Competition Commission Of India

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Competition Commission of India

Competition Commission of India is a statutory body of the Government of India responsible for enforcing The Competition Act, 2002 throughout India and to prevent activities that have an appreciable adverse effect on competition in India. It was established on 14 October 2003. It became fully functional in May 2009 with Dhanendra Kumar as its first Chairman.

Vision and mission

Vision

To promote and sustain an enabling competition culture through engagement and enforcement that would inspire businesses to be fair, competitive and innovative; enhance consumer welfare; and support economic Growth.

Competition Commission of India aims to establish a robust competitive Environment through:

Proactive engagement with all stakeholders, including consumers, Industry, government and international jurisdictions.
Being a knowledge intensive organization with high competence level.
Professionalism, transparency, resolve and wisdom in enforcement.

The Government of India in April 1964 appointed the Monopolies Inquiry Commission under the Chairmanship of Justice K. C Das Gupta, a judge of The Supreme Court, to inquire into the extent and effect of concentration of economic power in private hands and prevalence of monopolistic and restrictive trade practices in important sectors of economic activity other than agriculture. To regulate advertising, in 1984, Parliament inserted a chapter on unfair trade practices in the Monopolies and Restrictive Trade Practices Act, 1969. The Monopolies and Restrictive Trade Practices Commission was constituted in the year 1970. The Monopolies and Restrictive Trade Practices Act, 1969 had its genesis in the Directive Principles of State Policy embodied in the Constitution of India. It received the assent of the President of India on 27 December, 1969. The Monopolies and Restrictive Trade Practices Act was intended to curb the rise of concentration of wealth in a few hands and of monopolistic practices. It was repealed on September 2009. The Act has been succeeded by The Competition Act, 2002. The Competition Bill, 2001 was introduced in Lok Sabha by Finance Minister Arun Jaitley on 6 August 2001.

The Competition Act, 2002

The Competition Act, 2002 was enacted by the Parliament of India and governs Indian competition law. It replaced the archaic The Monopolies and Restrictive Trade Practices Act, 1969. Under this legislation, the Competition Commission of India was established to prevent the activities that have an adverse effect on competition in India. This act extends to whole of India except the State of Jammu and Kashmir.

It is a tool to implement and enforce competition policy and to prevent and punish anti-competitive business practices by firms and unnecessary Government interference in the market. Competition laws is equally applicable on written as well as oral agreement, arrangements between the enterprises or persons.

The Competition Act, 2002 was amended by the Competition (Amendment) Act, 2007 and again by the Competition (Amendment) Act, 2009.

This is an act to establish a commission, protect the interest of the consumers and ensure freedom of trade in markets in India :

To prohibit the agreements or practices that restricts free trading and also the competition between two business entities,
To ban the abusive situation of the market monopoly,
To provide the opportunity to the entrepreneur for the competition in the market,
To have the international support and enforcement Network across the world,
To prevent from anti-competition practices and
to promote a fair and healthy competition in the market.

Salient Features

Anti Agreements

Enterprises, persons or associations of enterprises or persons, including cartels, shall not enter into agreements in respect of production, supply, distribution, storage, acquisition or control of goods or provision of Services, which cause or are likely to cause an “appreciable adverse impact” on competition in India. Such agreements would consequently be considered void.

Types of agreement

Competition law identifies two type of agreements. Horizontal agreements which are among the enterprises who are or may compete within same business. Second is the vertical agreement which are among independent enterprise. Horizontal agreement is presumed to be illegal agreement but rule of reasons would be applicable for vertical agreements.

Abuse of dominant position

There shall be an abuse of dominant position if an enterprise imposes directly or indirectly unfair or discriminatory conditions in purchase or sale of goods or services or restricts production or technical development or create hindrance in entry of new operators to the prejudice of consumers. The provisions relating to abuse of dominant position require determination of dominance in the relevant market.

Combinations

The Act is designed to regulate the operation and activities of combinations, a term, which contemplates acquisition, mergers or amalgamations. Combination that exceeds the threshold limits specified in the Act in terms of assets or turnover, which causes or is likely to cause adverse impact on competition within the relevant market in India, can be scrutinized by the Commission.

The Competition Commission of India (CCI) is an independent statutory body established under the Competition Act, 2002 to promote and protect competition in the country. The CCI has the following sub-topics:

Anti-competitive agreements
Abuse of dominant position
Mergers and acquisitions
Investigations
Enforcement
Competition advocacy
International cooperation
Consumer protection
Competition Education

Anti-competitive agreements

Anti-competitive agreements are agreements between two or more parties that have the effect of preventing, restricting or distorting competition in the market. The CCI can investigate and take action against anti-competitive agreements, including imposing fines.

Abuse of dominant position

Abuse of dominant position occurs when a dominant firm in a market uses its power to prevent, restrict or distort competition in the market. The CCI can investigate and take action against abuse of dominant position, including imposing fines.

Mergers and acquisitions

Mergers and acquisitions are transactions in which two or more companies combine to form a single company. The CCI can investigate and take action against mergers and acquisitions that are likely to have a negative impact on competition in the market.

