie-in-arrangement (Sec.3(4)(a))
This arrangement includes any agreement that requires the

purchaser of the goods to purchase different goods that is not
required by the purchaser. Its objective is to pressurize or force
the customer to buy a particular product or lease a product or
service and if he is not interested to threaten him by withholding
any other product or service. A tie-in arrangement will become
illegal when an enterprise uses its market power that it has on a
particular product and by taking advantage does not sell or lease
that product to the customer until and unless he agrees to buy
another product that the enterprise wants him to buy.
For example, there is a medical shop in a remote place and it puts
a condition that whoever wants to buy medicines from that shop
should also buy two litres of orange juice. Under such
circumstances, the customer is forced to buy the orange juice
although he might not require the juice. Therefore the medical
shop has used its market influence to force the sale of an entirely
different product along with the product that is required.
b) Exclusive supply agreement (Sec.3(4)(b))
Any agreement that restricts the purchaser in the course of his

trade from acquiring or dealing in any goods other than those of
the seller or any other person is considered as an Exclusive supply
agreement. Such agreements result in major harm to the
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competition as the competitors of the seller are not in a position

to compete in the market. Generally, requirements and
arrangements referring to quality, specifications, quality control,
raw materials, packing materials, quantities, terms of delivery,
etc., may be made. However, if either the buyer or the seller has
significant market share then entering into a long-term exclusive
supply agreement may cause competition concerns.
For example, buyer asking the manufacturer not to manufacture
identical goods for any other buyer without the consent of the
buyer is considered to be restrictive.
c) Exclusive distribution agreement (Sec.3(4)(c))
Any agreement to limit, restrict or withhold the output or supply

of any goods or allocate any area or market for the disposal or
sale of the goods is considered as an Exclusive distribution
agreement.
In an exclusive distributor agreement, the supplier and
wholesaler-distributor agree that the wholesaler-distributor will
deal exclusively with the supplier for certain products. Such
agreements foreclose the supplier's competitors from accessing
the marketplace through the exclusive distribution network. Such
arrangements will violate the competition law if their effect
substantially lessens or tends to create a monopoly in any line of
commerce.
d) Refusal to deal (Sec.3(4)(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 are sold or from whom goods are bought.
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There is no absolute right to be supplied, and though in general
businesses have the freedom to determine who to deal with,
there are circumstances where a refusal to deal will be illegal.
Competitors may agree not to deal with others or to do so only on
collectively determined terms, with the intention of significantly
damaging these businesses or reducing the competition in the
market.
e) Resale price maintenance (Sec.3(4)(e))
Resale price maintenance includes any agreement to sell goods on

condition 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.
In other words, resale price maintenance refers to any attempt by
an upstream supplier to control or maintain the minimum price at
which the product is resold by its customer. This prevents the
resellers from competing too fiercely and thereby drives down its
profits. Insisting that a product be resold at a specific margin, or
limiting the discounts that a reseller may offer, in essence
restricts the reseller‘s ability to set a price and is accordingly
prohibited.
Agreements not anti-competitive

Agreements permitted by law are not anti-competitive. The Act gives
due recognition to intellectual property rights, wherein the prohibition
against anticompetitive agreements will not restrict the right of any
person to restrain any infringement of, or to impose reasonable
conditions as may be necessary for protecting, any rights under the
following legislations:
a. The Copyright Act 1957,
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b. The Patents Act 1970
c. The Trade and Merchandise Marks Act, 1958
d. The Geographical Indications of Goods (Registration and

Protection) Act, 1999
e. The Designs Act, 2000

f. The Semi-conductor Integrated Circuits Layout-Design Act, 2000
Thus any agreement for the purpose of restraining infringement of such

Intellectual Property Rights or for imposing reasonable conditions for
protecting such rights will not be subject to the prohibition against
anticompetitive agreements. (Section 3(5)(i) of Competition Act, 2002).
Similarly, exports enjoy exemptions from such prohibition, which will
not apply to the right of any person to export goods from India to the
extent to which the agreement relates exclusively to the export of
goods or services. (Section 3(5)(ii) of Competition Act, 2002).
Inquiry by Competition Commission into anti-competitive agreements

Section 19 empowers the Commission to inquire in to any alleged
contravention of the prohibition of anti-competitive agreements under
Sec.3 of the Competition Act, 2002. It can do on its own motion or on
receipt of a complaint from any person, consumer or their association or
trade association; or a reference made to it by the Central Government
or a State Government or a statutory authority.
While determining whether an agreement has an appreciable adverse
effect on competition, the Commission will take into consideration 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;
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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.
Section 26 provides for the procedure for inquiry relating to an

apprehended anti-competitive agreement. Accordingly, the Commission,
if it is of the opinion that there exists a prima facie case, it shall direct
the Director General to cause an investigation made in to the matter.
The Director General shall, on receipt of such direction from the
Commission, submit a report of his findings within such period as may be
specified by the Commission. On the other hand, on receipt of a
compliant, if the Commission is of the opinion that there exists no prima
facie case, it shall dismiss the complaint and may pass such orders as it
deems fit, including imposition of costs, if necessary. After the Director
General submits his report of investigation, the Commission shall
forward a copy of the report to the parties concerned or to the Central
Government or to the State Government or to the statutory authority, as
the case may be. If the report of the Director General relates to a
complaint and such report recommends that there is no contravention of
the provisions of the Act, the Commission shall give the complainant an
opportunity to rebut the findings of the Director General. If after
hearing the complainant, the Commission agrees with the
recommendations of the Director General, it shall dismiss the complaint.
If after hearing the complainant, the Commission is of the opinion that
further inquiry is called for, it shall direct the complainant to proceed
with the complaint. If the report of the Director General relates to a
65
reference made by a Government or statutory authority and

recommends that there is no contravention of the provisions of the Act,
the Commission shall invite comments of the Government concerned or
of the statutory authority on the report. On receipt of such comments,
the Commission shall return the reference if there is no prima facie case
or proceed with the reference as a complaint if there is a prima facie
case. If the report of the Director General recommends that there is a
contravention of the provisions of the Act, and also if the Commission is
of the opinion that further inquiry is called for, it shall inquire in to such
contravention.
Where after inquiry the Commission finds that any agreement is in

contravention of section 3, it may pass all or any of the following orders,
namely:—
(a) Direct any enterprise or association of enterprises or person or

association of persons, as the case may be involved in such
agreement to discontinue and not to re-enter such agreement;
(b) Impose such penalty, as it may deem fit which shall not be more
than ten per cent of the average annual turnover of the last three
preceding financial years, up on each such person or enterprises
which are parties to such agreement.
(c) Direct that the agreements shall stand modified to the extent and
in the manner as may be specified in the order of the Commission;
(d) Direct the enterprises concerned to abide by such other orders as

the Commission may pass and comply with the directions, including
payment of costs, if any;
(e) Pass such orders as it may deem fit.
In case any agreement under section 3 has been entered into by any
cartel, the Commission shall impose upon each producer, seller,
distributor, trader, or service provider included in that cartel, a penalty
66
equivalent to three times of the amount of profits made out of such

agreement by the cartel or ten per cent of the average of the turnover
of the cartel for the last preceding three financial years, whichever is
higher.
II. ABUSE OF DOMINANT POSITION
Abuse of dominant position is a serious violation under the Competition

Act, 2002. Section 4 of the Act specifically states that no enterprise
should abuse its dominant position. It also states that there will be an
abuse of dominant position if an enterprise imposes unfair or
discriminatory conditions or prices in the purchase or sale of goods or
provision of services or if it limits or restricts production of goods or
provision of services or technical and scientific development or it denies
market access, etc.
The Competition Act does not frown on dominance as such. An
enterprise is free to grow as large as it pleases or achieve as big a
market share as it can. The problem arises only when there is an abuse
of dominance.
Abuse of a dominant position occurs when a dominant firm in a market,
or a dominant group of firms, engages in conduct that is intended to
eliminate or discipline a competitor or to deter future entry by new
competitors, with the result that competition is prevented or lessened
substantially.
Dominant position means a position of strength enjoyed by an enterprise,
in the relevant market, in India, which enable it to –
i. Operate independently of competitive forces prevailing in the
relevant market; or
ii. Affect its competitors or consumers or the relevant market in
its favour.
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Therefore the two elements of dominance that need to be proved
together are the position of strength of an enterprise and the behaviour
that affects the competitors or consumer or market.
"Relevant market" means the market which may be determined with
reference to the relevant product market or the relevant geographic
market or with reference to both the markets. (Sec.2(r))
―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. (Sec.2(s))
―Relevant product market" means a market comprising all those products
or services which are regarded as interchangeable or substitutable by
the consumer, by reason of characteristics of the products or services,
their prices and intended use. (Sec.2(t))

Predatory pricing
Predatory pricing is the practice of selling a product or service at a very
low price, intending to drive competitors out of the market, or create
barriers to entry for potential new competitors. If competitors or
potential competitors cannot sustain equal or lower prices without losing
money, they go out of business or choose not to enter the business.
According to Explanation (b) to Section 4 of the Competition Act, 2002,

predatory price means the sale of goods or provision of services, at a
price which is below the cost, as may be determined by regulations, of
production of the goods or provision of services, with a view to reduce
competition or eliminate the competitors.
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The Competition Commission of India (Determination of Cost of

Production) Regulations, 2009 has been enacted to determine the cost in
predatory pricing. According to Regulation 3(1), cost will generally be
taken as average variable cost, as a proxy for marginal cost. But in
specific cases, the Commission may, depending on the nature of the
industry, market and technology used, consider any other relevant cost
concept such as avoidable cost, long run average incremental cost,
market value etc. Meanings of important terms under the regulations are
given hereunder:
a. Average variable cost means the total variable cost divided by
total output during the referred period.
b. Total variable cost means the total cost minus the fixed cost and
share of fixed overheads, if any, during the referred period.
c. Total cost means the actual cost of production including items,
such as cost of material consumed, direct wages and salaries,
direct expenses, work overheads, quality control cost, research
and development cost, packaging cost, finance and administrative
overheads attributable to the product during the referred period.
d. Total avoidable cost means the cost that could have been avoided
if the enterprise had not produced the quantity of extra output
during the referred period.
e. Long run average incremental cost is the increment to long run
average cost on account of an additional unit of product, where
long run cost includes both capital and operating costs.
f. Market value means the consideration which the customer pays or
agrees to pay for a product which is sold or provided or can be
sold or provided, as the case may be.
g. Marginal cost is the change in total cost that arises when the
quantity produced changes by one unit.
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The Competition Commission has adopted the Average Variable Cost as

the appropriate measure of cost to determine the predatory price. There
is a general presumption that where the enterprise sets its sale price
below its Average Variable Cost, then it has engaged in predatory pricing.
Inquiry by Competition Commission into abuse of dominant position

