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Powers and Function and Jurisdiction of Competition Commission of



Mr. Mohammad Atif Khan Shubhankar Thakur

(Faculty of- Competition Law) Roll No. 149

Semester- IX

(B.A., L.L.B (Hons.))

(DATE OF SUBMISSION- 05/10/2017)




First & foremost, I take this opportunity to thanks Mohammad Atif Khan, Faculty member of
Competition Law, HNLU, for allowing me to choose this topic and to work on it. He has been
very kind in providing inputs for this work, by way of providing lectures in the class and giving
suggestions for the formatting of the project and providing me resource of his vast knowledge of
the subject which helped me to look at the topic in its very broad sense. Therefore, I would like
to thank him.

I would also like to thank my dear colleagues and friends in the University, who have helped
me with ideas about this work and also a source for constant motivation and hence they were a
guiding force to me in making of this project. Last, but not the least I thank the University
Administration for equipping the University with such good library and IT lab.

My special thanks to library staff and IT staff for equipping me with the necessary books and
data from the website.

I would also like to thank the hostel staff for providing me a healthy and clean environment that
provided me a great concentration level.

Shubhankar Thakur

Roll No. - 149

Semester- IX

Table Of Contents

Acknowledgments 2

Chapter 1:Introduction... 4

Objectives and Research Methodology... 6

Chapter 2: Competition Commission of India....7

Chapter-3 :Powers and the Functions of the Competition Commission of Indi...11

Duties & Powers of CCI....15

Conclusion. 19

Bibliography.. 20



In the recent times, the Indian economy has seen reform and restructuring initiatives in diverse
facets and dimensions since mid 1980s. In the context of the globalization, the emergence of
multinational corporations, interdependence of economies, and role of private enterprise in
economic development, the global financial crisis is emerging as a watershed in the regulatory
and reform thinking. India took up economic reforms in earnest in the early 1990s and in the
second phase of the reforms, it enacted a new competition law to replace the Monopolies and
Restrictive Trade Practices (MRTP) Act of 1969, which had become obsolete in certain aspects.
The Competition Act of 2002 came on the statute book. It is in the economic terms a more
sophisticated law and covers the three standard limbs of Competition law namely anti-
competitive agreements, abuse of dominance and merger regulation. The new competition law
i.e. Competition Act 2002, after taking into consideration the recommendations of the Raghavan
Committee and deliberations of the standing Committee on finance, provided for the
establishment of Competition Commission of India (CCI) . The Commission is the sole
Competition enforcement agency.

It has also been assigned to take a proactive stand to promote Competition. The Competition
(Amendment) Act, 2007 provided for the establishment of Appellate Tribunal for adjudicating
claim for the Compensation and for hearing appeal against the direction of decision made or
order passed by the Commission. It is worth to be observe that the Commission established under
the earlier legislation i.e. MRTP Act, which was enacted primarily to curb monopolies and
concentration of economic power, had only limited powers. The MRTPC was empowered to
submit its recommendatory opinions to the Central Government on Monopolistic Trade Practices
and Unfair Trade Practices (UTP) matters. It is only empowered to investigate and enquire into
Restrictive Trade Practices (RTP). Inquires into the RTPS and UTP s remained the two most
important areas of activities of the Commission.

Between the two, UTP gained the momentum because the impact of the orders benefited the
aggrieved consumer significantly. Award of compensation as an interlocutory application to an
UTP enquiry further enhanced the credibility of the MRTPC in the eyes of the consumers and the

society. But with the coming up of the consumers courts , post 1986 , at all places , the
jurisdictions of the MRTPC and Consumer Courts got overlapping and resulted in ushering in of
forum shopping and multiplicity of litigations on some issues between the parties.

Important RTP s, involving big ticket enterprises, very rarely got concluded at the commission
level and invariably travelled up to the Supreme Court in appeal. Supreme Court, more often
than not, found infirmities in the order of the commission and set aside most of the Orders of the
Commission. With the deletion (of Chapter III of the Act as per further amendments to the
MRTP Act in 1991) the Commission lost its feeble power of recommendation into Merger and
Acquisition activities in India. Post -1991 scenarios forced the Government of India to ponder
over the issues relating to as to whether or not to continue with the MRTP Act and the
Commission established under it. There were two clear options available with the Government.

One either it thoroughly amends the existing MRTP Act to match the changed economic scenario
of India as well as of the other jurisdiction or the other was to repeal the law and enact a new
piece of legislation which would contain features of the latest international best practices. The
kind of amendments that could make sense was felt to be identical to writing a new legislation, a
high powered committee was set up in 1999.

