COMPETITION ACT

What is competition in the market?

In common parlance, competition in the market means
1.sellers striving independently for buyers’ patronage to maximize profit or other business objectives.
2.buyer prefers to buy a product at a price that maximizes his benefits whereas the seller prefers to sell the product at a price that maximizes his profit.

Why  do we need competition in the market ?

Competition

1.makes enterprises more efficient and offers wider choice to consumers at lower prices. 
2.ensures optimum utilization of available resources.
3.enhances consumer welfare since consumers can buy more of better quality products at lower prices.
4.beneficial for the consumers, producers / sellers and finally for the whole society since it induces economic growth.

What is meant by unfair competition?

Unfair competition means adoption of practices such as:

1.collusive price fixing,
2.deliberate reduction in output in order to increase prices,
3.creation of barriers to entry,
4.allocation of markets,
5.tie-up sale ,
6.predatory pricing,
7.discriminatory pricing,

What constitutes competition policy?

Competition policy is defined as those Government measures that affect the behavior of enterprises and structure of the industry with the view to promote efficiency and maximize welfare.
There are two elements of competition policy:-
First, a set of policies, such as liberalized trade policy, relaxed FDI policy, de-regulation, etc., that enhance competition in the markets.
Second, legislation to prevent anti-competitive practices with minimal government intervention.

When was the competition law enacted in India?

1.The Monopolies & Restrictive Trade Practices Act, 1969 is the first enactment to deal with competition issues and came into effect on 1st June 1970.
2.The Government appointed a committee in October 1999 to examine the existing MRTP Act for shifting the focus of the law from curbing monopolies to promoting competition and to suggest a modern competition law. Pursuant to the recommendations of this committee, the Competition Act, 2002, was enacted on 13th January 2003.
3.It provides for different notifications for making different provisions of the Act effective including repeal of MRTP Act and dissolution of the MRTP Commission.

Whether all provisions of the Competition Act have been notified?

Certain provisions such as those relating to establishment of the Commission, appointment of Chairperson and Members, appointment of staff, undertaking of competition advocacy have been notified.
Other provisions of the Act are yet to be notified such as those relating to adjudication of anti-competitive practices and regulation of combinations.

What are the objectives of the Competition Act?

The objectives of the Competition Act are
1.to prevent anti-competitive practices,
2.promote and sustain competition,
3.protect the interests of the consumers
4.ensure freedom of trade.

How would the objectives of the Act be achieved?

The objectives of the Act are sought to be achieved through the instrumentality of the Competition Commission of India (CCI) which has been established by the Central Government with effect from 14th October, 2003. 

What are the functions of CCI?  

1.CCI shall prohibit anti-competitive agreements and abuse of dominance, and regulate combinations (merger or amalgamation or acquisition) through a process of enquiry.
2.It shall give opinion on competition issues on a reference received from an authority established under any law (statutory authority)/Central Government.
3.CCI is also mandated to undertake competition advocacy, create public awareness and impart training on competition issues.

What is an “agreement” under the  Competition Act?

An agreement includes any arrangement, understanding or concerted action entered into between parties. It need not be in writing or formal or intended to be enforceable in law.

What is an anti-competitive agreement?

An anti-competitive agreement is an agreement having appreciable adverse effect on competition. Anti-competitive agreements include:-
1.agreement to limit production & supply
2.agreement to allocate markets
3.agreement to fix price
4.bid rigging or collusive bidding
5.conditional purchase/sale (tie-in arrangement)
6.exclusive supply/distribution arrangement
7.resale price maintenance
8.refusal to deal