Section 19 empowers the Commission to inquire in to any alleged
contravention of abuse of dominant position under section 4 of the
Competition Act, 2002. It can do on its own motion or on receipt of a
complaint from any person, consumer or their association or trade
association; or a reference made to it by the Central Government or a
State Government or a statutory authority.
Section 26 provides for the procedure for inquiry relating to abuse of

dominant position. Accordingly, the Commission, if it is of the opinion
that there exists a prima facie case, it shall direct the Director General
to cause an investigation in to the matter. The Director General shall, on
receipt of such direction from the Commission, submit a report of his
findings within such period as may be specified by the Commission. On
the other hand, on receipt of a compliant, if the Commission is of the
opinion that there exists no prima facie case, it shall dismiss the
complaint and may pass such orders as it deems fit, including imposition
of costs, if necessary. After the Director General submits his report of
investigation, the Commission shall forward a copy of the report to the
parties concerned or to the Central Government or to the State
Government or to the statutory authority, as the case may be. If the
report of the Director General relates to a complaint and such report
recommends that there is no contravention of section 4, the Commission
shall give the complainant an opportunity to rebut the findings of the
Director General. If after hearing the complainant, the Commission
agrees with the recommendations of the Director General, it shall
70
dismiss the complaint. If after hearing the complainant, the Commission

is of the opinion that further inquiry is called for, it shall direct the
complainant to proceed with the complaint. If the report of the Director
General relates to a reference made by a Government or statutory
authority and recommends that there is no contravention under section
4, the Commission shall invite comments of the Government concerned
or of the statutory authority on the report. On receipt of such comments,
the Commission shall return the reference if there is no prima facie case
or proceed with the reference as a complaint if there is a prima facie
case. If the report of the Director General recommends that there is a
contravention of section 4, and also if the Commission is of the opinion
that further inquiry is called for, it shall inquire in to such contravention.
Where after inquiry the Commission finds that action of an enterprise in

a dominant position is in contravention of section 4, it may pass all or
any of the following orders, namely:—
(a) Direct any enterprise or association of enterprises or person or

association of persons, as the case may be involved in abuse of
dominant position to discontinue such abuse of dominant position.
(b) Impose such penalty, as it may deem fit which shall not be more
than ten per cent of the average annual turnover of the last three
preceding financial years, up on each such person or enterprises
which are parties to such abuse.
(c) Direct the enterprises concerned to abide by such other orders as

the Commission may pass and comply with the directions, including
payment of costs, if any.
(d) Pass such orders as it may deem fit.
Factors to be considered while deciding abuse of dominance
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Section 19(4) of the Competition Act, 2002 stipulates that the

Competition Commission while inquiring whether an enterprise enjoys a
dominant position or not should consider all or any of the following
factors, namely:—
a) Market share of the enterprise -
The market share of the enterprise will depend upon the nature of
sector and issue under investigation. For example, the market share
of an airline could be measured on the basis of number of flights,
number of aircrafts; number of passenger's carrying capacity, the city
pairs etc. and each parameter may give different results.
b) Size and resources of the enterprise –

Large size and superior financial position or resources may be a
contributing factor to a dominant market position.
In India, the cash rich BCCI with virtual strangle-hold over cricket has
not accorded recognition to the ICL as a league, and has denied
access to cricket grounds and prevented ICL players and coaches
from participating in BCCI sponsored activities. The financial clout
and other resources at the command of BCCI enabled it to promote
its own sponsored IPL by excluding the ICL formed by Essel Group in
May, 2007. The presence of two cricket leagues namely the IPL and
ICL would have led to increased competition to the benefit of cricket
fans, cricketers and market as a whole. (News item in Economic
Times of 28th April, 2009 under the caption ―Cricket and the
Competition Law‖)
c) Size and importance of the competitors -

The competitor‘s size and importance need to be determined while
checking for abuse of dominance. Market share of one competitor in
the market will determine the competition constrain on the other
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player. For example both Pepsi and Coke enjoy a major share in the
soft drink market which reflects that one has ability to exercise
competitive pressure on another and therefore, neither of them
ought to be determined as dominant in the relevant market.
d) Economic power of the enterprise including commercial advantages

over competitors-
Superior market position or resources may be a causative factor to a
dominant market position. Life Insurance Corporation of India has the
benefit of prior entry and that of sovereign guarantee in the personal
insurance market and thereby has commercial advantage over new
entrants.
e) Vertical integration of the enterprises or sale or service network of

such enterprises –
The vertical integration and benefit of well-established distribution
system may also act as a barrier to entry as it can discourage or
impede access for a potential entrant to the market.
Sales network may also be a relevant factor and have a commercial
advantage over its rivals.
f) Dependence of consumers on the enterprise –

In public utilities, the dependence of the consumers is quite high. For
example – Most of the electricity boards are state owned with very
few private companies in this sector. Likewise the LPG market is
mostly state owned.
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 –
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Public sector undertakings do have an edge over new private sector

entrants. For example in India, Shell and Reliance ventured into
marketing of oil in a big way but had to close their oil dispensing
outlets due to absence of competitive neutrality between public
sector and private sector by confining the subsidy only to public
sector oil companies.
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 –
Barriers to entry, exit or expansion and durability to market power

are important factors in the assessment of dominance. The
substantial entry barriers shield existing competitors from
competition and foster market power. The barriers could be
structural, regulatory or strategic one. The structural barriers could
be on account of peculiar nature of industry e.g. cost advantages for
the incumbent, supplier-customer relationship, switching cost, sunk
cost, economies of scale and scope, technological knowhow etc. An
idle capacity of a player in industry could discourage a prospective
entrant to enter the market. The regulatory barriers are those which
are created by the State in the form of laws, regulations and
administrative practice e.g. tariff and non-tariff barriers. The
strategic barriers are those which are created by the incumbent in a
market which have the effect of deterring entry e.g. long term
supply contracts, exclusivity contracts, over investment in capacity
or advertising, exclusive dealing or tying etc.
i) Countervailing buying power –
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An enterprise may be constrained not only by actual and potential

competitors but also by its customers. If there are competitors with
adequate capacities to meet demand, a buyer's threat to switch to
another supplier may have a considerable disciplinary effect on a
supplier that sells a major part of its production to a single buyer.
j) Market structure and size of market –

Market structure which is characterized by a sole supplier of
goods/services either on standalone basis or by virtue of common
ownership makes conditions conducive to exercise market power
affecting competition, consumers or market.
k) Social obligations and social costs –

Social obligations performed by an enterprise should be given
consideration by the Commission. For example, while considering the
dominance of the Indian Railways, its important role in ensuring
connectivity between various places in the country at affordable
fares should be taken into consideration.
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 –
An enterprise‘ contribution to economic development should also be
taken into consideration while determining the dominant position of
the enterprise.
m) Any other factor which the Commission may consider relevant for the
inquiry.
Factors to be considered while determining relevant market
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For determining whether a market constitutes a relevant market, the

Commission should give due regard to the ‗relevant geographic market‘
and ‗relevant product market‘.
Competition Commission while determining the relevant geographic
market should consider 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.

Competition Commission while determining the relevant product market
should consider 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.
Division of enterprise enjoying dominant position

Section 28 empowers the Commission to direct division of an enterprise
enjoying dominant position to ensure that such enterprise does not
abuse its dominant position.
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The Order for division of enterprise by the Commission may provide for
all or any of the following matters namely:-
a) the transfer or vesting of property, rights, liabilities or
obligations;
b) the adjustment of contracts either by discharge or reduction
of any liability or obligation or otherwise;
c) the creation, allotment, surrender or cancellation of any
shares, stocks or securities;
d) the formation or winding up of an enterprise or the
amendment of the memorandum of association or articles of
association or any other instruments regulating the business of
any enterprise;
e) the extent to which, and the circumstances in which,
provisions of the order affecting an enterprise may be altered
by the enterprise and the registration thereof;
f) any other matter which may be necessary to give effect to the
division of the enterprise.
Notwithstanding anything contained in any other law for the time being
in force or in any contract or in any memorandum or articles of
association, an officer of a company who ceases to hold office as such in
consequence of the division of an enterprise will not be entitled to claim
any compensation for such cesser.
III. REGULATION OF COMBINATIONS
The Competition Act, 2002 provides for regulation of combinations.

Combination includes acquisition of shares, control, voting rights or
assets, mergers and amalgamations. Only those combinations where the
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total value of the assets or the turnover of the combining parties
exceeds the threshold limits prescribed are regulated by the Act.
Thresholds for Combinations

In case of small size combinations there is less likelihood of appreciable
adverse effect on competition in markets in India. Hence the Act
provides for sufficiently high thresholds in terms of assets/turnover for
mandatory notification to the Commission.
Broad overview of combinations is presented in the form a table below:
Individual / Group Assets / turnover in Assets / turnover in or
India outside India
Acquisition by an Joint assets over Joint assets over US$ 750
acquirer (individual) Rs.1500 crores or million including at least
turnover over Rs.4500 Rs.750 crores in India or
crores. turnover over US$ 2250
million including at least
Rs.2250 crores in India.
Acquisition by a Group asset over Group assets over US$ 3
group Rs.6000 crores or billion including at least
turnover over Rs.750 crores in India or
Rs.18000 crores. turnover over US$ 9
billion including at least
Rs.2250 crores in India.
Determination of value of assets

The value of assets will 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 merger falls, as reduced by any depreciation, and the
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value of assets will 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.

