Competition Act

• Submitted to :Prof. Pooja bhakuni

Submitted by:Nikita Singhai

Deepali Jain Nikhi Jain

Competition what

A situation in the market , in which seller independently strive for buyer patronage to achieve business objectives such as profits , sales & market share .

It is the foundation of an efficiently working market system.

Competition –why

The ultimate objective of competition is to secure the interest of the consumer – it empowers the consumer, best guarantee for consumer protection.

It is a means of reducing cost &improving quality. It also implies an open market where shortage

are rapidly estimated through the best allocation of resources.

It accelerates growth &development; preserves economic& political democracy.

Competition policy

Competition policy is defined as those govt. measures that affect the behavior of enterprises & structures of the industry . It is to promote efficiency & maximize welfare(sum of consumers ,surplus and producers , surplus &taxes collected by the govt. ) .

Competition policy goals

Preservation and promotion of the competitive process .

Efficiency in production & allocation of goods & services .

Innovation & adjustment to technological change.

Sustained economic growth .

The new law

A new law called competition act 2002 has been enacted to replace the extant law ,MRTP Act 1969 .

The law was challenged in the supreme court on the ground that the chairperson should only be from the judiciary .

The new law has been amended on 10 sep 2007 by the parliament .

Competition act - objective

Competition act ,2002 notified in Jan. 2003 . Stated objective in preamble is to provide “for establishment of commission .’’

To prevent practices having appreciable adverse effect on competition .

To promote & sustain competition in market .To protect the interest of the consumers .To ensure freedom of trade carried on by other

participants in markets, in India .

Main features :1.anti competition agreement

Sec.3 of the act deals with agreement among enterprises or persons , AOP, which cause or likely to cause appreciable adverse effect on competition. The act deal with following kind of agreement.

• Horizontal agreement • Vertical agreement

2. Abuse of dominant position

Unlike MRTP law, the act does not frown on dominance by market players .but the abuse of ‘Dominance’ or ‘Dominant position’ means a position of strength, enjoyed by an enterprise, in the relevant market , in India .

3. Regulation of combination

Combination include acquisition of shares, acquiring of control &mergers n amalgamations. These combinations can be horizontal type of combination that has very high potential to thwart competition when compared to other kinds of combinations.

4. Competition advocacy

The commission shall take suitable measures to:

o Promote competition advocacy o Create public awareness.o Impact training about competition issues.

The commission shall opinion or a reference from the central govt. on a policy /law of competition not binding .

Benefits