The Committee headed by SVS Raghavan found that MRTP Act to be falling short of squarely
addressing competition and anti- competitive practices. It found that the MRTP Commission s
powers under the Act were quite restrictive and it was ill equipped.

Based on this analysis, the Raghavan Committee found it expedient to have a new competition
law. It will be useful to understand the underlying principles that led to the new enactment. As a
result of the report submitted by the committee s recommendations, the Competition Act of 2002
came into being in January 2003. The preamble of the Competition Act provides for
establishment of the Competition Commission of India (CCI) .The CCI was established on 14th
October 2003. The Chairman and a Member were appointed by the Central Government.

Research Objectives

To study and describe the enactment of new Competition Act, 2002 and also to discuss
the drawbacks of earlier MRTP Act, 1991.
To study the objectives of Competition Act,2002.
To discuss the preamble of the new Competition Act,2002 which talks about
establishment of Competition Comission.
To discuss Amendment in Competition Act in 2007 which suggested to have a quasi
judicial body to deal with matters of competition.

Literature Review

Research Methodology

Non empirical research work has been used in this project as the material in this project mainly
consists of the work of people which is already done. Some potions of that work are referred in
this project and citations are also provided wherever they were necessary.

1. Sources of data- The following secondary sources of data have been used in the project-

1. Articles.
2. Books
3. Websites

Chapter 2 : Competition Commission of India

Competition Commission of India is a statutory body of the Government of India responsible for
enforcing The Competition Act, 2002 throughout India and to prevent activities that have an
appreciable adverse effect on competition in India. Competition Commission of India is set-up
by Government of India to check the uncompetitive environment which is artificially created by
influential persons and to create level playing field for all the persons who engaged in producing.
The Competition Commission of India has been constituted under Section 7 of the Competition
Act, 2002 as amended in 2007.

The Competition Commission of India consists of a Chairperson and not less than two and not
more than ten members to be appointed by the Central Government. Under Section 18 of the
Competition Act, the functions of the Commission inter-alia are to eliminate practices having
adverse effect on competition, promote and sustain competition, protect the interests of
consumers and ensure freedom of trade carried on by other participants, in markets in India 1. The
following are the objectives of the Commission.

1. To prevent practices having adverse effect on competition.

2. To promote and sustain competition in markets.

3. To protect the interests of consumers and

4. To ensure freedom of trade.

The Chairperson and every other member shall hold office as such for a term of five years from
the date on which he enters upon his office and shall be eligible for reappointment. The Central
Government is empowered to remove the chairperson and any member of the commission on
certain specific grounds and the procedure as specified in the Act. The Persons appointed shall
be whole time Members. The Chairperson has general power of superintendence, direction and
control over the administrative matters of the Commission2.


The Competition Commission will also have suo moto powers for initiating action against any
perceived infringement. The Commission shall be assisted by a Director General (DG) appointed
by the central government3.

The DG shall, when directed by the Commission assist the Commission in investigation into any
contravention of the provisions of the Act. The Commission shall hold the meetings for the
purpose of discharging the functions and all the questions which come up for before the
commission shall be decided by the majority of the members present and voting. The Raghavan
Committee had recommended that the Commission should be independent from political and
budgetary controls of the Government and that independent functioning of the members needs to
be ensured by having an appropriate provision for their removal, only with the concurrence of
the Supreme Court.

The Supreme Court has examined and explained the Law relating to Competition in India. The
Bench comprising the Chief Justice of India, Justice Swatanter Kumar and Justice KS
Radhakrishnan has discussed in great detail the law of competition, its aims and objectives, as
understood around the world. The Bench observed as under4;

The decision of the Government of India to liberalize its economy with the intention of removing
controls persuaded the Indian Parliament to enact laws providing for checks and balances in the
free economy. The laws were required to be enacted, primarily, for the objective of taking
measures to avoid anti-competitive agreements and abuse of dominance as well as to regulate
mergers and takeovers which result in distortion of the market. The earlier Monopolies and
Restrictive Trade Practices Act, 1969 was not only found to be inadequate but also obsolete in
certain respects, particularly, in the light of international economic developments relating to
competition law5. Most countries in the world have enacted competition laws to protect their free
market economies- an economic system in which the allocation of resources is determined solely
by supply and demand. The rationale of free market economy is that the competitive offers of
different suppliers allow the buyers to make the best purchase. The motivation of each



participant in a free market economy is to maximize self-interest but the result is favourable to

As far as American law is concerned, it is said that the Sherman Act, 1890, is the first
codification of recognized common law principles of competition law. With the progress of time,
even there the competition law has attained new dimensions with the enactment of subsequent
laws, like the Clayton Act, 1914, the Federal Trade Commission Act, 1914 and the Robinson-
Patman Act, 19366.