Exceptions
Share subscription or financing facility or any acquisition, by a public
financial institution, foreign institutional investor, bank or venture
capital fund made pursuant to any covenant of a loan agreement or
investment agreement will fall outside the combination provisions of the
Competition Act, 2002. But these investment institutions should notify
the details of the acquisition including the details of control, the
circumstances for exercise of such control and the consequences of
default arising out of such loan agreement or investment agreement etc.
in Form III (Competition Commission of India (Procedure in regard to the
transaction of business relating to combinations) Regulations, 2011)
within seven days from the date of acquisition to the Competition
Commission.
Compulsory Notice to the Commission

Any person or enterprise that proposes to enter into a combination
should give notice in Form I (Competition Commission of India
(Procedure in regard to the transaction of business relating to
combinations) Regulations, 2011) to the Competition Commission of
India along with prescribed fee of Rs.10 lakhs within thirty days of:
 Board‘s approval in case of merger/amalgamation; or
 Execution of any agreement or document for acquisition.
Optional Notice
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The parties to the combination engaged in production, supply,
distribution, storage, sale or trade of similar or identical or substitutable
goods or provision of similar or identical or substitutable services and
the combined market share of the parties to the combination after such
combination is more than fifteen percent (15%) in the relevant market
and the parties to the combination that are engaged at different stages
or levels of the production chain in different markets, in respect of
production, supply, distribution, storage, sale or trade in goods or
provision of services, and their individual or combined market share is
more than twenty five percent (25%) in the relevant market may give
notice in Form II (Competition Commission of India (Procedure in regard
to the transaction of business relating to combinations) Regulations,
2011) to the Competition Commission of India along with prescribed fee
of Rs.40 lakhs.
Combination to take effect

The proposed combination cannot take effect for a period of 210 days
from the date it notifies the Commission or till the Commission passes an
order, whichever is earlier. If the Commission does not pass an order
during the period of 210 days, the combination will be deemed to have
been approved.
Regulation 28(6) provides that the CCI shall endeavor to make its final
determination on the combination notice within 180 days of filing of
details of combination in Form I or Form II.
Regulation 5 and Regulation 19 provide that the time taken by the
parties in providing information on direction of CCI is excluded from the
relevant review period. These cases are: (1) Removing defects in notice,
or (2) Furnishing additional information by the parties.
Exemptions
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Regulation 4 read with Schedule - I of Combinations Regulations, 2011

provides exemption to the following transactions which ordinarily are
not likely to have any adverse competitive impact and therefore, the
parties to such transaction do not require filing notice to the CCI.
The list of the exempted transactions includes:
1) Acquisition up to 25% of the shares or voting rights of the target
enterprise, solely as an investment or in the ordinary course of business
provided no other controlling rights are acquired.
2) Acquisition of the shares or voting rights where the acquirer prior to
acquisition has at least 50% of the shares or voting rights in the target
enterprise except when it leads from joint to sole control.
3) Intra-group acquisition involving a holding company and its subsidiary
wholly owned by enterprises belonging to the same group and/ or
involving subsidiaries wholly owned by enterprises belonging to the same
group.
4) Deals taking place entirely outside India with insignificant local nexus
and effects on markets in India.
5) Acquisition of stock in trade, raw material, stores, spares or current
assets in the ordinary course of business.
6) Acquisition of shares or voting right pursuant to a bonus issue, stock
split or consolidation or buy back of shares or right issue provided no
control is acquired.
7) Amended or renewed tender offer where a notice has been filed prior
to such amendment or renewal offer.
8) Acquisitions of current assets in the ordinary course of business.
9) Acquisition of shares or voting rights by a person acting as a securities
underwriter or a registered stock broker in the ordinary course of the
business and in the process of underwriting or stock broking.
Factors to be considered while inquiring into Combinations
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Competition Commission while inquiring whether a combination would
have an appreciable adverse effect on competition in the relevant
market should consider all or any of the following factors, namely:—
(a) actual and potential level of competition through imports in
the market;
(b) extent of barriers to entry into the market;
(c) level of combination in the market;
(d) degree of countervailing power in the market;
(e) likelihood that the combination would result in the parties to
the combination being able to significantly and sustainably
increase prices or profit margins;
(f) extent of effective competition likely to sustain in a market;
(g) extent to which substitutes are available or arc likely to be
available in the market;
(h) market share, in the relevant market, of the persons or
enterprise in a combination, individually and as a combination;
(i) likelihood that the combination would result in the removal of
a vigorous and effective competitor or competitors in the market;
(j) nature and extent of vertical integration in the market;
(k) possibility of a failing business;
(/) nature and extent of innovation;
(m) relative advantage, by way of the contribution to the
economic development, by any combination having or likely to
have appreciable adverse effect on competition;
(n) whether the benefits of the combination outweigh the adverse
impact of the combination, if any.
Inquiry and Investigation into Combination
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Section 20 empowers the Commission to inquire into any combination

which has caused or is likely to cause an appreciable adverse effect on
competition in India. It can do on its own motion or on receipt of a
complaint from any person, consumer or their association or trade
association; or a reference made to it by the Central Government or a
State Government or a statutory authority. But the Commission should
not initiate any inquiry after the expiry of one year from the date on
which such combination has taken effect.
Section 29 provides for the procedure for investigation of combination.
 The Commission will issue a show cause notice to the parties to

the combination to respond within 30 days of the receipt of the
notice as to why investigation in respect of such combination
should not be conducted.
 After receipt of the response of the parties to the combination

the Commission may call for a report from the Director General
and such report should be submitted by the Director General
within such time as the Commission may direct.
 If the Commission is of the opinion that the combination has, or is
likely to have, an appreciable adverse effect on competition, it
shall, within seven working days from the date of receipt of the
response of the parties to the combination, or receipt of report
from the Director General, whichever is later direct the parties to
the said combination to publish details of the combination within
ten working days of such direction, in such manner, as it thinks
appropriate, for bringing the combination to the knowledge or
information of the public and persons affected or likely to be
affected by such combination.
 The Commission may invite any person or member of the public,
affected or likely to be affected by the said combination, to file
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his written objections, if any, before the Commission within

fifteen working days from the date on which the details of the
combination were published.
 The Commission may, within fifteen working days from the expiry
of the period mentioned above call for such additional or other
information as it may deem fit from the parties to the said
combination.
 The additional or other information called for by the Commission
should be furnished by the parties to the Combination within
fifteen days from the expiry of the period mentioned above.
 After receipt of all information and within a period of forty-five
working days from the expiry of the period mentioned above, the
Commission shall pass appropriate orders.
Orders of Commission on certain combinations
After completion of investigation into any combination, any of the

following orders may be passed by the Commission (Section 31):
1) Where the Commission is of the opinion that any combination

does not, or is not likely to, have an appreciable adverse effect
on competition, it shall, by order, approve that combination.
2) Where the Commission is of the opinion that the combination has,
or is likely to have, an appreciable adverse effect on competition,
it shall direct that the combination shall not take effect.
3) Where the Commission is of the opinion that the combination has,
or is likely to have, an appreciable adverse effect on competition
but such adverse effect can be eliminated by suitable
modification to such combination, it may propose appropriate
modification to the combination, to the parties to such
combination.
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4) The parties, who accept the modification proposed by the

Commission, should carry out such modification within the period
specified by the Commission.
5) If the parties to the combination, who have accepted the
modification fail to carry out the modification within the period
specified by the Commission, such combination will be deemed to
have an appreciable adverse effect on competition and the
Commission can deal with such combination in accordance with
the provisions of the Competition Act.
6) If the parties to the combination do not accept the modification
proposed by the Commission, such parties may, within thirty
working days of the modification proposed by the Commission,
submit amendment to the modification proposed by the
Commission.
7) If the Commission agrees with the amendment submitted by the
parties it shall, by order, approve the combination.
8) If the Commission does not accept the amendment submitted,
then the parties will be allowed a further period of thirty working
days within which such parties should accept the modification
proposed by the Commission.
9) If the parties fail to accept the modification proposed by the
Commission within thirty working days referred to in sub-section
(6) or within a further period of thirty working days referred to in
sub-section (8), the combination will be deemed to have an
appreciable adverse effect on competition and be dealt with in
accordance with the provisions of this Act.
10) Where the Commission has directed that the combination should
take effect or the combination is deemed to have an appreciable
adverse effect on competition, then without prejudice to any
penalty or any prosecution which may be initiated, the
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Commission may order that the acquisition or acquiring of control

or the merger or amalgamation should not be given effect to. The
Commission may also frame a scheme to implement its order.
11) If the Commission does not on expiry of the period of two hundred
and ten days from the date of notice given to the Commission of
the proposed combination, pass an order or issue direction, then
the combination will be deemed to have been approved by the
Commission. While determining the period of 210 days, the period
of 30 days mentioned in sub-section (6) and (8) will be excluded.
12) Where any extension of time is sought by the parties to the
combination, the period of ninety working days shall be reckoned
after deducting the extended time granted at the request of the
parties.
Appeals
The Central Government has notified a Competition Appellate Tribunal
(COMPAT) to hear and dispose of appeals against any direction issued or
decision made or order passed by the Commission under specified sections
of the Act, such as orders relating to notification of combination, inquiry by
the Commission and penalties.
An appeal has to be filed within 60 days of receipt of the order / direction /
decision of the Commission.
IV. COMPETITION ADVOCACY
Competition Advocacy is defined as 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,
firm behavior and market performance. (World Bank)
86
The International Competition Network (ICN) defines competition advocacy

