Competition?????? An economic rivalry amongst enterprises to control greater market power.

Fair competition
Enterprises Offers wider where

choice to consumers at lower prices. Leads to optimal allocation of resources. Is an amalgam of factors that stimulate economic rivalry

two enterprises adopt fair means such as production of fair goods/services, investment in R&D etc. Competition is fair Is a tool to mount market pressure to penalize laggards and to reward the enterprising

INTRODUCTION
Restrictive trade practices: A combination of producers of any product joined together to control its production, sale, and price, so as to obtain a Monopoly and restrict competition in any particular industry or commodity. For e.g. forming the cartel, predatory pricing

 Section

2(c) "cartel" includes 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; Case: Jet Airways -Kingfisher

Objectives
To prevent practices having adverse

effect on competition. To promote & sustain competition in the markets. To protect the interests of consumers. Ensure freedom of trade carried on by participants in markets

Anti-competitive agreementssection 3
Any agreement entered in to between

enterprise, person, association of person, engaged in trade of goods or provision of services. Which causes Adverse effect on competition.

Predatory Pricing
Predatory pricing refers to a practice of

driving rivals out of business of selling at a price below the cost of production. PP is a commercial strategy by which a dominant firm lowers its price to a level which will ultimately force its rivals out of the market when the latter have been successfully expelled, the company can raise the prices again and reap the rewards Case: US Microsoft Co

Anti-competitive agreements
These are agreements between entities

in respect of production, supply, distribution, storage, acquisition or control of goods or provisions of services Which are likely to cause an appreciable adverse effect on competition (AAEC) Legal assessment standard Determining the prices Limiting and controlling production , supply, markets, or provisions of services

Anti-competitive agreements
Section 3: Anti-competitive agreements
Tie-in-arrangement Exclusive supply agreement

Exclusive distribution agreement

Exclusive refusal to deal Resale price maintenance

Cont..
Tie-in-arrangement This is an arrangement by which a seller

agrees to sell a product known as the tying item only on the condition that buyer agrees to buy a second product known as the tied product from the seller E.g. requiring a stabilizer to be bought along with the refrigerator To buy tyre-lock, petrol tank lock, and helmet along with a scooter

Cont..
Requiring buyers of DTH service also to

buy /take rent the STBs (set top box) In India, as on date there are 4 ways in which a viewer may receive broadcast of TV programs: i. Dish TV India Limited ii. Tata Sky Limited a. Free to Air (FTA) iii. Reliance Big TV b. Cable TV Limited iv. Sun Direct TV Pvt. c. Direct To Home Limited d. IP TV-Internet Protocol Television

Exclusive supply agreement

This includes any agreement restricting

the purchaser in the course of his trade from acquiring or dealing in any goods other than those of the seller. Its a agreement between distributor and a supplier whereby a distribution of a certain product engages a supplier on an exclusive basis to distribute and sell to customers within a given territory.

Cont..
E.g.

Jindal steel and power limited (JSPL) alleging that the SAIL (steel authority of India) has entered exclusive supply agreement with Indian railways for supply of long rails and foreclosed the market for JSPL.

Exclusive distribution agreement

This includes any agreement which

restricts or is likely to restrict, or withhold the output or supply of any goods or allocate any market area or market for the disposal or sale of the goods.

Cont..
Manish singh, kamal udyog vs US

Pharmacopeia where USP a non-profit orgn based in USA terminated all its distributorship contracts with kamal udyog and appointed LGC India pvt ltd as its exclusive distributor

Exclusive refusal to deal

This includes any agreement which restricts

person or class of persons to whom good are sold or from goods are bought A dealer of company complained to the commission that the company was withholding supply of goods to him. In the course of enquiry it was found that on account of delayed payments from dealer the company did so BATA restraining the small scale producers with whom it entered in to arrangement for buying footwear raw materials prohibits small scale producers from selling additional raw materials

Resale price maintenance

Resale price maintenance (RPM) is a

form of price fixing , RPM exits with a supplier specifying the minimum (or maximum) price at which the product must be re-sold to customers. Exceptions Copyright act Patent act & other IPR

Prohibition of abuse of dominant position: Section 4

The expression dominant position

means a position of strength enjoyed by an enterprise in the relevant market in India No enterprise shall abuse its dominant position

Regulation of Combinations
The acquisition of one or more enterprises by one or more persons or acquiring of control or merger or amalgamation of enterprises under certain circumstances as mention in section 5

THE COMPETITION COMMISSION OF INDIA

Is enabled to participate in the formulation

of policies and reviewing of policies relating to competition at the instance of the government. It can give opinion on competition issues . Is required to create competition culture Is required to act as competition advocate

Cont..
Competition Advocacy is one of the main

pillars of modern competition law which aims at creating, expanding and strengthening awareness of competition in the market. Section 49 of the Competition Act, 2002 mandates the CCI to undertake advocacy for promoting competition.

COMPETITION COMISSION OF INDIA (CCI)

Establishment of commission (sec -7) Corporate body (sec -7(1))

Competition commission of India having perpetual succession and a common seal . it can acquire , hold and dispose of property ,both movable and immovable Composition of commission (sec -8) Commission shall consist of a chairperson and not less than 2 and 10 and other member appointed by central government. To be qualified as Chairperson of CCI he must be the judge of high court with 15 years of professional experience in economics ,business, commerce, law, finance , accountancy, management , industry, etc

Cont..
Government may by notification appoint a directory

general and as many additional ,joint, deputy general etc.., as may think fit for the purposes of assisting the commission in conduction. Registrar and officer and other employees of commission Commission may appoint a register and such officers and other employees as it consider necessary for the efficient performance of its function under this act ( sec 17(1)) Competition commission proposed staff strength : 125 ( 50 economist , 50 lawyer and 25 finance professionals )

Functions of CCI
(A) Eliminate practices having adverse effect on competition (B)Inquiry whether an enterprise abuses dominant position . (C) Inquiry into certain anti-competitive agreements and dominant position of enterprise. (D) CCI mandate to undertake competition advocacy (E) CCI shall give opinion about competition issues to central government

Power of Commission
Power grant Interim Relief (Sec 33)
Power to award compensation (Sec 34) Appearance before commission (Sec 35)

Power to regulate its own procedures

(Sec 36) CCI has same powers has vested in civil court like issue summons, production documents, receive evidence, examination of witness, exparte hearing

Cont..
Review of orders of commission (Sec 37

& 40)

Power of Commission
Execution of Orders (sec 39)
Order of CCI Similar as the decree of a

high court
Independent Authority Power to investigate Penalties