Competition law
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This article has been written by Samarth Suri, from Symbiosis Law School, Noida and is edited by Gitika Jain. The article discussed the need for developing competition law in India and subsequent to that the major provisions and judicial pronouncements. The article also pays special emphasis on how competition law will affect the geo-political environment in India.

Introduction

India was always thought of to be a socilaist state, the freedom fighters and legislators who were behind the genesis of this nation, has made it clear that securing a social order was necessary for the growth of this country. 

On the advent of the formation of the constitution the words Socialsit was nowhere to be seen, but its essence was felt throughout the articles of the constitution. Finally via the 42nd Amendment Act, the words Socialist, Secular and integrity were added to the preamble, making explicit what earlier was presumed. Besides this under Article 38 it has been provided that the State has to secure a social order for the people, by securing and protecting the justice, social, economic and political aspects, similarly Article 39 also provides for reminiscent principles to be followed.

Both of these articles come under Part-IV to the constitution, which covers Directive Principles of State Policy (DPSP). Although these are neither binding nor justiciable in the court of law, they impose a responsibility on the state to take proper measures for their implementation. 

Genesis of antitrust law in India 

In the background of such provisions in the law, the government appointed the Mahalanobis Committee to look into the distribution of income and levels of living. The said committee submitted its report in 1960 portraying the economic divide. 

Subsequent to this the Monopolistic inquiry committee was set up, which submitted its report in 1965. Therefore it can be said that provisions of Article 39 form the basis for competition laws in India. Pursuant to the report submitted by the committee, a bill was tabled in the parliament to enact the Monopolistic and Restrictive Trade Practices Act (Hereinafter MRTP Act).

The provisions of the act were aimed at preventing the concentration of wealth in a few and regulating competition, so as to make it as fair as possible, even for new players.The main objectives of the Act were to regulate mergers, amalgamations, appointment of directors among others. 

History of MRTP Act

As time passed there were unprecedented advances in technology, particularly in the internet, because of which globalization had become essential for any country to achieve economic growth. There was an urgent need to come up with a better model to regulate competition in the country.

Post the implementation of the LPG policy in India the government of India constituted a High Level Committee in 1999 with Shri S.V.S. Raghavan as the Chairman to look into the working of the MRTP Act. 

The report that was submitted felt the need for phasing out of the 1969 MRTP Act and its replacement by a competition law that was in sync with the Global trends of competition in the world economy. This resulted in the enactment of the Competition Act of 2002, which had been made keeping in mind the Global facet of it, fair play in the market and also keeping in mind the interests of the consumer. 

Need for antitrust law in India 

To create a level playing field with effective competition in the market, competition laws are introduced to regulate the manner in which businesses are conducted in India. Businesses compete on merit, and not with the aid of anti-competitive agreements and/or conduct is the underlying intent for this statute. The intent of this relatively new statute in the Indian legal system is not to make it easier for the weaker businesses to survive in the market, or require the more profitable businesses to give up their market share, even though competition laws can be used by businesses as a sword to ensure ‘level playing field’ in the market.

Important provisions of the Competition Act of 2002

First and foremost the Act provides for a body that will overlook the implementation of Anti-trust laws in India i.e.- the Competition Commission of India. 

Which types of agreement will be held as void

Section 3(1) of the Act describes Anti-competitive agreements. It is an agreement which prevents any enterprise or association from entering into any agreement and which causes or will probably cause an appreciable adverse effect on competition in India. 

The next thing that needs declassification, is what constitutes an appreciable adverse effect on competition. Section 19(3) of the Act lists down criteria that are taken into consideration while determining appreciable adverse effects.

  1. Creating barriers for new entrants- The entry of new entrants into the market is very important as it keeps the existing players on their toes and this is widely even held as beneficial for consumers.
  2. Driving competition out of the market- For ensuring healthy competition in the market, it is important to preserve it.
  3. Foreclosure of competition by hindering entry into the market- Sometimes a few enterprises come together and form cartels, these cartels then go on to drop the prices of their products so low, that is impossible for new competition to enter into the market. 

Other than the three mentioned above Improvement in production or distribution of goods or provision of services, accrual benefits to consumers, Promotion of technical, scientific and economic developments may also be held under Appreciable adverse effects. 

In the case of Haridas Exports v. All India Float Glass Manufacturers Associations, the Supreme court held that the words AAEC embraces acts, contracts and agreements that act in prejudice to public interest.

The Act basically prohibits any agreement that may be detrimental to competition in the country, shall be prohibited. In this regard it defines two types of agreements.

