Dear John,
Background of the Competition Act, 2002. - Predecessor of this act was “Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act).
- MRTP Act dealt with the concept of monopolistic and restrictive trade practices and subsequently dealt with unfair trade practices.
- Current scenario, a need was felt for framing the policies and regulations, which were restricting competition.
- Hence in October 1999 government of India appointed a high level committee known as “RAGHVAN COMMITTEE”
- Committee presented it’s report in May 2000 & based on this report draft was presented to government in November, 2000.
- This act was enacted by Parliament in 53rd year of Republic of India & was passed in December, 2002 – namely called as “COMPETTITION ACT 2002”.
Important Definition wrt to the act -
ACQUISITION – Sec 2 (a) - It means, directly or indirectly, acquiring or agreeing to acquire –
Shares, voting rights or assets of any enterprise or
Control over management or control over assets of any enterprise.
AGREEMENT – Sec 2(b) - Agreement includes any arrangement, understanding or action in concert –
Whether or not, such arrangement , understanding or action is formal or in writing; or
Whether or not, such arrangement , understanding or action is intended to be enforceable by legal proceedings.
CARTEL – Sec 2(c) - Cartel includes an association of –
Producers, Sellers, Distributors, Traders or Service providers
who by agreement amongst themselves, limit, control or attempt to control the production, sale or price of or trade in goods or provision of services.
CONSUMER – Sec2(f) - "consumer" means any person who –
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, whether such purchase of goods is for resale or for any commercial purpose or for personal use;
ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first-mentioned person whether such hiring or availing of services is for any commercial purpose or for personal use;
Role of Competition Law and Policy -
Both Competition Law and Policy have roles in maintaining free & fare competition:
Competition Policy – set of market based policies that enhance competition, facilitate entry and exit, reduce administrative controls, minimize regulations etc. Increasing number of countries migrating to competition oriented policies.
Competition Law – a law to prohibit and penalize anti competitive practice by enterprises and regulate potentially anti-competitive mergers.
Could also provide for Competition Advocacy.
Competition Act, 2002 - Objective
Objective in preamble - “ for the establishment of a commission to”:
- Eliminate practices having adverse effect on competition.
- Promote & sustain competition.
- Protect interests of consumers.
- Ensure
freedom of trade carried on by other participants in markets in India
MAIN FEATURES:- Four Compartment - Prohibits Anti-Competitive Agreements - sec 3
- Prohibits Abuse of Dominant Position - sec 4
- Provides regulation of combinations - sec 5, 6
- Enjoins Competition Advocacy - sec 49
This is what am aware of....will keep you posted further on this...
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