COMPETITION ACT, 2002

WHY COMPETITION ACT WAS INTRODUCED ?
The Monopoly and Restrictive Trade Practice Act 1969 became obsolete in the present world of throat cutting competition. The MRTP Act prevent the expansion of the companies whose assets was 100 crore, because these companies need to take government permission to expand their business.



So there was a desperate need to shift our focus from the monopoly to the competition. Hence a new law has been enacted and published in the gazette of India on 14 January, 2003 for bringing competition in the Indian market.

OBJECTIVE OF COMPETITION ACT, 2002

1. To protect the interests of the consumers by providing them good products and services at reasonable prices.

2. To promote healthy competition in the Indian market.

3. To prevent the interests of the smaller companies or prevent the abuse of dominant position in the market.

4. To prevent those practices which have adverse impact on competition in the Indian markets.

5. To ensure freedom of trade in Indian markets.

6. To regulate the operation and activities of combinations (acquisitions, mergers and amalgamation).

FEATURES OF COMPETITION ACT, 2002
The Act mainly covers these aspects;

1. Prohibition of anti competitive agreements

2. Prohibition of abuse of dominance

3. Regulation of combination (acquisition, mergers, and amalgamation of certain size)

4. Establishment of the competition commission of India

5. Power and functions of the competition commission of India

WAYS TO ACHIEVE THE OBJECTIVE:
The Act identifies three ways which can have adverse effect on the competition

1. Anti competitive agreement (vertical agreement, horizontal agreement)

2. Abuse of dominant position; enjoying a dominant position will not be crime but its abuse will be a crime

3. Elimination/reduction of competitors in the market achieved through acquisition, mergers, and amalgamation

COMPETITION COMMISSION OF INDIA (CCI)

Competition Commission of India (CCI) had finally become operational from May 20, 2009. It’s an independent body responsible for investigating mergers, acquisition and pricing strategy by the different companies. CCI had replaced the Monopolies and Restrictive Trade Practices Commission, 1969.