  • Horizontal agreements- These are agreements made between firms that are at the same level in the market. Acts such as price fixing, changes in supply with an intent to manipulate prices, collusive bidding, market sharing etc. 
  1. Price fixation- It is an agreement between participants on the same side of the market to buy or sell a product at a fixed price and maintain that price by controlling the supply and demand. It fraudulently prevents other businesses from being able to compete in the market.
  2. Market sharing- This is when competitors in the same line of business decide to share consumers, suppliers or geographical areas among themselves rather than making independent decisions. 
  • Vertical agreements- Vertical agreements have been defined under Section 3(4) of the Act. These are agreements between firms that are at a different stage of production chain in different markets in respect of production, supply, distribution storage etc. 

Types of prohibitory vertical agreements: 

  1. Tie-in-agreements- any agreement which requires the purchaser of goods, as a condition for such purchase, to purchase some other goods. For e.g – there is a Medical Shop in a remote place which states that whoever wants to buy medicines from that shop also has to buy 2 liters of orange juice from another Shop X. Herein although the customer didn’t need the orange juice, still the firm used its power to the prejudice of the consumer to make a purchase of the firm’s choice.
  2. Exclusive supply agreement- Any agreement restricting in any manner the purchaser to buy goods from any other person other than the seller. This may apply to both a supplying and a purchasing obligation. 

In a supplying obligation, the supplier is restricted from supplying to any other person other than the purchaser, and in a purchasing obligation, the purchaser is restricted from buying from any other supplier. This particular concept is also known as “single branding”, “Non compete obligations” and “exclusive purchasing”. 

In Hoffmann-La Roche v. Commission, the European commission opined that if an enterprise which is holding a dominant position in the relevant market ties its purchasers (even if this is made at request), to buy all of the parts exclusively from the said enterprise then that would lead to abuse of the dominant position. 

  1. Exclusive distribution agreement- Includes any agreement to limit, restrict or withhold the supply of certain goods to a particular area or market. In such an agreement the supplier and the wholesale distributor will agree that the whole distributor will only resale his goods, therefore allowing the supplier to close the access of an exclusive distribution network for his competitors. Such an agreement should tend to create a monopoly in any line of commerce.
  2. Refusal to deal agreement- Agreement restricting a particular class of people with whom business can be done. Herein competitors may not agree to deal with certain players in the market, while restricting their dealings with a particular group of players, thus damaging the market. 
  3. Resale Price Maintenance- An agreement under which the seller sells the goods on the condition that the resale value of the goods will be determined by the seller, unless the agreement explicitly states that goods below a particular price may be sold. This in a way curbs the reseller’s ability to market his product the way he wants, he might not be able to maintain the margin that he wants to offer the discounts. 

The exception to such practices has been given to the enforcement of Intellectual property rights. 

Cartelisation 

Cartels have been defined under Section 2(c) of the Act as an association of producers, sellers, distributors, traders who by agreement between themselves limit, control or attempt to control production, distribution, sale or price of trader of goods or provision of services. 

In other words cartelisation may be defined as an agreement between different enterprises, for not competing on prices, quality or customers. The purpose of a cartel is to raise the prices for consumers and also bad quality in some cases. 

There are a few acts of the cartels that prohibited:

  1. Directly or indirectly determine sale prices.
  2. Limits or controls on production, distribution, sale and prices.
  3. Resulting in bid rigging or collusive bidding directly or indirectly.

An exception to the application of this section is that it is not applicable in cases of joint ventures if such agreement increases efficiency in production, distribution, storage etc.

In Builders Association of India v. Cement Manufacturers Association and others, the CCI imposed a penalty of over Rs 6000 on 11 leading cement producers for formation of cartels to control price, production and supply.

In a suo moto case against LPG cylinder manufacturers, the commission held the LPG cylinder companies guilty of Bid rigging, as most of them quoted identical prices in a tender issued by the Indian Oil corporation. 

How is appreciable adverse effect on competition actually proved in courts

For this there are two rules that are applied by the court i.e.- the rule of per se and the Rule of Reason. The rule of per se operates under Section 3(3) of the Act which states that all of such horizontal agreements are presumed to have an AAEC. In this the presumption operates even in the absence of proof, the only way to overturn the presumption is to provide evidence to the contrary. Hence the court is bound to take the fat as true unless evidence is provided to the contrary. 