as under:
Competition advocacy ―refers to those activities conducted by a
competition authority related to the promotion of a competitive economic
environment by means of non-enforcement mechanisms, mainly through its
relationship with other Governmental entities and by increasing public
awareness of the benefits of competition.‖
There is a direct relationship between competition advocacy and
enforcement of a competition law and this connection is especially strong in
transition and developing economies where an appropriate understanding or
appreciation of the merits of competitive market economic systems is often
lacking.
Section 49 of the Competition Act, 2002, empowers the Competition
Commission of India (CCI) to undertake 'competition advocacy'. Advocacy
role takes the Commission beyond being merely an 'enforcing authority' to
be 'an advocate of competition' and to take suitable non-enforceable
measures with an aim to create and strengthen awareness of the role of
competition among market players and stakeholders, thereby encouraging
compliance and reducing the need for enforcement action on erring
enterprises.
Advocacy Role of Competition Commission
The Commission has, taken up competition advocacy efforts simultaneously
at the three levels of the governments in India viz. central, state, and
municipal governments, besides undertaking advocacy with the other
stakeholders such as the business chambers, consumer activists and
statutory bodies of professionals such as lawyers, chartered accountants,
cost accountants and company secretaries.
9. COMPETITION COMMISSION OF INDIA
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Competition Commission Of India has been established as autonomous body

charged with the responsibility to prevent practices having adverse affect on
competition, to promote and sustain competition in markets, to protect
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.
The basic functions of the Competition Commission are:
a) Administration and enforcement of competition law and competition policy
to foster economic efficiency and consumer welfare.
b) Involve proactively in Governmental policy formulation to ensure that
markets remain fair, free, open, flexible and adaptable.
The Competition Commission of India is being guided by the following principles

in its approach to its work:
1. To be in sync with markets; have good understanding of market forces.
2. To minimize cost of compliance by enterprises, and cost of enforcement

by Commission.
3. To maintain confidentiality of business information; to maintain

transparency in Commission's own operations.
4. To be a professional body, equipped with requisite skills.
5. To maintain a consultative approach.
Chapter III of the Competition Act, 2002 deals with the establishment,
composition of commission, term of office etc; Chapter IV deals with the duties,
powers and functions of the Commission and Chapter V deals with the duties of
the Director General.
Composition of the Commission
88
The Commission will consist of a Chairperson and not less than two and not
more than six other members. The Chairperson and Members of the Commission
will be appointed by the Central Government by a Selection Committee
procedure. The Chairperson and every other Member should be a person of
ability, integrity and standing and who has special knowledge of, and such
professional experience of not less than fifteen years in, international trade,
economics, business, commerce, law, finance, accountancy, management,
industry, public affairs or competition matters, including competition law and
policy, which in the opinion of the Central Government, may be useful to the
Commission. The commission finally became operative in May 2009.
Term of office
The Chairperson and every other Member should hold office for a term of five
years from the date on which he enters upon his office and will be eligible for
re-appointment. But the Chairperson or members will not be allowed to
continue in office if he has attained the age of sixty five years.
Resignation, removal and suspension

On submission of resignation in writing to the Central Government, the
Chairperson or member will be allowed to hold office for a period of three
months from the date of submission of resignation or until a person has been
appointed as his successor or until the expiry of his term of office, whichever is
earlier.
The Central Government can remove the Chairperson or any other Member
from his office, if such Chairperson or member –
(a) is, or at any time has been, adjudged as an insolvent; or
(b) has engaged at any time, during his term of office, in any paid
employment; or
(c) has been convicted of an offence which, in the opinion of the Central
Government, involves moral turpitude; or
89
(d) has acquired such financial or other interest as is likely to affect

prejudicially his functions as a Member; or
(e) has so abused his position as to render his continuance in office
prejudicial to the public interest; or
(f) has become physically or mentally incapable of acting as a Member.
Administrative powers
The Chairperson has the powers of general superintendence, direction and
control in respect of all administrative matters of the Commission. The
Chairperson can also delegate such of his powers relating to administrative
matters of the Commission, as he may think fit, to any other Member or officer
of the Commission.
Vacancy not to invalidate proceedings of the Commission

No act or proceeding of the Commission will be invalid merely by reason of—
(a) any vacancy in, or any defect in the constitution of, the Commission;
or
(b) any defect in the appointment of a person acting as a Chairperson or
as a
Member; or
(c) any irregularity in the procedure of the Commission not affecting the
merits of the case.
Inquiry by the Commission

The Commission may initiate inquiry into anti-competitive agreements or abuse
of dominance:
 On its own on the basis of information and knowledge in its possession;
or
 On receipt of an information; or
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 On receipt of a reference from the Central Government or a State

Government or a statutory authority.
On receipt of information or reference or on its own, if the Commission is

satisfied that there is prima facie case, it can direct the Director General to
investigate the matter and report his findings to the Commission. On receipt of
the investigation report from the Director General, the Commission will
determine whether the behaviour under inquiry is anti-competitive, after
hearing the concerned parties and pass appropriate orders.
Information to the Commission

Any person, consumer, consumer association or trade association can provide
information relating to anti-competitive agreements and abuse of dominant
position. The Central Government or State Government or an authority
established under any law can make a reference for an inquiry. ―Person‖
includes an individual, HUF, firm, company, local authority, cooperative or any
artificial juridical person.
The information can be filed on the issues like anti-competitive agreements
and abuse of dominant position or a combination.
Competition Commission of India (General) Regulations 2009 deals with the
procedure for submitting information or reference to the Commission.
Information or reference or responses to the Commission should be sent to the
Secretary, in person or by registered post or courier service or facsimile
transmission addressed to the Secretary or to the authorized officer. However,
any separate or additional document(s) that is relied upon in support of the
information, or reference should be filed in the form of a ―Paper Book‖, at
least seven days prior to the date of the ordinary meeting, after serving the
copies of the said document(s) on the other parties to the proceedings, with
documentary proof of such service. Such documents need to be serially
numbered, prefaced by an index and should be supported by a verification.
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All information(s) or references or responses or other documents which are

required to be filed before the Commission should be typed in Arial 12 fonts on
one side of A4 size (210 x 297mm or 8.27‖x11.69‖) white bond paper in double
space with 2‖ margin on the left and 1‖ margin on all other sides. Only neat
and legible photocopies or scanned documents duly certified as true copies
should be filed as exhibits or annexes.
The reference to the Commission should contain the following details:

 The information should be in the form of statement of facts, containing
details of the alleged contraventions of the Act. A complete list enlisting
all documents, affidavits and evidence, as the case may be, in support
of each of the alleged contraventions may also be furnished. A brief
narrative in support of the alleged contraventions will help the
commission to examine the case expeditiously and in its right
perspective.
 Relief or interim relief that is sought from the Commission should be
mentioned.
 The information along with the appendices and attachments should be
complete and duly verified by before submitting to the Commission.
 The information filed should be signed by the individual himself/ herself,
including a sole proprietor of a proprietorship firm, the Karta in the case
of a Hindu Undivided Family (HUF), the Managing Director and in his or
her absence, any Director, duly authorized by the board of directors in
the case of a company, etc.
 The counsel may also append his or her signature to the information or
reference as the case may be.
Investigation
At the apex level of the investigative wing, there is an official who has been
designated as Director General (DG). The Director General will not have suo
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motu powers of investigation. He will only look into the complaints received
from the CCI and submit his findings to it. Investigators will be solely
responsible for making enquiries, for examining documents, for making
investigations into complaints and for effecting interface with other
investigative agencies of the Government including Ministries and Departments.
The DG has been vested under the Act with powers, which are conferred on the
Commission, namely, summoning of witnesses, examining them on oath,
requiring the discovery and production of documents, receiving evidence on
affidavits, issuing commissions for the examination of witnesses etc.
Depending on the load of work on the Commission, Additional, Joint, Deputy or
Assistant Directors General or such officers or other employees in the office of
Director General will be appointed by the Central Government.
Acts taking place outside India but having an effect on competition in India
The Commission has power to inquire in accordance with the provisions
contained in Sections 19, 20, 26, 29 and 30 of the Competition Act, 2002 into
any agreement or abuse of dominant position or combination if it has or is
likely to have an appreciable adverse effect on competition in the relevant
market in India and pass appropriate orders although –
a) An agreement has been entered into outside India;
b) Any party to such agreement is outside India; or
c) Any enterprise abusing the dominant position is outside India; or
d) A combination has taken place outside India; or
e) Any party to combination is outside India; or
f) Any other matter or practice or action arising out of such agreement or
dominant position or combination is outside India.
Power to issue interim orders

Section 33 of the Competition Act, 2002 empowers the Competition
Commission to issue interim orders. If during an inquiry, the Commission is
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satisfied that an act in contravention of Section 3 (Anti-competitive

agreements) or Section 4 (Abuse of dominant position) or Section 6 (Regulation
of combinations) has been committed and continues to be committed or that
act is to be committed, the Commission can temporarily restrain any party
from carrying on such act until the conclusion of such inquiry or until further
orders. The order can be passed even without giving notice to the party if
deemed necessary.
Commission’s powers to issue Orders
The Commission can direct any enterprise or person or their associations to

discontinue with anti-competitive practice, which is also known as ‗cease and
desist‘ order. The Commission can impose penalty up to 10% of the turnover,
which can go up to the higher of three times of the profit or 10 per cent of the
turnover for each year of cartelization. The Commission has the power to
modify any agreement or direct an enterprise to abide by its orders. The
Commission is also empowered to order division of an enterprise which enjoys
dominant position in order to prevent abuse of such position.
Rectification of Orders
The Commission is empowered to amend any Order passed by it to rectify any
mistake apparent from the record of the case. The Commission may make an
amendment on its own motion or if the mistake has been brought to the notice
of the Commission by any party to the Order. While rectifying the mistake the
Commission is not allowed to amend any substantive part of the Order.
Execution of orders of Commission

In case where the Commission is of the opinion that it would be expedient to
recover the penalty imposed under the Competition Act, 2002 in accordance
with the provisions of the Income-tax Act, 1961, it may make a reference to
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this effect to the concerned income-tax authority under that Act for recovery
of the penalty as tax due under the said Act.
Appearances before the Commission

