Competion Act 2002

download Competion Act 2002

of 28

  • date post

  • Category


  • view

  • download


Embed Size (px)

Transcript of Competion Act 2002

  • 7/30/2019 Competion Act 2002


  • 7/30/2019 Competion Act 2002



    An economic rivalry amongst

    enterprises to control greater

    market power.

  • 7/30/2019 Competion Act 2002


    Fair competition

    Enterprises Offers wider

    choice to consumers atlower prices. Leads to

    optimal allocation of


    Is an amalgam of factorsthat stimulate economic


    where two enterprises

    adopt fair means such asproduction of fair


    investment in R&D etc.

    Competition is fair Is a tool to mount market

    pressure to penalize

    laggards and to reward

    the enterprising

  • 7/30/2019 Competion Act 2002


    Restrictive trade practices: Acombination of producers of any product

    joined together to control its production,

    sale, and price, so as to obtain aMonopolyand restrict competition in anyparticular industry or commodity. For e.g.forming the cartel, predatory pricing

  • 7/30/2019 Competion Act 2002


    Section 2(c) "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;

    Case: Jet Airways -Kingfisher

  • 7/30/2019 Competion Act 2002



    To prevent practices having adverse

    effect on competition. To promote & sustain competition in the


    To protect the interests of consumers. Ensure freedom of trade carried on by

    participants in markets

  • 7/30/2019 Competion Act 2002


    Anti-competitive agreements-

    section 3Any agreement entered in to between

    enterprise, person, association of

    person, engaged in trade of goods orprovision of services. Which causes

    Adverse effect on competition.

  • 7/30/2019 Competion Act 2002


    Predatory Pricing

    Predatory pricing refers to a practice of

    driving rivals out of business of selling at

    a price below the cost of production. PP is a commercial strategy by which a

    dominant firm lowers its price to a level

    which will ultimately force its rivals out of

    the market when the latter have beensuccessfully expelled, the company can

    raise the prices again and reap the


    Case: US Microsoft Co

  • 7/30/2019 Competion Act 2002


    Anti-competitive agreements

    These are agreements between entities

    in respect of production, supply,

    distribution, storage, acquisition or

    control of goods or provisions of servicesWhich are likely to cause an appreciable

    adverse effect on competition (AAEC)

    Legal assessment standard

    Determining the prices

    Limiting and controlling production ,

    supply, markets, or provisions of


  • 7/30/2019 Competion Act 2002


    Anti-competitive agreements

    Section 3: Anti-competitive agreements


    Exclusive supply agreement

    Exclusive distribution agreement

    Exclusive refusal to deal

    Resale price maintenance

  • 7/30/2019 Competion Act 2002




    This is an arrangement by which a seller

    agrees to sell a product known as the

    tying item only on the condition thatbuyer agrees to buy a second product

    known as the tied product from the seller

    E.g. requiring a stabilizer to be boughtalong with the refrigerator

    To buy tyre-lock, petrol tank lock, and

    helmet along with a scooter

  • 7/30/2019 Competion Act 2002



    Requiring buyers of DTH service also to

    buy /take rent the STBs (set top box)

    In India, as on date there are 4 ways inwhich a viewer may receive broadcast of

    TV programs:

    a. Free to Air (FTA)

    b. Cable TV

    c. Direct To Home

    d. IP TV-Internet Protocol Television

    i. Dish TV India Limited

    ii. Tata Sky Limited

    iii. Reliance Big TVLimited

    iv. Sun Direct TV Pvt.


  • 7/30/2019 Competion Act 2002


    Exclusive supply agreement

    This includes any agreement restricting

    the purchaser in the course of his trade

    from acquiring or dealing in any goodsother than those of the seller.

    Its a agreement between distributor and

    a supplier whereby a distribution of a

    certain product engages a supplier on anexclusive basis to distribute and sell to

    customers within a given territory.

  • 7/30/2019 Competion Act 2002


  • 7/30/2019 Competion Act 2002


    Exclusive distribution

    agreement This includes any agreement which

    restricts or is likely to restrict, or withhold

    the output or supply of any goods orallocate any market area or market for

    the disposal or sale of the goods.

  • 7/30/2019 Competion Act 2002



    Manish singh, kamal udyog vs US

    Pharmacopeia where USP a non-profit

    orgn based in USA terminated all itsdistributorship contracts with kamal

    udyog and appointed LGC India pvt ltd

    as its exclusive distributor

  • 7/30/2019 Competion Act 2002


    Exclusive refusal to deal

    This includes any agreement which restricts

    person or class of persons to whom good are

    sold or from goods are bought

    A dealer of company complained to the

    commission that the company was withholding

    supply of goods to him. In the course of enquiry

    it was found that on account of delayed

    payments from dealer the company did so BATA restraining the small scale producers with

    whom it entered in to arrangement for buying

    footwear raw materials prohibits small scale

    producers from selling additional raw materialsto an other art without batas a roval

  • 7/30/2019 Competion Act 2002


    Resale price maintenance

    Resale price maintenance (RPM) is a

    form of price fixing , RPM exits with a

    supplier specifying the minimum (ormaximum) price at which the product

    must be re-sold to customers.


    Copyright act

    Patent act & other IPR

  • 7/30/2019 Competion Act 2002


    Prohibition of abuse of

    dominant position: Section 4 The expression dominant position

    means a position of strength enjoyed by

    an enterprise in the relevant market inIndia

    No enterprise shall abuse its dominant


  • 7/30/2019 Competion Act 2002


    Regulation of Combinations

    The acquisition of one or more

    enterprises by one or more persons or

    acquiring of control or merger oramalgamation of enterprises under

    certain circumstances as mention in

    section 5

  • 7/30/2019 Competion Act 2002



    COMMISSION OF INDIA Is enabled to participate in the formulation

    of policies and reviewing of policies relatingto competition at the instance of the

    government. It can give opinion oncompetition issues .

    Is required to create competition culture

    Is required to act as competition advocate

  • 7/30/2019 Competion Act 2002



    Competition Advocacy is one of the main

    pillars of modern competition law which

    aims at creating, expanding andstrengthening awareness of competition

    in the market. Section 49 of the

    Competition Act, 2002 mandates the CCI

    to undertake advocacy for promotingcompetition.

  • 7/30/2019 Competion Act 2002




    Establishment of commission (sec -7)

    Corporate body (sec -7(1))

    Competition commission of India having perpetual

    succession and a common seal . it can acquire , hold anddispose of property ,both movable and immovable

    Composition of commission (sec -8)

    Commission shall consist of a chairperson and not less than2 and 10 and other member appointed by central

    government.To be qualified as Chairperson of CCI he must be the judge of

    high court with 15 years of professional experienceineconomics ,business, commerce, law, finance ,accountancy, management , industry, etc

  • 7/30/2019 Competion Act 2002



    Government may by notification appoint a directorygeneral and as many additional ,joint, deputy generaletc.., as may think fit for the purposes of assisting thecommission in conduction.

    Registrar and officer and other employees ofcommission

    Commission may appoint a register and suchofficers and other employees as it consider necessary

    for the efficient performance of its function under this act( sec 17(1))

    Competition commission proposed staff strength : 125

    ( 50 economist , 50 lawyer and 25 finance professionals )

  • 7/30/2019 Competion Act 2002


    Functions of CCI

    (A) Eliminate practices having adverse effect oncompetition

    (B)Inquiry whether an enterprise abuses dominantposition

    . (C) Inquiry into certain anti-competitive agreements anddominant position of enterprise.

    (D) CCI mandate to undertake competition advocacy

    (E) CCI shall give opinion about competition issues to