The other is the Rule of reason, which is applied when the opposite party is allowed to defend the case under Section 19(3) of the Act. In Sodhi Trport Company v.State of Uttar Pradesh, the court observed that the presumption in itself is no evidence, it only indicates the person on whom the burden of proof lies and when that other person provided evidence to the contrary the purpose of the presumption is over. 

To this the CCI has also observed that once a case of an agreement under Section 3(3) of the Act has been established, there is no need to prove whether such agreement has any AAEC or not, herein the presumption provides that it will have an AAEC. This shifts the onus of proof on the other party to provide evidence to prove that such agreement did not have any AAEC.

How are void agreements under Section 3(3) of the act decided by the court

Cartels by their very nature are difficult to identify, the approach of the CCI has remained dichotomous, in recognising the existence of a cartel. In its earlier cases teh CCI held that the existence of a cartel should be proved unequivocally, in thes the commission was following the rule of beyond reasonable doubt. 

Later in the Shoe Cartel Case, the commission tweaked this rule to that of balancing of probabilities. The commission also took into account circumstantial evidence concerning the market. From the decisions taken by the CCI till date it is deducible that it examines anti competitive agreements based upon the conduct of the enterprise and as well as the economic evidence present in cases of horizontal agreements. 

Examples of conduct based evidence includes evidence of meetings between competitors, doubtful sharing of documents, similar or identical bidding prices etc. Furthermore, the enterprises that form cartels are well aware of its illegality, and therefore keep their actions as discreet as possible, all written proof is discarded and it is preferred to do most of such agreements verbally. 

Leniency provisions for disclosure of cartel

Section 46 of the Act provides for leniency provisions, in the form of a reduced penalty in case an enterprise voluntarily comes forward and declares the existence of a cartel. The intent of providing for such provisions is to provide an incentive structure for enterprises to declare the existence of cartels, this is moreover important because proving the existence of cartels is difficult and this allows for proper whistle blower policy. 

Liabilities of companies and individuals under the Competition Act 

As per Sub Section (1) of Section 48 of the Act, whosoever was in incharge of the company in question at the time of such contravention will be proceeded against. The onus of proof will then be upon this person to prove that he/she did not have any knowledge of such contraventions. 

Section 48(2) envisages that whichever employee of such enterprise which has contributed to the anti competitive agreement will also be guilty of such contravention and the burden of proof in such cases will be upon the commission in contrast to sub section (1).

Penalty for contravention under Section 3 of the Act

  1. A cease and desist order, which directs the enterprise to discontinue or withdraw from the agreement causing AAEC.
  2. Impose a fine not more than that of 10% of the previous 3 financial years. 
  3. In case of cartels the penalty will be three times the estimated profit or 10% each year of pursuit of such agreement, whichever is higher.
  4. Issue any other order as deem fit by the commission. 

Misuse of dominant position 

The exercise of leverage by a dominant firm over other players in the market, or exercising such position with the intent of making it difficult for new entrants in the market to enter has also been penalized by Section 4 of the Act

Excessive pricing is also one of the major menaces in competition law. A combined reading of Section 4(1) and Section 4(2) of the Act prohibits the imposition of “unfair prices” by firms. In regards to this it is also true that there is no universally accepted policy with regards to “unfair pricing.” 

In this regard the EU courts have made a two stage test for determining what might be excessive price. 

  1. The Competition authorities first have to access whether the cost incurred and the price charged is excessive or not?
  2. IF it is excessive then they have to determine whether the change in price has been done in itself, or in relation to other competing products.  

To determine what might be “excessive pricing” earlier prices of the same enterprise can also be used for comparison. In General Motors Continental NU v. Commission, the earlier p[rices of the same enterprise were used to compare with the current prices and determine whether the prices weren in excess or not. 

A position of strength enjoyed by an enterprise, in a relevant market in India, which enable it to:

  1. Operate independently of competitive forces prevailing in the relevant market; or 
  2. Affect its competitors or the consumers or the relevant market in its favour; 

is called Dominant Position.

There are specific practices under which such firms may be penalised. 

  • Predatory pricing- This means that a particular firm sells the goods and services at a price below the cost, therefore increasing the demand of its product in the market and with a view to eliminate competition. The CCI (Determination of cost of production) regulations has been enacted to determine what will be considered as the cost of a product. It has been determined that the Average Variable Cost as a proxy for Marginal Cost will be considered as the cost.