A person or an enterprise or the Director General may either appear in person
or authorise one or more chartered accountants or company secretaries or cost
accountants or legal practitioners or any of his or its officers to present his or
its case before the Commission.
Advisory Committees
To seek the opinion of the best available intellectual capital on competition

matters, the Commission has constituted a number of expert advisory
committees that comprise eminent experts from the legal profession,
economics, industry, academia, consumer representatives and others. As of
now there are four advisory committees.
 Advocacy
 Infrastructure
 Market studies
 Regulations
10. COMPETITION APPELLATE TRIBUNAL
The Competition Appellate Tribunal is a statutory organization established

under the provisions of the Competition Act, 2002 to hear and dispose of
appeals against any direction issued or decision made or order passed by the
Competition Commission of India under section 26 (2) and (6), section 27,
section 28, section 31, section 32, section 33, section 38, section 39, section 43,
section 43A, section 44, section 45 or section 46 of the Competition Act, 2002.
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The Appellate 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 or under section 42A or under section 53Q (2)
of the Act and pass orders for the recovery of compensation under section 53N
of the Act.
The Central Government has set up the Appellate Tribunal on 19th October,
2009 having its Headquarters at New Delhi. Hon‘ble Dr. Justice Arijit Pasayat,
former Judge of Supreme Court, has been appointed as the First Chairperson of
the Appellate Tribunal. Besides, the Chairperson, the Appellate Tribunal will
consist of not more than two Members to be appointed by the Central
Government. The Chairperson of the Appellate Tribunal will 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 should 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 will hold office for a term of five years and
can be eligible for re-appointment provided that no Chairperson or other
Member of the Appellate Tribunal can hold office after he has attained the age
of sixty-eight years or sixty-five years respectively.
Every appeal should be filed within a period of 60 days from the date on which
a copy of the direction or decision or order made by the Competition
Commission of India is received and it should be in the prescribed form and be
accompanied by the prescribed fees. The Appellate Tribunal may entertain an
appeal after the expiry of the period of 60 days if it is satisfied that there was
sufficient cause for not filing it within that period.
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The Appellate Tribunal will not be bound by the procedure laid down in the
Code of Civil Procedure, 1908 but will 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. The Appellate Tribunal will have, for the purposes of
discharging its functions under the Act, the same powers as are vested in a civil
court under the Code of Civil Procedure, 1908 (5 of 1908). Every order made by
the Appellate Tribunal will 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 will be
liable for a penalty of not exceeding rupees one crore or imprisonment for a
term up to three years or with both.
11. PENALTIES
Chapter VI of the Competition Act, 2002 deals with imposition of penalties by

the Competition Commission.
Sl. No Contravention Penalty / Compensation Section
1 Orders of Competition Rupees One Lakh for each day of 42(2)

Commission of India contravention subject to a
maximum of Rupees Ten crore
2 Orders of Competition Imprisonment for a term upto 42(3)

Commission of India under three years or with fine upto
Section 42(2) Rupees Twenty five crore or
with both.
3 Orders of Competition Make application to the 42A

Commission of India Appellate Tribunal and claim
compensation for any loss or
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damage suffered.
4 Failure to comply with Rupees One Lakh for each day of 43

directions of Competition contravention subject to a
Commission of India / maximum of Rupees One crore.
Director General
5 Non furnishing of Penalty upto one percent of 43A

information on total turnover or the assets
combinations whichever is higher of such
combination.
6 Making false statement or Minimum – Rupees Fifty Lakhs 44

omission to furnish Maximum – Rupees One crore
material information with
regard to Combination
7 Offences in relation to Up to Rupees One crore 45

furnishing information
Provision for lesser penalties
Leniency provision is incorporated under Section 46 of the Competition Act,

2002. If the requirements of section 46 are met, Competition Commission is
empowered to impose lesser penalty in cartel cases.
Section 46 provides that, if any producer, seller, distributor, trader or service

provider included in any cartel, which is alleged to have violated section 3, has
made a full and true disclosure in respect of alleged violations and such a
disclosure is vital, the Commission may impose upon him a lesser penalty than
as prescribed under the Act or rules or regulations. However, lesser penalty
will not be levied where before making such disclosure, the report of
investigation directed under section 26 has been received. Further, lesser
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penalty will be imposed only in respect of the producer, seller, distributor,

trader or service provider included in the cartel, who has made full, true and
vital disclosures.
The provision for lesser penalty under section 46 will cease to operate if the
person making the disclosure does not continue to cooperate with the
Commission till the completion of proceedings before the Commission. Section
46 further provides that any producer, seller, trader or service provider
included in the cartel will also be liable to imposition of penalty, if in the
course of proceedings, he had – (i) not complied with the condition on which
the lesser penalty was imposed by the Commission; or (ii) given false evidence;
or (iii) the disclosure made is not vital.
Procedure for imposing penalty

The procedure for imposition of penalty under the Competition Act, 2002 is
mentioned in Regulation 48 of the Competition Commission of India (General)
Regulations, 2009. Accordingly no order or direction imposing a penalty under
the Act should be made unless the person or the enterprise or a party to the
proceeding, during an ordinary meeting of the Commission, has been given a
show cause notice and reasonable opportunity to represent his or her or its
case before the Commission. In case the Commission decides to issue show
cause notice to any person or enterprise or a party to the proceedings, as the
case may be, the Secretary should issue a show cause notice giving not less
than fifteen days asking for submission of the explanation in writing within the
period stipulated in the notice. The Commission on receipt of the explanation,
and after oral hearing if granted proceeds to decide the matter of imposition of
penalty on the facts and circumstances of the case.
Crediting sums realised by way of penalties

All sums realised by way of penalties under the Competition Act should be
credited to the Consolidated Fund of India.
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Contravention by companies
"Company" means a body corporate and includes a firm or other association of
individuals.
"Director", in relation to a firm, means a partner in the firm.
Where a person committing contravention of any of the provisions of the
Competition Act, 2002 or of any rule, regulation, order made or direction
issued there under is a company, every person who, at the time the
contravention was committed, was in charge of, and was responsible to the
company for the conduct of the business of the company, as well as the
company, will be deemed to be guilty of the contravention and will be liable to
be proceeded against and punished accordingly. But such person will not be
liable to any punishment if he proves that the contravention was committed
without his knowledge or that he had exercised all due diligence to prevent the
commission of such contravention.
Where a contravention of any of the provisions of the Competition Act, 2002 or
of any rule, regulation, order made or direction issued there under has been
committed by a company and it is proved that the contravention has taken
place with the consent or connivance of, or is attributable to any neglect on
the part of, any director, manager, secretary or other officer of the company,
such director, manager, secretary or other officer will also be deemed to be
guilty of that contravention and will be liable to be proceeded against and
punished accordingly.
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12. IMPORTANT CASES
1) JSPL vs. SAIL

Judgment by Supreme Court of India pronounced on 9th September
2010
The Supreme Court inter alia held as under –
 An appeal shall lie only against such directions, decisions or
orders passed by the Commission before the Tribunal which
have been specifically stated under the provisions of Section
53(A)(1)(a). The orders, which have not been specifically made
appealable, cannot be treated appealable by implication e.g.
taking a prima facie view and issuing a direction to the Director
General for investigation would not be an order appealable under
Section 53A.
 Neither any statutory duty is cast on the Commission to issue
notice or grant hearing, nor any party claim, as a matter of right,
notice and/or hearing at the stage of formation of opinion by the
Commission, in terms of Section 26(1) of the Act that a prima
facie case exists for issuance of a direction to the Director
General to cause an investigation to be made into the matter.
 The Commission, in cases where the inquiry has been initiated by
the Commission suo moto, shall be a necessary party and in all
other cases the Commission, being expert body, shall be a proper
party in the proceedings before the Tribunal for complete
adjudication, effective and expeditious disposal of matters.
 During an inquiry and where the Commission is satisfied that the
act is in contravention of the provisions stated in Section 33 of
the Act, it may issue an order temporarily restraining the party
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from carrying on such act, until the conclusion of such inquiry or

until further orders without giving notice to such party, where it
deems it necessary.
 In consonance with the settled principles of administrative
jurisprudence, the Commission is expected to record at least
some reason even while forming a prima facie view.
2) Amir Khan Productions Private Limited v. Union of India

Judgement by High Court of Bombay decided on 18.08.2010
It was held that mere issuance of show cause notice under Section
26(8)/Section 27, like issuance of a charge-sheet in a departmental
inquiry, cannot be treated as pre-judging the issue, merely because the
petitioners had raised some of the legal contentions in the replies to the
notice issued by the DG and thereafter also the Commission has issued
show cause notices. That can never mean that the Commission will not
consider the petitioners objections against maintainability of the
proceedings. The Court granted liberty to the petitioners to raise all
available contentions, including preliminary objection against legality or
otherwise of initiation of the proceedings against the petitioners.
3) Interglobal Aviation Ltd. vs. Secretary CCI

Delhi High Court decided on 06.10.2010
The basic issue in these Writ Petitions was that the CCI has no
jurisdiction to deal with these matters because these were the matters
pending before the erstwhile MRTP Commission as the same were
referred by the MRTP Commission to DG (I&R) for merely preliminary
investigation under Section 11(1) of MRTP Act. It was the case of
petitioners that Section 66(6) of the Competition Act (CA) was meant to
cover only such cases where DG (I&R) took suo-motto notice under
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Section 11(2) of MRTP Act and investigations were incomplete at the

time of repeal of MRTP Act.
The Hon'ble Court held that there is nothing in the language of Section
66(6) of CA to suggest this. The resultant position is that all
investigations and proceedings which were pending before DG (I&R),
MRTP Commission as on the date of repeal of MRTP Act, whether by way
of a reference made to it by the MRTP Commission under Section 11(1)
or taken up by DG (I&R) suo-motto under Section 11(2) of the MRTP Act,
would stand transferred to the CCI in terms of Section 66(6) of the CA.
There is, therefore, no illegality in the action of transferring the
investigations pending before the DG (I&R), MRTP Commission to the CCI.
4) Vitamin Cartel Case

