Subject : law aspects of corporate business COMPETITION ACT - 2002 Name : khavadiya arti s. Roll no :25 Subject : law aspects of corporate business Class : mcom sem 2

What is a competition ? The word competition is not defined under the comoetition act ,2002. In normal terms refers to the set of activities carried by two different persons or organisations who or wchich are trying to be better then others. " A situation in a market in wchich firms or sellers independently strive for the buyers patronage in order to achieves a particular business objectives " ( world bank 1999) It is the foundation of an efficiently working market system

Why competition innovation Quality services. Better motivation Competition force focus and differentiation competition pushes you

Back ground of competion act 2002 In india the first competition law was enacted in 1969 that is monopolies and restrictive trade practices act 1969. The enactment of MRTP act 1969 was based on the socio economic philosophy enshriched in the directive principal in the constitution of india . Which was constitution by the government of india under the chairmanship of Justic Rajander Sachar in the year 1977 . In October 1999 under the chairmanship of mr.SVS Raghavan competition law for the contry

On the basis of the recommendation of the Raghavan committee a draft competition law Was prepared and presented in november 2002 The monoplies and restrictive trend practices act 1969 ( MRTP act) repealed and was replaced by the competition act 2002

Competition act 2002 A new called competition act 2002 has been enacted to replace the extant law MRTP act 1969 The act was enacted to provide for the establishment of a commission to prevent practices having adverse effect on competition . The competition act 2002 came into existence in january 2003 and the competition commission of india was establish on 14 oct.2003 The provision of competition act relating to anti. Competition agreement and abuse of dominant position were notified on 20 may 2009 .

DEFINITION Acquisition : Agreement : Cartel : Consumer: Enterprise: Goods : Persone: Price: Relevant market: Service:

Objectives The broad objectives of the competition act as laid down in its preamble are Competition act 2002 notified in january 2003 started objectives in provide for establishment of a commission to prevent practices having appreciable adverse effect on competition To promots and sustain competition in market . To protect the intrest of the consumers To ensure freedom of trade carried on by other participants in markets in india .

PROHIBITION OF AGREEMENTS Prohibition anti competitive arguments (sec. 3) Prohibition abuse dominate positions (sec. 4) Provides the regulations of combinations (sec. 5&6 ) Competition advocacy PROHIBITION ANTI COMPETITIVE ARGUMENTS (sec.3) Enterprises ,persons or associations of enterprise or persons , including cartels ,shall not enter into agreements in respect of production , supply , distributio,storage

Conti...... Acquisition or control of goods or provision of services ,which cause or are likely to cause an " appreciable adverse impact " on competition in india such agreements would consequently be considered void. Agreements which would be considered to have an appreciable adverse impact would be those agreements which Directly or indirectly determine sale or purchase prices

Limit or control production supply ,market ,technical development ,investment or provision of servics . Share the market or source of production or provision of services by allocation of Geographical area of market ,nature of goods or number of customers or any other similaf way. Directly or indirectly result in collusive bidding . TYPE OF AGREEMENT Horizontal agreements Vertical agreement

Horizontal agreement Horizontal agreements which are among the enterprise who are or may compete within same business price fixing ( section 3(2) (a) ) Limiting or controlling supply of goods or services ( section 3(2) (b)) Market allocation ( section 3(2)(c))

Vertical agreement Agreement between enterprise at different stage of production ,distribution etc. Agreement includes arrangements or understanding oral or in writing not necessarilly enforceable by law. Which are discussed in detail as under : Tie in agfeement Exclusive supply agreement Exclusive distribution agreement Refusal to deal Resale price maintenance

ABUSE OF DOMINANT POSITION Meaning of dominant position Dominant position means a position of strength enjoyed by an enterprice,in the relevant market In india Meaning of abuse of dominant position Section 4 (1) of the act provids that no enterprise or group shall abuse its dominant position Section 4(2) states that there shall be abuse of dominant position u/s 4(1) if an enterprise -

(a) directly or indirectly imposes unfair or discrimination (b) limits or restricts (c) indulges in practice or practices resulting in denial of market access in any manner (d) makes conclusion of contracts subject to acceptance by other parties of supplementary obligation which by their nature have to connection with the subject of such contracts (e) uses dominant position in one relevant market to enter into other relevant market

REGULATION OF COMBINATION MEANING OF COMBINATION ( section 5) Combination basically refers to coming together. The conbination may be by acquisition of control voting right or shares or may be way of amalgamation and merger. The acquision of one or more enterprises by one or more persons or merger or amalgmation of enterprise shall be a combination .Acquision refers to acquiring shares ,voting rights or control of enterprise . According there are 3 elements of combination as under (a) Acquisition of shares and voting rights

REGULATION OF COMBINATION (section 6) (b) Acquisition of control (c) Amalgamation or merger REGULATION OF COMBINATION (section 6) (1) notice of combination (2) Effective date of combination (3) investigation and order by competition commission of india

Competition advocacy The provision relating to competition advocacy have been spelled under the act. as per the provision of the sec.16 of the act in the course of formulating a policy on the competition the center government may make reference to the competition for its opinion on possible effect of such reference the commission shall given its opinion to the center government with the period of 60 days of making such reference and letter may formulate the policy as its deems fit

Competition commission of india (cci) (1) Establisment of commission - section 7 establish a commission Body corporate The head office To establish its office at other place (2) Composition of commission - section 8 :No. of members Qualification and experience (3)Selection of chairperson and members of commission

(4) Term of office of chairperson and other members - section 10 (5) Resignation and removal of chairperson and other member of CCI - section 11 (6) Restriction on employment of chairperson and other members - section 12 (7) Salary and terms and conditions of service - section 13

DUTIES , POWERS AND FUNCTION OF THE CCI general duties of cci - section 18 - 20 To elimininate practices having adverse effect on competition To promote and sustain competition To protect interests of consumers To ensure freedom of trade carried on by other participants in marksts in india inquiry into Combination - To enter into memorandum or arrangement

Inquiry into certain agreement and dominant position of enterprice –(section – 19) Inquiry into combination (section – 20) Financial power

conclusion The Indian competition act 2002 is very much comprehensive and enacted to meet the requirement of the economy growth and international economic developments relating to competition laws. The legislation is in synchronization with other policies such as tread policy, norms ,FEMA etc. which would ensure uniformity in overall competition policy.

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