COMPETITION ACT,

2002
INTRODUCTION
• An Act to provide, keeping in view of the economic development of
the country, for the establishment of a Commission to prevent
practices having adverse effect on competition, to promote and
sustain competition in markets, to protect the 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.
• (1) This Act may be called the Competition Act, 2002.
• (2) It extends to the whole of India except the State of Jammu and
Kashmir*.
• (3) It shall come into force on such date as the Central Government
may, by notification in the Official Gazette, appoint: Provided that
different dates may be appointed for different provisions of this Act
and any reference in any such provision to the commencement of this
Act shall be construed as a reference to the coming into force of that
provision.
FEATURES OF THE ACT
The focus of the new law is towards the following areas affecting competition namely:
• 1. Prohibition of certain agreements, which are considered to be anticompetitive in nature. Such
agreements [namely tie in arrangements, exclusive dealings (supply and distribution), refusal to
deal and resale price maintenance] shall be presumed as anti- competitive if they cause or are
likely to cause an appreciable adverse effect on competition within India.
• 2.Prohibition of Abuse of dominant position- If an enterprise by imposing unfair or discriminatory
conditions or limiting and restricting production of goods or services or indulging in practices
resulting in denial of market access or through in any other mode are prohibited.
• 3. Regulation of combinations which cause or are likely to cause an appreciable adverse affect on
competition within the relevant market in India is also considered to be void.
• 4. Entrust Competition Commission of India the responsibility of undertaking competition
advocacy, awareness and training about competition issues.
Objectives of the Act
• Facilitate & Foster Competition
• Establish a Commission to prevent practices having adverse effect on
competition
• Promote and sustain competition in markets
• Protect the interests of consumers
• Ensure freedom of trade in the Indian markets
PROHIBITION OF CERTAIN AGREEMENTS, ABUSE OF
DOMINANT POSITION AND REGULATION OF COMBINATIONS
1.Anti competitive agreements (Section 3)
It shall not be lawful for any enterprise or association of enterprises or person or association of persons to
'enter' into an agreement in respect of production, supply of goods or provision of services, which causes or is
likely to cause an appreciable adverse effect on competition within India. All such agreements entered into in
contravention of the aforesaid prohibition shall be void. Any agreement entered into between enterprises or
associations of enterprises or persons or associations of persons or between any person and enterprise or
practice carried on, or decision taken by, any association of enterprises or association of persons, including
cartels, engaged in identical or similar trade of goods or provision of services, shall be presumed to have an
appreciable adverse effect on competition, which—
(a) directly or indirectly determines purchase or sale prices;
(b) limits or controls production, supply, markets, technical development, investment or provision of services;
(c) shares the market or source 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;
(d) directly or indirectly results in bid rigging or collusive bidding.
However, any agreement entered into by way of joint ventures, if such agreement increases efficiency in
production, supply, distribution, storage, acquisition or control of goods or provision of services, shall not be
considered to be an anti-competitive agreement.
2.Abuse of dominant position
(Section 4)
• Sub-section (1), prohibits abuse of dominant position by any enterprise or group. There shall be abuse of dominant
position if an enterprise or a group,
• - (a) directly or indirectly, imposes unfair or discriminatory—
(i) condition in purchase or sale of goods or services; or
(ii) price in purchase or sale (including predatory price) of goods or service, or ["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.] T
The unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or
discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause (ii)
shall not include such discriminatory condition or price which may be adopted to meet the competition; or
(b) limits or restricts—
(i) production of goods or provision of services or market therefor; or
(ii) technical or scientific development relating to goods or services to the prejudice of consumers; or
(c) indulges in practice or practices resulting in denial of market access in any manner; or
(d) makes conclusion of 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; or (e) uses its
dominant position in one relevant market to enter into, or protect, other relevant market. D
3.Combination (Section 5)
• Section 5 deals with combination of enterprises and persons. The acquisition of one or more enterprises by
one or more persons or merger or amalgamation of enterprises shall be a combination of such enterprises
and persons or enterprises, if—
• (a) any acquisition where—
(i) the parties to the acquisition, being the acquirer and the enterprise, whose control, shares, voting rights or
assets have been acquired or are being acquired jointly have,
— (A) either, in India, the assets of the value of more than rupees one thousand crores or turnover more than
rupees three thousand crores; or
(B) in India or outside India, in aggregate, the 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 atleast rupees fifteen hundred crores in India; or
(ii) the group, to which the enterprise whose control, shares, assets or voting rights have been acquired or are
being acquired, would belong after the acquisition, jointly have or would jointly have,
— (A) either in India, the assets of the value of more than rupees four thousand crores or turnover more than
rupees twelve thousand crores; or
(B) in India or outside India, in aggregate, the 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
• (b) acquiring of control by a person over an enterprise when such person has already direct or indirect
control over another enterprise engaged in production, distribution or trading of a similar or identical or
substitutable service, if:-
• (i) the enterprise over which control has been acquired along with the enterprise over which the acquirer
already has direct or indirect control jointly have,
- (A) either in India, the assets of the value of more than rupees one thousand crores or turnover more than
rupees three thousand crores; or
(B) in India or outside India, in aggregate, the 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 dollars,
including at least rupees fifteen hundred crores in India; or
(ii) the group, to which enterprise whose control has been acquired, or is being acquired, would belong after
the acquisition, jointly have or would jointly have,
- (A) either in India, the assets of the value of more than rupees four thousand crores or turnover more than
rupees twelve thousand crores; or
- (B) in India or outside India, in aggregate, the 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; or
Competition Commission of
India
• Establishment of Commission (Section 7)
Section 7 provides for the establishment of the Competition
Commission of India. The Commission shall be a body corporate by the
aforesaid name having perpetual succession and a common seal with
power to acquire, hold and dispose of property and to contract and
shall sue or be sued. The place of head office of the Commission shall
be decided by the Central Government. Further, the Commission may
establishment offices at other places in India.
COMPOSITION OF COMMISSION (SEC
8)
• The Commission shall consist of the Chairperson and not less than
two and not more than six other Members, to be appointed by the
Central Government. The Chairperson and every other Member shall
be a person of ability, integrity and standing and who has special
knowledge of, and such professional experience of not less then 15
years in international trade, economics, business, commerce, law,
finance, accounting, 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 Chairperson and other members shall be whole
time members.
Duties of Commission (Section 18)
This section provides that it shall be the duty of the Commission
• to eliminate practices having adverse effect on competition,
• to promote and sustain competition in markets in India,
• to protect the interests of consumers and
• to ensure freedom of trade carried on by other participants in
markets in India.
The Commission may for the purpose of discharging its duties or
performing its functions under this Act, enter into any memorandum or
arrangement, with the prior approval of the Central Government, with
any agency of any foreign country.
What are the Functions and Role of CCI?
• To eliminate practices having adverse effects on competition, protect the interests of
consumers and ensure freedom of trade in the markets of India.
• To give opinion on competition issues on a reference received from a statutory authority
• To undertake competition advocacy, create public awareness and impart training on
competition issues.
• Consumer Welfare: To make the markets work for the benefit and welfare of consumers.
• Ensure fair and healthy competition in economic activities in the country for faster and
inclusive growth and development of the economy.
• Implement competition policies with an aim to effectuate the most efficient utilization
of economic resources.
• Effectively carry out competition advocacy and spread the information on benefits of
competition among all stakeholders to establish and nurture competition culture in the
Indian economy.