PPT on Competition Act, 2002 presented by students of T A Pai Management Institute (TAPMI)

1. The Competition Act, 2002
FAS AA1
ANIMESH | KAVAN | PRIYESH | SNEHA | VIJAI

2. Timeline
• MRTP Act, 1969
• For prohibition of monopolistic, unfair and restrictive trade practice
• Liberalization, 1991
• After this, difficulty arose to administer present market
• Competition Act, 2002 and Competition (Amendment) Act, 2007
• To meet the requirement of highly competitive market
o Anti-Competitive Agreements
o Abuse of Dominance
o Combinations
o Competition Advocacy

3. What is Competition?
• It 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 e.g. profits, sales or market share” (World Bank, 1999)
• It is the foundation of an efficiently working market system
• The process of rivalry between firms striving to gain sales and make
profits
• Motive: self-interest, but outcome mostly beneficial for the society
• Competition is not just an event, but a process
• It is not automatic, needs to be nurtured

4. Benefits from Competition
• Companies: Efficiency, cost-saving operations, better utilization of
resources, etc.
• The Consumer: wider choice of goods at competitive prices
• The Government: generates revenue
However, all of these benefits are lost if the competition is unfair or
non-existent

5. Types of Competition
• Price Competition: Winning customers by lowering price
• Non-price Competition: Winning customers by advertising, offering
after-sales services, using sale promotion tools, etc.
Ways of Competition
• Fair Competition: Fair means such as producing quality goods, becoming
cost-efficient, optimizing the use of resources, best technology, R&D etc.
• Unfair Competition: Unfair means such as fixing price with the rivals,
predatory pricing, disparaging or misleading advertisement, etc.

6. Background
• Economic Reforms of 1991
1. Post 1991 policy of liberalization, privatization and globalization were
introduced
2. MRTP 1969 Act was found inadequate to meet the challenges of a modern
globalized economy
3. Government of India in October 1999 appointed a high level committee on
Competition Policy and Law to advise on the Competition Law in
consonance with international developments
• As a sequel to the report of the committee, the Competition Act,
2002 was enacted and notified in January 2003

7. The Competition Act, 2002
• A new law called the competition act 2002 has been enacted to
replace the extant law MRTP Act 1969
• A new law has been amended on 10th September 2007 by the
parliament
• An act to formulate, 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 market, 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

8. Competition Commission: Aim and Objectives
• Aim
• Proactive engagement with all stake holders, including consumers, industry,
government and international jurisdictions
• Being a knowledge intensive organization with high competence levels
• Professionalism, transparency, resolve, and wisdom in enforcements
• Objectives
• Curb practices having an adverse effect on competition
• Promote and sustain competition in market
• Protect the interest of consumers and to ensure freedom of trade carried on
other participants in market in India, and for matters connected therewith or
incidental thereto

9. Composition
• The Commission shall consist of a Chairperson and not less than two and not
more than six other Members to be appointed by the Central Government
• The Chairperson and every other Member shall be a person of ability, integrity
and standing, and who has special knowledge of, and professional experience
of not less than fifteen years in, international trade, economics, business,
commerce, law, finance, accountancy, management, industry, public affairs or
competition matters, including competition law and policy, which, in the
opinion of the Central Government, may be useful to the Commission
• The Chairperson and other Members shall be whole-time Members (section 8)

10. Prohibition of Anti-Competitive Agreements
• No enterprise or association of enterprise or person or association of persons
shall enter into any agreement in respect of production, supply, distribution,
storage, acquisition or control of goods, or provision of services, which causes
or is likely to cause and appreciable adverse effect on competition within India
• Any agreement entered into between enterprises or association of enterprises
or persons or associations of persons or between any person and enterprise or
practice carried on, or decision taken by, any association of enterprises or
association of persons, including cartels, engaged in identical or similar trade of
goods or provision of services, which
• Directly or indirectly determines purchase or sale price
• Limits or controls production, supply, markets, technical development, investment, or
provision of services
• Shares the market by the way of allocation of the geographical area of the market, or
types of goods, or number of customers in the market
• Directly of indirectly result in bid rigging or collective bidding

11. • Any agreement amongst enterprises or persons at different stages or levels of
the production chain in different markets, in respect of production, supply,
distribution, storage, sale or price, or trade in goods or provision of services
• Tie-in arrangements
• Exclusive supply agreement
• Exclusive Distribution agreement
• Refusal to deal
• Resale price maintenance

12. Thank You!