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COMPETITION ACT 2002This Act replaced Monopolies & Restrictive Trade Practices Act of 19691

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IntroductionThe new law on competition came into being with the passage of the Competition Act, 2002 (hereafter referred to as the Act) by the Parliament and assented to by the President on 13th January 2003. This Act seeks to replace MRTP Act, 1969. 2

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ObjectivesIn line with prevailing pattern of modern competition laws, the Act seeks to 1. prohibit anti-competitive agreements (including cartels), which determine prices or control or limit or share markets among players or result in bid rigging. 2. prohibit abuse of dominant position through unfair and discriminatory prices or conditions (including predatory pricing) limiting or restricting production, denying market access, etc. 3. regulate combination (acquisition, mergers and amalgamations etc.) that causes or likely to cause appreciable adverse effect on competition. 4. entrust the Competition Commission the responsibility of undertaking competition advocacy, awareness and training about competition issues. 3

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Restrictive Business practices covered by Competition Law Horizontal RestraintsPrice fixing or price rigging.Restraint of output Allocation of customers among suppliersPrevention of other suppliers to compete in the market.Bid-rigging (bidders collude and keep the bid)

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Restrictive Business practices covered by Competition LawVertical RestraintsExclusive dealing between producers and distributors.Producer suppliers only to sole-selling distributors .Supplier charges to different parties at different prices.Suppliers sell at low price to drive away competitors.5

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Remedies in Competition Act passing cease and desist order - providing agreements having appreciable adverse effect on competition to be void - imposing penalty upto 10% of the turnover or 3 times of cartelised profit, whichever is higher - awarding compensation or damages as per Section 34 - directing modifications to agreements - in case of combinations, they can be approved with or without modification or even be refused approval - in case of dominant enterprise, order can recommend division as provided in Section 28 of the Act6

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