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“When world at large is a single platform for
carrying out trade and commerce, the need for
Legal Environment of Business :
Group Project on -
1947 – Command and control , laws, policies, rules, regulation
Strategy of planned economic development - Indian Industrial Policy 1948
Emphasized Growth, social justice and self reliance
Limited licenses in private sector, Government controlled all areas
Restrictions on foreign investments
Free competition in the market was under severe threat
Monopolistic Behavior - Concentration of economic power in few
individuals or business houses.
Three studies conducted
1. Committee setup in 1960 under Professor Mahalonobis
Distribution and level of Income
2. Monopolies Inquiry commission (MIC), April 1964
Concentration of economic power, restrictive and
monopolistic trade practice
3. Committee Chaired by Mr. Hazari, 1965
Industrial licensing process - Disproportionate growth
Articles 38 and 39 of the Constitution of India – Basic principles
behind MRTP Act 1969
MRTP Act Competition Act
1. Based on command and control regime Based on liberalized regime
2. Competition concepts not expressly defined Competition concepts expressly defined
3. No regulation of combinations Provides for regulation of combination
4. Has no advocacy role Provides for advocacy
5. No power to impose penalty Power to impose penalty deterrence factor
6. Government Departments outside its ambit Government Departments within its ambit
Competition Act Defined:
An act to prevent practices having adverse effect on competition, to promote and sustain
competition in markets , to protect the interest of consumers & To ensure freedom of
trade on by other participants in the market.
Objectives of the act
Establish a Commission to prevent practices having
adverse effect on competition
Promote and sustain competition in markets
Protect the interests of consumers
Ensure freedom of trade in the Indian markets
Agreements that negatively or adversely impact competition (Section 3)
Prohibition on Anti Competitive Agreements
Horizontal Agreement Section 3(3):
Vertical Agreements Section 3(4):
Tie in Arrangements
Exclusive supply Agreement
Exclusive distribution Agreement
Refusal to Deal
Resale Price Maintenance
Unfair Trade Practices
Subjecting a consumer to undue pressure/ influence to buy
Taking advantage of a consumer’s inability to understand a transaction
Representing that goods have or have not been used to the extent that is
different from the fact
Representing that goods are available in a particular quantity if they are
Restrictive Trade Practices
Any trade practice that tends to block the flow of capital into production and also
bring in conditions of delivery to affect flow of supplies leading to unjustified cost.
3 Stage Process of determining abuse of dominance:
Determination of Relevant Market
Dominance of the enterprise/group in the relevant market is
"Abuse" by the dominant enterprise in the relevant market is
Stage 1 - Determination of Relevant Market
Relevant Product Market
Relevant Geographic Market
Stage 2 - Determination of Dominance
What is Dominance
Factors determining dominance
Stage 3 - Determination of Abuse
As per the act, Abuse of Dominance occurs if an enterprise or the group
engages in one or more of the following conducts:
Imposing unfair or discriminatory price or condition in purchase or sale
Case Example - CCI Case/ DLF Case
Case Example – Small retailers vs e-commerce companies
Limiting production, technical or scientific development to the prejudice
Denying Market Access in any manner
Using the dominant position in one relevant market to enter into, or
protect, other relevant market.
Combinations include mergers, amalgamations and acquisition of control,
shares, voting rights or assets.
Entering into a combination which causes adverse effect on competition
within the relevant market in India is prohibited
Types Of Combination.
Threshold for Combinations under the Act
Individual Rs.1,500 cr. Rs.4,500 cr.
Group Rs.6,000 cr. Rs.18,000 cr.
Group $3 bn Rs.750 cr. $ 9 bn Rs.2,250 cr.
The aim is to foster conditions that will lead to a more competitive market
structure and business behaviour.
A successful competition advocacy can be viewed in terms of the
following efforts from CCI:
Develop relationship with the Ministries and Departments of the
Government / regulatory agencies that formulate policies affecting demand
and supply in various markets.
Encourage debate on competition and promote a better and more informed
economic decision making
Competition advocacy must be open and transparent to safeguard the
integrity and capability of the CCI
Establish good media relations and explain the importance of Competition
Policy as an integral part of the Government’s economic framework
Initiatives taken by the CCI
Engaged in undertaking advocacy with ministries, regulators, &
Given its opinion on the draft of many Bills
E.g. the Shipping Trade Practices Bill
The Commission has given its views on regulatory policies and
practices in the fields of banking, telecommunications and
intellectual property rights.
