bl lecture 22
TRANSCRIPT
-
8/8/2019 BL Lecture 22
1/20
The Competition Act, 2002
-
8/8/2019 BL Lecture 22
2/20
OBJECTIVESOBJECTIVES
1.Establish a Commission to prevent practices having
adverse effect on competition.2.Promote and sustain competition and protect the
interests of consumers.
4.Ensure freedom of trade carried on by other
participants in markets, in India.
Core function areas
. Prohibition of nti!competitive greements.
". Prohibition of buse of #ominant Position.
C. $egulation of Combinations
%ote& the competition commission is not yet fully
functional,
-
8/8/2019 BL Lecture 22
3/20
ANTI-COMPETITIVE AGREEMENTS ANTI-COMPETITIVE AGREEMENTS
'his ct, sought to replace the ($'P ct.
"asic $ule& )*.+ %o enterprise, person or associationshall enter into any agreement in respect of
production, supply, distribution, storage, ac-uisition
or control of goods or provision of services, hich
causes, or is likely to cause an appreciable adverseeffect on competition in India. n agreement that
contravenes the above $ule is void.
greement includes any arrangement or
understanding& /i0 hether or not the same is formal
or in riting or /ii0 hether or not the same is
intended to be enforced.
-
8/8/2019 BL Lecture 22
4/20
ANTI-COMPETITIVE AGREEMENTS ANTI-COMPETITIVE AGREEMENTS
•Enterprise means any person /individual, Indian
foreign company, authority etc.0 or government.E3cluding sovereign functions of the overnment,
including activities relating to atomic energy,
currency, defence and space.
)*. +/+0 ! 'he folloing agreement/s0 presumed tohave appreciable adverse effect on competition
5determines purchase or sale prices.
5limits or controls production, supply, markets,technical development, investment or provision of
services.
-
8/8/2019 BL Lecture 22
5/20
ANTI-COMPETITIVE AGREEMENTSANTI-COMPETITIVE AGREEMENTS
5allocation of geographical area of market, or typesof goods or services, or number of customers in the
market or any other similar ay.
5results in bid rigging or collusive biddings
E3ception to the above rule&
n agreement entered into by ay of 6oint
ventures if such agreement increases efficiency in
production, supply, distribution, storage, ac-uisitionor control of goods or provision of services.
-
8/8/2019 BL Lecture 22
6/20
Anti-competitive Agreements Anti-competitive Agreements
[S. 3(4)] The following shall be considered anti-
competitive if it causes or is liel! to cause an
appreciable adverse effect on competition in "ndia.
#Tie-in arrangement $ re%uiring to purchase some
other goods as a condition.
#&'clusive suppl! agreement $ restraint dealingwith goods of an! other person.
* &'clusive distribution agreement $ to limit
restrict or withhold output or suppl! of goods orallocate an! area or maret for the disposal or sale
of the goods.
-
8/8/2019 BL Lecture 22
7/20
Anti-Competitive Agreements Anti-Competitive Agreements
#efusal to deal $ to restrict from whom goods ma! bebought or sold.
#esale price maintenance $ prescribing the price atwhich the goods ma! be resold unless it clearl! statesthat a lower price ma! be charged.
&'ceptions to Section -3
#ight of an! person to restrain an! infringement ofintellectual propert! rights -cop!right trademars
patents designs geographical indications etc.
#ight of an! person to e'port goods from "ndia tothe e'tent to which the agreement relates e'clusivel!to the production suppl! distribution or control of
goods or provision of services for such e'port.
-
8/8/2019 BL Lecture 22
8/20
Abse o! "omin#nt Position Abse o! "omin#nt Position
S. 4(*) -+o enterprise or group shall abuse its dominant position.
•,roup means two or more enterprises which directl!or indirectl! are in a position to/ (i) e'ercise 012 ormore of the voting rights in the other enterprise or (ii)appoint more than 52 of the members of the 6oard of
7irectors of the other or (iii) control the managementor affairs of the other enterprise.
