Mr. Dhanendra Kumar was invited by NILS Summer Law School - Competition Law during April 2015 as a guest speaker.

1. Dhanendra
Kumar
Former
Chairperson,
Compe33on
Commission
of
India
Currently,
Principal
Advisor,
IICA
and
Chief
Mentor,
School
of
Compe33on
Law
and
Market
Regula3on
1
COMPETITION LAW IN INDIA –
AN OVERVIEW

2. Contents
— Benefits of competition
— Historical overview
— Competition Act, 2002
— Anti-competitive agreements
— Abuse of dominance
— Regulation of combinations
— Career prospects for young professionals
2

3. Benefits
of
Compe33on
— True
competition
eliminates
the
need
to
plan,
for
as
gravity
guides
water
through
the
shortest
path,
competition
naturally
guides
the
economy
to
the
most
productive
route.
(RBI
Governor,
Dr
Raghuram
Rajan
on
CCI
Annual
Lecture)
— Competition
can
be
used
as
a
powerful
instrument
to
achieve
the
macroeconomic
policy
goals
–
economic
growth,
competitiveness,
inflation
control,
employment,
innovation
etc.
3

4. Benefits
of
Compe33on
Consumers:
Effective
competition
in
properly
regulated
markets
can
deliver
lower
prices,
better
quality
goods
and
services
and
greater
choice
for
consumers.
Business
:
Competition
can
create
strong
incentives
for
firms
to
be
more
efficient
and
to
invest
in
innovation,
thereby
helping
raise
productivity
growth.
Government:
Optimal
realization
from
sale
of
assets,
Savings
of
public
money
in
procurement,
Enhanced
availability
of
resources
for
social
sector.
4

5. Need
of
Compe33on
Law
and
Policy
— Markets
are
vulnerable
to
distortions
and
anti-­‐
competitive
conducts.
Therefore,
to
protect
competitive
process
and
make
sure
that
fair
and
healthy
competition
exists
in
the
market
competition
law
is
needed.
— However,
in
addition
to
Competition
Act,
a
Policy
may
assist
in
alignment
of
other
Government
policies
and
other
laws
to
the
ethos
of
competition.
5

6.
Compe33on
Law
&
Compe33on
Policy
— Competition
law
refers
to
the
framework
of
rules
and
regulations
designed
to
foster
the
competitive
environment
in
a
national
economy.
It
consists
of
measures
intended
to
promote
a
more
competitive
environment
as
well
as
enactments
designed
to
prevent
a
reduction
in
competition.
— Competition
policy,
on
the
other
hand,
broadly
refers
to
all
laws,
government
policies
and
regulations
aimed
at
establishing
competition
and
maintaining
the
same.
It
includes
measures
intended
to
promote,
advance
and
ensure
competitive
market
conditions
by
the
removal
of
control,
as
well
as
to
redress
anti-­‐competitive
results
of
public
and
private
restrictive
practices.
6

7. Historical
Overview
— 1951- Hazari Committee undertook the first study in the area of industrial
licensing procedure under the Industries (Development and Regulation)
Act, 1951
— 1960-Government appointed the Mahalanobis Committee on the
Distribution of Income and Levels of Living which noted that the top 10
percent of the population had cornered as much as 40 percent income
— 1964- the Monopolies Inquiry Commission (‘MIC’) found that there was
high concentration of economic power in over 85 percent of industries
— 1969- MRTP Act : To curb these practices when prejudicial to public
interest.
— 2000- Raghavan committee on competition policy and law presented its
report.
7

8. Passage
of
the
Compe33on
Act,
2002
— 2002- Competition Act enacted by the Parliament
— 2007-Amendment in the Act to address the
concerns of the Supreme Court of India
— 2009-Enforcement of Section 3 and 4 of the Act
— 2011- Enforcement of Section 5 & 6 of the Act.
8

