Sopore Law College

Competition Law
TITLE:
“PROTECTION OF PUBLIC AGAINST INJURY”

SUBMITTED TO
NADIA MA’AM

SUBMITTED By
NAREEN FAROOQ
18042128011
BA.llB 8Th SEMESTER

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Introduction.

The Competition Act came into force to promote and sustain competition in markets,
safeguarding consumer interests and ensuring trade freedom carried on by other
participants in the Indian market. The competition policy document of the Government of
India recognises that imperfections in markets may lead to suboptimal outcomes. These
imperfections need to be addressed through competition law and policy measures.
It was decided to enact a competition law in the country to promote fair competition by
prohibiting anti-competitive agreements, abuse of dominant position by enterprises and
regulation of combinations (mergers & acquisitions) that are highly likely to hurt
competition in India. The enactment of such a law will also fulfill our obligations as a
signatory to the International Competition Network.
Competition Act 2002
The Competition Act came into force to promote and sustain competition in markets,
safeguarding consumer interests and ensuring trade freedom carried on by other
participants in the Indian market. The competition policy document of the Government of
India recognises that imperfections in markets may lead to suboptimal outcomes. These
imperfections need to be addressed through competition law and policy measures.
It was decided to enact a competition law in the country to promote fair competition by
prohibiting anti-competitive agreements, abuse of dominant position by enterprises and
regulation of combinations (mergers & acquisitions) that are highly likely to hurt
competition in India. The enactment of such a law will also fulfil our obligations as a
signatory to the International Competition Network (ICN). The Competition Act 2002
was enacted by the Parliament of India and replaced The Monopolies and Restrictive
Trade Practices Act 1969. The Competition Act of 2002 came into effect on 20 May
2009, repealing the Monopolies and Restrictive Trade Practices Act, 1969. It was passed
in December 2002, and the act came into force on 14 January 2003. The Indian
Competition Commission (CCI) was established on 14 October 2003 to enforce the
provisions of the Competition Act, 2002. The CCI became fully functional with the
appointment of its Chairman, Mr Dhanendra Kumar, on 19 May 2009. Before the
Competition Act was enacted, there were no provisions in India regulating competition or
prohibiting anti-competitive agreements.

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History

The Government of India in April 1964 appointed the Monopolies Inquiry Commission
under the Chairmanship of Justice K. C Das Gupta, a judge of the Supreme Court, to
inquire into the extent and effect of concentration of economic power in private hands
and prevalence of monopolistic and restrictive trade practices in important sectors of
economic activity other than agriculture1. To regulate advertising, in 1984, Parliament
inserted a chapter on unfair trade practices in the Monopolies and Restrictive Trade
Practices Act, 1969.2
The Sachar Committee pointed out that advertisements and sales promotions having
become well established modes of modern business techniques, representations through
such advertisements to the consumer should not become deceptive. The Committee also
noted that fictitious bargain was another common form of deception and many devices
were used to lure buyers into believing that they were getting something for nothing or at
a nominal value for their money. The Committee recommended that an obligation is to be
cast on the seller to speak the truth when he advertises and also to avoid half truth, the
purpose being preventing false or misleading advertisements.
However, as the times changed, the need was felt for a new competition law. With
introduction of new economic policy and opening up of the Indian market to the world,
there was a need to shift focus from curbing monopolies to promoting competition in the
Indian market. As pointed out by the then Finance Minister in his budget speech in
February, 1999–

“The MRTP 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 promoting competition. The 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 constituted a High Level Committee under the
Chairmanship of Mr. SVS Raghavan [‘Raghavan Committee’] to advise a modern
competition law for the country in line with international developments and to suggest
legislative framework, which may entail a new law or suitable amendments in the MRTP
Act, 1969. The Raghavan Committee presented its report to the Government in May
2000.

1
https://books.google.com/books?id=xX0Ff6p_f5QC
2
Pathak, Akhileshwar (18 April 2016). "New law, statutory body imperative to foster fair trade practices in
India"

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On the basis of the recommendations of the Raghavan Committee, a draft competition
law was prepared and presented in November 2000 to the Government and the
Competition Bill was introduced in the Parliament, which referred the Bill to its Standing
Committee. After considering the recommendations of the Standing Committee, the
Parliament passed December 2002 the Competition Act, 2002.
Hence, the Monopolies and Restrictive Trade Practices Act, 1969 [MRTP Act] was
repealed and was replaced by the Competition Act, 2002, with effect from 1 September,
2009.

DUTIES, Section 18.

The Act establishes a Commission which is duty bound to protect the interests of free and
fair competition (including the process of competition), and as a consequence, protect the
interests of consumers. Broadly, the commission's duties are provided under s. 18 of the
Act which are as under.

● To prohibit the agreements or practices that have or are likely to have an

appreciable adverse effect on competition in a market in India, (horizontal and
vertical agreements / conduct);
● To prohibit the abuse of dominance in a market;
● To prohibit acquisitions, mergers, amalgamations etc. between enterprises which
have or are likely to have an appreciable adverse effect on competition in
market(s) in India.
● Ensure that the interests of consumers get protected in the marketplace.
● Implement the policies outlined in the Competition Act 2002.
● Educate advocates and other government bodies like state governments and
ministries about Competition Act 2002.
● To encourage market participants to engage in fair and constructive competition.
● Anti-competitive agreements should not get implemented.
● To work more efficiently with other regulatory agencies to ensure the continuation
of a free and fair market.
In addition to this, the Competition Act envisages its enforcement with the aid of mutual
international support and enforcement network across the world.

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Powers of Competition Commission of India.