In April 2003, the Korea Fair Trade Commission (KFTC) decided to issue
corrective order and impose surcharge on six vitamin producers
belonging to Switzerland, Germany, France, Japan and the Netherlands,
who participated in the vitamin international cartel. The amount of
surcharge aggregated more than USD 3 million in total. These six
companies, accounting for 90 per cent market share in the world bulk
vitamin market, agreed to allocate the sales volume and coordinate
price of bulk vitamins such as vitamin A, E, B5, D3, and Beta Carotene in
the global market. Vitamins A, E and beta-carotene are important inputs
for the production of foods, medicine, cosmetics and animal feed. Bulk
vitamin is used in manufacturing animal feeds, medicine, foods and
cosmetics. The concerned industries in Korea were learnt to have
imported bulk vitamin of about US$185 million during the above period
from the six companies. As the conspiracy affected the Korean economy
throughout the 1990s, the behavior of these firms affected all Korean
citizens, who were prevented from benefiting from the price reductions
that would have resulted from a competitive market.
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5) Boeing and McDonnell - Douglas

Proposed combination of Boeing and McDonnell - Douglas relating to
aircraft industry was allowed by US Anti-trust Authorities, but was
refused by European Commission.
6) General Electric and Honeywell

Combination of General Electric and Honeywell relating to Jet Engines
was allowed by US Anti-trust Authorities but refused by European
Commission.
7) Microsoft Case
In a recent landmark decision that received wide publicity, the European
Union Competition Commissioner found Microsoft, the world‘s largest
software company, guilty of abusing its dominant position in the market
for the personal computer operating system, and violating, the EU
Treaty‘s Competition Rules. The European Commission imposed on
Microsoft a record fine of Euro 497 million (US $ 612 million equivalent
to approximately Rs. 2630 crores). The EU ruling is the latest in a series
of brushes that Microsoft has been having with competition regulators
for the last several years.
8) Seamless Steel Tubes Case

8 companies (4 European and 4 Japanese) were fined by European
Commission in 1999 for an illegal market sharing cartel. The companies
are British Steel Ltd; Vallourec SA; Dalmine SpA; Salzgitter Mannesmann
GmbH (4 European companies) and Nippon Steel Corp; Sumitomo Metal
Industries Ltd; Kawasaki Steel Corp; NKK Corp (4 Japanese companies).
Total fines of € 99 million imposed on these companies. The Europe -
Japan Club required that the domestic markets of the different
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producers should be respected. Commission found it to be a very serious

infringement of Art 81 (1) of EU Treaty. 7 of these 8 companies appealed
to the Court of First Instance, which upheld Commission‘s decision in
substance, but reduced fees by 13 million on appealing companies as
Commission had not produced sufficient evidence covering the entire
duration of the infringement.
9) Brazilian case of price fixing in flat rolled steel products

Until 1992 steel products were subject to price controls, which were
administered in part by SEAE. In July 1996 representatives of the
Brazilian Steel Institute met with officials of SEAE and informed them
that its members intended to increase their prices on these products by
certain specified amounts on a specific day. On the day after the
meeting SEAE informed the Institute by fax that such an agreement was
a violation of competition law and illegal. Nevertheless, the three
producers each increased price of these products in early August that
year. The increases were approximately as those given to SEAE by the
Steel Institute. Aside from the presentation to the SEAE by the Institute
there was no direct evidence of concerted action.
CADE‘s decision that parties were guilty was based on the ―parallelism
plus‖ theory, because in addition to the economic evidence, some
circumstantial event was associated to the price parallelism. The first
issue taken into account was the fact that price increase of the
companies at similar rates and dates could not be explained just by
referring to it as oligopoly‘s interdependence. Although CADE did not
consider the meeting as direct evidence of collusion, the Commissioners
understood that it constituted a strong indication that there had been
previous meeting among the companies to discuss matters before
actually taking them to the government
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10) Soda Ash Cartel case

In September, 1996, American Natural Soda Ash Corporation (ANSAC)
comprising of six American producers of soda ash attempted to ship a
consignment of soda ash at cartelized price to India. - Based on the
ANSAC membership agreement, the M.R.T.P. Commission held it as a
prima facie cartel and granted interim injunction in exercise of its
powers in terms of Section 14 of the M.R.T.P. Act. The Supreme Court,
however, overturned the order of the Commission inter alia, on the
ground that it did not have authority to prohibit imports.
11) Trucking Cartel case

Eliminating competition in the market by fixing the freight rates without
liberty to the members of the truck operator union to negotiate freight
rates individually is common in the trucking industry. The M.R.T.P.
Commission passed ‗Cease & Desist‘ order against Bharatpur Truck
Operators Union, Goods Truck Operators Union, Faridabad, and Rohtak
Public Goods Motor Union. In the absence of any penalty provision,
however, no fines could be imposed.
12) Bayer AG case

Bayer AG was a major global supplier of insecticides except in USA. It
developed a new unique and potent active ingredient for insecticides for
household use and secured a patent for the technology. It licensed the
new technology to S C Johnson & Sons, a dominant market leader in
pesticides market, the market Johnson‘s market share was 50-60%. The
DOJ challenged this licensing arrangement which reduced incentives of
Bayer to compete with Johnson in manufacture and sale of household
insecticides and which further helped Johnson to increase its dominance
in the US market. The Court decided that Bayer should offer the
patented ingredients to other manufacturers and also those that Bayer
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may introduce later. Through this decision, the court sought the
maintenance of competitive markets while protecting the IPR.
13) Price-fixing in the petrol sector
According to OECD Annual Report on Competition Policy Developments in

Brazil (2002), the Administrative Council of Economic Defense (CADE)
has fined Sindiposto, an association of petrol stations, and its President
a total of approximately US$ 105,000 after Sindiposto was found to have
engaged in price-fixing by having advised its members to set prices and
profit margin for fuel sales, as well as concerted price increases.
According to a CADE official, cartelization attempts of the petrol sector
in Brazil has been a subject of more than 30 investigations by the
Brazilian competition authorities out of a total of about 260 cartel
investigations. According to information released by the Secretariat of
Economic Law, 56 per cent of cartel complaints relate to the petrol
sector.
14) Cement Cartel
In Argentina, five cement companies were prosecuted for operating a

cartel that lasted for 18-years from 1981 to 1999 and the Argentine
authority imposed a total fine of US$ 107 million, which is more than
three times the highest fine assessed by Argentine authority in any
previous case. Romania also fined total EUR 28,500,000 on its three
cement companies for their participation in a cement cartel and the fine
represented 6 per cent of the companies‘ annual turnover.
15) Boaters Cartel

Siem Reap in Cambodia is a very popular tourist town, which houses the
famous Angkor Vat temples. There are three means of transportation
from Phnom Penh to Siem Reap – boat, road and air. The competition
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between boat companies has been intense and the prices came down
from US $ 10 to US $ 5. The boaters discussed among themselves and
resolved that they will charge US $ 10 from Khmer nationals and US $ 20-
25 from foreigners. They further agreed that they would not compete
with each other and would share their departure schedules. There was
no written agreement and only an understanding and it constitutes a
cartel agreement.
16) Airlines Cartel

The Competition Commission in South Africa referred to its Competition
Tribunal, a case alleging that four airline companies had conspired to
simultaneously announce in May, 2004 a fuel surcharge in identical
amounts. After the investigation, prompted by news reports of the price
increase, an airline applied to the Commission for leniency under the
Commission‘s Corporate Leniency Policy. The applicant cooperated with
the Commission and was not cited as a respondent and the Commission
recommended a fine up to 10% of the turnover of each of the respondent.
13. COMPETITION LEGISLATION IN OTHER COUNTRIES
About 90 countries in the world have enacted their own competition laws to
restrict the unhealthy and immoral competition by the traders and also with an
aim of safeguarding the interests of the consumers in those countries.
1) United States –
Anti-trust policy of US owes its origin to industrial revolution which was

marked by the shift of economic wealth and political power to industrial
empires. It brought a new breed of business culture that led to building
of giants through alliances. It was during this time around the 20 th
century that anti-trust policies were legislated. These policies generally
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were based on distrust of a big business and rarely aimed at promoting

competition. The fundamental anti-trust statutes are as follows:
i. Sherman Act, 1890: Section 1of Sherman Act, 15 U.S.C.1, sets forth
the basic antitrust prohibition against contracts, combinations and
conspiracies ―in restraint of trade or commerce among the several
States or with foreign nations‖. Section 2 of the Act, prohibits
monopolization, attempts to monopolize and conspiracies to
monopolize ―any part of trade or commerce among the several States
or with foreign nations‖. Section 6a of the Act, defines the
jurisdictional reach of the Act with respect to non-import foreign
commerce.
ii. Clayton Act, 1914: It enlarged the scope of anti-trust policy by
including price discrimination, exclusive dealings and mergers.
Section 7 of the Clayton Act, 15 U.S.C.18, prohibits any merger or
acquisition of stocks or assets ―wherein any line of commerce or in
any activity affecting commerce in any section of the country, the
effect of such acquisition may be substantially to lessen competition
or to tend to create a monopoly‖.
iii. Federal Trade Commissions Act, 1914: It broadened the scope of
anti-trust Acts and established a commission known as the Federal
Trade Commission which was empowered to deal with major anti-
trust practices and entities.
iv. National Cooperative Research and Production Act: It promotes
research and development by providing a special antitrust regime for
research and development joint ventures.
v. Export Trading Company Act, 1982: This act has been formulated to
increase US export of goods and services. It promotes a better
provision of export trade services to US producers and suppliers by
minimizing restrictions on trade financing provided by financial
institutions.
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vi. The Wilson Tariff Act, 1984: This Act ―prohibits every combination,
conspiracy, trust, agreement or contract‖ made by or between two
or more persons or corporations, either of whom is engaged in
importing any article from a foreign country into United States,
where the agreement is intended to restrain trade or increase the
market price in any part of the United States of the imported articles,
or of ―any manufacture into which such imported article enters or is
intended to enter‖.
2) Australia –
Australia has embarked upon a new legal initiative combining consumer

protection rights with anti-competition measures. The Trade Practices
Act, 1974 has facilitated the establishment and empowerment of
Australian competition and consumer commission to ensure a
transparent administration of trade practices. The Act expressly
prohibits anti-competitive agreements, which include price fixing and
primary / secondary market boycott.
3) Canada –
In Canada, the Competition Act is a federal law governing most business

conduct in Canada. It contains both criminal and civil provisions aimed
at preventing anti-competitive practices in the marketplace. Its purpose
is to maintain and encourage competition in Canada in order to –
 Promote the efficiency and adaptability of the Canadian economy
 Expand opportunities for Canadian participation in world markets

while at the same time recognizing the role of foreign
competition in Canada
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 Ensure that small and medium sized enterprises have an equitable

opportunity to participate in the Canadian economy
 Provide consumers with competitive prices and product choices.
4) China –
The idea of a comprehensive Anti monopoly Law for the People's