9. Difference
between
MRTP
Act
&
Compe33on
Act
MRTP
Act
Competition
Act
Objective
was
to
curb
monopolies
Aims
to
promote
competition
Size
based
approach
Effect
based
approach
Prohibit monopolistic, restrictive
and unfair trade practices
prohibit anti- competitive
agreements, abuse of dominance and
to regulate combinations
Suo-motu power of investigation
vested in DG (I&R)
DG does not have suo- motu power
for investigation
No
power
to
impose
penalties
only
power
to
order
cease
and
desist
Power
to
impose
heavy
penalties
in
addition
to
cease
and
desist
order
9

10. COMPETITON
ACT,
2002
-­‐
Preamble
An
Act
to
provide,
keeping
in
view
of
the
economic
development
of
the
country,
for
the
establishment
of
a
Commission
to
— prevent
practices
having
adverse
effect
on
competition,
— promote
and
sustain
competition
in
markets,
— protect
the
interests
of
consumers
and
— ensure
freedom
of
trade
carried
on
by
other
participants
in
markets,
in
India
and
— for
matters
connected
therewith
or
incidental
thereto
10

11. COMPETITON
ACT,
2002
–
Powers
of
CCI
On
the
basis
of
information
and
knowledge
received
or
in
its
possession
(suo
moto)
— Prima
facie
view
{Section
26(1)}
— Director
General
to
investigate
and
report
{Section
26(3)}
— Inviting
objections
and
suggestions
{Section
26(5)}
—
Decision
of
the
Commission
{Section
26(6)
and
26(7)}
— Orders
of
the
Commission
(Section
27)
11

12. COMPETITON
ACT,
2002
–
Inves3ga3ons
by
the
DG
— Powers
as
vested
in
a
Civil
Court
under
the
Code
of
Civil
Procedures
1908
a. summoning
and
enforcing
the
attendance
of
any
person
and
examining
him
on
oath;
b. requiring
the
discovery
and
production
of
documents;
c. receiving
evidence
on
affidavit;
d. issuing
commissions
for
the
examination
of
witnesses
or
documents;
e. requisitioning
any
public
record
or
document
or
copy
of
such
of
record
or
document
from
any
office.
12

13.
COMPETITON
ACT,
2002
–
Powers
of
CCI
After
inquiry
if
contravention
is
established,
the
Commission
may
pass
all
or
any
of
the
following
orders:
§ Cease
and
desist
§ Impose
such
penalty
as
it
may
deem
fit
not
exceeding
10%
of
the
average
of
the
turnover
for
the
last
three
preceding
financial
years
upon
each
of
person
or
enterprise
§ In
case
of
cartel,
a
penalty
of
up
to
three
times
of
its
profit
for
each
year
of
the
continuance
of
such
agreement
or
ten
percent
of
its
turnover
for
each
year
of
the
continuance
of
such
agreement,
whichever
is
higher
each
producer,
seller,
distributor,
trader,
or
service
provider
included
in
that
cartel)
13

14. COMPETITON
ACT,
2002
–
Powers
of
CCI
§ Direct
that
agreements
shall
stand
modified
to
the
extent
and
in
the
manner
as
may
be
specified
in
the
order
of
the
Commission.
§ Direct
the
enterprises
concerned
to
abide
by
such
other
orders
as
the
Commission
may
pass
and
comply
with
the
directions,
including
payment
of
costs,
if
any.
§ Pass
any
other
order
or
issue
directions
as
it
may
deem
fit.
§ Under
Section
28
-­‐
can
order
division
of
enterprise
enjoying
dominant
position.
14

15. COMPETITON
ACT,
2002
–
Appeal
provisions
Competition
Appellate
Tribunal-­‐
COMPAT
• To
hear
and
dispose
of
appeals
against
the
specific
order
of
the
Commission.
• An
appeal
has
to
be
filed
within
60
days
of
receipt
of
the
order
/
direction
/
decision
of
CCI.
Supreme
Court
of
India
• A
person
aggrieved
with
the
direction,
decision
or
order
of
the
COMPAT
can
appeal
to
the
Supreme
Court
of
India
within
60
days
from
the
date
of
communication
of
the
direction,
decision
or
order.
15

