COMPETITION POLICY AND LAW 1

2 EXTANT COMPETITION LAW OF INDIA MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969 BROUGHT INTO FORCE IN 1970

3 THE NEW LAW n A NEW LAW CALLED COMPETITION ACT 2002 HAS BEEN ENACTED TO REPLACE THE EXTANT LAW, MRTP ACT 1969 n THE NEW LAW WAS CHALLENGED IN THE SUPREME COURT ON THE GROUND THAT THE CHAIRPERSON SHOULD ONLY BE FROM THE JUDICIARY n THE NEW LAW HAS BEEN AMENDED ON 10 SEPT 2007 BY THE PARLIAMENT n NEW LAW ISENFORCED

4 FOUR COMPARTMENTS ã ANTI-COMPETITION AGREEMENTS ã ABUSE OF DOMINANCE ã MERGERS, AMALGAMATIONS, ACQUISITIONS AND TAKE-OVERS ã COMPETITION ADVOCACY

5 : HORIZONTAL RESTRAINTS : n CARTELS {FIXING PURCHASE OR SALE PRICES (EXPORT CARTELS EXEMPTED) } n BID-RIGGING (COLLUSIVE TENDERING) n SHARING MARKETS BY TERRITORY, TYPE ETC. n LIMITING PRODUCTION, SUPPLY, TECHNICAL DEVELOPMENT THE ABOVE ARE “PER SE” ILLEGAL. : VERTICAL RESTRAINTS : n TIE-IN ARRANGEMENTS n EXCLUSIVE SUPPLIES n EXCLUSIVE DISTRIBUTION n REFUSAL TO DEAL n RESALE PRICE MAINTENANCE ADJUDICATION BY RULE OF REASON ANTI - COMPETITION AGREEMENTS

6 WHO ARE PROHIBITED FROM ENTERING INTO SECTION 3 AGREEMENTS? ENTERPRISES PERSONS DEPARTMENTS OF GOVERNMENT WHO ARE ENGAGED IN ACTIVITIES RELATING TO PRODUCTION, STORAGE, SUPPLY, DISTRIBUTION, ACQUISITION OR CONTROL OF GOODS AND WHO ARE ENGAGED IN PROVIDING SERVICES OF ANY KIND ALL GOVERNMENT ENTERPRISES FALL WITHIN THE MISCHIEF OF SECTION 3.

7 ABUSE OF DOMINANCE DOMINANCE NOT LINKED TO ANY ARITHMETIC FIGURE OF MARKET SHARE DOMINANCE MEANS A POSITION OF STRENGTH ENABLING AN ENTERPRISE TO OPERATE INDEPENDENTLY OF COMPETITIVE PRESSURE AND TO APPRECIABLY AFFECT THE RELEVANT MARKET,COMPETITION AND CONSUMERS. ABUSE OF DOMINANCE ARISES IF AN ENTERPRISE IMPOSES UNFAIR /DISCRIMINATORY PURCHASE OR SALE PRICES (INCLUDING PREDATORY PRICES) LIMITS PRODUCTION,MARKETS OR TECHNICAL DEVELOPMENT DENIES MARKET ACCESS CONCLUDES CONTRACTS SUBJECT TO OBLIGATIONS HAVING NO CONNECTION WITH THE SUBJECT OF THE CONTRACTS. USES DOMINANCE TO MOVE INTO OR PROTECT OTHER MARKETS RELEVANT MARKET = RELEVANT PRODUCT MARKET + RELEVANT GEOGRAPHIC MARKET

8 COMBINATIONS MERGERS/AMALGAMATIONS 1. REDUCTION IN NUMBER OF PLAYERS 2. ACQUISITION OF ENORMOUS ECONOMIC STRENGTH 3. DISCOURAGEMENT OF NEW ENTRANTS PEJORATIVE EFFECTS 4. DICTATION OF PRICES 5. DOMINANCE 1. COMPETITION LAW TO HAVE SURVEILLANCE OVER COMBINATIONS BEYOND A THRESHOLD LIMIT (Assets > Rs.1000 Crores or Turnover > Rs.3000 Crores ) 2.NOTIFICATION OF COMBINATIONS MANDATORY 3. CCI MANDATED TO DECIDE WITHIN 210 WORKING DAYS ELSE DEEMED APPROVAL REGULATION ON COMPETITION PERSPECTIVE

