COMPETITION LAW IN

INDIA
 INTRODUCTION
Competition law in India regulates anti-competitive practices to
ensure fair market competition.
It aims to prevent monopolies, promote consumer welfare, and
encourage economic efficiency.
The Competition Commission of India (CCI) enforces the law,
replacing the outdated Monopolies and Restrictive Trade Practices
(MRTP) Act, 1969.
Governed primarily by the Competition Act, 2002, which came into
full effect in 2009.
Covers anti-competitive agreements, abuse of dominant position,
and regulation of mergers & acquisitions.
EVOLUTION OF COMPETITION LAW IN
INDIA
Pre-1991 Era:
Monopolies and Restrictive Trade Practices (MRTP) Act, 1969,
was India’s first competition law, focusing on preventing
monopolistic and restrictive trade practices.
It lacked provisions for regulating anti-competitive agreements
and abuse of dominance effectively.
The economy was highly regulated with government control
over industries.
Post-Liberalization (1991-2002):

Economic liberalization led to a shift from a controlled economy to

a market-driven one.
Need for a modern competition law to address globalization and
market competition.
The Raghavan Committee (1999) recommended replacing the
MRTP Act with a new law.
Introduction of the Competition Act, 2002:

Enacted to replace the MRTP Act and align with global competition
practices.
Established the Competition Commission of India (CCI) in 2003.
Initially, only provisions on anti-competitive agreements and abuse of
dominance were enforced in 2009.
Further Amendments & Developments:
2011 Amendment: Introduced merger control regulations for
Mergers & Acquisitions (M&A).
2017 Developments: Proposed a National Competition Policy for
better enforcement.
2023 Amendment (Competition Amendment Act, 2023):
Reduced merger review timelines.
Introduced deal-value thresholds for merger scrutiny.
Strengthened CCI’s enforcement powers and penalties.
 IMPORTANT DEFINITIONS
1. Agreement
Section 2(b) of Competition Act 2002 "agreement" includes any
arrangement or understanding or action in concert,--
(i) whether or not, such arrangement, understanding or action is
formal or in writing; or
(ii) whether or not such arrangement, understanding or action is
intended to be enforceable by legal proceedings.
2. Cartel
Section 2 (c) of Competition act 2002,"cartel" includes an association
of producers, sellers, distributors, traders or service providers who, by
agreement amongst themselves, limit, control or attempt to control the
production, distribution, sale or price of, or, trade in goods or provision
of services.

3. Commission
Section 2(e) "Commission" means the Competition Commission of
India established under sub-section (1) of section 7;
4. Consumer

Section 2(f) "consumer" means any person who--

(i) buys any goods for a consideration which has been paid or promised or partly
paid and partly promised, or
under any system of deferred payment and includes any user of such goods other
than the person who buys such goods for consideration paid or promised or partly
paid or partly promised,
or under any system of deferred payment when such use is made with the approval
of such person, whether such purchase of goods is for resale or for any commercial
purpose or for personal use;
(ii) hires or avails of any services for a consideration which has been paid or promised
or partly paid and partly promised,
or under any system of deferred payment and includes any beneficiary of such
services other than the person who hires or avails of the services for consideration
paid or promised,
or partly paid and partly promised, or under any system of deferred payment, when
such services are availed of with the approval of the first-mentioned person whether
such hiring or availing of services is for any commercial purpose or for personal use;
5. Enterprise
Section 2(h) "enterprise" means a person or a department of the
Government, including units, divisions, subsidiaries, who or which is,
or has been, engaged in any economic activity, relating to the
production, storage, supply, distribution, acquisition or control of articles
or goods,
or the provision of services, of any kind,
or in investment, or in the business of acquiring, holding, underwriting
or dealing with shares, debentures or other securities of any other body
corporate, either directly or through one or more of its units or divisions
or subsidiaries,
but does not include any activity of the Government relatable to the
sovereign functions of the Government including all activities carried on
by the departments of the Central Government dealing with atomic
energy, currency, defence and space.
6. person