The Concept of predatory pricing has been given a wider ambit under EU competition laws. According to the EU definition, Predatory pricing is a practice wherein an enterprise sells its product below the cost in the short run, thus enabling it to drive out competition or hinder the entry of new rivals in the market. To this extent the EU denotes two types of pricing strategies as predatory:

  1. If the enterprise sells its product or services below the Average Variable Cost (AVC). 
  2. If an enterprise sells its product or service above the Average Variable Cost (AVC) but below the Average Total Cost (ATC), with an intent of driving out competition. 
  • Restricting the production of goods and services in a market, with the intent of increasing ist demand. 
  • Restricting the technical or scientific development of goods or processes to the prejudice of consumers. 

Section 19 of the Act allows the commission to enquire into any alleged misuse of dominant position. Such enquiry can be made by the commission, Suo moto, receipt of complaint by any person or trade association or upon the directions of the central government. 

Important cases relating to abuse of dominant position 

In the case of Belaire Owners Association v. DLF Limited, the CCI analysed Section 4 of the Act. In this it explained the ability of an undertaking to operate independently of the competitive forces generated by its competitors, meaning that when an enterprise can freely adopt its price and non-price strategy without affecting its demand and creating a marketplace that deters the entry of new competition, in terms of rival products. 

In this the CCI also explained that in an Indian Market holding a dominant position does not involve any regulation, however using such a dominant position in an abusive manner will involve regulatory practices. 

In Arshiya Rail Infrastructure Limited v. Ministry of Railways & Others, the CCI explained the concept of relevant markets. In this it stated that the concept of relevant market in competition law is only a tool to determine the boundaries of the competition between enterprises. 

Relevant market tends to lay down the basis upon which the competition authorities apply the competition laws. In India the first step in case of abuse of dominant position, is to determine the relevant market and then take the provisional assumption that abuse of dominant position has taken place. 

Post this, it has to be analysed, till what extent such abuse would be allowed. In this regard it is also seen that the CCI tends to define a narrow relevant market, contrary to this enterprises tend to define market in a wider sense as that would mean a smaller market share in that market and hence would decrease the chances of having a dominant position in the first place.

In Surinder Singh Barmi v. Board for Control of Cricket in India, the CCI that the dominant position of the BCCI arises due to its regulatory power to control entities and players in the cricket world. To this the CCI also added that BCCi contributed to the suspension of other private leagues that were started in competition to the Indian Premier League. The CCi held that the BCCI was abusing its dominant position by:

  1. Denying market access to potential competitors in terms of cricket leagues. 
  2. And limiting the number of franchises in any private professional league. 

In the case of MCX Stock exchange limited v. NSE of India Ltd,  the CCI formulated a two pronged test for predatory pricing. The claimant that alleges Predatory pricing must prove:

  1. The competitor could actually be driven out of the market by that scheme. 
  2. That the surviving monopolist could subsequently raise the prices to the existing consumers long enough to recoup his costs without driving new errants in the market. 

In United Brands Company & United Brands Continental BV v. Commission of European Communities, the court used the strategy of comparing prices to determine whether excessive price was being charged or not. This case also paid testament to the rule that in competition economics the level of fixed cost and capital intensity would be regarded as equal in the same industry, which makes it possible to compare prices across industries. 

In Competition Commission of India v. FastWay Transmission Pvt. Ltd & Others, opined that the term denial of market in any manner is a wide term and such term should be given its natural meaning. The court also held that once a dominant position has been established, the fact that the denial of market is caused by the competitor is irrelevant. The only consideration to be taken care of is that of denial of market.

Regulation of combinations

The competition Act also provides for regulation of combinations, in the form of mergers. Aquisations, amalgamations etc. For determining whether which types of combinations  have to be compulsorily notified to the commission, it has defined various thresholds.

Individual/Group 

Assets/ Turnover in India 

Assets/ Turnover outside India 

Acquisition by an Individual 

Joint assets over Rs. 1500 crores or turnover over Rs. 4500 crores.

Joint assets over US$ 750 million including at least Rs. 750 crores in India or turnover over US$ 2250 million including at least Rs. 2250 crores in India. 

Acquisition by a group 

Group asset over Rs. 6000 crores or turnover over Rs. 18000 crores.

Group assets including at least Rs. 750 crores in India or turnover over US$ 9 billion including at least Rs. 2250 crores in India of over US$ 3 billion.

