2. CONTENT
• MRTP Act
• Competition Act 2002
• Anti-competitive agreements
• Regulation of combinations
• Abuse of dominant position
• Competitive commission of India (CCI)
• MRTP vs Competition Act
• Recent Events
• Other similar acts/laws:
• US Antitrust
• UK Competition Law
3. MRTP
THE MONOPOLIES AND RESTRICTIVE TRADE PRACTICES
ACT, 1969
The MRTP Act, 1969 has its genesis in the Directive Principles of
State Policy embodied in the Constitution of India. Clauses (b) and
(c) of Article 39 of the Constitution lay down that the State shall
direct its policy towards ensuring:
• that the ownership and control of material resources of the
community are so distributed as to best serve the common good;
and
• that the operation of the economic system does not result in the
concentration of wealth and means of production to the common
detriment.
Provisions of the Monopolies and Restrictive Trade Practices Act,
1969 (MRTP Act) were inadequate to effectively deal with antitrust
issues in India and post-1991 (when the Indian government initiated
economic reforms and open market policies), substantial portions of
the MRTP Act had more or less become redundant.
4. WHAT IS COMPETITION
ACT 2002 ?
The Act prohibits anti-competitive agreements, abuse of
dominant position by enterprises and regulates
combinations (acquisition, acquiring of control and Merger
and acquisition), which causes or likely to cause an
appreciable adverse effect on competition within India.
5. ANTI-COMPETITIVE
AGREEMENTS
No enterprise or association of enterprises 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 an appreciable adverse
effect on competition within India.
REGULATION OF
COMBINATIONS
No person or enterprise shall enter into a combination which
causes or is likely to cause an appreciable adverse effect on
competition within the relevant market in India and such a
combination shall be void.
6. ABUSE OF DOMINANT
POSITION
There shall be an abuse of dominant position if an enterprise or a group:
• Directly or indirectly, imposes unfair or discriminatory-
• condition in purchase or sale of goods or service
• price in purchase or sale (including predatory price) of goods or service.
• Limits or restricts-
• production of goods or provision of services or market therefor
• technical or scientific development relating to goods or services to the
prejudice of consumers
• Indulges in practice or practices resulting in denial of market access in
any manner
• Makes conclusion of contracts subject to acceptance by other parties of
supplementary obligations which, by their nature or according to
commercial usage, have no connection with the subject of such
contracts
• Uses its dominant position in one relevant market to enter into, or
protect, other relevant market.
7. COMPETITION
COMMISSION OF INDIA
(CCI)
The objectives of the Competition Act are sought to be achieved
through the Competition Commission of India (CCI), which has
been established by the Central Government with effect from
14th October 2003. CCI consists of a Chairperson and 6
Members appointed by the Central Government.
It is the duty of the Commission to eliminate practices having
adverse effect on competition, promote and sustain competition,
protect the interests of consumers and ensure freedom of trade
in the markets of India.
The Commission is also required to give opinion on competition
issues on a reference received from a statutory authority
established under any law and to undertake competition
advocacy, create public awareness and impart training on
competition issues.
8. MRTP VS COMPETITION ACT
2002
MRTP Act 1996 Competition Act 2002
Competition offences implicit or not defined Competition offences explicit and defined
Complex in arrangement and language Simple in arrangement and language and
easily comprehensible
14 per se offences negating the principles of 4 per se offences and all the rest subjected
natural justice to rule of reason.
Frowns upon dominance Frowns upon abuse of dominance
No combinations regulation Combinations regulated beyond a high
threshold limit.
No penalties for offences Penalties for offences
Reactive and rigid Proactive and flexible
Unfair trade practices covered Unfair trade practices omitted (consumer fora
will deal with them)
Does not vest MRTP Commission to inquire Competition Law seeks to regulate them.
into cartels of foreign origin in a direct
manner.
Concept of ‘Group’ Act had wider import and Concept has been simplified
was unworkable
9. FEW CASES
Competition Commission of India (CCI) has received a total
number of 304 cases up to March 31, 2012 under various
sections of the Competition Act. Out of these, 227 cases have
been disposed off.