Section 2 (l) "person" includes—

(i) an individual;
(ii) a Hindu undivided family;
(iii) a company;
(iv) a firm;
(v) an association of persons or a body of individuals, whether incorporated or not, in
India or outside India;
(vi) any corporation established by or under any Central, State or Provincial Act or a
Government company as defined in [clause (45) of section 2 of the Companies Act,
2013 (18 of 2013)
(vii) any body corporate incorporated by or under the laws of a country outside India;
(viii) a co-operative society registered under any law relating to co-operative
societies;
(ix) a local authority;
(x) every artificial juridical person, not falling within any of the preceding sub-clauses;
Section 2(m) "practice" includes any practice relating to the
carrying on of any trade by a person or an enterprise;
Section 2(o) "price", in relation to the sale of any goods or to the
performance of any services, includes every valuable
consideration, whether direct or indirect, or deferred, and includes
any consideration which in effect relates to the sale of any goods
or to the performance of any services although ostensibly relating
to any other matter or thing;
Section 2(r) "relevant market" means the market which may be
determined by the Commission with reference to the relevant
product market or the relevant geographic market or with
reference to both the markets;
Section 2(s) "relevant geographic market" means a market
comprising the area in which the conditions of competition for
supply of goods or provision of services or demand of goods or
services are distinctly homogenous and can be distinguished from
the conditions prevailing in the neighbouring areas;
Section 2(u) "service" means service of any description which is
made available to potential users and includes the provision of
services in connection with business of any industrial or
commercial matters such as banking, communication, education,
financing, insurance, chit funds, real estate, transport, storage,
material treatment, processing, supply of electrical or other energy,
boarding, lodging, entertainment, amusement, construction, repair,
conveying of news or information and advertising;
Section 2(w) "statutory authority" means any authority, board,
corporation, council, institute, university or any other body
corporate, established by or under any Central, State or Provincial
Act for the purposes of regulating production or supply of goods or
provision of any services or markets therefor or any matter
connected therewith or incidental thereto;
Section 2(x) "trade" means any trade, business, industry,
profession or occupation relating to the production, supply,
distribution, storage or control of goods and includes the provision
of any services;
 ANTI COMPETITIVE PRACTICES AND
AGREEMENT
Section 3 - Anti-competitive agreements

Anti-competitive agreements restrict fair competition in the market.

Governed by the Competition Act, 2002 in India.
Agreements that cause "Appreciable Adverse Effect on
Competition" (AAEC) are prohibited.
Anti-competitive agreements harm fair market practices.
Competition Commission of India (CCI) regulates and penalizes
violations.
No entity (enterprise, association, or person) shall enter into an
agreement regarding:
Production
Supply
Distribution
Storage
Acquisition
Control of goods or services
If such agreements impact competition in India, they are void.
Types of Anti-Competitive Agreements
1. Horizontal Agreements (Between competitors)
2. Vertical Agreements (Between different levels of the supply
chain)

Horizontal Agreements (Presumed to have AAEC)

Agreements between entities engaged in similar trade that:
Fix prices (directly or indirectly)
Limit production, supply, or markets
Divide markets geographically or by customer type
Engage in bid-rigging or collusive bidding
Vertical Agreements (May Have AAEC)
Agreements at different stages of the production chain that may
restrict competition:
Tie-in Arrangements – Forcing a buyer to purchase another product
as a condition of sale.
Exclusive Dealing – Restricting a buyer/seller from dealing with
competitors.
Exclusive Distribution – Limiting supply or market allocation.
Refusal to Deal – Restricting entities from selling or buying from
certain parties.
Resale Price Maintenance – Imposing restrictions on resale pricing.
Exceptions to Prohibition
Protection of Intellectual Property Rights (IPR) under:
Copyright Act, 1957
Patents Act, 1970
Trade Marks Act, 1999
Geographical Indications Act, 1999
Designs Act, 2000
Semiconductor IC Layout-Design Act, 2000
Other relevant IP laws
Export Agreements – Allowed if they relate exclusively to exports.
ABUSE OF DOMINANT POSITION
Section 4 : Abuse of Dominant Position

A firm’s ability to act independently of market forces.

