Need for Competition Act when world at large is a single platform for carrying
out trade and commerce
What is Competition?
Competition
is “a situation in a market in which firms or sellers independently strives for
the buyers’ patronage in order to achieve a particular business objective for
example, profits, sales or market share” (World Bank, 1999).
“Competition”
is an age-old phenomenon.
Benefits of Competition:
·
Companies:
Efficiency, cost-saving operations, better utilization of resources, etc.
·
The
Consumer: Wider choice of goods at competitive prices
·
The
Government: Generates revenue.
But
all these benefits are lost if Competition is UNFAIR or NON-EXISTANT
·
Choice
of CARS in the olden days
·
MTNL
·
Airlines:
Indian Airlines, Jet, etc
·
Indian
Railways
Competition Act:
The Competition
Act, 2002 was enacted by the Parliament of India and
governs Indian
competition law. It replaced the
Monopoly and Restrictive Trade Practices Act, 1969. Under this legislation,
the Competition
Commission of India was established
to prevent activities that have an adverse effect on competition in India.
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, to promote and sustain competition in markets, to protect the
interests of consumers and to ensure freedom of trade carried on by other
participants in markets, in India, and for matters connected therewith or
incidental thereto.
Competition
Commission of India is a body of the Government
of India responsible
for enforcing The
Competition Act, 2002 throughout
India and to prevent activities that have an adverse effect on competition in
India. It was established on 14 October 2003. It became fully functional in May
2009.
The
Act prohibits anti-competitive agreements, abuse of dominant position by
enterprises and regulates combinations (acquisition, acquiring of control
and Merger
and acquisition),
which causes or likely to cause an appreciable adverse effect on competition
within India.
Preambles stated objectives are to establish the
commission which has the duty to:
·
Eliminate
practices having adverse effect on competition.
·
Promote
and sustain competition.
·
Protect
consumers’ interests.
·
Ensure
freedom of trade carried on by other participants in markets, in India.
To achieve
its objectives, the Competition Commission of India endeavors to do the
following:
·
Make the markets work for the
benefit and welfare of consumers.
·
Ensure fair and healthy competition
in economic activities in the country for faster and inclusive growth and
development of economy.
·
Implement competition policies with
an aim to effectuate the most efficient utilization of economic resources.
·
Develop and nurture effective
relations and interactions with sectoral regulators to ensure smooth alignment
of sectoral regulatory laws in tandem with the competition law.
·
Effectively carry out competition
advocacy and spread the information on benefits of competition among all
stakeholders to establish and nurture competition culture in Indian economy.
Monopolistic and Restrictive Trade Practice under
MRTP Act, 1969
The
Monopolistic and Restrictive Trade Practices Act, 1969, was enacted:
·
To
ensure that the operation of the economic system does not result in the
concentration of economic power in hands of few,
·
To
provide for the control of monopolies, and
·
To
prohibit monopolistic and restrictive trade practices.
Competition Act covers the following aspects:
·
Anti - Competitive
Agreements. Example, cartels.
·
Abuse of Dominant
Position by enterprises. Example, Predatory pricing, barriers to entry.
·
Regulation of Mergers
and Acquisitions (M&As).