Competition Act, 2002
The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) was repealed and replaced by the Competition Act, 2002, on the recommendations of Raghavan committee. The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007 follows global modern competition law.
The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
Competition Commission of India
The objectives of the Act are achieved through the Competition Commission of India, which has been established by the Central Government with effect from 14th October 2003. CCI consists of a Chairperson and 6 Members appointed by the Central Government.
Competition Commission of India (CCI) is a statutory body of the Government of India. It is responsible for enforcing the Competition Act, 2002 including prohibiting anti-competitive agreements, unfair trade practices etc.
Functions of CCI
The functions of the Commission are as under:
- The commission is empowered to:
- eliminate practices having adverse effect on competition,
- promote and sustain competition,
- protect the interests of consumers and
- ensure freedom of trade in the markets of India
- The Commission shall give opinion on competition issues on a reference received from a statutory authority established under any law and
- To undertake competition advocacy, create public awareness and impart training on competition issues.
Unfair Trade Practices
Unfair trade practices or competition includes adoption of practices such as:
- collusive price fixing,
- deliberate reduction in output in order to increase prices,
- creation of barriers to entry,
- allocation of markets,
- tie-in sales,
- predatory pricing,
- discriminatory pricing, etc.
Anti-competitive agreements
An anti-competitive agreement is an agreement having significant adverse effect on competition. Anti-competitive agreements include:-
- a agreement to allocate markets;
- a agreement to limit production and/or supply;
- a agreement to fix price;
- a bid rigging or collusive bidding;
- a conditional purchase/ sale (tie-in arrangement); a exclusive supply / distribution arrangement; a resale price maintenance; and
- a refusal to deal etc.
Practice Prelims Question
Which of the following is/are correct with regard to CCI?
1. It is a statuory body empowered to eliminate unfair trade practices.
2. It operates under the Ministry of Corporate Affairs.
Codes:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (c)
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