Investigations

The CCI can investigate any matter that it believes may involve a contravention of the Competition Act. Investigations can be initiated by the CCI on its own motion or on a complaint from a third party.

Enforcement

The CCI can take enforcement action against companies that have contravened the Competition Act. Enforcement action can include imposing fines, ordering companies to take corrective action, and referring cases to the courts.

Competition advocacy

The CCI undertakes competition advocacy to promote competition and to educate the public about the benefits of competition. Competition advocacy includes activities such as publishing reports, conducting workshops and seminars, and engaging with policymakers.

International cooperation

The CCI cooperates with competition authorities in other countries to promote competition and to enforce the Competition Act. Cooperation includes activities such as sharing information, conducting joint investigations, and referring cases to each other.

Consumer protection

The CCI protects consumers from anti-competitive practices. The CCI can investigate and take action against companies that engage in anti-competitive practices that harm consumers.

Competition education

The CCI educates the public about the benefits of competition and about the Competition Act. Competition education includes activities such as publishing reports, conducting workshops and seminars, and engaging with the media.

The CCI plays an important role in promoting and protecting competition in India. The CCI’s work helps to ensure that markets are competitive and that consumers have access to a wide range of goods and services at competitive prices.

What is the Competition Commission of India (CCI)?

The Competition Commission of India (CCI) is an independent statutory body established under the Competition Act, 2002. The CCI is responsible for promoting and protecting competition in the Indian market.

What are the functions of the CCI?

The CCI has the following functions:

To prevent, restrict, and control anti-competitive agreements and practices.
To investigate and penalize abuse of dominant position by enterprises.
To promote and protect competition in the market.
To undertake studies and research on competition issues.
To provide guidance and advice to the government on competition matters.

What are the powers of the CCI?

The CCI has the following powers:

To issue directions to enterprises to cease and desist from anti-competitive agreements and practices.
To impose penalties on enterprises for anti-competitive agreements and practices.
To order divestiture of assets by enterprises that have abused their dominant position.
To recommend to the government the imposition of additional penalties on enterprises that have violated the Competition Act.

What are the procedures followed by the CCI?

The CCI follows a two-stage process in dealing with cases:

The first stage is the investigation stage, in which the CCI investigates the allegations of anti-competitive agreements or practices.
The second stage is the adjudication stage, in which the CCI adjudicates on the allegations and passes an order.

What are the remedies available under the Competition Act?

The Competition Act provides for the following remedies:

Injunctions: The CCI can issue injunctions to prevent anti-competitive agreements and practices from being entered into or continued.
Damages: The CCI can order enterprises to pay damages to consumers who have suffered losses as a result of anti-competitive agreements or practices.
Dissolution: The CCI can order the dissolution of an enterprise that has been found to have abused its dominant position.
Divestiture: The CCI can order the divestiture of assets by an enterprise that has been found to have abused its dominant position.
Imposition of penalties: The CCI can impose penalties on enterprises that have violated the Competition Act.

What are the challenges faced by the CCI?

The CCI faces a number of challenges, including:

Lack of awareness of the Competition Act among businesses and consumers.
Lack of Resources to investigate and adjudicate cases.
Lack of cooperation from businesses and consumers.
Delays in the disposal of cases.

What are the future prospects of the CCI?

The CCI has the potential to play a significant role in promoting and protecting competition in the Indian market. However, it is important that the CCI addresses the challenges it faces in order to realize its full potential.

Sure, here are some MCQs on the topics of competition law, economics, and regulation:

Which of the following is not a type of competition law?
(a) Antitrust law
(b) Consumer protection law
(c) Competition policy
(d) Merger control law
Which of the following is not a goal of competition law?
(a) To promote economic efficiency
(b) To protect consumers from anti-competitive practices
(c) To promote innovation
(d) To protect small businesses from large businesses
Which of the following is not a type of economic regulation?
(a) Price regulation
(b) Entry regulation
(c) Conduct regulation
(d) Merger control
Which of the following is not a goal of economic regulation?
(a) To protect consumers from monopoly power
(b) To promote competition
(c) To protect the environment
(d) To promote innovation
Which of the following is not a type of regulatory agency?
(a) Independent regulatory agency
(b) Executive agency
(c) Legislative agency
(d) Judicial agency
Which of the following is not a power of an independent regulatory agency?
(a) To set prices
(b) To grant licenses
(c) To enforce regulations
(d) To adjudicate disputes
Which of the following is not a criticism of independent regulatory agencies?
(a) They are too powerful.
(b) They are not accountable to the public.
(c) They are captured by special interests.
(d) They are inefficient.
Which of the following is not a benefit of independent regulatory agencies?
(a) They can provide expertise and specialized knowledge.
(b) They can insulate decisions from political pressure.
(c) They can promote competition and innovation.
(d) They can protect consumers from anti-competitive practices.
Which of the following is not a criticism of economic regulation?
(a) It can stifle innovation.
(b) It can lead to higher prices.
(c) It can be inefficient.
(d) It can be captured by special interests.
Which of the following is not a benefit of economic regulation?
(a) It can protect consumers from monopoly power.
(b) It can promote competition.
(c) It can protect the environment.
(d) It can promote innovation.