The overall intention of competition law policy has not changed markedly over the past century.
Its intent is to limit the role of market power that might result from substantial concentration in a
particular industry. The major concern with monopoly and similar kinds of concentration is not
that being big is necessarily undesirable. However, because of the control exerted by a monopoly
over price, there are economic efficiency losses to society and product quality and diversity may
also be affected. Thus, there is a need to protect competition.

The primary purpose of competition law is to remedy some of those situations where the
activities of one firm or two lead to the breakdown of the free market system, or, to prevent such
a breakdown by laying down rules by which rival businesses can compete with each other. The
model of perfect competition is the `economic model'7.

As far as the objectives of competition laws are concerned, they vary from country to country
and even within a country they seem to change and evolve over the time. However, it will be
useful to refer to some of the common objectives of competition law. The main objective of
competition law is to promote economic efficiency using competition as one of the means of
assisting the creation of market responsive to consumer preferences. The advantages of perfect
competition are three- fold: allocative efficiency, which ensures the effective allocation of
resources, productive efficiency, which ensures that costs of production are kept at a minimum
and dynamic efficiency, which promotes innovative practices8. These factors by and large have
been accepted all over the world as the guiding principles for effective implementation of
competition law.


In India, a High Level Committee on Competition Policy and Law was constituted to examine its
various aspects and make suggestions keeping in view the competition policy of India. This
Committee made recommendations and submitted its report on 22nd of May, 2002. After
completion of the consultation process, the Competition Act, 2002 (for short, the `Act') as Act 12
of 2003, dated 12th December, 2003, was enacted. As per the statement of objects and reasons,
this enactment is India's response to the opening up of its economy, removing controls and
resorting to liberalization9.

The Bill sought to ensure fair competition in India by prohibiting trade practices which cause
appreciable adverse effect on the competition in market within India and for this purpose
establishment of a quasi judicial body was considered essential. The other object was to curb the
negative aspects of competition through such a body namely, the `Competition Commission of
India' (for short, the `Commission') which has the power to perform different kinds of functions,
including passing of interim orders and even awarding compensation and imposing penalty.

The Director General appointed under Section 16(1) of the Act is a specialized investigating
wing of the Commission. In short, the establishment of the Commission and enactment of the
Act10 was aimed at preventing practices having adverse effect on competition, to protect the
interest of the consumer and to ensure fair trade carried out by other participants in the market in

The various provisions of the Act deal with the establishment, powers and functions as well as
discharge of adjudicatory functions by the Commission. Under the scheme of the Act, this
Commission is vested with inquisitorial, investigative, regulatory, adjudicatory and to a limited
extent even advisory jurisdiction. Vast powers have been given to the Commission to deal with
the complaints or information leading to invocation of the provisions of Sections 3 and 4 read
with Section 19 of the Act. In exercise of the powers vested in it under Section 64, the
Commission has framed Regulations called The Competition Commission of India (General)
Regulations, 2009 (for short, the `Regulations').


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Primarily, there are three main elements which are intended to be controlled by implementation
of the provisions of the Act, which have been specifically dealt with under Sections 3, 4 and 6
read with Sections 19 and 26 to 29 of the Act11. They are anti-competitive agreements, abuse of
dominant position and regulation of combinations which are likely to have an appreciable
adverse effect on competition.


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Powers and the Functions of the Competition Commission of India

The Commission has duty to eliminate the practices having adverse effect on competition, to
promote and sustain competition in the market, to protect the consumer interests and to ensure
freedom of trade carried on by other participants in the market in India. For the purpose of
discharging its duties or performing its functions, the Commission may enter into any
memorandum or arrangement with the prior approval of the Central Government, with any
agency of any foreign country12.

Observations of High Level Committee on Competition Regulatory Authorities;

Although significant steps have been taken to increase competition in various sectors of the
economy, a number of important things need to be done that are essential for a competition
policy. There is the need for a Competition Law Tribunal (Competition commission of India)
that will act as a watch dog for the introduction and maintenance of the Competition policy. It
will promote the introduction of the required changes in the policy environment. Competition
law should deal with anti competitive practices, particularly Caterlisation, price fixing and other
abuses of the market power and should regulate mergers13.

Further, the Act prescribes that the commission in discharge of its functions shall be guided by
the principles of natural justice and the concerned parties can appear before the commission in
person. It is relevant to note here that, the Draft regulation s of the Commission being issued in
terms of the Act attempt to provide the detailed procedure that the commission intends to follow
while implementing various provisions of the Act. The Draft Regulation provide for the
procedure to be adopted by the CCI in exercise of its function s and powers. The procedure
shown reflects a transparent process consistent with the principles of natural justice as enshrined
in the law.

