International Dimensions of Competition Law :

I.Globalization Globalization describes an ongoing process by which regional economies, societie

s, and cultures have become integrated through a globe-spanning network of commu
nication and trade. The term is sometimes used to refer specifically to the inte
gration of national economies into the international economy through trade, fore
ign direct investment, capital flows, migration, and the spread of technology. H
owever, globalization is usually recognized as being driven by a combination of
economic, technological, socio-cultural, political, and biological factors. The
term can also refer to the transnational circulation of ideas, languages, or pop
ular culture through acculturation.
Definition of Globalisation ;
Globalisation can be defined in the following manner Globalisation may be define
d as a primarily economic phenomenon, which involves increasing interaction and
integration of national economic systems. This leads in turn to growth in intern
ational trade, investment and capital flows. Moreover, there is a rapid increase
in cross-border social, cultural and technological exchanges because of the phe
nomenon of globalization.
In the Indian context
In the Indian context ,it implies opening up of the economy to foreign direct in
vestments by providing requisites facilities ,removing administrative and other
constraints ,allowing Indian companies to enter into joint ventures and foreign
collaborations, bringing down quantities and non-quantities restrictions to trad
e ,diluting the role of public sector and encouraging privatization and so on.be
ggining haltingly in 1980s, Globalization got the real thrust from the new econo
mic policy of 1991 and it was further pushed forward by the coming up of the Wor
ld Trade Organisation(WTO).
Globalization is a leading concept which has become the main factor in business
life during the last few decades. This phenomenon affects the economy, business
life, society and environment in different ways, and almost all corporations hav
e been affected by these changes. These changes are mostly related to increasing
competition and the rapid changes of technology and information transfer. To ch
allenge these changes, companies need to keep in mind various aspects of the mai
n effects of globalization.
Competition
Globalization leads to increased competition. This competition can be related to
product and service cost and price, target market, technological adaptation, qu
ick response, quick production by companies etc. When a company produces with le
ss cost and sells cheaper, it is able to increase its market share.
Customers have a large multitude of choices in the market and this affects their
behaviors: they want to acquire goods and services quickly and in a more effici
ent way than before. They also expect high quality and low prices. All these exp
ectations need a response from the company, otherwise sales of company will decr
ease and they will lose profit and market share. A company must always be ready
for price, product and service and customer preferences because all of these are
global market requirements.
Exchange of Technology
One of the most striking manifestations of globalization is the use of new techn

ologies by entrepreneurial and internationally oriented firms to exploit new bus

iness opportunities. Internet and e-commerce procedures hold particular potentia
l for SMEs seeking to broaden their involvement into new international markets.
Knowledge/Information transfer
Information is a most expensive and valuable production factor in the current en
vironment. Information can be easily transferred and exchanged from one country
to another. If a company have a chance to use knowledge and information then it
means that it can adapt to this global changing. This issue is similar with the
technology transfer issue in global markets. The rapid changing of the market re
quires also quick transfer of knowledge and efficient using of that knowledge an
d information.
------------------------------------------------------------------------------------------------------------------------------II.The World Trade Organisation:
The World Trade Organisation gave a real push to the process of globalisation Th
e World Trade Organisation (WTO) came into existence on 1st January, 1995.the WT
O is a powerful body which broadly aims at making the whole world a big village
where there is free flow of goods and services and where there are no barriers t
o trade. It is the only global international organisation which deals with the r
ules of trade between nations. At its heart are the WTO agreements , negotiated an
d signed by the bulk of the worlds trading nations and ratified in their parliam
ents.
Features of the World Trade Organisation (WTO):
The WTO is the main organ of implementing the Multilateral Trade Agreements.
The WTO is global in its membership. Its present membership is 151 countries and
with many other considering accessions.
It is forum for negotiation among its members. In the forum, the member-nations
discuss issues related to the Multilateral Trade Agreements (MTAs) and associate
d legal instruments, it is also the forum for negotiations on terms of the Pluri
lateral Trade Agreements (PTAs). In fact, it is the third economic pillar of wor
ldwide dimensions along with the IMF and the World Bank.
It has a far wider scope than its predecessor GATT, bringing into the multilater
al trade system, for the first time, trade in service, intellectual protection a
nd investment.
It is a full-fledged international organisation in its own right.
It administers a unified package of agreements to which all members are committe
d.
The decision-mankind under the WTO is carried out by consensus. Where a consensu
s is not arrived at the issue shall be decided by voting. Each member has one vo
te.
The WTO has legal personality. Members shall endow it with such legal capacity,
privileges and immunities as are necessary for the exercise of its functions.
The representatives of the members and all officials of the WTO enjoy internatio
nal privileges and immunities.
Functions of the WTO:
The following are the major functions of the IMF:
The WTO shall facilitate the implementation, administration and operation of wor
ld trade agreements.
The WTO shall provide the forum for trade negotiations among its member countrie
s.
The WTO shall handle trade disputes.
The WTO shall monitor national trade policies.

