Download - Competion Act 2002

7/30/2019 Competion Act 2002

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Competition??????

An economic rivalry amongst

enterprises to control greater

market power.


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Fair competition

Enterprises Offers wider

choice to consumers atlower prices. Leads to

optimal allocation of

resources.

Is an amalgam of factorsthat stimulate economic

rivalry

where two enterprises

adopt fair means such asproduction of fair

goods/services,

investment in R&D etc.

Competition is fair Is a tool to mount market

pressure to penalize

laggards and to reward

the enterprising


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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

INTRODUCTION
http://legal-dictionary.thefreedictionary.com/Monopolyhttp://legal-dictionary.thefreedictionary.com/Monopoly


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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


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Objectives

To prevent practices having adverse

effect on competition. To promote & sustain competition in the

markets.

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

participants in markets


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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.


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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

rewards

Case: US Microsoft Co


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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

services


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Anti-competitive agreements

Section 3: Anti-competitive agreements

Tie-in-arrangement

Exclusive supply agreement

Exclusive distribution agreement

Exclusive refusal to deal

Resale price maintenance


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Cont..

Tie-in-arrangement

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


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Cont..

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.

Limited


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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.


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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.


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Cont..

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


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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


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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.

Exceptions

Copyright act

Patent act & other IPR


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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

position


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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


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THE COMPETITION

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


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Cont..

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.


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COMPETITION COMISSION OF INDIA

(CCI)

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


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Cont..

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 )


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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

central government


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Power of Commission

Power grant Interim Relief (Sec 33)

Power to award compensation (Sec 34)

Appearance before commission (Sec 35) Power to regulate its own procedures

(Sec 36)

CCI has same powers has vested in civilcourt like issue summons, production

documents, receive evidence,

examination of witness, exparte hearing


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Cont..

Review of orders of commission (Sec 37

& 40)


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Power of Commission

Execution of Orders (sec 39)

Order of CCI Similar as the decree of ahigh court

Independent Authority

Power to investigate

Penalties