Prevent unfair business practices that harm competition.
No enterprise or group shall abuse its dominant position in the market.
Abuse occurs when dominance leads to unfair market practices.

Key definition :
1. Dominant Position: A firm’s strength in a market that allows it to:
 Operate independently of competitors.
 Influence market conditions in its favor.

2. Predatory Pricing: Selling goods/services below cost to eliminate competition.

What Constitutes Abuse of Dominance?
Abuse of dominance occurs if a firm:
Imposes unfair or discriminatory conditions
 In the purchase or sale of goods/services.
Imposes unfair or discriminatory prices
 Including predatory pricing (selling below cost to eliminate competition).
Limits or restricts
 Production, supply, or market access.
 Technical or scientific development to harm consumers.

Denies market access to competitors in any manner.

Ties contracts with irrelevant supplementary obligations.
Uses dominance in one market to enter or protect another market.
Exceptions
Fair competition-driven pricing or conditions are not considered
abuse.
Competitive actions taken to meet market competition are allowed.

Impact of Abuse of Dominance

Harms competition and eliminates small players.
Reduces consumer choices.
Prevents innovation and market efficiency.
Increases monopoly power, leading to higher prices
 REGULATION OF COMBINATION
Section 5 : Combination
Combination refers to:
 Acquisition of an enterprise.
 Merger or amalgamation of enterprises.
 Regulated to prevent anti-competitive effects.

Key Definitions
 Control: Ability to influence management, affairs, or strategic decisions.
 Group: Two or more enterprises where one:
 Holds 26%+ voting rights, OR
 Controls board appointments, OR
 Influences management or policies.
 Turnover: Revenue from the latest audited accounts, excluding intra-group sales & indirect
taxes.
 Value of Transaction: Includes all direct, indirect, or deferred considerations.
A transaction qualifies as a combination if it meets any of these thresholds:
(a) Acquisition
If acquirer + acquired entity have:
 In India:
 Assets > ₹1,000 crore OR Turnover > ₹3,000 crore.
 Global (including India):
 Assets > $500 million (with at least ₹500 crore in India) OR
 Turnover > $1,500 million (with at least ₹1,500 crore in India).
(b) Acquisition of Control over Similar Business
If acquirer already has control over a similar business:
 Same financial thresholds as above apply.

(c) Mergers & Amalgamations

If the resulting enterprise has:
 In India:
 Assets > ₹1,000 crore OR Turnover > ₹3,000 crore.
 Global (including India):
 Assets > $500 million (with at least ₹500 crore in India) OR
 Turnover > $1,500 million (with at least ₹1,500 crore in India).
(d) Transaction Value Test (New Addition)
If the value of transaction (acquisition, merger, or amalgamation) exceeds ₹2,000 crore, and
Exemptions : Section 5(e)
Combinations are not regulated if:
The target enterprise's assets or turnover in India are below
prescribed limits.
The transaction promotes efficiency without adverse competition
effects.

Regulatory Implications
Mandatory notification to Competition Commission of India (CCI).
CCI reviews combinations to prevent anti-competitive effects.
Transactions can be approved, modified, or blocked if found anti-
competitive.
Section 6 : Regulation of Combinations
Prohibition of Anti-Competitive Combinations
No person or enterprise shall enter into a combination that:
Causes or is likely to cause an appreciable adverse effect on
competition (AAEC) in India.
Such a combination is void.
No combination shall take effect until 150 days have passed
from notification to CCI, or
CCI has approved or blocked the transaction under Section 31.
Certain pre-defined combinations can be notified under a separate
fast-track process.
Upon filing & acknowledgment by CCI, the combination is deemed
approved.
If CCI finds incomplete or misleading information, the approval is
void ab initio.
CCI can pass necessary orders after hearing the parties.
Exemptions (Sections 6(7)–6(9))
Certain combinations may be exempted from notification if they meet
prescribed criteria.
Section 6 does not apply to:
Share subscription, financing facilities, or acquisitions by:
 Public Financial Institutions (PFIs).
 Foreign Portfolio Investors (FPIs).
 Banks.
 Category I Alternative Investment Funds (AIFs).
COMPETITION COMMISSION OF INDIA (CCI)
SECTION 7-17
Establishment of CCI
CCI is a statutory body established under the Competition Act,
2002.
It ensures fair competition and prevents anti-competitive
practices in India.
Headquarters: New Delhi (can establish offices elsewhere).
Composition of CCI (Section 8)