10. CCI PENALIZES CHEMISTS &
DRUGGISTS ASSOCIATION, GOA
(CDAG)
Anti-competitive practices followed:
• Supply of medicines to common man not at an affordable rate.
• Controls the supply of drugs in the market through a system of
seeking mandatory Product Information Service (PIS) approvals
• The number of players is limited and controlled by insisting on
obtaining its "No Objection Certificate (NOC)
The Commission imposed a penalty of Rs. 2 lakhs on
CDAG.(2008-2010)
On similar grounds, the Commission also found Chemists and
Druggists Association, Baroda (CDAB) and a penalty of 54,000 was
imposed.(2006-2009
11. THE CEMENT CASE
• The Competition Commission of India (CCI) has slapped
11 cement companies with a fine of Rs 6,304 crore for
price cartelization, the highest penalty ever imposed
• The Commission in its order observed the existence of
price parallelism, controlled and limited supply with a view
of maximizing profits.
• Cement Manufacturers Association asked
COMPAT(Competition Appellate Tribunal) to relook into
the penalty imposed by CCI.
12.
13.
14. INDIAN AIRLINE
INDUSTRY
Rival private airlines Jet Airways and Kingfisher Airlines, with
a collective market share of over 58 per cent in 2008,
announced a strategic alliance to help them reduce cost and
enhance efficiency.
The alliance involved code-sharing on domestic and
international flights, an interline agreement, joint fuel
management, common ground-handling services and cross-
selling flights through the global ticketing system.
The Competition Commission of India investigated into the
agreement to check if there is a “possible cartel- like
behavior”
Similar case was filed against all the private Airlines in India
for charging high prices on April 26.
Both cases were later dismissed
15.
16. AUTOMOBILE
INDUSTRY INDIA
International car makers, Honda, Hyundai and Volkswagen,
have come under the scanner of the competition watchdog
Competition Commission of India (CCI) for abusing their
dominant market position by selling auto parts to customers
at high prices.
17. A MONOPOLY!!!!
• The Competition Commission of India has initiated an
investigation against the global internet giant Google, for
its alleged involvement in anti-competitive practices in
India.
• It has been alleged that Google, being dominant in the
search engine market, is leveraging its position in the
generic search to specialised search market, by way of
discriminatory and retaliatory practices relating to
AdWords.
• It is pertinent to note that currently Google is under
scanner of several competition authorities such as in US,
EU, Australia, South Korea, Brazil and Argentina.
18.
19. UNITED STATES
ANTITRUST LAW
The United States Antitrust laws were put in place by federal
and state governments to regulate corporations. They keep
companies from becoming too large and fixing prices, and
also encourage competition so that consumers can receive
quality products at reasonable prices. These laws give
businesses an equal opportunity to compete for market
share. Preventing monopolies ensures that consumer
demand is met in a fair and balanced way. There are four
sections that the laws focus on including agreements
between competitors, contracts between buyers and sellers,
mergers and monopolies.
20. UNITED KINGDOM
COMPETITION LAW
United Kingdom competition law is affected by both British and European elements. The
Competition Act 1998 and the Enterprise Act 2002 are the most important statutes for cases
with a purely national dimension. However if the effect of a business' conduct would reach
across borders, the European Union has competence to deal with the problems, and
exclusively EU law would apply. Even so, the section 59 of the Competition Act 1998 provides
that UK rules are to be applied in line with European jurisprudence. Like all competition law,
that in the UK has three main tasks.
• Prohibiting agreements or practices that restrict free trading and competition between
business entities. This includes in particular the repression of cartels.
• Banning abusive behavior by a firm dominating a market, or anti-competitive practices that
tend to lead to such a dominant position. Practices controlled in this way may
include predatory pricing, tying, price gouging, refusal to deal and many others.
• Supervising the mergers and acquisitions of large corporations, including some joint
ventures. Transactions that are considered to threaten the competitive process can be
prohibited altogether, or approved subject to "remedies" such as an obligation to divest
part of the merged business or to offer licenses or access to facilities to enable other
businesses to continue competing.
