include full description about competition act 2002,2007,2009,2012 .MRTP ACT ETC

1. Group - 5

4. What is Competition ?

5. Competition with each other provide us various
benefits like
• Promotes Growth
• Advances the Human Civilization
• Forces Us to Be More Creative
• Promotes Taking Chances and Trying Something New
• Competition Prepares Us for The Real World
• Makes Us More Goal Oriented

6. Apple and Samsung: The Smartphone War
Both the Samsung and apple are largest manufacturer of
smartphones in the world and the most competing brand.
Thirst for increasing Sales, profits and creation of Brand Value
amongst the customers are the certain competing factors
existing between the organisations.
Increase in consumer lifestyle forced both organisation to
provide best smartphone to their users in order to hold
maximum stake in market.

7. Result:
These competing factors among the organisation helps in the development of both organisation and society.
It helps to
• Drives innovation and the evolution of products and services.
• Motivates us to distinguish our organization from other and are recognized either through setting higher
standards or creating a new and better product.
• Benefits to consumers.
• Forced companies to appeal to a target audience either by offering better customer service or cheaper
prices.

9. The Monopolies and Restrictive Trade Practices Act, 1969
• Government of India in April, 1964 appointed Monopolies Inquiry Commission under
the chairmanship of Justice K.C Das Gupta
• To determine the extent and effect of monopolies in the Indian Market.
• Commission submitted report on 31st October, 1965.
• After the assent of the Majority a Bill was Passed : The Monopolies and Restrictive Trade
Practices Act, 1965.
• On 27th December 1969, The MRTP Bill received the assent for the President, thus The
Monopolies and Restrictive Trade Practice was intended to curb the rise of monopolistic
Practices.

11. 1991: Economic Reforms
• Balance of Payments (B.O.P) Crisis, due to unsustainable Borrowing and High expenditure
• Increase in Trade Deficit (3.5%) in 1991-1992
• Average Inflation Rate was 7.5% in 1989-90 and to 10% in 1990-92
• Strict norms on Imports and exports
• Escalating Tension between countries
Crisis:-

12. 1991 Reforms
• 1991 that India took the Initiative in favour of economic reforms
• India entered the phase of Liberalization, privatization and Globalization.
• Post 1991 that’s after introduction of LPG changes like market were driven by competitive force
• Raising productivity, improving efficiency and reducing cost
Many changes were made in the MRTP Act.
Two of the five major objectives of MRTP act namely prevention of concentration of economic
power and control of monopolies have been de-emphasized after 1991
EXAMPLE
• Prior to 1991 companies with assets more than Rs. 100 Crore need to take approval from Government for
setting up new undertakings. Post 1991 such conditions were all deleted.

13. Need for Reforms
Despite of certain changes: -
• MRTP act post 1991 did not prohibit merger, amalgamation and takeovers. Many private and public sector
companies were brought under the ambit of MRTP Act.
• A perusal of the MRPT act didn’t even include certain offending trade practices, which are restrictive in
nature like ―Abuse of Dominance, Cartels, Collusion and Price Fixing, Bid Rigging and Predatory
Pricing.
Considering all these facts need for change in the act arises
All these major changes led the wordings of existing law were considered inadequate by judicial
pronouncements, thus redrafting the law to inhere the spirit of the law and the new law arises, namely, The
Competition Act 2002.
In October 1999 Government of India Appointed a Committee under Mr. SVS Raghavan. Committee
submitted the report in May 2000 and parliament passed the new law in December 2002 named “The
Competition Act 2002.

15. Indian Competition Act, 2002
• Enacted by the Parliament of India.
• Replaced the archaic The Monopolies and Restrictive Trade Practices Act, 1969.
• Competition Commission of India was established to prevent activities that has an adverse effect of
competition in India.
• Extends to whole of India except Jammu and Kashmir.
• The Competition Act, 2002 was passed by the Parliament in the year 2002, to which the President accorded
assent in January, 2003.
• The provisions of the Competition Act relating to anti-competitive agreements and abuse of dominant
position were notified on May 20, 2009.
• The act aims at curbing negative aspects of competition through the medium of CCI.