Republic of China surfaced in 1987, in response to the diverse and
incoherent existing laws such as Anti-Unfair Competition Law, Price Law,
Foreign Trade Law. Representatives from various agencies and academic
institutions began drafting the new Law in 1994. However, the initial
drafts often reflected divergent and inconsistent goals among its various
agencies. The final version of the law was finally adopted by the People's
Congress on 30 August 2007 and took effect on 1st August 2008. The main
aim of the law is to –
 Advance consumer interests
 Promote economic efficiency
 Protect economic security, which includes subjecting foreign

acquisitions of Chinese corporations to national security review.
5) Russia –
The Law on the Protection of Competition came into effect in the

Russian Federation on 26th October 2006. The stated aim for establishing
the law was to bring the Russian Federation to be in line with the
general trend of competition regulation in Europe. Beyond western
European competition laws against dominance, the Competition Law in
Russia expressly presumes existence of dominance by defining thresholds
–
 A company is in dominance if it dominates more than 50% of
market share.
111
 A company with less than 35% of market share, unless in

exceptional case, is not considered dominant.
 A collective dominance exists when up to three companies hold a

combined market share exceeding 50%.
 A collective dominance exists when up to five companies hold a

combined market share exceeding 75%.
 A safe harbor margin of up to 20% market share per company for

agreements between companies of different segments of a supply
chain.
The law also places restrictions on aids from, and public procurement
policies of, federal, provincial or municipal governments that
otherwise would encourage anti-competition. The law is enforced by
the Federal Anti-Monopoly Service (FAS). The law also gives the FAS
authority over approval of company mergers stipulating various
combinations of thresholds of assets of merging companies, an excess
of which would require prior approval from the FAS. The scope of
regulation of the FAS is focused on the commodity market and
financial services with mandates over operations and transactions not
just within the Russian Federation but also those taking place outside
the boundaries of Russia which would have anti-competitive effects
on the Russian market place. In addition to a distinct competition law,
the Code of Administrative Offences has also been amended to
increase liability of anti-competitive practices. Punitive measures
against anti-competitive practices are meted out in terms of
percentages of revenues of a company.
6) United Kingdom –
112
The Competition Act 1998 and the Enterprise Act 2002 are the most
important statutes for cases with a purely national dimension. However
if the effect of a business' conduct would reach across borders, the
European Union has competence to deal with the problems, and
exclusively EU law would apply. Like all competition law, that in the UK
has three main tasks –
 Prohibiting agreements or practices that restrict free trading and
competition between business entities. This includes in particular
the repression of cartels;
 Banning abusive behaviour by a firm dominating a market, or anti-

competitive practices that tend to lead to such a dominant
position. Practices controlled in this way may include predatory
pricing, tying, price gouging, refusal to deal and many others;
 Supervising the mergers and acquisitions of large corporations,

including some joint ventures. Transactions that are considered to
threaten the competitive process can be prohibited altogether, or
approved subject to remedies such as an obligation to divest part
of the merged business or to offer licences or access to facilities
to enable other businesses to continue competing.
The Office of Fair Trading (OFT) and the Competition Commission are
the two primary regulatory bodies for competition law enforcement
in United Kingdom.
7) European Union –
European Community competition law regulates the exercise of market

power by large companies, governments or other economic entities. In
the European Union, it is an important part of ensuring the completion
of the internal market, meaning the free flow of working people, goods,
113
services and capital in a borderless Europe. Four main policy areas

include –
 Cartels, or control of collusion and other anti-competitive
practices which has an effect on the EU. This is covered under
Articles 81 of the Treaty of the European Community (TEC).
 Monopolies or preventing the abuse of firms' dominant market

positions. This is governed by Article 82 of TEC.
 Mergers, control of proposed mergers, acquisitions and joint

ventures involving companies which have a certain, defined
amount of turnover in the EU. This is governed by the Council
Regulation 139/2004 EC (the Merger Regulation also known as
ECMR).
 State aid, control of direct and indirect aid given by Member

States of the European Union to companies. This is covered under
Article 87 EC (ex Article 92).
Primary competence for applying EU competition law rests with

European Commission and its Directorate General for Competition,
although state aids in some sectors, such as transport, are handled by
other Directorates General. On 1 May 2004 a decentralized regime for
antitrust came into force which is intended to increase the application
of EU competition law by national competition authorities and national
courts.
114
14. PROFESSIONAL OPPORTUNITIES
1) Appearance before Commission
Section 35 of competition act, 2002 specifically allows chartered accountants

to represent a complainant, defendant or the director general to present a
case before the competition commission of India. This implies that the
accountants can represent a party in cases relating to anti-competitive
agreements, abuse of dominance and combination (mergers etc.) and
regulation cases. Therefore, chartered accountants should acquaint themselves
on Competition Act, 2002 and other regulations and notifications relating to it.
Chartered Accountants can appear on the behalf of the enterprise in the
following cases:
 Chartered accountants may appear for parties before the CCI in cases
relating to abuse of dominance as unfair and discriminatory purchase
and price levels, predatory pricing, conclusion of contracts with
obligations having no connection with the subject of contracts etc have
115
high accounting overtones and dimensions. Therefore, chartered

accountants with their expertise in accountancy and related subjects
can contribute substantially.
 Chartered accountants may appear for parties before the CCI in cases
relating to combinations regulation. The knowledge and expertise of
Chartered Accountants are needed for
o threshold analysis
o value of assets determination
o value of turnover determination
o market share analysis
o level of competition analysis
o group impact
o control impact
o failing business costing and impact
o weighing benefits of combination against adverse impact of
combination
Chartered Accountants can do valuation of assets and turnover of an enterprise
which is acquired or merged with other enterprise to determine whether the
threshold limit under section 5 are attracted or not. The assets are to be
valued at book value as shown in the audited books of accounts under section 5
of the Competition Act.
2) Devising Competition Compliance Programme (CCP) for the enterprise
Compliance involves the active efforts on the part of an enterprise to comply

with the provisions of the Act. When the enterprise takes certain necessary and
concrete steps to ensure that knowingly or unknowingly it does not infringe the
provisions of the Act, it can be stated to maintain a Competition Compliance
Programme. A Chartered Accountant can play an important role in devising a
CCP.
Objective of CCP:
116
The Competition Compliance Programme should have the following three main
objectives:
(i) Prevent violation of law, i.e. the Competition Act 2002 and all
Rules, Regulations & Orders made there-under.
(ii) Promote a culture of compliance, and
(iii) Encourage good corporate citizenship
Features of CCP
A well formulated and adequate compliance programme should address the
business realities faced by the enterprise concerned. It should have following
essential features-
 Explicit statement of the commitment of senior management to the
Compliance Programme
 Availability of an Enterprise‘s Compliance Policy
 Training and education of employees
 Compliance manual
 The main principles of the compliance policy should be set out in simple
and plain language that is easily understandable.
 An effective Compliance Policy may include seeking a written
undertaking from employees to conduct their business dealings within
the compliance framework and taking disciplinary action against
employees whose actions result in an infringement of the law.
 The relevant procedures should enable the employees to seek advice on
whether a particular transaction complies with competition law and
report activities that they suspect infringe the law. These practices
should be included in the ―best practices‖ norms of every enterprise.
3) Training officers and employees
117
An enterprise should consider having an active training programme that

includes instruction by knowledgeable professionals having expertise and
experience in corporate compliances. Chartered Accountants being experts in
corporate compliances can play a vital role here. The training should be as
practical as possible, including case studies drawn from the enterprise‘s actual
experiences. It should also highlight the consequences of violations. The
objective is to enable all officers and employees to develop capabilities to
recognize and identify law-violating activity related to their business.
Compliance education must contain sufficient practical explanation/examples
on difficult legal concepts and issues. It is, therefore, advisable that
enterprises integrate compliance education as part of overall training and
education programme of the enterprise.
4) Act as a Compliance Officer

In order to ensure effectiveness of compliance programme, it is desirable that
a Compliance Officer with appropriate delegation of authority be appointed to
enforce the Compliance Programme. A chartered Accountant with its expertise
and knowledge can fit in this role. A Chartered Accountant in the role of the
Compliance Officer should preferably be an independent professional with
expertise and core competency in compliance and compliance management.
He should be a focal point and in charge of designing a program, motivating
officers and employees, managing any accompanying administrative/
organizational issue, preparing compliance manual, and auditing compliance.
5) Drafting Compliance Manual

To facilitate compliance, the enterprises should develop a Compliance Manual
and distribute it to their officers and employees as detailed guidelines for
compliance with the provisions of the Act. The Chartered Accountants with
their drafting skills and knowledge of the laws pertaining to corporate
compliances are best suited for drafting such documents.
118
The Compliance Manual must have the following features:

