COMPETITION ACT-

2002

Presented By:-
VISHWANATHTRIPATHI
DEEPIKA
MBA-I
 Competition

Is ''a situation in a market in which firms

or sellers independently strive for the
buyers'
patronage in order to achieve a particular
business objectives for example, profits
,sales,or market share''(World Bank 1999)
''Competition'' is an age-old phenomenon

Benefits of Competition:

Companies :Efficiency ,cost-saving operation,better

utilization of resources,etc.

The Consumer : Wider choice of goods at

competitive prices

The Government : Generates revenue

BUT...................
 It is not necessary that there are a large number
producers/suppliers to have competitions.

A single producer can exist and provide a competitive

atmosphere provided entry of new firms is easy and not
costly.

Entry barriers can be due to the market position of

incumbent firms, legal barriers or strategic barriers
Incumbent firms may use their power as "first
Movers" to block entry.
Legal barriers include licensing and other
Government regulations
OBJECTIVES OF COMPETITION LAW
AND POLICY
Promoting economic efficiency in both static and
dynamic sense

protecting consumers from the undue excercise

of market power

facilitating economic liberalization , including

privatization. Deregulation and reduction of
external trade barriers

Preserving and promoting the sound

development of a market economy
Competition Law

It is a tool to implement and enforce competition policy and to

prevent and punish anti-competitive business practices by firms and
unnecessay Governmaent interference in the market.

Competition Law generally covers 3 areas:

A. Anti - competition Agreemant , e.g. , cartels,

B. Abuse of Dminant Position by enterprises, predatory , pricing ,

barriers to entry and

C. Regulation of Mergers and Acquistion .

Element of competition Policy

Putting in place aset of Policies that enhance

competition in local and national markets.

A Law designed to prevent anti competitive

business parctices and unnecessary
government intervention
Competition Policy

It includes Reforms in certain Policy areas to make these

more pro- competition:-

Industrial policy

Trade policy

Privatization/disinvestment

Economic Regulation

State Aids
Industrial Policy

Idustrial Policy has to address and

reforms licencing requiremants,
restrictions on capacities, or on location of
industries reservations for small scale
industry etc. These adversely affect free
competition in the markets.
Trade Policy

Trade policy important implications for

development of competition in the
markets. Measures for libralisation of trade
promote grater competition e.g. reducing
tariffs, removal of quotas/physical controls,
investment controls, conditions relating to
local content etc.
Privatization/Disinvestment

Empherial research has found that state owned

enterprises generally tend to be less efficient
than private owned firms, for reasons such as
manager compensation , low incentives, lack of
direct accountability , hard budget constraints for
managers.

State owned enterprises are generally insulted

from market forces and recieve protection/
benefits such as government imposed barriers to
entry, prices regulation and subsidies.
Economic Regulations

New legislation and regulations to

promote competition and to bring about
restructuring of major industrial sectors is
essential. Legislation to aim at separating
natural monopoly elements from
potentially competitive activities, and the
regulartory functions from commercial
functions, and also create several
competing entities .
State Aids

Several state aids create unequal

operating conditions for
businesses.Example :-
- subsidies
- tax rebates
- Prefential loans
- Capital injection
 Adverse effects on Competition

Creation of barriers to entry

Driving existing competitiors out of market

Benefits to consumers

benefit to Scientific and technical knowhow

Thank You