comprtition act, 2002

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Objectives of the Competition Act, 2002

To prevent practices having adverse effect onCompetition.

To promote and sustain competition inmarket.

To protect the interests of consumers.

To ensure freedom of trade carried on by otherparticipants in markets in India.

Presented By:

1)Ankita Vekariya2)Pradip Mishra

3)Apexa Patel


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Objectives of the Competition Act, 2002

To prevent practices having adverse effect onCompetition.

To promote and sustain competition inmarket.

To protect the interests of consumers.

To ensure freedom of trade carried on by otherparticipants in markets in India.


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Copyright - Dr. S. Chakravarthy 3


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THE COMPETITION ACT, 2002

What and how

WHAT?

Main Focus areas of the Act :s Prohibition of Anti Competitive Agreements

s Prohibition of Abuse of Dominance

s Regulation of Combinations

HOW?Through establishment of a Competition Commission of India

(CCI) and Competition Appellate Tribunal (CAT)


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New Law

s A New Law Called Competition Act 2002 Has Been Enacted ToReplace The Extant Law, Mrtp Act 1969

s The New Law Was Challenged In The Supreme Court On The GroundThat The Chairperson Should Only Be From The Judiciary

s The New Law Has Been Amended On 10 Sept 2007 By TheParliament

s New Law Likely To Be Enforced Shortly

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Main Focus areas of the Act :

(A) Anti-competition Agreements

(B) Abuse Of Dominance

(C) Mergers, Amalgamations, Acquisitions And Take-overs

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(A). Anti-competitive Agreements

s All Anti-competitive agreements are void, i.e.,agreements which could restrict competition, vertical orhorizontal

s Rule of Reason to be applied for determining legality ofan agreement

s Certain agreements between same or similar enterprisesregarding prices or quantities, on bidding, or to share ordivide markets areper se illegal


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Anti - Competition Agreements

Horizontal restraints

s Cartels {Fixing Purchase Or SalePrices (Export Cartels Exempted) }

s

Bid-rigging (Collusive Tendering)s Sharing Markets By Territory,

Type Etc.

s Limiting Production, Supply,Technical Development

The Above Are Per Se Illegal.

Vertical restraints

s Tie-in Arrangements

s Exclusive Supplies

s Exclusive Distribution

s Refusal To Deal

s Resale Price Maintenance

Adjudication By Rule Of Reason

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(B) Abuse Of Dominance

s An entity is considered to be in a dominant position if it is

able to operate independently of competitive forces in India,

or is able to affect its competitors or consumers or the

relevant market in India in its favor.s The Competition Act prohibits an entity from abusing its

dominant position.

s Abuse of dominance would include imposing unfair or

discriminatory conditions or prices in purchase/sale ofgoods or services and predatory pricing, limiting or

restricting production / provision of goods/services,

technical or scientific development, indulging in practices

resulting in denial of market access etc.9


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(C) . Regulation Of Combinations:

s An acquisition where transferor and transferee jointly have,or a merger or amalgamation where the resulting entity has

following,

( a ) assets valued at more than Rs. 10 billion or turnover ofmare than Rs. 30 billion, in India; or

( b ) assets valued at more than USD 500 million in India andabroad, of which assets worth at least Rs. 5 billion are inIndia, or turnover of mare than USD 1500 million, of whichturnover in india should be at least Rs.15 billion.


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s An Acquisition where the group to which the

acquired entity would belonging jointly has, or a

merger or amalgamation where the group to which the

resulting entity belongs, has following :

(a) assets valued at more than Rs. 40 billion or turnoverof mare than Rs. 120 billion, in India; or

( b ) assets valued at more than USD 2 billion in Indiaand abroad, of which assets worth at least Rs. 5 billionare in India, or turnover of mare than USD 6 billion,of which turnover in India should be at least Rs.15

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s A share subscription, financing facility or any acquisition

by a public financial institution, FII, bank or venture capital

fund persuant to any loan or investment agreement, would

not qualify as a combination that will be regulated by theCCI, and such transactions are there for exempt under the

Competition Act.

s

However, a public financial institution, FII, bank or venturecapital fund is required to notify the CCI of the details of

the acquisiotion within 7 days of completion of the

acquisition.

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Mandatory reporting

s Where previously reporting of a combination was optional,

proposed amendments to the Competition Act make it

mandatory for persons undertaking combinations, to give

prior notice to the CCI.

s The information is provided to the CCI in the priscribed

format within 30 days of the approval of the combinatition

or the execution of any agreement or other document foracquisition.

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s The combinatition will become effective only after the

expiry of 210 days from the date on which notice is given to

the CCI, or after the CCI has passed an order approving the

combinatition or rejecting the same.

s In case of failure to notify the CCI, or contravention of its

order, the competition Act inter alia provides for certain

penalties, civil liability and criminal liability, depending onthe nature of the failure / contravention.

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THANK YOU

comprtition act, 2002

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