NEED OF COMPETITION LAW

IIPM MUMBAI BATCH - A1 GROUP NO. 4

GROUP MEMBERS
JINESH SAKARIYA (22) KARAN RIJHWANI (24) KAUSHAL DALAL (26) MD SAMSHAD (28) MARLESH AMBILDHOK (30) MEGHNA AGARWAL (32) NAITIK AJMERA (34) PRASHANT SINGH (36) PUSHKAR CHATURVEDI (38) RAHUL CHAUDHURI (40)

FLOW
          

Competition Phase 1 (1947-1990) Phase 2 (1990-2007) Phase 3 (current scenario) MRTP Act Competition Act Competition Commission of India European Union Case study Conclusion Recommendation

COMPETITION


Is a Dynamic Concept A tool to mount market pressure to penalize laggards and to reward the enterprising

BACKGROUND


Competition (L compete) is an age-old phenomenon In olden days, competition Existed amongst cave-men Is also reflected in the Mahabharat In modern times, competition Has become a global phenomenon Starts right from Kindergarten & Nursery classes

WHAT CONSUMER WANT ?



Low price Good quality Wider choice Adequate supply

BENEFITS OF COMPETITION


To the Companies To The Consumer To The Government BUT . . .

BENEFITS OF COMPETITION


All these benefits are lost if Competition is UNFAIR or NON-EXISTANT Choice of CARS in the olden days  MTNL Monopoly : The position today  Airlines : INDIAN AIRLINES : JET : SAHARA  Mobiles : Price Wars  Indian Railways : The monopoly continues.


PHASE 1


After independence government adopted MRTP Act,1969 The major ideology behind the introduction of MRTP act was to give scope for future development of the Indian companies in the Indian market The Government of India wanted to make sure that the economy of the country was not going to be out ridden by the new companies that were going to begin their Business.

PHASE 1


The Situation across the whole economy had become very restrictive for the companies to work By the end of 1980s the economic situation had become very critical This led to the tremendous change in the economic policies of the country

PHASE 2


The post 1991 phase was that phase in which we have noticed a tremendous change in the Economy of our country India Introduction of the policies of L.P.G The change of the economic policy had taken place under then Prime Minister Shri P V Narsimha Rao

PHASE 2


The main objectives behind the introduction of the new economic policy were : - To overcome the Reservation of Industries - To overcome the entry and growth restrictions - To overcome restriction of foreign capital and technology

PHASE 3
Interview with Mr. Rajiv Agarwal ( CEO & Director of Essar Shipping, Ports & Logistics)
     

What competition are you facing in the current scenario ? Advantages and disadvantages of CCI in the competition act ? Is CCI helpful and if not then why ? Is CCI a full proof act ? Your view ? Your suggestions for the competition act ? Is it necessary to have such an act ?

MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT,1969 BROUGHT INTO FORCE IN 1970

THE MRTP ACT1969



Prevention of concentration of economic power Prohibition of monopolistic trade practices Prohibition of restrictive trade practices Prohibition of unfair trade practices

LIMITATIONS OF THE ACT



Command and Control Policy absolute "Growth Objective Failed to cover all Aspects- WTO agreements, relation to Foreign Investment, Intellectual Property Rights, subsidies, anti-dumping measures Lack of Awareness about the Act Does not prohibit restrictive and unfair trade practices(penalties)

LIMITATIONS OF THE ACT



Lack of independent powers Cease and Desist orders-no prevent or punish orders

EXAMPLES

COMPETITION ACT2002
Def.

COMPETITION ACT2002


To prevent practices having adverse effect on competition To promote and sustain competition To protect interests of consumers To ensure freedom of trade carried on by other participants in markets

OBJECTIVES OF THE ACT



To check anti-competitive practices To prohibit abuse of dominance Regulation of combinations To provide for the establishment of Competition Commission of India (CCI), a quasi-judicial body

FEATURES OF THE ACT

Anti-competition agreements
Under Sec.3


Horizontal Agreements Vertical Agreements Example

FEATURES OF THE ACT

Abuse of Dominance


Under Sec.4 No enterprise shall abuse its dominant position There shall be an abuse of dominant position under subsection (1) if an enterprise Directly or indirectly, imposes unfair or discriminatory condition in purchase or sale Example

FEATURES OF THE ACT

Combination Regulation


Designed to regulate the operation and activities of Combinations, a term which contemplates acquisition, mergers, take over's or amalgamations No person or enterprise shall enter into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India and such a combination shall be void

FEATURES OF THE ACT

Competition advocacy


creates a culture of competition The Regulatory Authority under the Act, namely, Competition Commission of India (CCI), in terms of the advocacy provisions in the Act, is enabled to participate in the formulation of the country's economic policies and to participate in the reviewing of laws related to competition at the instance of the Central Government Example

COMPETITION COMMISSION OF INDIA (CCI)



Apex body vested with the responsibility of eliminating practices having an adverse effect on competition, promoting and sustaining competition, protecting the interest of the consumers, and ensuring freedom of trade carried on by other participants in India Is a body corporate and independent entity possessing a common seal with the power to enter into contracts and to sue in its name

POWERS OF CCI


To award compensation To impose fines on the guilty To order division of dominant undertaking Power to order de-merger

EUROPEAN UNION


Collusion and Cartels Dominance and Monopoly Mergers and Acquisitions Leniency Policy

CASE STUDY
Tata Motors enters into Definitive Agreement with Ford for purchase of Jaguar Land Rover


points related to the case study ??

OUTCOME
??????

CASE STUDY
Ranbaxy takeover by Daiichi - Sankyo


Daiichi- Sankyo has acquired 52.5% stake In Ranbaxy Under the term of the deal, Ranbaxy will Become the subsidiary of Japanese company Ranbaxy - access to Daiichis expertise in research Daiichi - benefit from low-cost production

OUTCOME
?????

CONCLUSION


We have observed that both these act are still not sufficient for Indian market We have discussed and tried to find out what all other problems companies are facing with the current competition act (MRTP and CCI) ANY OTHER ???

THANK YOU