Why should mergers be regulated

A merger leads to a bad outcome only if it creates a dominant enterprise in the market and subsequently abuses that dominance. From this point, if view only horizontal mergers come in the limelight as may have an impact on the competition in the market and their abuse of dominance in all likelihood will pose a danger to the interests of the consumer. In this regard there are three basic types of mergers:

  • Horizontal mergers- These types of mergers have the potential for reducing the competition in the market. 
  • Vertical mergers- In this there are specific cases where such mergers may lead to abuse of dominance:
  1. Fea of foreclosure- Vertical mergers can create captive distribution channels and foreclose the entry of new firms into the market. 
  2. Entry blocking- Vertical mergers may block the entry of centrain new firms into the market.
  3. Price squeezes- Vertical mergers internalise the process of production and hence can decide upon the selling cost of the product by themselves, which might be low in comparison to other such competitors in the market. 
  • Conglomerate mergers- These are those mergers which are neither horizontal nor vertical, but are based upon folklore. 

Amalgamations under the Competition Act 

Amalgamations are combinations of one or more companies into a new entity. An amalgamations is regarded as a distinct form of merger because neither of the merging companies remains as a legal entity. 

However it is also true that all amalgamations do not cause an AAEC, and some combinations might also help the enterprises and the economy both. Section 6 of the Act provides for such exceptions: 

  1. The combination must be within the same group of companies. 
  2. Acquisition of not more than 15% of the voting rights, not leading to control. 
  3. Acquisition of share, where the acquirer already has 50% or more of the holding.
  4. Combination entirely taking place outside India, which has insignificant local nexus and effect on Indian markets. 

Which types of combinations are prohibited under the act

Section 6(1) provides that the combination which has an AAEC will be prohibited under the act. The test in determining whether a particular combination will have an AAEC is the “rule of Reasonïs”. Section 23 of the Indian Contract Act also applied to this section, which states that consideration and object of a contract is lawful unless a) it is forbidden by law or is of such nature that if permitted will violate any of the provisions of law etc.

Section 6(2) of the Act, gives an enterprise the authority to move to the commission to enquire whether the combination is prohibited or not. However the commission has no power to judge the validity of the validity of the combination except for the purposes of this act. 

The procedure under Section 6(2) of the Act provides that whichever person or enterprise proposes to enter into a combination may at its option( voluntarily not compulsorily) give notice to the commission within 7 days of:

  1. Approval of board of directors with respect to merger or amalgamation under Section 5(c). 
  2. Execution of any agreement or other document under Section 5(a)(b).

How to determine whether a particular combination will have an appreciable adverse effect on competition

Over its short span of time the CCI through various decisions and regulations has detailed some rules with regards to AAEC. These will be the cases/situations under which AAEC will be determine in the market:

  1. Actual and potential level of competition in the market through imports. 
  2. Extent of barriers on entry. 
  3. Level of combination in the market. 
  4. Likelihood that the combination would result in the enterprise so formed to tweak prices in the market. 
  5. Possibility of a failing business. 
  6. Whether the benefits of the combination outweigh its AAEC.
  7. Vertical integration in the market’s nature and extent.

In the case of Jet Airways (India) Limited and Etihad Airways PJSC, a UAE based company Etihad wanted to buy 24% in Jet Airways, this was sent to the CCI for determining whether there will be a AAEC.

The commission held that the relevant market in consideration is that of international passenger transport based on point of origin or point of destination. There were 38 routes to/from Indian which CCI determined, where Etihad and jet airways flew flights, and one competitor on each of such routes. Except 7 destinations, where jet airways and Etihad had a combined share of more than 50%, rest in all destinations the combined share was less. Upon this the CCI observed that it did not cause any AAEC. 

Authorities under the Competition Act 

The Competition Commission of India has been established under Section 7 of the Act. According to the act the commission is in the form of a company that even has perpetual succession, common seal and the capacity to sue and be sued. The head office of the commission is in New Delhi.

Composition of the commission 

The commission shall have a chairperson and a minimum of two members and maximum 6 members. The members should have intricate knowledge relating to the fields of economics, international trade, business, commerce law, industry, public affairs or competition matters, with a minimum experience of 15 years in any of the above stated fields.

Under section 9 the chairperson and other members shall be appointed by the central government from a list of members who are deemed fit to be members of the Commission. The selection committee consists of the Chief Justice of India and its nominee who may suggest the name of the chairperson. while the other members may be suggested by the secretary of the Ministry of Corporate affairs, the secretary of the ministry of law and justice and two other experts who have special knowledge and professional experience in the fields of International Trade, economics, business, commerce, finance, accountancy, management, industry, or competition matters including competition law and policy. 

Duties of the commission 

The main activities of the commission are to eliminate activities that cause an appreciable adverse effect on competition and promote and sustain competition, it also has to keep in mind the interests of the consumers. The commission may fior discharging its duties enter into a memorandum of understanding with the central government. 