16. Compe33on
Act,
2002
• Prohibits
Anti-­‐Competitive
Agreements
Section
3
• Prohibits
Abuse
of
Dominant
Position
Section
4
• Regulates
Acquisitions,
Mergers
and
Combinations
Section
5&6
16

17. CASE
POSITION:
AT
A
GLANCE
S.
No.
Description
No. of
cases
received
u/s 19(1)
(a)
Cases
received
from
MRTPC
Suo-
moto
cases
Reference
received
from
Statutory
Authorities
(u/s 21)
Reference
received from
Central/State
Govt./Statutory
Authority (u/s
19(1)(b)
Total
1.
No. of Cases
received
485
50
26
1
22
584
2.
No. of cases
referred to DG
for investigation
u/s 26(1)
184
29
26
-
13
252
3.
No. of cases in
which DG
report received
135
29
12
-
4
180
17

18. CASE
POSITION:
AT
A
GLANCE
S.
No.
Description
No. of
cases
received
u/s 19(1)
(a)
Cases
received
from
MRTPC
Suo-
moto
cases
Reference
received
from
Statutory
Authorities
(u/s 21)
Reference
received from
Central/State
Govt./Statutory
Authority (u/s
19(1)(b)
Total
4.
No. of cases in
which DG
report awaited
49
-
14
-
9
72
5.
No. of cases
decided/
disposed off
after DG’s
Investigation
report
110
28
9
-
4
151
18

19. CASE
POSITION:
AT
A
GLANCE
S.
No.
Description
No. of
cases
received
u/s 19(1)
(a)
Cases
received
from
MRTPC
Suo-
moto
cases
Reference
received
from
Statutory
Authorities
(u/s 21)
Reference
received from
Central/State
Govt./Statutory
Authority (u/s
19(1)(b)
Total
6.
No. of cases
closed u/s 26(2)
267
21
-
1
8
297
7.
No. of Cases
under
consideration
before the
Commission
59
1
3
-
1
64
19

20. Principal Substantive Areas
- Anti-competitive agreements
- Abuse of dominance
- Regulation of combinations
20

21. Agreements
Section
2
(b)
of
the
Competition
Act,
2002
Includes
any
arrangement
or
understanding
or
action
in
concert,—
(i)
whether
or
not
formal
or
in
writing;
or
(ii)
whether
or
not
intended
to
be
enforceable
by
legal
proceedings
21

22.
Horizontal
Agreements
Section
3
(3)
of
the
Competition
Act,
2002
Horizontal
agreements
refer
to
agreements
among
competitors,
i.e.,
agreements
between
two
or
more
enterprises
that
are
at
the
same
stage
of
the
production
chain
and
in
the
same
market.
— The
Act
provides
for
the
following
four
kinds
of
horizontal
agreements,
which
are
presumed
to
be
anticompetitive
— directly/indirectly
fixing
purchase/sale
price;
— limiting/controlling
production,
supply,
markets,
technical
development
and
investment;
— sharing
of
markets
by
geographical
area,
types
of
goods/
services
and
number
of
customers
— Tenders
submitted
as
a
result
of
joint
activity
or
agreement.
22

23. CARTEL
• The
Act
defines
‘cartel’
as
including
“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.
• The
aforesaid
agreements
are,
therefore,
presumed
to
be
illegal
i.e.
having
appreciable
adverse
effect
on
Competition.
23

24. A
few
illustra3ve
Cases
— Cement
cartel
case:
Commission
imposed
a
penalty
of
approx
Rs.6000
Crore
on
11
cement
manufacturers,
guilty
of
cartelizing
the
Indian
cement
industry.
Commission,
among
other
things,
considered
the
oligopolistic
nature
of
the
cement
industry,
price-­‐parallelism
and
the
role
of
the
Cement
Manufacturers
Association
in
facilitating
such
collusion.
24

25. A
few
illustra3ve
Cases
— LPG
cylinder
manufacturers
case:
(Suo
Moto
Case)
Bidders
quoted
identical
price
in
the
tender
for
procurement
of
LPG
cylinders.
CCI
imposed
a
penalty
of
Rs.
165.58
Crore
upon
each
of
the
contravening
party
@
7%
of
the
average
turnover
of
companies
.
COMPAT
sent
back
case
to
CCI.
25