The CCI have the powers not only to formulate own rules and regulations to govern the
procedures and conduct of its business and administration, but also have the powers to frame


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Regulations which could supplement the provision s of competition law. Since some of these
regulations which will supplement the economic conditions, the CCI could from time to time
review and amend these regulations. This will ensure consistency and would minimize the risk of
uneven application of law. These regulations would put trade and industry at advance notice on
how the competition commission was likely to look at certain aspects of their conduct and
behavior, i.e. what is acceptable and what is not acceptable . All policy direction s by the
Government should be binding on the Competition Commission.

Merger Commission

For those cases of mergers, amalgamation etc, which need to be examined on the touchstone of
competition, before the event takes place, the Act designed the Merger Commission, which will
be a part of the Competition Commission of India, but which will be a separate Bench to handle
pre-merger scrutiny cases14. This is to ensure that there is no avoidable delay in dealing with
such scrutiny, as delays can prevent bodies corporate from being competitive globally.

Procedure for enquiry into Anti-competitive Agreements by the Competition Commission

of India

The CCI upon receipt of reference or its own knowledge or information received under section
19 with regard to anti-competitive agreement has to come to a prima facie opinion that a case
exits and once it comes to such conclusion, it shall direct the Director General (DG) to make an
investigation. If the CCI does not find a prima facie case, it will close the case, pass an
appropriate Order and forward the Orders to the concerned persons. The Director General is
required to submit a report on his finding to the CCI within the time as may be specified by the
Order of the Commission.

The CCI has jurisdiction and is empowered to pass ex-parte interim Orders temporarily
restraining a party from carrying out an act until conclusion of an investigation or until further
orders. In case of cartel15;


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Impose penalty on each member of cartel up to three times of its profit for each year of
the continuance of agreement or ten percent of its turn over for each year of continuance
of such agreement , whichever is higher;
Modify the agreement;
Pass any order/ direction which deems fit;
Order division of the enterprise enjoying dominant position.

Procedure for inquiry into Abuse of Dominance by the Competition Commission of India:-

The Commission must arrive at a prima facie opinion that a case of abuse of dominance exists.
Once it comes to such conclusion, it shall direct the Director General DG to investigate into the
matter. If the Commission does not find a prima facie case, it will close the case, pass an
appropriate order and forward the orders to the concerned persons. DG is required to submit a
report on his findings to the Commission within the time as may be specified by the order of the

Procedure for Investigation of Combination by the Competition Commission of India

On coming to a prima facie opinion that the combination is likely to cause or has caused
appreciable adverse effect on competition within the relevant market, the commission shall issue
a show cause notice to parties to the combination calling upon them to show within 30 days of
receipt as to why investigation of such combination should not be conducted. After the receipt of
the response from the parties, the commission may call for a report from the DG within the time
as may be specified.

Orders that CCI can pass in respect of Combinations

The commission is empowered to pass the following orders after the due process:

a. Approve the combination where no appreciable adverse effect on competition in the relevant
market in India

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b. Direct that combination shall not take effect where the Commission is opinion that there is or
is likely to have appreciable adverse effect on competition;
c. Propose modification in the combination where the commission is of the appreciable adverse
effect cause or likely to be caused by the combination can be eliminated by the modification.

Once the Commission has passed an order a combination to be void, the acquisition, acquiring of
the control or merger or amalgamation shall be dealt by the authorities as if such acquisition,
acquiring control or merger or amalgamation had not taken place. It is worth to refer here that the
Commission is vested with the power to pass ex parte interim order temporarily restraining a
party from carrying out an act or until the conclusion of the investigation17.

Further, that any enterprise abusing the dominant position is outside India, the Commission is
empowered to:

Inquire into such abuse of dominance; and pass such orders as it may deem fir in
accordance with the provision of the Act. The Act further provides for imposing
significant penalties or imprisonment up to a period of three years or both in case parties
who have not preferred appeals against the orders of the Commission within the
stipulated period of 60 days have defaulted in complying with the Orders of the