9 COMPETITION ADVOCACY THE COMPETITION COMMISSION OF INDIA ¨ IS ENABLED TO PARTICIPATE IN THE FORMULATION OF POLICIES AND REVIEWING OF POLICIES RELATING TO COMPETITION AT THE INSTANCE OF THE GOVERNMENT ¨ IS REQUIRED TO CREATE COMPETITION CULTURE ¨ IS REQUIRED TO ACT AS COMPETITION ADVOCATE

10 EXEMPTIONS GOVERNMENT BY NOTIFICATION MAY EXEMPT FROM THE COMPETITION LAW A ANY CLASS OF ENTERPRISES IN THE INTEREST OF NATIONAL SECURITY/PUBLIC INTEREST. B.ANY PRACTICE/AGREEMENT ARISING OUT OF INTERNATIONAL TREATY/AGREEMENT C.ANY ENTERPRISE PERFORMING A SOVEREIGN FUNCTION ON BEHALF OF GOVERNMENT DIFFERENT PROVISIONS FROM DIFFERENT DATES IF, NEED BE.

11 EXTRA TERRITORIAL REACH n THE COMPETITION ACT, 2002 EXTENDS THE COMPETITION COMMISSION OF INDIA’S REACH BEYOND THE INDIAN SOIL n THE EXTRA TERRITORIAL REACH IS BASED ON “EFFECTS DOCTRINE”.

12 COMPETITION COMMISSION OF INDIA COMPRISES : CHAIRPERSON MEMBERS (NOT LESS THAN TWO AND NOT MORE THAN SIX) SELECTION BY A COLLEGIUM THIS IS TO MINIMISE POLITICISATION OF APPOINTMENTS

13 DEPOLITICISATION AND CASTING NET WIDE n RATIONALE FOR THE COLLEGIUM APPROACH IS TO MINIMISE POLITICISATION OF APPOINTMENTS n CHAIRPERSON OF CCI NEED NOT BE FROM THE JUDICIARY n CHAIRPERSON AND MEMBERS FROM FIELDS – JUDICIARY, ECONOMICS, LAW, INTERNATIONAL TRADE, BUSINESS, COMMERCE, INDUSTRY, FINANCE, ACCOUTANCY, MANAGEMENT, PUBLIC AFFAIRS, AND ADMINISTRATION

14 COMPETITION APPELLATE TRIBUNAL n WILL HEAR AND DISPOSE OF APPEALS AGAINST ORDERS OF CCI n WILL ADJUDICATE ON CLAIMS FOR COMPENSATION

15 COMPOSITION OF CAT n CAT WILL CONSIST OF CHAIRPERSON, WHO IS OR HAS BEEN A JUDGE OF THE SUPREME COURT OR THE CHIEF JUSTICE OF A HIGH COURT AND NOT MORE THAN TWO MEMBERS n SELECTION BY A COLLEGIUM

16 THE NEW LAW AND IPRs n SECTION 3(5) OF THE COMPETITION ACT, 2002 EXCLUDES ALL IPRs FROM ITS APPLICABILITY n INTELLECTUAL PROPERTY RIGHT CARRIES WITH IT A BUNDLE OF RIGHTS IN THE INTEREST OF CREATIVITY AND INNOVATION n ANY CONDITION OR OBLIGATION OUTSIDE THE BUNDLE OF RIGHTS CANNOT BE COUNTENANCED IF IT TRENCHES COMPETITION n THE ACT HAS THEREFORE BROUGHT UNDER ITS SURVEILLANCE UNREASONABLE PRACTICES THAT MAY ACCOMPANY THE EXPLOITATION OF IPRs

THANK YOU