16. Implements:
• Enforce competition Policy
• Prevent and Punish anti Competitive practices by firms
• Unecessary Government interference in the market
• Faith and liberty to foreign Investors
• Freedom of trade in markets

17. Competition Act Comprises of THREE Major Headings
Competition Act, 2002
Abuse of Dominant
Position
Position and Regulatiion
Combination
Prohibition on
Certain Agreements

19. Prohibition on Agreements
Anti Competitive Agreements section (3)
• Agreements in which two or more companies operating together in the same market
make an agreement to do something together.
• They mainly involves fix prices or limit production which has the result of reducing the
competition on that particular market.
• They negatively impact the process of Competition in the market
• Thus any agreement between the organisation which doesn’t allow to flourish the
competition in market are considered to be anti competitive in nature

20. CASE:-

21. • Jet Airways, IndiGo and Spicejet together were accused of concerted actions in fixing and
revising Fuel Surcharge (FSC) for Transporting Cargo.
• CCI the apex authority of moderating Anti Competition Practices imposed fines of Rs 258
Crores, on Jet Airways, IndiGo and Spicejet.
• According to CCI, such anti-competitive ways in the air cargo industry undermines economic
development of the country and ultimately acts to the detriment effect on end-consumers.
• Violation of Competition Act:
Such Conducts resulted in indirectly determining the rates of air cargo transport,
and thus contravening Section 3 of the Competition Act, 2002.

22. Types of Anti Competitive Agreements
Horizontal agreements
Vertical agreements
Horizontal Agreements:-
• Horizontal Agreement is an agreement for co-operation between two or more competing businesses
operating at the same level in the market
• The Agreement may include sharing of information regarding the products and the market
• Hence Horizontal agreements may cause negative market effects with respect to prices and quality of
products
• Horizontal cooperation can lead to substantial economic benefits such as sharing risk, cost savings, sharing
know-how and making innovations faster.
• Price fixing is a term associated with horizontal agreements.

23. Vertical agreements: -
• A vertical agreement usually involves one enterprise at the upstream level supplying an input to an
enterprise downstream.
• vertical price fixing is likely to be more anti-competitive
• Vertical price restrictions limit the ability of those reselling to compete on price
Types Of Vertical Anti- Competitive Agreements
Tie-in arrangement :-
An agreement by a party to sell one product but only on the condition that the buyer also purchases a
different (or tied) product, or at least agrees he will not purchase the product from any other supplier.

24. Case:-
Ajay devgn films pvt. Yash Raj Films Pvt. ( Ek Tha Tiger + jab Tak Hai Jaan)

27. Dominant Position
Dominant arises where an enterprise indulges –
• Directly or indirectly imposing discriminatory conditions in the purchase or sale of goods or
• Limiting or restricting the production of goods or provision of services or market therefore
• limiting technical or scientific development relating to goods or services
• Indulging in practice or practices resulting in the denial of market access
• Making conclusion of contracts subject to acceptance by other parties of supplementary
obligations, which has no connection with the subject of such contract;
• Utilization of the dominant position in one relevant market to enter, or protect, another relevant
market.

28. Abuse of Dominant Position
• Section 4 of the competition act prohibits any enterprise or group from abusing its
dominant position
• Section 4 of the competition act concludes 'Dominant Position' as a position which
includes a position of strength, enjoyed by an enterprise or group, in relevant market
• Which enable the organisation :
• Operate independently of competition forces prevailing in the relevant market
• Affect its competitors or consumers or the relevant market in its own favour.
• Indulges in such activity which only favours dominant organisation in market

29. CASE
Reliance Jio vs Rivals: Under Scanner of CCI
• Mukesh Ambani led firm Reliance Jio filed against other telecom operators and
two cases were filed against Muksesh Ambani’s firm
• CCI filed 4 cases against telecom service providers for alleging section 4 of the
competition Act.
• Section 4 of the Competiion Act corresponds to the use of Dominant position.
• Telecom operators were accused of unfair competition and monopolistic agenda
against certain cellular service providers

30. Result :-
Under the provisions of the Competition Act, 2002, the CCI is mandated, inter-alia, to impose
penalties and/ or issue cease and desist orders in cases of unethical practices such as anti-
competitive agreements and abuse of dominance.