 The manual should incorporate the features set in CPP and contain up-
to-date information regarding its business(es), its operational
environment, and relevant competition regimes.
 It is necessary that the manual incorporates full, relevant and correct
information and is properly distributed.
 The Compliance Manual should be developed, distributed and
implemented under the overall supervision of Compliance Officer.
 In-charge(s) of Departments/Divisions should be put under obligation to
inform the Compliance Officer of any changes in the business
environment and market scenario that may have bearing on compliance,
including the opinion of subordinates concerning the Compliance Manual.
 The Enterprises are advised to constitute a Compliance Committee
comprising senior management, with ultimate responsibility of
overseeing the Compliance Programme, including conducting periodic
review of its effectiveness.
6) Internal Audit
To ensure effective compliance of completion laws a system of audit may be
required. Therefore, at the time of the start of the compliance programme an
internal audit of procedures and documents, including email, may be
introduced. This may be repeated at intervals to ascertain if the policy is
working. The nature of such audit will have to be tailored to the nature of the
enterprise concerned.
While auditing the procedures, documents and emails of each and every
employee may be a herculean task it would be always possible to identify those
individuals who are most at risk and to conduct an audit of a ―snap shot‖ of
their e-mails on a given day. External legal advisers could be employed to do
such auditing to avoid embarrassment to the employees concerned while
auditing their correspondence/e-mail.
119
Chartered Accountants with their auditing skills and knowledge of business and
regulatory environment are best suited for the job.
15. IMPORTANT WEBSITES
1 Competition Commission of India www.cci.gov.in

2 Competition Appellate Tribunal http://compat.nic.in/
3 Federal Trade Commission (United States) www.ftc.gov/
4 Federal Trade Commission Bureau of www.ftc.gov/bcp/consumer.shtm
Consumer Protection
5 OECD www.oecd.org
6 World Trade Organization http://www.wto.org/
7 UNCTAD http://www.unctad.org/competition
8 Global Competition Forum www.globalcompetitionforum.org
9 International Competition Network (ICN) www.internationalcompetitionnetwo
rk.org
10 EUROPA - European Commission – www.ec.europa.eu
Competition
120
11 Centre on Regulation and Competition www.competition-regulation.org.uk

U.K (CRC)
12 WTO - Interaction between Trade and http://www.wto.org/english/tratop
Competition Policy _e/comp_e/comp_e.htm
13 International Consumer Protection and www.icpen.org
Enforcement Network (ICPEN)
14 APEC Competition Policy & Law Database www.apeccp.org.tw
15 The Office of Fair Trading - U.K consumer www.oft.gov.uk

and competition authority
16 Competition Commission U.K www.competition-
commission.org.uk
17 American Antitrust Institute www.antitrustinstitute.org
18 The Competition Authority- The Chief www.tca.ie

Regulatory Agency in Ireland
19 American Bar Association's Section of www.abanet.org/antitrust/
Antitrust
20 Australian Competition and Consumer www.accc.gov.au
Commission (ACCC)
21 CUTS International (Consumer Unity & www.cuts-international.org
Trust Society)
22 National Consumer Disputes Redressal http://ncdrc.nic.in/
Commission
23 Ministry of Consumer Affairs, Food and http://fcamin.nic.in/
Public Distribution
About the Author
Rajkumar S. Adukia
121
B. Com (Hons.), FCA, ACS, AICWA, LL.B, M.B.A, Dip IFRS (UK), Dip LL & LW
Senior Partner, Adukia & Associates, Chartered Accountants
Meridien Apts, Bldg 1, Office no. 3 to 6
Veera Desai Road, Andheri (West)
Mumbai 400 058
Mobile 098200 61049/093230 61049
Fax 26765579
Email [email protected]
Mr.Rajkumar S Adukia is an eminent business consultant, academician, writer, and

speaker. A senior partner of Adukia & Associates he has authored more than 34 books on
a wide range of subjects. His books on IFRS namely, “Encyclopedia on IFRS (3000
pages) and The Handbook on IFRS (1000 pages) has served number of professionals who
are on the lookout for a practical guidance on IFRS. The book on “Professional
Opportunities for Chartered Accountants” is a handy tool and ready referencer to all
Chartered Accountants.
In addition to being a Chartered Accountant, Company Secretary, Cost Accountant, MBA,

Dip IFR (UK), Mr. Adukia also holds a Degree in Law and Diploma in Labor Laws. He
has been involved in the activities of the Institute of Chartered Accountants of India
(ICAI) since 1984 as a convenor of Kalbadevi CPE study circle. He was the Chairman of
the Western Region of Institute of Chartered Accountants of India in 1997 and has been
actively involved in various committees of ICAI. He became a member of the Central
Council in 1998 and ever since he has worked tirelessly towards knowledge sharing,
professional development and enhancing professional opportunities for members. He is a
regular contributor to the various committees of the ICAI. He is currently the Chairman
of Committee for Members in Industry and Internal Audit Standard Board of ICAI.
122
Mr. Adukia is a rank holder from Bombay University. He did his graduation from
Sydenham College of Commerce & Economics. He received a Gold Medal for highest
marks in Accountancy & Auditing in the Examination. He passed the Chartered
Accountancy with 1st Rank in Inter CA & 6th Rank in Final CA, and 3rd Rank in Final
Cost Accountancy Course in 1983. He started his practice as a Chartered Accountant on
1st July 1983, in the three decades following which he left no stone unturned, be it
academic expertise or professional development. His level of knowledge, source of
information, professional expertise spread across a wide range of subjects has made him
a strong and sought after professional in every form of professional assignment.
He has been coordinating with various professional institutions, associations’

universities, University Grants Commission and other educational institutions. Besides
he has actively participated with accountability and standards-setting organizations in
India and at the international level. He was a member of J.J. Irani committee which
drafted Companies Bill 2008. He is also member of Secretarial Standards Board of ICSI.
He represented ASSOCHAM as member of Cost Accounting Standards Board of ICWAI.
He was a member of working group of Competition Commission of India, National
Housing Bank, NABARD, RBI, CBI etc.
He has served on the Board of Directors in the capacity of independent director at BOI
Asset management Co. Ltd, Bharat Sanchar Nigam Limited and SBI Mutual Funds
Management Pvt Ltd. He was also a member of the London Fraud Investigation Team
Mr. Rajkumar Adukia specializes in IFRS, Enterprise Risk Management, Internal Audit,
Business Advisory and Planning, Commercial Law Compliance, XBRL, Labor Laws, Real
Estate, Foreign Exchange Management, Insurance, Project Work, Carbon Credit,
Taxation and Trusts. His clientele include large corporations, owner-managed
companies, small manufacturers, service businesses, property management and
construction, exporters and importers, and professionals. He has undertaken specific
123
assignments on fraud investigation and reporting in the corporate sector and has
developed background material on the same.
Based on his rich experience, he has written numerous articles on critical aspects of
finance-accounting, auditing, taxation, valuation, public finance. His authoritative
articles appear regularly in financial papers like Business India, Financial Express,
Economic Times and other professional / business magazines. He has authored several
accounting and auditing manuals. He has authored books on vast range of topics
including IFRS, Internal Audit, Bank Audit, Green Audit, SEZ, CARO, PMLA, Anti-
dumping, Income Tax Search, Survey and Seizure, Real Estate etc. His books are known
for their practicality and for their proactive approaches to meeting practice needs.
Mr. Rajkumar is a frequent speaker on trade and finance at seminars and conferences
organized by the Institute of Chartered Accountants of India, various Chambers of
Commerce, Income Tax Offices and other Professional Associations. He has also
lectured at the S.P. Jain Institute of Management, Intensive Coaching Classes for Inter &
Final CA students and Direct Taxes Regional Training Institute of CBDT. He also
develops and delivers short courses, seminars and workshops on changes and
opportunities in trade and finance. He has extensive experience as a speaker, moderator
and panelist at workshops and conferences held for both students and professionals both
nationally and internationally.. Mr. Adukia has delivered lectures abroad at forums of
International Federation of Accountants and has travelled across countries for
professional work.
Professional Association: Mr. Rajkumar S Adukia with his well chartered approach
towards professional assignments has explored every possible opportunity in the fields of
business and profession. Interested professionals are welcome to share their thoughts in
this regard.
124

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An overview of provisions relating to competition

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2. Historical background of Competition Law

3. Evolution of Competition law in India

4. Monopolies and Restrictive Trade Practices Act, 1969 – An overview

5. Consumer Protection laws in India

7. Competition Act, 2002 – An overview

8. Analysis of key concepts and issues of competitive law

b. Abuse of Dominant Position

9. Competition Commission of India (CCI)

10. Competition Appellate Tribunal

12. Important Cases

13. Competition legislations in other countries

14. Professional Opportunities

15. Important websites

“The main objective of the Competition Law is to promote economic

Competition can be defined as a process wherein cost efficient production is

Competition refers to a market situation in which sellers independently strive

In the absence of adequate safeguards, enterprises may undermine the market

Most competition laws seek to increase economic efficiency, enhance consumer

Need for competition

Competition and Growth

There is a positive association between GDP growth and level or degree of

Competition and Democracy

IN THE MARKET FOR CONSUMERS FOR BUSINESS

 Promotes  Lower prices  Availability of inputs

efficiency  Improved quality at competitive price,

 Leads to higher  Better services  Level playing field,

productivity  Wider choices  Redressal against

 Punishes the denial of market

laggards access and other anti-

 Enhances choice, competitive

improves quality agreements. 5

Competition Law in India

The market principles stipulating that enterprises must be prevented from

Sections 5 and 6 (dealing with combination, mergers and acquisitions) came

agreements; and (ii) where the ―enterprise‖ is indulging in abusing its/their

The Competition Act provides that an anti-competitive agreement shall be void

The Competition Act seeks to regulate ‗combinations‘ which include

The Competition Commission of India undertakes promotion of competition

2. HISTORICAL BACKGROUND OF COMPETITION LAW

Law governing competition is found in over two millennia of history. Roman

in Broad v. Jolyffe and Mitchell v. Reynold where Lord Macclesfield asked,

3. EVOLUTION OF COMPETITION LAW IN INDIA

Competition Law for India was triggered by Articles 38 and 39 of the

 That the ownership and control of material resources of the community

promoting competition. Government has decided to appoint a Committee to

In October 1999, the Government of India appointed a High Level Committee

 Certain anti-competitive practices should be presumed to be illegal.

(a) The proposed Commission, to be headed by a bureaucrat, would

(b) Commission had adjudicatory functions which warranted that the

Historical background of the Act in a nutshell

 1948 - The First Industrial Policy Resolution announced

List of Rules and Regulations under the Competition Act, 2002

Sl.No. Rules / Regulations

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1 Competition Commission of India (Procedure in regard to the

2 The Competition Commission of India (Manner of Recovery of