26. A
few
illustra3ve
Cases….
—
A
Foundation
for
Common
Cause
&
People
Awareness
Case
Collusive
tendering
in
the
tender
floated
for
supply,
installation,
testing
and
commissioning
of
Modular
Operation
Theatre
evident
by
commonality
of
mistakes.
The
Commission
imposed
a
penalty
of
Rs.
3
Crore
upon
each
of
the
contravening
party
(5%
of
the
average
turnover
of
the
company.)
However,
COMPAT
reduced
the
penalty
to
3%
of
the
average
turnover.
26

27. A
few
illustra3ve
Cases….
—
In
Aluminum
Phosphide
Tablets
Manufacturers,
(Suo
Motu
Case)
Tender
for
procurement
of
Aluminum
Phosphide
Tablets
by
Food
Corporation
of
India.
The
Commission
found
the
collective
action
of
identical
bids,
common
entry
in
the
premises
of
FCI
before
submission
of
bids
as
indicative
of
‘plus’
factors
is
support
of
existence
of
an
understanding
among
the
parties.
Imposed
penalty
of
Rs.
317.91
Crore
(9%
of
the
average
turnover
of
the
company)
COMPAT
reduced
the
penalty
to
10.01
Crore.
27

28. A
few
illustra3ve
Cases….
• In
Bengal
Chemist
and
Druggist
Association
&
Ors.-­‐CCI
imposed
a
total
penalty
of
Rs
18.35
crores
(on
79
parties)
on
Association
and
its
office
bearers
who
were
directly
responsible
for
running
its
affairs
and
played
lead
role
in
decision
making
@10%
and
on
the
executive
committee
members
@7%,
of
their
respective
turnover/
income.
28

29. Ver3cal
Agreements
Section
3
(4)
of
the
Competition
Act,
2002
Any
agreement
amongst
enterprises
or
persons
at
different
stages
or
levels
of
the
production
chain
in
different
markets
,
in
respect
of
production
,
supply,
distribution,
storage,
sale
or
price
of,
or
trade
in
goods
or
provision
of
services,
including:
— Tie-­‐in
arrangement
— Exclusive
distribution
agreement
— Exclusive
supply
agreement
— Refusal
to
deal
— Resale
price
maintenance
29

30. A
few
illustra3ve
Cases
— Shamsher
Kataria
Vs.
Honda
Siel
Cars
India
Ltd
&
Ors
Clauses
in
agreements
requiring
authorized
dealers
to
source
spare
parts
only
from
the
manufacturers
or
their
approved
vendors
is
anti-­‐competitive
in
nature
and
restricting
access
of
independent
repairers
to
spare
parts
and
diagnostic
tools
and
by
denying
the
independent
repairers
access
to
repair
manuals
violated
Sections
3
and
4
of
the
Act.
Imposed
penalty
of
2%
of
total
turnover
in
India
of
the
opposite
parties
(Rs.
2544.65
Crore)
30

31. A
few
illustra3ve
Cases
— Mr.
Ramakant
Kini
Vs
Dr.
L.H.
Hiranandani
Hospital-­‐
it
is
the
market
of
stem
cell
banking
in
which
competition
was
being
adversely
affected
among
stem
cell
bankers
and
the
free
trade
was
not
being
allowed
and
the
patients
were
being
fleeced
of
not
only
choice
but
also
money.
Imposed
penalty
of
Rs.
3.8
Crore
(4%
of
the
average
turnover
of
OP
hospital)
31

32. Intellectual
Property
and
Compe33on
Law
• Section
3
(5)
of
the
Competition
Act,
2002
• Exception
regarding
reasonable
conditions,
necessary
for
protecting
any
of
the
following
Intellectual
Property
Rights
• Copyright
• Patent
• Trade
mark
• Geographical
indicators
• Industrial
designs
• Semi-­‐conductor
Integrated
Circuits
Layout
Designs
32