The Competition Commission of India has the following powers under the Act:

● The Indian Competition Commission has the authority to investigate a specific

agreement and a company’s dominating position. It means that the Competition
Commission of India has the right to initiate an investigation into any alleged
violation of its anti-competitive regulatory prohibited, either on its authority or in
response to any information.
● The Competition Commission of India has the authority to investigate any
purchase or combination if it believes it will have an unfavourable effect on
competition in the Indian market.
● India’s Competition Commission has the authority to control its procedures
● In India, the Competition Commission can levy monetary penalties for violations
of the Competition Act, 2002.
● The Competition Commission of India has the authority to issue an interim order
in anti-competition agreements or dominant party abuse of position that harms
market competition.

The Competition Act, 2002 does not prescribe any qualification for the person who wants
to file information under Section 19(1) (a). There are no conditions which must be
fulfilled before information can be filed under the section. Further, there is nothing in the
plain language of Sections 18 and 19 read with Section 26(1) from which it can be
inferred that the Commission has the power to reject the prayer for an investigation into
the allegations involving violation of Sections 3 and 4 only on the ground that the
informant does not have personal interest in the matter or he appears to be acting at the
behest of someone else.3

Leading Case Laws

Maharashtra State Power Generation Company Ltd. v. M/s. Mahanadi Coalfields
Ltd. & Anr.
The information in this case was filed under section 19(1)(a) of the Act by two state
owned power generation companies in Maharashtra and Gujarat against CIL and its
subsidiaries alleging contravention of the section 4 of the Act. They alleged that OP were
dominant in the relevant market and were abusing this dominance primarily through the

3
Samir Agrawal v. Competition Commission of India (2021) 1 MLJ 364 (SC).

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terms and conditions imposed in the Fuel Supply Agreements. The court in this case
provided the constitutional mandate for state monopoly was raised by Opposite Parties
placing reliance on Supreme Court ruling in Ashoka Smokeless Coal (P) Ltd. v. Union of
India.4

Automobiles Dealers Association v. Global Automobiles Limited & Anr.

Here in this conflict, interpretation of section 19(3) of the Competition Act came before
the court. The language in section 19(3) states that the CCI shall have ‘due regard to all
or any’ of the aforementioned factors. However, in this case CCI held that it would be
prudent to examine an action in the backdrop of all the factors mentioned in Section
19(3)5.
i) Penalty on tyre manufacturers
The Competition Commission of India (CCI) in Re: Ministry of Corporate Affairs and
Apollo Tyres and Ors by an order dated August 31, 2018 (CCI Order) imposed a
collective penalty of ₹17.88 billion on five tyre companies and their association, i.e.,
Automotive Tyre Manufacturers Association (ATMA). The CCI had imposed the penalty
on the tyre companies and ATMA for indulging in cartelisation, and contravening the
provisions of Section 3 of the Competition Act, 2002 (the Act).

Aggrieved by the CCI Order, a writ petition was filed by MRF Ltd before the Madras
High Court which came to be dismissed. The matter reached before the division bench of
the High Court which on March 8, 2018 directed the CCI Order to be kept in a sealed
cover till the disposal of the writ appeal.
Eventually, vide an order dated January 6, 2022, the division bench of the High Court
dismissed the aforesaid appeal. Aggrieved with the decision of the division bench of High
Court, the tyre companies preferred SLPs before the Supreme Court. The Apex Court
refused to interfere with the CCI Order and left it open to the parties to pursue their
remedies in accordance with the law.

II. CCI has jurisdiction over lotteries:

In another recent decision (Competition Commission of India Vs State of Mizoram), the

Supreme Court held that while lotteries may be regulated commodity and res extra
commercium (things beyond commerce), the same would not take away the jurisdiction

4
Maharashtra State Power Generation Company Ltd. v. M/s. Mahanadi Coalfields Ltd. & Anr
5
Automobiles Dealers Association v. Global Automobiles Limited & Anr.

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of Competition Commission of India (CCI) to look into allegations of anti-competitive
activities in business or services related to lotteries. The Apex Court took note of the
expansive definition of ‘service’ under Section 2(u) of the Competition Act.
The word ‘service’ meant and included ‘service of any description’ which was to be
made available to potential users. The Apex Court opined that purchaser of a lottery
ticket to a potential user was a service made available by the selling agents in the context
of the Competition Act.
The lottery business could continue to be regulated by the Lotteries (Regulation) Act,
1998. However, if in the tendering process there was an anti-competitive element which
would require investigation by the CCI, that could not be prevented under the pretext of
the lottery business being res extra commercium. This was more so when a government
of state (State of Mizoram) decided to deal in lotteries.

Conclusion.
India and the world was going through a new phase of globalisation, liberalisation and
privatisation and these changing times were bringing newer challenges and the existing
MRTP Act had become obsolete in the modern era. Hence the new Competition Act
came into being in order to suit the need of the hour. The new act is based on the
regulation of conduct or behaviour of the players in the market and is result oriented
rather than being procedure oriented like the MRTP Act.
Further its main purpose is to protect and promote competition in the market.
Competition is very essential as it benefits: the Consumers as they get wider choice of
goods and services, better quality and improved value for money; it benefits the
Businesses as a level playing field is created and a redressal of anti-competitive practices
is available, the inputs are competitive priced, they tend to have greater productivity and
ability to compete in global markets and finally it also benefits the state as there is
optimal realisation from sale of assets and there is enhanced availability of resources for
social sector.
Thus, by protecting competition in the market the competition law helps benefit all the
players in the market which in turn is beneficial for the economy as a whole.

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