1 Chairperson + 6 Members appointed by the Central Government.

Members must have experience in competition law, business,
economics, finance, or public affairs.
Eligibility Criteria: Integrity, ability, and expertise in relevant fields.
Chairperson & Members appointed by the Central Government.
Selection Committee Includes:
 Chief Justice of India or nominee (Chairperson).
 Secretary of Ministry of Corporate Affairs.
 Experts from law, economics, business, or public policy.
Term & Removal (Sections 10 & 11)
Tenure: 5 years or until the age of 65 years, whichever is earlier.
Reappointment allowed for additional terms.
Removal by Central Government on grounds of:
Misconduct.
Insolvency.
Physical or mental incapacity.
Conviction of an offense involving moral turpitude.
Duties & Functions of CCI (Section 18)

Prevent anti-competitive practices and ensure fair competition.

Promote consumer welfare and protect market integrity.
Regulate mergers and acquisitions to avoid market dominance.
Advise the government on competition-related policies.
Promote competition advocacy, awareness, and training.
Meetings & Decision-Making (Sections 12 & 13)
CCI follows a majority decision-making process.
Meetings presided over by the Chairperson.
Quorum: 3 members (including Chairperson).
Decisions made based on majority vote.
 POWERS, RIGHTS AND INQUIRY
Powers of CCI
Regulatory & Investigative Powers (Sec 19–27)
 Investigates anti-competitive agreements & abuse of dominance.
 Regulates mergers & acquisitions to prevent adverse competition
effects.
Enforcement & Penalizing Powers
 Can impose penalties for anti-competitive practices (Sec 27).
 Power to cease & desist orders against violators.
Advisory & Advocacy Powers (Sec 49)
 Advises government & statutory authorities on competition policies.
 Conducts awareness programs for businesses & consumers.

Case Law: Google Android Case (2023) – ₹1,337 Cr penalty for

abuse of dominant position in Android OS licensing.
Rights of CCI
Right to Conduct Inquiries (Sec 19)
 Suo moto or based on complaints, CCI can investigate anti-competitive
practices.
Right to Summon & Examine Witnesses (Sec 36)
 Similar to a civil court; can call for evidence, documents, and expert
opinions.
Right to Impose Penalties (Sec 27)
 Can impose fines of up to 10% of a company’s turnover for violations.
Right to Regulate Mergers (Sec 6 & 20)
 Power to approve, reject, or modify combinations (M&As) exceeding
prescribed thresholds.

Case Law: Flipkart-Walmart Merger (2018) – Examined for potential

adverse competition effects.
Inquiry Process of CCI (Sec 19–27)
Step 1: Initiation of Inquiry
Based on complaints, references, or suo moto action.
Director General (DG) appointed for detailed investigation.
Step 2: Investigation & Findings
Collection of evidence, interviews, and forensic data analysis.
Opportunity for the accused to present their case.
Step 3: CCI Decision & Orders
Can impose fines, direct modifications, or pass cease-and-desist orders.
Can recommend structural remedies like breaking monopolistic control.
Case Law: DLF Ltd. vs CCI (2010) – ₹630 Cr penalty for abusing
dominance in real estate.
1. Amazon-Future Retail Case (2021)
Issue: Alleged anti-competitive agreements in retail acquisition.
Verdict: CCI suspended Amazon’s 2019 deal with Future Coupons.

2. Coal India Limited Case (2014)

Issue: Unfair contract terms imposed on power producers.
Verdict: ₹1,773 Cr penalty & order to revise contracts.

3. Cartelization – Cement Cartel Case (2021)

Issue: 11 cement companies colluded to fix prices & restrict supply.
Verdict: CCI imposed a ₹1,164 Cr fine on top companies like UltraTech &
ACC.
Found guilty of price coordination & reducing market competition.