COMPETITION ACT 2002.

OBJECTIVES: Safety & stability of domestic market, transparency,

prevention of abusive practices, to protect the interest of consumers.
To regulate the unethical competition in the international trade.
Act covers: prohibition of anti-competitive agreements & abuse of
dominant position, regulation of combinations & mergers. Penalties
for contravention of orders & constitution of competition fund.
Competition Commission of India: A regulatory body for
administration and enforcement of law.
TRADE PRACTICES: Means any practice relating to carrying on
of any trade and includes anything done by the trader in relation
to any trade.
UNFAIR TRADE PRATICE: A trade practice, which a person adopts
for the purpose of sale, use of supply of goods or provision of any
services by any unfair method / practice. For example, misleading
advertisements, Gifts offered as free of charges but the prices are
covered, Hoarding or refusing to sell the goods. (Ref Text Book)

ANTI COMPETITIVE AGREEMENTS

The Act provides that no enterprise or person shall enter
into any agreement which causes or is likely to cause an
adverse effect on the competition within India.
Such agreements shall be void.
ANTI COMPETITIVE AGREEMENTS:
Any agreement between competitors
1) directly/ indirectly determines purchase / sale prices.
2) limits or controls production, supply, investments.
3) shares the market by allocation of geographical area
4) directly or indirectly results in rigging.
An agreement which causes or is likely to cause an
appreciable adverse effect on competition includes:
Exclusive supply / distribution / tie-in agreement etc..

FACTORS WHICH CAUSE ADVERSE EFFECT

1) Creation of barriers to new entrants in the market.
2) Driving existing competitors out of the market.
Foreclosure of competition by hindering entry into mk.
REF. TEXT BOOK FOR MORE.
PROHIBITION OF ABUSE OF DOMINANT POSITION:
The Act prohibits the abuse of dominant position by
any enterprise or group. For example:
1) Unfair discrimination in purchase / sale
2) Limiting production of goods or services.
3) Restricts technical or scientific development
4) Denial of market access.
EXEMPTION OF COPY RIGHTS, PATENTS, DESIGNS ETC.

COMBINATIONS

The acquisition of one or more enterprises by one or

more persons or merger or amalgamation of enterprises
shall be treated as combination of such enterprises and
persons or enterprises in the following cases:
1) Acquisition by large enterprises
2) Acquisition by group
3) Acquisition of enterprises having similar goods
4) Merger of enterprises etc..
REGULATION OF COMBINATIONS: Act prohibits any
person or enterprise to enter into a combination which
causes or likely to cause adverse effect on competition
within the relevant market in India.
VOID.

COMPETITION COMMISSION OF INDIA

DUTIES: To eliminate practices having adverse effect

on competition,
to promote and sustain competition,
to protect the interest of consumers and to ensure
freedom of trade.
POWERS AND FUNCTIONS:
1) Inquire into certain agreements of enterprise.
2) Inquire whether it enjoys a dominant position.
3) Inquiry into acquisition, control and combination.
4) Power to grant interim relief.
5) Power to award compensation.
6) Power to regulate its own procedure.
7) Power to review its own orders.
8) Powers of Civil Court.