Presentations on Competition law and policy to Ministries
Held a series of lectures/ seminars/ conferences dedicated to
competition related issues
Need for Amendment :
The composition of the CCI
Establishment of Competition Appellate Tribunal
Imposing of penalty and other administrative powers/
Competition Commission to issue its order within 210 days
from making of the application
Provide for continuation of the MRTP commission for 2 years
to deal with the pending cases under the MRTP act
Administration and enforcement of competition law and
competition policy to enable economic efficiency and
Involvement proactively in government policy formulation to
ensure that markets remain fair, free open flexible and
COMPAT adjudicates appeals against the orders of the
Competition Commission of India and also adjudicates the
claims of compensation that may arise from the findings of
CCI or itself.
Infringement Fine/Penalty Who is liable?
Penalties of up to 10% of
turnover (or 3x cartelized
Enterprises who enter into
Penalties of up to 10% of
Division of dominant enterprise
Failure to notify
Fine of up to 1% of combined
Person or enterprise
directions of CCI
Fines and/or imprisonment as
Compensation can also be
awarded by Appellate Tribunal
for loss/damage suffered by
Person failing to comply
BRICS is a group of five major emerging economies of
the world viz: Brazil, Russia, India, China and South
BRICS countries periodically review the competition regimes
in their region & represent a fundamental change in
international competition enforcement
The BRICS countries represent 3 billion people accounting for
about 43 percent of the world population and 25 percent of the
world's GDP. Trade within the group amounts to about 17 percent
of global commerce.
The Competition Commission of India ("CCI") imposed one fine—
INR 52.24 Crore fine against the Board for Control of Cricket in
India for an alleged abuse of dominance.
This case was initiated on the basis of information filed by Sh. Surinder
Singh Barmi, a cricket fan from New Delhi
The allegations leveled by the informant centre on the following three
dimensions of organization of Indian Premier League (IPL), a Twenty
20, professional cricket league tournament conducted by BCCI:
○ Irregularities in the grant of franchise rights for team ownership.
○ Irregularities in the grant of media rights for coverage of the
○ Irregularities in the award of sponsorship rights and other local
contracts related to organization of IPL.
Builders’ Association of India Vs Cement
Manufacturers’ Association &Ors.
In cartel cases, the CCI has the power to
fine parties up to three times of its profit
for each year of the continuance of the
cartel or 10% of its turnover for each year
of the continuance of the cartel, whichever
Compat granted a stay regarding the
collection of INR 63.07 billion ($1.04 billion) in
fines imposed on 11 cement manufacturers
for coordinating prices and reduced the
original fine of INR 600 million by 90%
Ambuja Cements Ltd.
Binani Cements Ltd.
Century Textiles Ltd.
India Cements Ltd.
J.K. Cements Ltd.
Lafarge India Pvt Ltd.
Madras Cement Ltd.
Ultra tech Cement Ltd.
Jai Prakash Associates Ltd
Belaire Owners Association vs. DLF Limited & Ors.
DLF had used its position of strength in dictating the terms of the
Apartment Buyers Agreement ("Agreement') and imposed unilateral
and one-sided clauses
Relevant market : the market for services of developer/builder in
respect of high-end residential accommodation in Gurgaon
DLF had the highest market share (45%), vis-a-vis the market
share of the nearest competitor (19%) which was more than twice
of its competitor, leading to hardly any competitive constraints.
CCI imposed penalty of Rs. 630 Crores on DLF Ltd. under section
27(b) of the Act, at the rate of 7% of the average turnover of DLF
for the last three financial years
Hiranandani Hospital under CCI lens for monopoly
First instance of the anti-trust regulator turning its gaze
towards the under-regulated healthcare sector in India
Lady was refused maternity services by Hiranandani during
the 38th week of her pregnancy because she declined to
avail the stem cell banking services offered by Cryobanks
International India, with which the hospital had an exclusive
Dominant player in the field of maternity services abused its
dominance by restricting the patient choice.
Competitive markets are backbone for economic growth
Competition Act: A perfect blend for liberalized India
Multilateral Competition vital for protection of competition
Scope & Objective of competition policy are both inter-
The elements of competition policy take care of all facets
Thus competition law is an important institutional pillar for
thriving a market economy like India