 It shall provide technical assistance and training to developing countries.

With a view to achieve greater coherence in global economic policy making, the W
TO shall co-operate, as appropriate, with the IMF and IBRD and its affiliated ag
encies.
Competition :
Competition policy has an important role to play in developing countries, both i
n promoting a competitive environment and in building and sustaining public supp
ort for a pro-competitive policy stance by the government. Liberal trade and inv
estment policies are a key element of a good competition policy, and priority sh
ould be given eliminating barriers to trade and FDI. However, in many sectors of
the economy the threat of foreign competition will remain limited, and there is
need to apply competition law to ensure that firms do not behave collusively an
d that market power is not exploited. This can and should be done independently
of the WTO--no international disciplines are needed.
There are a number of potential rationales for international cooperation in the
area of competition law, notably where multi-jurisdictional mergers take place a
nd where welfare-reducing export cartels cannot be disciplined because the juris
dictions most able to collect evidence have no incentive to do so. This does not
imply an international agreement that could improve global welfare can easily b
e negotiated. Given the mercantilist basis of multilateral trade negotiations, t
he WTO is less likely to be a powerful instrument to encourage adoption of welfa
re-enhancing competition rules than it is as a forum for the abolition of border
measures.
Clearly there is scope for bargaining outside the area of competition law. The f
act that the competition agenda is being driven by market access considerations
does not mean this is the only factor that could enter into play. Pressure for m
odifications in anti-dumping law and for commitments by OECD competition authori
ties to provide assistance to developing country competition authorities are exa
mples of the type of quid pro quo that could be sought.
Realism suggests, however, that the primary focus should be on the design of app
ropriate national policies. Developing countries should use the opportunities of
fered by the WTO to implement a pro-active, broad-based competition policy stanc
e as this is in their own interest, while seeking all the leverage they can to i
ncrease the contestability of world markets.
----------------------------------------------------------------------------------------------------------------------------------Regulatory framework for merger control :
Regulatory framework
The Competition Act 2002 (Competition Act) is the principal legislation that reg
ulates combinations (acquisitions, mergers, amalgamations and de-mergers) in Ind
ia. Sections 5 and 6 of the Competition Act, which deal with the regulation of c
ombinations, have been in force since 1 June 2011.
The procedure for notifying combinations is set out in:
The Competition Commission of India (Procedure in regard to the transaction of b
usiness relating to combinations) Regulations 2011 (as last amended on 7 January
2016) (Combination Regulations).
The Competition Commission of India (General) Regulations 2009 (General Regulati
ons).
Regulatory authority
The Competition Commission of India (CCI) is the statutory authority responsible
for reviewing combinations and assessing whether or not they cause or are likel
y to cause an appreciable adverse effect on competition within the relevant mark

