Sumbitted by:-

Aastha Garg Priyanka Yadav Anjali Mishra

Is “a situation in a market in which firms or sellers independently strive for the buyers’ patronage in order to achieve a particular business objective for example, profits, sales or market share”

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.

Competition act, 2002 passed in january2003 Competition commission of india established

under act in october,2003 with one member/ acting chairman

Enforcement provision not notified due to legal challenge leading to process of amendments

Competition act,2007 passed in october2007-stage set for full activation of commission

Is foundation of efficiently working market system:

Maximizes consumer welfare. Lower prices, wider choice and better services.

Accelerates economic growth; higher efficiency/ productivity.

Generates innovation; dynamic efficiency. For enterprises provides level playing field ,

redressal against anti competitive practices.

These are agreements which cause or are likelyto cause an appreciable adverse effect oncompetition within India:

Horizontal Agreements:These are between and among competitors who are at the

same stage of production, supply, distribution, etc.

These are presumed to be illegal

Examples: cartels, bid rigging, collusive bidding, sharing of markets, etc.

Vertical Agreements:

• Vertical Agreements are between parties at different stages of production, supply, distribution, etc.

• These are not presumed illegal; are subject to rule of reason.

Examples: tie-in arrangements, exclusive supply/distribution agreements, refusal to deal.

Combinations, in terms of the meaning given to them in the Act, include mergers and acquisition, acquiring of control and acquisition of shares , voting right, assets.

in order to establish whether the higher concentration in the market resulting from the merger will increase the possibility of collusive or unilaterally harmful behavior, it must first be established as to what the relevant market is

Notification of Combination to Commission is voluntary.

If notified, Commission to take a decision within 90 days on the combination. Decision may allow, disallow, modify, etc. the combination.

Combination assessed on rule of reason based on 14 factors.

Combination can take suo motu action within 1year after combination.

Commission is expected to regulate “Combinations”,

i.e., large mergers, acquisitions, etc. likely to have

appreciable adverse effect on competition.

• Threshold:

For single enterprise

– Assets > Rs.1000 crores

– Turnover > Rs.3000 crores

Threshold:

For group of enterprises

– Assets > Rs.4000 crores

– Turnover > Rs.12000 crores

Similarly, threshold is provided for overseas groups

FTC,US successfully opposed (1997) Mergers Between Staples and Office Depot- Two Office Supplies Super Stores:

Court accepted “office supplies super stores” as relevant market used economic tool e.g. CR, HHI, “Brown Shoe” indices

Court recognized benefits to consumers by firms. But found reasonable probability that proposed merger may substantially lessen competition ; rejected efficiency argument

Issues involves predicting future structure/conduct factors

The Competition Commission of India, in terms of advocacy provisions in the Act, is enabled to participate in the formulation of the country’s economic policies and to participate in the reviewing of laws related to competition at the instance of the Central Government.

Commission is required to take measures for promotion of Competition Advocacy, creating Awareness and imparting Training about competition issues [Section 49(3)]

Advocacy means competition promotion through non-enforcement measures

For promotion of competition advocacy and creation of awareness about competition issues, the Commission may:-

i) Undertake appropriate programmes / activities etc.;

ii) Encourage and interact with the organizations of stakeholders, academic community etc. to undertake activities, programmes, studies, research work, etc. on competition issues;