Competition Act 2002

The Competition Act 2002

The Mahalanobis committee in 1960 brought out the issue of growing inequality in the post-independence period. The monopoly inquiry commission in its report submitted in 1965 recognized the ill effects of economic power which prompted GOI to enact the monopolies and restrictive trade practices act [MRTPA],1969 with an objective of prevention of concentration of economic power to common detriment, control of restrictive trade practices. The act covered monopolistic trade practices and restrictive trade practices.

As the economic reform programme got implemented in the 1990s, it became more evident that MRTPA is not in sync with the policies under the reform programme. The need was felt to shift the focus from curbing monopolies to promote competition. The RAGHAVAN COMMITTEE in its report observed that MRTPA was limited and on the recommendation of the committee, competition act, 2002 was enacted.

This act aimed to provide, keeping in view the economic development of the country, for the establishment of a commission to prevent practices having adverse effects on competition; to promote and sustain the competitive market , protect the interest of consumer and to ensure freedom of trade carried on by other participants in the markets in India.

The act covers the following thing:

a) Anti-competitive agreements: It prohibits anti-competitive agreements among enterprises, it exempts efficiency-enhancing joint ventures from the purview of the presumption of appreciable adverse effect on competition. Agreements in respect to production, supply, distribution, storage, acquisition or control of goods and services which could have an adverse effect.

b) Abuse of dominant position: Dominance is defined in the act as a position of strength enjoyed by an enterprise in a market which enables it to operate independently of competitive forces prevailing, affect its competitors or consumer or the relevant market in its favor.

c) Regulations of combinations: it empowers the commission to evaluate the effect of mergers on competition in the relevant market in India. In any case, mergers are likely to have an adverse effect on competition, the commission may order de-merger which may have both cost to the merged entities and some social cost too.

d) Competition of advocacy: It is one of the silent features of the act. The commission is obliged to take suitable measures for the promotion of competition advocacy, creating awareness and imparting training about competition issue

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