Legal Aspects Of Corporate Business

COMPETITION ACT 2002

INTRODUCTION The Govt. Of India Introduced the bill 2001. Bill passed in Dec 2002. On 13 Jan 2003 The President of India gave his assent. Competition Of India(CCI) is advocacy for competition Act 2002. It replace Monopolies and Restrictive Trade Practices Act 1969.

DEFINITIONS Section 2 defines certain terms. (1) Acquisition : Directly or indirectly, acquiring or agreed to acquire, – - Shares, voting rights or assets of any enterprise ; or - Control over management or control over assets of any enterprise. (2) Agreement : any arrangement or understanding or action in concert,- - whether or not, such arrangement or 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. (3) Cartel : An association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or trade in goods or provision of services.

CONT… (4) Consumer : Any person who ; - 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 a consideration or partly paid or partly promised, or under any system of deferred payment. (5) Enterprise : A person or a department of the Government _ - production, control of goods… A. Sovereign Function B. Non-Sovereign Function

CONT… (6) Goods : A goods as defined in the Sale of Goods Act, 1930 and includes - products manufactured, processed or mined, - debentures, stocks and shares after allotment, - in relation to goods supplies, distributed or controlled in India, goods imported into India. (7) Person : It includes ; - an individual, - a Hindu undivided family, - a company, - a firm,

CONT… (8) Price : In relation to the sale of any goods or to the performance of any services, includes every valuable consideration, whether direct or indirect, or deferred. (9) Relevant market : The market which may be determined by the Commission with reference to the relevant product market or the relevant geographic market or with reference to both the markets. (10) Relevant product market : a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use.

CONT… (11) Relevant geographic market : A market comprising the area in which the conditions of competition for supply of goods or provision of services or demand of goods or services are distinctly homogenous and can be distinguished from the conditions prevailing in the neighbouring areas. (12) Service : Any industrial or commercial matters such as banking, communication, education, financing, insurance, real estate etc….services included (13) Trade : any trade, business, industry, profession or occupation relating to the production, supply, distribution, storage or control of goods and include the provision of any services.

CONT… (14) Shares : Shares in the share capital of a company carrying voting rights and includes _ - any security which entitles the holder to receive shares with voting rights ; - stock except where a distinction between stock and share is expressed or implied ;

MEANS : Unfair Means : predatory pricing Fair means : innovation : quality Improvation : cost effective Unfair Means : predatory pricing : tied selling : abuse Dominant position

OBJECTIVES Establish a commission to prevent practices having adverse effect on competition. Promote and sustain competition in markets. Protect the interests of consumers. Ensure freedom of trade in the in the Indian markets Ambit.

FEATURES Anti-Competitive Agreements Regulation of Combination Abuse of Dominant Position Combinations Regulations

ANTI-COMPETITIVE AGREEMENTS No enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which cause or is likely to cause an appreciable adverse effect on competition within India.

REGULATION OF COMBINATION No person or enterprise shall enter into a combination which cause or is likely to cause an appreciable adverse effect on competition within the relevant market in India and such a combination shall be avoid.

ABUSE OF DOMINANT POSITION Abuse is prohibited abuse occurs when an enterprise uses its dominant in the relevant market in an exclusionary and/or exploitative manner. three stage process of determining abuse of dominance : Stage 1 - Determination of Relevant Market Stage 2 - Dominance of the enterprise/group in the relevant market is ascertained Stage 3 - “Abuse” by the dominant enterprise in the relevant market is determined

COMBINATIONS REGULATIONS Combining parties exceed the thresholds set in the Act. Combination which cause or is likely to cause an appreciable adverse effect on competition is prohibited. Horizontal combinations are between rivals. Vertical combinations are between enterprises that are at different stages. Conglomerate combinations are between enterprises not in the same line of business.

MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT-1969 [MRTP ACT-1969] The MRTP Act extends to the whole of India except the state of Jammu and Kashmir. This law was enacted : To ensure that the operation of the economic system.

OBJECTIVES Prevention of concentration of economic power. Prohibition of Monopolistic trade Practices. Prohibition of Restrictive trade Practices. Prohibition of Unfair trade Practices.

COMPETITION COMMISSION OF INDIA Competition commission of India is a body of government of India responsible for enforcing the competition act 2002 through India and to prevent activities that have an appreciable adverse effect on competition in India. It was established on 14 oct 2003. it became fully functional in May 2009, with Dhanendra Kumar as its 1st Chairman.

OBJECTIVES (Duties) To promote and sustain an competition To enhance the consumer welfare To support economic growth To Protect consumers To Freedom of trade

CONCLUSION The competition act 2002, is passed to benefit the consumer, business houses as well as government. The main aim of the act is to encourage healthy and free competition in the market.

Submitted by : Kathad Divyesh Roll No. : 23