32. Regulation of Combination (SECTION 5)
• Worldwide term used for this concept is Merger review/Merger control, which is done by competition
regulators to prevent mergers and acquisitions that are likely to reduce competition in the market and lead to
higher prices, lower quality goods or services, or less innovation.
• Regulation of Combination deals with Merger’s and Acquisition which directly has detrimental
effect on consumers/customers.
• Prior to Merger & Acquisition, a pre-merger notification has to be sent to the CCI for validation of
the threshold extremity.
• If an inquiry finds appreciable adverse effect on competition, the CCI may order de-merger which
would involve social and economic costs.

33. Type of combination
A vertical combination can happen .
When a firm acquires another firm
which produces raw materials used
by it or which would help it get
closer to the customer in case of
service.
For e.g.
• Tyre manufacturer acquires a
rubber manufacturer,
• Car manufacturer acquires a steel
company,
• FMCG company acquiring an
advertising company or a retailing
outlet etc.
Horizontal combination occurs
when to two firms operating in
same industry or producing ideal
products combining together.
For e.g.
• Acquisition of Times Bank by
HDFC Bank,
• Bank of Madura by ICICI Bank,
• Kotak Mahindra Bank by ING
Vysya Bank.
Conglomerate combination occurs
when two firms operating in
industries unrelated to each other.
For e.g.
• A watch manufacturing
company acquiring a cement
manufacturer,
• A steel manufacturer acquiring
a software company etc.

34. REVISED THRESHOLDS FOR COMBINATION REGULATIONS
The Ministry of Corporate Affairs, Government of India (“MCA”) has recently brought in significant
changes to the merger control thresholds through certain notifications
Revised threshold limit

35. Competition Advocacy
A commonly accepted definition of competition advocacy is that it includes all activities of a competition agency
that are intended to promote competition apart from those that involve enforcement of the competition law.
Benefits of healthy competition advocacy can be viewed in terms of the following:
• CCI develop relationship with the Ministries and Departments of the Government
• CCI encourage debate on competition and promote a better and more informed economic decision making
• Competition advocacy to be open and transparent to safeguard the integrity and capability of the CCI
• Competition advocacy enhanced by the CCI establishing good media relations and explaining the role and
importance of Competition Policy / Law as an integral part of the Government’s economic framework.

37. COMPETITION COMMISSION OF INDIA (CCI)
The objectives of the Act are sought to be achieved through the Competition Commission of India
(CCI), 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.
• Maintain Perfect Competition
• Protect the interest of the consumers and ensure freedom of trade in markets in India
• To ban the abusive situation of the market monopoly
• To provide the opportunity to the entrepreneur for the competition in the market
• To have the international support and enforcement network across the world
• To prohibit the agreements or practices that restricts free trading and the competition
between two business entities
Objective of CCI

38. Amendments in the Competition Act, 2002
The Competition Act, 2002 after its enactment has been amended with a view to fine tune
the provisions of the Act and to meet the present day needs in the field of competition, in
light of the experiences gained in the actual working of the Competition Commission of
India over the last few years.
• The Competition (Amendment) Bill, 2006
• The Competition (Amendment) Bill, 2007
• The Competition (Amendment) Bill, 2009
• The Competition (Amendment) Bill, 2012

39. Latest Amendments
A. Power given to Chairperson of the CCI to authorize dawn raids:
Past Position under the act Present position under the act
Power of Director General to investigate Contravention
In the course of its investigation of
any contravention of the Act, an order
from a Magistrate of relevant
jurisdiction be obtained for this
purpose.
In the course of its investigation of
any contravention of the Act,
Authorization to conduct such an
operation is to be obtained from the
Chairperson of the CCI.

40. B. Collective Dominance
Past Position under the ACT Present Position under the act
Section 4(1): Abuse of Dominance
No enterprise or group shall abuse its
dominant position.
No enterprise or group "jointly or
singly" shall abuse its dominant
position.

41. C. Definition of Turnover
Past Position under the act Present Position under the ACT
Section 2(y): Definition of Turnover
"Turnover" includes value of sale of
goods or services
"Turnover" includes value of sale of
goods or services "excluding the
taxes, if any, levied on sale of such
goods or provisions of services."