33. Abuse
of
Dominance
Section
4
of
the
Competition
Act,
2002
The
Act
mandates
that
no
enterprise
or
group
shall
abuse
its
dominant
position
and
provides
for
situations
in
which
the
conduct
of
a
dominant
firm
would
be
treated
as
contravention
of
Section
4
of
the
Act.
Dominance:
means
a
position
of
strength,
enjoyed
by
an
enterprise,
in
the
relevant
market,
in
India,
which
enables
it
to—
(i)
operate
independently
of
competitive
forces
prevailing
in
the
relevant
market;
or
(ii)
affect
its
competitors
or
consumers
or
the
relevant
market
in
its
favour
33

34. Abuse
of
Dominance
There
shall
be
an
abuse
of
dominant
position
if
an
enterprise
or
group
— Directly
or
indirectly
imposing
unfair
purchase
or
selling
prices
including
predatory
prices
— Limits
production,
markets
or
technical
development
to
the
prejudice
of
the
consumers
— Indulges
in
action
resulting
in
the
denial
of
market
access;
— Making
contracts
with
supplementary
obligations
which
have
no
connection
with
the
subject
of
such
contracts;
— Using
dominance
in
one
market
to
move
into
or
protect
other
markets
34

35. Abuse
of
Dominance
Determination
of
relevant
market
Determination
of
dominance
Determination
of
abuse
of
dominance
35

36. A
few
illustra3ve
Cases
— NSE-­‐MCX
Case
–
‘stock-­‐exchange
case’
–
This
was
the
first
case
decided
by
the
CCI
in
which
a
penalty
of
Rs.
55.5
crore
was
imposed
upon
NSE
for
its
abuse
of
dominant
position
in
the
stock
exchange
market
by
indulging
into
the
practice
of
predatory
pricing
and
also
abusing
its
dominant
position
to
protecting
other
relevant
market.
36

37. A
few
illustra3ve
Cases
— DLF
Case
–
‘real-­‐estate’
–
In
this
case,
the
CCI
imposed
a
penalty
of
Rs.
630
Crore
on
a
real-­‐estate
dominant
player
for
abusing
its
dominant
position
and
imposing
unfair
conditions
on
the
sale
of
its
service
to
its
consumers.
This
order
highlights
the
need
for
regulation
in
this
sector
which
has
been
recently
approved
by
the
cabinet.
The
case
is
pending
before
Supreme
Court
of
India
37

38. A
few
illustra3ve
Cases……
— Coal
India
case
–As
per
Spot
e-­‐Auction
Scheme
2007
a
buyer
had
to
pay
penalty
by
way
of
forfeiture
of
EMD
for
non-­‐lifting
of
coal
after
successful
participation
in
the
e-­‐Auction
without
any
corresponding
liability
upon
CIL
and
its
subsidiaries
for
failure
to
deliver
coal
in
respect
of
accepted
bids.
Apart
from
issuing
a
cease
and
desist
order,
the
Commission
ordered
modification
of
the
terms
and
conditions
of
the
Scheme
suitably
and
imposed
penalty
of
Rs.
1773.05
Crore
.
38

39. Regula3ng
Combina3ons
• Sections
5
&
6
of
the
Competition
Act,
2002
• The
Commission
regulates
combinations
(acquisitions,
control
and
mergers)
if
certain
turnover
and
asset
thresholds
are
met.
• If
the
combinations
are
causing
appreciable
adverse
effect
on
competition,
the
mergers
can
be
blocked
or
approved
with
some
remedies.
39

40. 40
Parties
i.e.
(acquirer
and
target
group
jointly)
Combined
Group
(group
to
which
target
enterprise
belongs
post
acquisition
Assets
Turnover
Assets
Turnover
India I N R
1 5 0 0
Crore
I N R
4 5 0 0
Crore
INR
6000
Crore I N R
1 8 0 0 0
Crore
Worldwide
Including
India
USD
750
Million
(including
at
least
INR
750
Crore
in
India)
USD
2250
Million
(including
at
least
INR
2250
Crore
in
India)
USD
3
Billion
(including
at
least
INR
750
Crore
in
India)
USD
9
Billion
(including
at
least
INR
2250
Crore
in
India)
Exemption
–
Target
entity
with
assets
in
India
not
exceeding
Rs.
250
crore
or
turnover
in
India
not
exceeding
Rs.
750
crore
exempt

