1. EVOLUTION OF COMPETITION LAW IN INDIA
Pradeep S Mehta
CUTS International

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

3. ROOTS OF THE MRTP ACT A LODE STAR
CONSTITUTION OF INDIA - DIRECTIVE PRINCIPLES OF
STATE POLICY
B PRINCIPLES
SOCIAL JUSTICE WITH ECONOMIC GROWTH
WELFARE STATE
REGULATING CONCENTRATION OF ECONOMIC POWER TO
THE COMMON DETRIMENT
CONTROLLING MONOPOLISTIC, UNFAIR AND RESTRICTIVE
TRADE PRACTICES

4. THREE STUDIES SHAPE THE MRTP ACT
HAZARI COMMITTEE REPORT ON INDUSTRIAL LICENSING PROCEDURE, 1955
MAHALANOBIS COMMITTEE REPORT ON DISTRIBUTION AND LEVELS OF INCOME, 1964
MONOPOLIES INQUIRY COMMISSION REPORT OF DAS GUPTA, 1965

5. OBJECTIVES OF THE MRTP ACT
CONTROL OF MONOPOLIES
PROHIBITION OF MONOPOLISTIC TRADE PRACTICES (MTP)
PROHIBITION OF RESTRICTIVE TRADE PRACTICES (RTP)
PREVENTION OF CONCENTRATION OF ECONOMIC POWER TO THE COMMON DETRIMENT
PROHIBITION OF UNFAIR TRADE
PRACTICES (UTP)

6. 1984 AMENDMENTS TO THE MRTP ACT
HIGH-POWERED EXPERT COMMITTEE REPORT OF JUSTICE SACHAR
THE REPORT RECOMMENDED THAT A SEPARATE CHAPTER SHOULD BE ADDED TO THE MRTP ACT DEFINING UTPs ESSENTIALLY IN THE INTERESTS OF CONSUMERS.
ADVERTISEMENT AND REPRESENTATION TO CONSUMERS SHOULD NOT BECOME DECEPTIVE BUT SHOULD BE TRANSPARENT.

7. RESTRICTIVE TRADE PRACTICES
REFUSAL TO DEAL
TIE-UP SALES
FULL LINE FORCING
EXCLUSIVE DEALINGS
PRICE DISCRIMINATION
RE-SALE PRICE MAINTENANCE
AREA RESTRICTION

8. UNFAIR TRADE PRACTICES
MISLEADING ADVERTISEMENT AND FALSE REPRESENTATION
BARGAIN SALE, BAIT AND SWITCH SELLING
OFFERING OF GIFTS OR PRIZES WITH THE INTENTION OF NOT PROVIDING THEM AND CONDUCTING PROMOTIONAL CONTEST
PRODUCT SAFETY STANDARDS
HOARDING OR DESTRUCTION OF GOODS

9. MONOPOLISTIC TRADE PRACTICES
UNREASONABLE PRICING
PREVENTING OR LESSENING COMPETITION IN SUPPLY/DISTRIBUTION OF GOODS/ SERVICES
LIMITING TECHNICAL DEVELOPMENT,CAPITAL INVESTMENT OR PRODUCTION/ SUPPLY
UNREASONABLE PROFITS (PROFITEERING)

10. 1991 REFORMS AND SINCE APPROVAL PROCEDURES
RECENT POLICY CHANGES FROM 1991 ONWARDS INCLUDE:
DEREGULATION AND SIMPLIFICATION OF LICENSING AND
APPROVAL PROCEDURES
EXEMPTION OF A LARGE NUMBER OF INDUSTRIES FROM LICENSES,
APPROVALS AND QUOTAS
NEW ECONOMIC ADJUSTMENT MEASURES
DIVESTITURE AND SALE OF GOVERNMENT ASSETS
GRADUAL DECLINE IN THE INTERVENTIONIST ROLE OF THE PUBLIC
SECTOR
PRIVATISATION/DISINVESTMENT
ENCOURAGING COMPETITION

11. 1991 AMENDMENTS TO MRTP ACT SIZE CONCEPT GIVEN UP
CURBS ON GROWTH OF MONOPOLY COMPANIES DELETED
MERGER CONTROL REMOVED
MORE EMPHASIS ON PROHIBITION OF RTPs, UTPs AND MTPs
BIG, NO MORE UGLY

12. EXPERIENCE IN THE LAST THREE DECADES
NO MENTION OR DEFINITION OF OFFENCES LIKE (ILLUSTRATIVE)
ABUSE OF DOMINANCE
CARTELS, COLLUSION AND PRICE FIXING
BID RIGGING
BOYCOTTS AND REFUSAL TO DEAL
PREDATORY PRICING
LARGE NUMBER OF INTERPRETATIONS & CASE LAWS AFFECTING THE INTENT/SPIRIT OF THE MRTP ACT
WTO FALL OUT OBLIGATIONS

13. NEED FOR A NEW WINE
NEED FOR A NEW LAW HAS ITS ORIGIN IN FINANCE MINISTER’S BUDGET SPEECH IN FEBRUARY,1999 :
“THE MRTP ACT HAS BECOME OBSOLETE IN CERTAIN AREAS IN THE LIGHT OF TERNATIONAL ECONOMIC DEVELOPMENTS RELATING TO COMPETITION LAWS. WE NEED TO SHIFT OUR FOCUS FROM CURBING MONOPOLIES TOPROMOTING COMPETITION. THE GOVERNMENT HAS DECIDED TO APPOINT A COMMITTEE TO EXAMINE THIS RANGE OF ISSUES AND PROPOSE A MODERN COMPETITION LAW SUITABLE FOR OUR CONDITIONS.”