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Duties & Powers of CCI

It shall be the duty of CCI to sustain competition in markets, protect freedom of trade
and interests of consumers in markets.
To sustain competition in markets, CCI has power to make inquiries in case of any
certain agreement, abuse of dominant position or any combination by any person or body
corporate on its own or on receipt of complaint by consumer or by reference of govt or
any authority18.
The CCI has powers to inquire into any of acts outside India that causes adverse impacts
on competition within India.
The Chairperson shall constitute benches to exercise powers of CCI and a bench shall
consist of at least 2 members include at least 1 judicial member (qualified to be a judge of
High Court. The Bench where Chairperson presides is known as Principal bench and
others are known as additional benches19.
The CCI has power to make inquiry (either Suo Motto or on request of any person,
consumer or trade association) and pass order for any certain agreement, abuse of
dominant position or any combination that cause adverse effect on competition within
The CCI can impose penalties on enterprises or on persons which shall not be > 10% of
turnover of enterprise or person in case of any offence as provided under this act. Also
CCI can order to any enterprise or person to pay compensation to person or enterprise
who suffered from acts of that person or enterprise.
The CCI can advise central govt for division of a dominant enterprise to ensure that it
does not abuse its position. Consequently, govt can take action either same as advised by
CCI or in other form as case may be21.


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The CCI has power equivalent to a civil court while discharging its functions in matters
such as summoning, producing evidences etc. Also has power to regulate its own
procedure such as place of sittings, timings etc.
Any person or enterprise can appeal to Supreme Court against order of CCI within 60
days from date of order. But no appeal shall be allowed if order passed by CCI involves
consent of both parties.
No Civil court can exercise jurisdiction on any matter under this act or any matter on
which CCI is empowered to exercise jurisdiction.


Chapter VII of the Indian Competition Act contains following specific provisions related to
Advocacy: Under Section 49 (1), Central Govt. or State Govt. while formulating a law or policy
may make a reference to the Commission, and the Commission shall within sixty days give its
opinion. The opinion given by the Commission are not binding upon the Govt. Under Section 49
(3), The Commission is mandated to take suitable measures for the promotion of competition
advocacy, creating awareness and imparting training about the competition issues22.

Control of Central Govt. over CCI

The Central Govt. has power to exempt any number of enterprises from provisions of act

as it may deems fit for security or interests of country or public.

The Central can issue directions to CCI and CCI is bound to follow that directions.

The Central Govt. can suspend & take charge over the CCI for period not exceeding 6
months in circumstances such as default made by CCI or situation beyond control of CCI
or in public interest etc. The Govt. shall reconstitute CCI after that period by fresh
appointments may be differed from previous one.


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Amendment 2007 (Key Features)

A Competition Appellate Tribunal (CAT) is established to hear and dispose of appeals

against certain decisions made by the CCI. Some of the decisions that can be challenged


The CCIs decision that an agreement is not causing adverse effect on competition or an

enterprise is not abusing its dominant position;

The CCIs order to discontinue the abuse of dominant position, modify agreements or

divide an enterprise;

The CCIs decision on whether a combination is having an adverse effect on competition,

and if so, the steps to be taken to rectify the matter.

The CAT would consist of a Chairperson and a maximum of two members, appointed by

the central govt from the panel of names proposed by the Selection Committee. The

Chairperson would have to be a Judge of the SC or the CJ of the HC.

Any person can appeal the decision of the CAT in the SC within 60 days from the date on

which the order of the CAT is communicated to the person.

The bill also repeals the MRTP Act, 1969 but MRTP Commission may continue work for

next 2 yrs on subjects it was working on before this act.

Competition Appellate Tribunal was established in 2009 which was the result of
amendment in 2007 to Competition Act, 2002. Arijit Pasayat was appointed as its
chairman. He was the retired judge of Supreme Court of India. CAT deals with the
appeals which come against decisions of Competition Commission of India23.


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Competition is the engine of free enterprise. Competition laws have been described as Magna
Carta of free enterprises. Competition is important for the preservation of economic freedom and
our free enterprise system. The need for competition law arises because market can suffer from
failures and distortions, and various players can resort to anti- competitive activities such as
cartels, abuse of dominance etc. which adversely impact economic efficiency and consumer
welfare. Thus, there is a need for competition law to provide a regulative force which establishes
effective control over economic activities. During the era in which the economies are moving
from close economies to open economies, an effective competition commission is essential to
ensure the continued viability of domestic industries, carefully balanced with attaining the
benefits of foreign investment increased competition. The Competition Commission of India is
established by Central Government to implement the Competition Law. The Commission is
Competition law enforcing agency. It has also been assigned to take a proactive stand to promote
Thus Competition Commission has two basic functions,
Administration and enforcement of competition law and competition policy to foster
economic efficiency and consumer welfare;
Involvement proactively in Governmental policy formulation to ensure that markets
remain fair, open, flexible and adaptable.
Competition Appellate Tribunal is also empowered to adjudicate the claim for compensation and
for hearing appeal against the direction of decision made or order passed by the Commission.

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