41. Forms
— Form
I
to
be
filed
ordinarily
— Form
II
to
be
filed
preferably
when:
o Horizontal
overlap
with
combined
market
share
of
more
than
fifteen
percent
(15%)
in
the
relevant
market.
o Vertical
overlap
with
individual
or
combined
market
share
of
parties
being
more
than
25%
in
the
relevant
market.
— Form
III
to
be
filed
for
acquisition
of
public
financial
institutions,
foreign
institutional
investors,
banks
or
venture
capital
funds
o contract
note
issued
by
a
stock
broker
confirming
the
trade
cannot
be
construed
to
be
an
investment
agreement
for
the
purposes
of
section
6(4)
of
the
Competition
Act,
2002
–
GS
Mace
Holdings
Limited
41

42. Pre-­‐merger
consulta3on
Enterprises
may
request
for
an
informal
verbal
consultation
seeking
clarification
about
the
filing
of
notice.
— confidential
— Opinions
or
views
-­‐
not
be
binding
on
CCI.
42

43. A
few
illustra3ve
Cases
— Sun Pharma -Ranbaxy Merger - The
Competition
Commission
of
India
(CCI)
has
given
final
clearance
to
Sun
Pharmaceutical-­‐Ranbaxy
Laboratories
merger,
approving
divestment
of
seven
overlapping
drugs
of
the
two
companies
to
Emcure
Pharmaceuticals
— Jet- Etihad Merger- first
precedent
in
India
where
a
penalty
has
been
imposed
on
the
acquirer
for
gun
jumping
i.e.
failure
to
notify
CCI
of
a
proposed
combination.
Imposed
penalty
of
Rs.
One
Crore
on
Etihad.
43

44. Extraterritorial
reach
of
Commission
• Section
32
of
the
Competition
ACT,
2002
provides
for
acts
taking
place
outside
India
but
having
an
effect
on
Competition
in
India-­‐
Effects
doctrine.
• The
Proviso
of
Section
18
states
the
CCI
may
enter
into
any
Memorandum
or
arrangement
with
the
prior
approval
of
the
Central
Government,
with
any
agency
of
any
foreign
country
in
order
to
discharge
its
duty
under
the
provisions
of
this
Act.
— CCI
has
signed
MoUs
with-­‐
Russia,
FTC
and
DOJ
of
United
States
of
America,
Australia,
European
Commission
and
Canada
44

45. Career
prospects
in
Compe33on
Law
Any
professional
with
understanding
of
competition
law
is
an
asset
for
companies
for
deciding
business
strategies
and
their
better
implementation.
— Competition
Commission
of
India
— Competition
Law
division
of
law
firms
— Working
with
senior
advocates/lawyers
— In-­‐house
law
departments
of
big
companies
Indian
&
Multinational
— Research
and
think-­‐tanks
45

46. School
of
Compe33on
Law
and
Market
Regula3on,
IICA
Mandate:
Capacity
building
in
Competition
Law
&
Market
Regulation
through
its
teaching
and
training
programmes
and
interactive
events
such
as
workshops,
seminars,
roundtables
for
the
officials
from
Govt.
of
India
Ministries
and
Departments,
regulatory
bodies,
public
and
private
sector
enterprises
and
practitioners
of
Competition
Law
including
CCI
Internship:
School
offers
internship
to
students
and
out
of
college
young
professionals
(not
in
any
job)
in
the
areas
of
Economics,
Statistics,
Law,
Business
Management,
Finance.
(Monthly
Honorarium
:
Rs.
10,000/-­‐
)
(for
further
details
visit
our
website
www.iica.in)
Courses:
—
One
year
LL.M.
Course
in
collaboration
with
National
Law
University,
Delhi
—
Certificate
course
in
Competition
law
2015
&
—
Other
customised
short-­‐term
courses
46

47. 47