14. HIGH LEVEL COMMITTEE
GOVERNMENT APPOINTED A HIGH LEVEL COMMITTEE TO ADVISE A MODERN COMPETITION LAW FOR INDIA IN LINE WITH INTERNATIONAL DEVELOPMENTS AND TO SUGGEST A LEGISLATIVE FRAME WORK.
THE COMMITTEE INCLUDED COMPETITION EXPERTS, REPRESENTATIVES OF INDUSTRY AND CONSUMERS, ECONOMISTS, CHARTERED ACCOUNTANT, LAWYERS ETC.

15. TRIGGER FOR METAMORPHOSIS FROM MRTP ACT TO COMPETITION ACT
RECOMMENDATIONS OF EXPERT GROUP
RECOMMENDATIONS OF HIGH LEVEL COMMITTEE
RECOMMENDATIONS OF STANDING COMMITTEE OF PARLIAMENT
UNANIMITY TO REPEAL MRTP ACT AND TO ENACT A NEW LAW
APPRECIATION THAT THE MRTP ACT WAS MORE CONCERNED WITH CURBING MONOPOLIES RATHER THAN WITH PROMOTING COMPETITION
APPRECIATION THAT PRE-1991 LPG HAS CHANGED TO POST-1991 LPG
RECOGNITION THAT INDIAN ENTERPRISES ARE SMALL IN SIZE AND NEED TO GROW TO BECOME GLOBALLY COMPETITIVE

16. OLD WINE OR NEW WINE ? MRTP ACT NEW LAW
1. BASED ON PRE-1991 control regime
2. PREMISED ON SIZE
3. PROCEDURE ORIENTED
4. NO TEETH (REFORMATORY)
5. OFFENCES DEFINED IMPLICITLY
(CARTELS, BID-RIGGING ETC.)
6. FROWNS ON DOMINANCE
(25% OF MARKET SHARE)
7. UNFAIR TRADE PRACTICES COVERED
8. RULE OF LAW APPROACH
9. NO COMPETITION ADVOCACY ROLE FOR MRTPC
NEW LAW
1. BASED ON POST-1991 reforms
2. PREMISED ON CONDUCT
3. RESULT ORIENTED
4. CAN BITE (PUNITIVE )
5. OFFENCES DEFINED EXPLICITLY
6. FROWNS ON ABUSE OF DOMINANCE
7.UNFAIR TRADE PRACTICES OMITTED
8. RULE OF REASON APPROACH
9. CCI HAS COMPETITION ADVOCACY ROLE

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

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

19. 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

20. COMBINATIONS MERGERS/AMALGAMATIONS
PEJORATIVE EFFECTS
1. REDUCTION IN NUMBER OF PLAYERS
2. ACQUISITION OF ENORMOUS ECONOMIC STRENGTH
3. DISCOURAGEMENT OF NEW ENTRANTS
4. DICTATION OF PRICES
5. DOMINANCE
REGULATION FROM COMPETITION PERSPECTIVE
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 VOLUNTARY AND
NOT MANDATORY
3. CCI MANDATED TO DECIDE WITHIN 90 WORKING DAYS
ELSE DEEMED APPROVAL

21. 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

22. 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.

23. COMPETITION NEEDS TO BE INCORPORATED IN
INDUSTRIAL POLICY
RESERVATIONS FOR SSI
TRADE POLICY (TARIFFS, SUBSIDIES ETC)
STATE POLICIES
LABOUR POLICY
REFORMS POLICY (PRIVATISATION ETC)
COMPETITION LAW CAN NOT OPERATE IN A VACUUM UNLESS PRE-REQUISITES OF COMPETITION POLICY ARE ALSO IN PLACE

24. IS A COMPETITION LAW REQUIRED AT ALL?
WITH GLOBALISATION, THERE IS LIKELY TO BE SIGNIFICANT RESTRUCTURING OF MANUFACTURE, TRADE AND SERVICES
DOMESTIC CONSOLIDATION AND ENTRY OF FOREIGN ENTITIES
ANTI-COMPETITION PRACTICES MAY SURFACE AS A CONSEQUENCE
WTO FALL OUT OBLIGATIONS NEED TO BE ADDRESSED
REGULATORY AND ADVOCACY FUNCTIONS NEED TO BE POSITED
EXISTING MRTP ACT IS INADEQUATE
NEW COMPETITION LAW WILL SUPPLANT MRTP ACT
WITHOUT A COP, TRADE TRAFFIC MAY PREJUDICE CONSUMER INTEREST
COMPETITION LAW WILL BE A COP AND A FRIEND