Competition Act 2002

The competition Act was enacted in December 2002. this act aim at:
1. Promoting competition through prohibition of anti competitive practices
2. Abuse of dominance and
3. Regulation of combinations beyond a certain size.

Monopolies and Restrictive Trade Practices (MRTP) act, 1969 was replaced with
competition act.

Objectives of the Act:

1. To prevent practices having adverse effect on competition

2. To promote and sustain competition in market
3. To protect the interest of consumers.
4. To ensure freedom of trade carried on by the other participants in the market.
Main provisions of the act:
1. Prohibition of anti-competitive agreements.
2. Prevention of abuse of dominant position.
3. Regulation of combinations.
4. Establishment of Competitive commission and competition appellate tribunals
Competition commission and competition appellate tribunal:

It consisting of a chairperson and not less than two and not more than six other members.

Functions:
1. It act as a market regulator for preventing and regulating anti-competitive practices in the
country.
2. It also have advisory and advocacy role as a regulator.

Duties of the commission:

1. Eliminate practices having adverse effect on competition

2. Promote and sustain competition
3. Protect the interests of consumers
4. Ensure freedom of trade carried on by other participants, in market in India.

The commission is empowered for imposition of penalty for contravention of its orders.
Anti-Competitive Agreements:

According to this act, agreements or decisions which have any of the following effects
shall be presumed to have an appreciable adverse effect on competition:
1. Directly or indirectly determining the purchase or sales prices.
2. Limiting production, supply, markets, technical developments, investment.
3. Directly or indirectly resulting in bid rigging or collusive bidding.

Agreements causes or likely to cause adverse effect:

1. tie-in arrangement
2. Exclusive supply agreement
3. Exclusive distribution agreement
4. Refusal to deal
5. Resale price maintenance.
Abuse of dominant position:
Section 4 of the competition act lays down that no enterprise shall abuse its dominant
position. The following cases are considered abuse of dominant position:

1. Directly or indirectly impose unfair or discriminatory

(a) conditions in purchase or sale of goods or services
(b) price in purchase or sale of goods or services
2. Limits or restricts
(a) production of goods or provision of services.
(b) technical and scientific development
3. Indulge in practices resulting in denial of market access
4. Uses its dominant position in one relevant market to enter or protect.
Division of enterprise:
according to section 28 of the Act, the competition commission may order the
division of the enterprise enjoying dominant position to ensure that such enterprise
does not abuse the dominant position.

Regulation of Combinations:

The act provides for regulation of combination through mergers and acquisition
which causes an appreciable effect on competition.

Power to exempt:
The central government is empowered to exempt from the application of act, or any
provision thereof.