42. European Competition Law

43. Need for European
COMPETITION POLICY
 Low prices
 Better Quality
 More choice
 Innovation
 Better competitors in global
markets

44. MAIN POLICY AREAS
 Cartels
 Market dominance
 Mergers
 State aid

46. CASE:- Car battery recycling cartel
 From 2009 to 2012, 4 recycling companies took
part in a cartel to fix the purchase prices of scrap
lead-acid automotive batteries
 Recycling companies reduced the purchase price
paid to scrap dealers & collectors for used car
batteries.
 Disrupted the normal functioning of the market
and prevented competition on price.
 Breach of EU antitrust rules

47.  EU Commission fined Campine, Eco-Bat Technologies and Recylex a total of
€68 million
 Johnson Controls, was not fined because it revealed the existence of the
cartel
 Article 101 of the Treaty on the Functioning of the European Union
prohibits agreements between companies which prevent, restrict or distort
competition in the EU and which may affect trade between Member States
(anti-competitive agreements). These include, for example, price-fixing or
market-sharing cartels

48. MERGERS
 A merger is a legal consolidation of 2
entities into 1 entity, whereas an acquisition
occurs when one entity takes ownership of
another entity's stock, equity interests or
assets
 M&A can allow enterprises to grow, shrink,
change the nature of their business or
competitive position

49. CASE:- Commission approves acquisition of
WhiteWave by Danone
 EU cleared under the EU Merger Regulation the proposed acquisition of WhiteWave, a
US-based manufacturer of packaged foods and beverages, by the French Danone group
 Danone is active in the EEA mainly in dairy products but also in early life nutrition
products
 WhiteWave manufactures plant-based products such as soy milk and yoghurts under its
Alpro and Provamel brands
 Alpro products also include plant-based "growing-up milk" (for children aged 1 to 3
years)
 The Commission had concerns that the proposed transaction would significantly reduce
competition for "growing-up milk" in Belgium. The commitments offered by Danone
address these concerns

50.  Commission indicated that the proposed transaction would leave only 1 other
competitor, Nestlé, on the market for "growing-up milk" in Belgium
 There would be no other competitor in the plant-based "growing-up milk"
segment in Belgium, where only Danone and Alpro are active
 Belgian consumers would have no alternative to the merged entity in this
market

51.  Danone offered to divest a large part of its "growing-up milk"
business in Belgium.
 Therefore, the Commission concluded that the transaction, as
modified by the commitments, would no longer raise competition
concerns.

52. STATE AID
 Control of direct and indirect aid given by Member States of the European
Union to companies under TFEU article 107
 A unique characteristic of the European competition law regime.
 As the European Union is made up of independent member states, both
competition policy and the creation of the European single market could
be rendered ineffective were member states free to support national
companies as they saw fit.

53. CASE:- Commission green-lights German green
cars infrastructure
 Germany's scheme to roll out a network of user-
friendly infrastructure for charging electric vehicles
across the country
 Addresses a real gap in the market without unduly
affecting competition in the Single Market
 Cost of total €300 million over 4 years
 Promotes the installation of new standard and high-
speed charging stations for electric vehicles

54.  Scheme is open to all, including companies, individuals and local authorities,
and support will be awarded progressively through an open and transparent
tender procedure
 Requires that the electricity for the charging infrastructure comes from
renewable energy sources
 This measure will encourage a significant uptake of electric vehicles & hence
make a major contribution towards meeting the common interest of reducing
emissions & improving air quality
 The Commission concluded that the measure is in line with EU state aid rules
(Article 107(3)(c) of the Treaty on the Functioning of the European
which allow aid to facilitate the development of economic activities in the
common interest under certain conditions

55. Difference between European Antitrust Policy and
Indian Competition Act

56. Conclusion
The Competition Commission of India (Commission) established under the Competition Act, 2002. has been
resulted
• to prevent practices having adverse effect on competition,
• to promote and sustain competition in Indian markets,
• to protect the interests of consumers, and
• to ensure freedom of trade carried on by other participants in markets.
The act is comprehensive enough and to meet the requirements of the new era of market economy, which
has dawned upon the horizon of Indian economic system.
The amendments resulted to increase the predictability, efficiency and effectiveness of the enforcement and
administration of the Competition Act for both business and the Competition Bureau, and better protect
Indians from the harm caused by anti-competitive conduct.