Slide 1
Presentation on Overview of Competition Law in India by I.
Sridhar
Overview of Competition Law in India
Introduction to Competition Act, 2002
Objectives of Competition Act- Prevent Practices having adverse
effect on competition- Promote & Sustain competition in
markets- Protect Interest of consumers- Ensure freedom of trade
carried on by other participants in the market- Competition
advocacy
Overview of Competition Law in India
Prohibition of Anti Competitive Agreements Section 3(1) - No
enterprise shall enter into any agreement in respect of production,
supply, distribution, storage, acquisition, controlof goods /
services which causes or likely to causeappreciable adverse effect
on competition.
- Under the law the whole agreement is void
Overview of Competition Law in India
Prohibition of Anti Competitive Agreements Section
3(2)Agreements which- directly or indirectly determine purchase or
sale price,- limits or controls production, supply, markets,
technical development, investment or provision of services,- shares
the market or source of production by way allocation of
geographical area or type of goods or service,- directly or
indirectly results in bid rigging or collusive bidding
shall be presumed to have appreciable adverse effect on
competition
Overview of Competition Law in India
Prohibition of Anti Competitive Agreements Section
3(4)Agreements which provides for- tie-in agreement- exclusive
supply agreement- exclusive distribution agreement- refusal to
deal- resale price maintenanceshall be in contravention of Sec 3(1)
if such agreement causes or likely to cause appreciable adverse
effect on competition
Overview of Competition Law in India
Prohibition of Abuse of Dominant Position Section 4
- No enterprise shall abuse its dominant position Dominant
position means position of strength which enables to:- operate
independently of competitive forces- affect its competitors or
consumers or the relevant market its favour
Overview of Competition Law in India
Prohibition of Abuse of Dominant Position Section 4(2)
There shall be abuse of dominant position, if an enterprise
directly or indirectly imposes unfair or discriminatory condition
in - purchase or sale of goods or service,- price in purchase or
sale of goods or service (Predatory Pricing)
Overview of Competition Law in India
Prohibition of Abuse of Dominant Position Section 4(2) Limiting
or restricting - production of goods or provision of service or
market- technical or scientific development relating to goods or
services to the prejudice of consumers- practices of denial of
market access- makes conclusion of contracts subject to acceptance
by other parties of supplementary obligations which have no
connection with the subject of such contracts- uses dominant
position in one market to enter into other relevant market
Overview of Competition Law in India
Regulation of Combinations Sections 5 & 6Commission to
regulate Combinations, i.e., large mergers, acquisitions which are
likely to have appreciable adverse effect on competitionThreshold
limits for single enterpriseAssets > Rs. 1,500 croresTurnover
> Rs. 4,500 crores for group of enterprisesAssets > Rs. 6,000
croresTurnover > Rs. 18,000 crores
Overview of Competition Law in IndiaThreshold provided for
overseas enterprises / groups for single enterpriseAssets > $
750M (min indian component Rs.750CR)Turnover > $ 2,250M (min
indian component Rs.2,250CR) for group of enterprisesAssets > $
3 bn (min indian component Rs.750CR)Turnover > $ 9 bn (min
indian component Rs.2,250CR)
Notification of Combinations to Commission is mandatory within
30 days of approval of such proposal by BODs or execution of any
agreement / document.If notified, Commission to take decision
within 210 days on the Combination.Decision may allow, disallow,
modify, etc the Combination
Overview of Competition Law in India
6. Inquiry into Anti-competitive agreements / Abuse of
dominance- Suo motu inquiry- On receipt of complaint- On receipt of
a reference Commission has suo motu power to enquire whether a
combination causes or is likely to cause an appreciable adverse
effect on competition.
Overview of Competition Law in India
7. Powers of Commission- Cease & desist order- Impose
penalty upto 10% of turnover- In case of Cartel, penalty can be 10%
of turnover or 3 times of profit illegally gained from cartel
activity, whichever is more- Recommend to Govt the division of
dominant enterprise- Various penalties ranging from Rs. 1lakh upto
Rs. 1 crore are also provided for failure to comply with direction
/ order of Commission
Overview of Competition Law in India8. Recent cases concerning
Anti-Competitive Agreements and Abuse of Dominant Position and
Regulation of Combinations
i) On Cement Cartel Fine of Rs. 6,200Crii) On DLF Fine of
Rs.630Criii) On NSE Fine of Rs.55.5Criv) On BCCI for abusing power
Fine of Rs.52.24 Cr v) M&M - Mahindra Navistar deal approval
9th Feb, 2013vi) Diageo-USL deal approval 26th Feb, 2013vii) On
Tyre cartel and Sugar cartelviii) On agreement between SAIL and
Indian Railwaysix) On acquisition of Barclays creditcard business
by Standard Chartered Bank
Overview of Competition Law in Indiax) On merger of Nippon
Steel, Sumitomo Metal Industriesxi) On Coal India role in stagnant
outputxii) Probe on SBI & Associate banks CASA ratesxiii) On
FDI in retail
Overview of Competition Law in India
Thank You