et(s) in India. CCI approval is required for combinations where the parties invo
lved exceed the assets/turnover thresholds set out in section 5 of the Competiti
on Act.
The Director General (DG) is the investigative wing of the CCI. The DG can condu
ct a Phase II investigation of combinations when directed by the CCI.
---------------------------------------------------------------------------------------------------------------------------------Emerging Issues in Competition Law a) Market Share of the Enterprise
After determining the relevant market, the next step in determining dominance" i
s to assess market share of enterprise or group. Different parameters are employ
ed to measure market share depending upon the nature of
sector and the issue under investigation. For example, the market share of an ai
rline could be measured on the basis of number of flights, number of aircrafts,
number of passenger's carrying capacity, the city pairs etc. and each parameters
may give different results. In the mining industry, the market share can be bas
ed on reserves held by different operators. In case, the products are heterogene
ous, it is advisable to calculate market share in terms of value expressed in tu
rnover and in case products are homogenous, the production capacities and reserv
es are believed to be better indicators of market share.
(b) Size and Resources of the Enterprise
In India, the cash rich BCCI with virtual strangle-hold over cricket has not acc
orded recognition to the ICL as a league, and has denied access to cricket groun
ds and prevented ICL players and coaches from participating in BCCI sponsored ac
tivities.5 The financial clout and other resources at the command of BCCI enable
d it to promote its own sponsored IPL by excluding the ICL formed by Essel Group
in May, 2007. The presence of two cricket leagues namely the IPL and ICL would
have led to increased competition to the benefit of cricket fans, cricketers and
market as a whole.
(c) Size and Importance of Competitors
When looking at market share it is also relevant to look at the largest firm's m
arket share relative to its competitors; the smaller the shares of the competito
rs, it would be advisable to hold that the largest firm as dominant. Market shar
e of one competitor in the market also determine the competition constraint on t
he another player. For example, both Pepsi and Coke enjoy over 40 per cent marke
t share in soft drink market in India and again in the truck chassis market, the
re are only two players namely Ashok Leyland and Telco and both have almost equa
l market shares. This reflects that one has ability to exercise competitive pres
sure on another and therefore, neither of them ought to be determined as "domina
nt in the relevant market".
(d) Economic Power of the Enterprise Including Commercial Advantage
Over Competitors
Superior market position or resources may be a contributing factor to a dominant
market position. The ECJ in United Brands Co V. Commission6 considered economie
s of scale and scope as a significant power
leading to dominance. In India, Life Insurance Corporation of India is having th
e benefit of prior entry and that of sovereign guarantee in the personal insuran
ce market and thereby has commercial advantage over new entrants. Access to capi
tal which incumbent has to the exclusion of others may be regarded as relevant f
or the purpose. In Continental Can Co. Inc.7 case, the Commission regarded acces
s to international capital market as significant factor in determining dominance
.

(f) Dependence of Consumers on the Enterprise

In public utilities, the dependence of consumers is invariably high. Unlike in o
ther developed jurisdictions, a consumer of electricity in India, at present, do
es not have a choice of supplier. Likewise, in the absence of
portability of number, a mobile user in India is being restrained to switch to a
nother and the resultant effect is conferring dominance on the existing provider
of service.
--------------------------------------------------------------------------------------------------------------------------------IPR And Competition Law: Neck To Neck
Competition law and IPRs policies are bound together by the economics of innovat
ing and an intricate web of legal rules that seeks to balance the scope and effe
ct of each policy.
IPRs protection is a policy tool meant to foster innovation, which benefits cons
umers through the development of new and improved goods and services, and spurs
economic growth. It bestows on innovation the right to legitimately exclude for
a limited period of time, other parties from the benefits arising from new knowl
edge and more specifically from the commercial use of innovative products and pr
ocesses based on that new knowledge. In other words, innovators or IPR holders a
re rewarded with a temporary monopoly by the law to recoup the costs incurred in
the research and innovation process. As a result, IPR holders earn rightful and
reasonable profits so that they have incentives to engage in further innovation
.
Competition law on the other hand, has always been regarded by most as essential
mechanism in curbing market distortions, disciplining anti-competitive practice
s preventing monopoly and abuse of monopoly, inducting optimum allocation of res
ources and benefiting consumers with fair prices, wider choices and better quali
ties. It therefore ensures that the monopolistic power associated with IPR is no
t excessively compounded or leveraged and extended to the detriment of competiti
on. Besides seeking to protect competition and the competitive process which in
turn prods innovations to be first in the market with a new a product service at
a price and quality that underscores the importance of stimulating innovation a
s a competitive input, and thus also works to enhance consumer welfare.
1. Both as a means to achieve improved efficiency and better welfare
Thus, competition is not the end goal of competition law just as IP protection i
s not the end goal of IPRs policy but only a means to achieve improved efficienc
y and better welfare in the long run. In some circumstances, the society would b
e better off by allowing for limited market restrictions, monopolistic profits a
nd short-term allocative inefficiency when these can be proven to promote dynami
c efficiency and long-term economic growth. This has even been explicitly includ
ed among those factors to be taken into account by competition authorities in so
me competition statutes.
2. Both as a driving force for innovation
Moreover, competition may drive a race for innovation, as firms compete to explo
it first- mover advantages, learning-curve advantages, as well as to gain IPRs p
rotection.[xiv] It is also one of the tasks of competition law to protect this t
ype of competition: competition in the innovation race or competition for the ma
rket as distinguished from competition in the product market.
3. Both promoting consumer welfare

Both regimes can thus function to promote consumer welfare in the same manner, w
hile showing similarities and differences in their consideration of short and lo
ng run effects on consumer welfare. Patent law and the incipiency elements of an
titrust law are similar in that they both are ultimately based on inherently unc
ertain predictions of what is going to happen in the future.
----------------------------------------------------------------------------------------------------------------------------------Cross border issues -ONLY LEFT
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