Procedure for enquiry under Section 19 

On receipt of reference from the central government or state government or any other statutory authority, if the commission is of the opinion that there exists a prima facie case, it shall pass an order under Section 26(1) of the Act and accordingly direct the director general to carry out a detailed investigation i to the matter.

However if the commission feels that there is no prima facie case being made then it shall pass an order under Section 26(2) of the Act to either continue the investigation or close it and send a copy of the same to the central or the state government concerned. 

If the director generals that there is no violation of dominant position and no case is being made then the central or the statue government concerned may send in their recommendations.

Types of orders passed by the commission 

  1. The commission can pass an order regarding a person enjoying a dominant position.
  2. The commission can order an enterprise to leave or discontinue with an agreement and enter into a new agreement where they would not be following a dominant position. 
  3. The commission can impose a penalty of not more than 10% of the turnover of the previous 3 financial years. 
  4. The commission may direct an enterprise to modify its terms of agreement til the commission feels that such enterprise is not in a dominant position. 
  5. The commission may pass an order as it deems fit. 

Right to appeal against the order of the commission

Section 40 of the Act provides that any person aggrieved by any decision or order of the Commission may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Commission.

Penalties under the Act 

The person shall be punishable with fine which may extend to ₹ 1 lakh for each day whenever such non compliance occurs, subject to a maximum of ₹ 10 crore, if any person fails to comply with the orders or directions of the Commission.

It is provided in Section 44 that if any person, being a party to a combination makes a statement which is false in any material particular or knowing it to be false to state any material particular knowing it to be material, he shall be liable to a penalty which shall not be less than ₹ 50 lakhs but which may extend to ₹ 1 crore.

Indian economy and competition law 

Although the competition Act came into force in 2003, the Competition Commission of India was formed until 2009,  after formation it inherited the cases of MRTP commission. It is also true that Competition Law is yet to fully develop in India and has only reached the infancy stage. In the end, the consumers are the ones that will gain maximum benefit out of this, in terms of affordability, availability and quality. Having all the laws in one place, is one thing, their implementation is another.

On an analysis of the Indian economy we can see that there is unfathomable opulence on one end and extreme penury on the other. While one half is deciding which type of meal they would prefer for dinner, the other half is only concerned about whether they would get dinner or not. This is the sad truth about the economic divide in India, and as much socialist as we admit ourselves to be, such problems can never be resolved to their fullest. 

The competition law will help in regulating the competition, hence providing for a fair playing field for everyone, thus disbursing the benefits of trade among a larger population rather than remaining is only in the hands of a few. 

In Ashok kumar Thakur v. Union of India, the Supreme Court observed that the gap between the rich and the poor is clearly visible in India, and the competition Act will act as a tool to bridge this gap and ensure a more inclusive India. 

It is also imperative that the provisions of the Competition Act are not used against competition itself, because these rules if applied with nonchalance with blindly achieving the motive Social equality, can again lead to situations wherein doing business in India might not be considered profitable and hence reducing Foreign direct investment and foreign portfolio investment. 

Hence it is important that a proper balance is struck in the application of the provisions of the act. 

Conclusion 

The Government of India issued a set of draft amendments in an attempt to plug in existing lacunas in the Competition Act, in 2012. Based on the recommendations of the expert committee, the government introduced the Competition Amendment Bill, 2012 (Bill) in the lower house of the Indian Parliament, the Lok Sabha. While these amendments are yet to be notified, once implemented, they are likely to introduce significant changes to competition in India. Under section 4 of the Competition Act, most notably, the Bill seeks to introduce the concept of “joint dominance”. With this amendment, the CCI will be able to assess dominance on the basis of the combined ability of two or more enterprises to act independently of the competitive forces in the relevant market.

In terms of procedure, one of the most controversial amendments sought to be introduced in the Bill is in relation to the CCI’s power of “search and seizure” or dawn raids. This will most likely ease the process for conducting “dawn raids” and it is expected this power will be exercised frequently during investigations. The Bill also seeks to introduce several other small yet significant changes to the Competition Act.

References

  1. http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Competition%20Law%20in%20India.pdf
  2. https://www.cci.gov.in/sites/default/files/presentation_document/Overview%20of%20Competiton%20Law%20%26amp%3Bamp%3B%20Economics_Yogesh%20Dubey%40ISEC_06.07.2018_1.pdf?download=1
  3. https://www.jstor.org/stable/4413938

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