#ominant position ! a position of strength en6oyed by
an enterprise, in the relevant market, in India, hichenables it to 7 operate independently of competitive
forces prevailing in the relevant market or affect its
competitors or consumers or the relevant market in its
favour.
-
8/8/2019 BL Lecture 22
9/20
Abse o! "omin#nt Position Abse o! "omin#nt PositionThere shall be an abuse of dominant position if anenterprise or group does an! of the following/
# imposes unfair or discriminator!
(i) condition in purchase or sale of goods or servicesor (ii) price in purchase or sale (including predator!
price ) of goods or service.
&'ception/ such unfair or discriminator! conditionsor prices adopted to meet the competition.
,8redator! price means the sale of goods or provision
of services at a price which is below the cost as ma!be determined b! regulations with a view to reducecompetition or eliminate competitors.
-
8/8/2019 BL Lecture 22
10/20
Abse o! "omin#nt Position Abse o! "omin#nt Position
•limits or restricts (i) production of goods or provision
of services or maret thereof or (ii) technical or
scientific development relating to goods or services to
the pre9udice of consumers.
#"ndulges in practice or practices resulting in denial of
maret access in an! manner.#:aes contracts sub9ect to acceptance b! other
parties of supplementar! obligations which b! their
nature and commercial usage have no connection with
the sub9ect of such contracts.
#;ses its dominant position in one relevant maret to
enter into or protect other relevant maret.
-
8/8/2019 BL Lecture 22
11/20
CCI’s decisionsCCI’s decisions
If the CCI finds the agreement or action of an
enterprise in dominant position to be in contraventionof la, it may pass orders like 7
/i0 direct discontinuation of such agreement or
discontinuation of such abuse of dominant position
/ii0impose penalty
/iii0 direct modification of agreements
/iv0 other directions including payment of costs
/v0pass such other orders or directions as appropriate.
'his ct shall be in addition to and not in derogation
of any other la.
-
8/8/2019 BL Lecture 22
12/20
Regulation of CombinationsRegulation of Combinations
[S. ] (a)The ac%uisition of one or more enterprises b!
one or more persons or (b) :erger or amalgamation ofenterprises shall be a ,combination if an! of the
specified parameters are met.
The specified parameters relate to value of ,assets and
,turnover of the entities or group involved $ includingthat in "ndia.
[S. 1]+o person or enterprise shall enter into a
combination which causes or is liel! to cause anappreciable adverse effect on competition within the
relevant maret in "ndia and such combination shall be
void.
-
8/8/2019 BL Lecture 22
13/20
Regulation of CombinationsRegulation of Combinations [S. 1]
-
8/8/2019 BL Lecture 22
14/20
Regulation of CombinationsRegulation of Combinations
8er S.1(0) +o combination shall come into effect until
e'pir! of 0*5 da!s from the date of notice to ==" oruntil ==" has passed appropriate orders whichever is
earlier.
==" after detailed in%uir! ma! approve suggest
modifications or re9ect a =ombination.
"n addition u>S. 0? the ==" has powers to order
division of enterprise in order to ensure that such
enterprise does not abuse its dominant position.
-
8/8/2019 BL Lecture 22
15/20
Aeals and Ot!e" P"o#isionsAeals and Ot!e" P"o#isions
# directions> decisions of the =="
within 15 da!s to the =ompetition
-
8/8/2019 BL Lecture 22
16/20
Simulated exercises
•$%A manufactu"e" of elect"ical goods
stiulated to !is "etaile"s t!at t!e& s!ould
not sell t!e goods belo' t!e minimum "ice(no" abo#e t!e ma)imum "ice no" 'it! an&
#a"iation in t!e stiulated "ice% *oes t!is
amount to "esale "ice maintenance+
-
8/8/2019 BL Lecture 22
17/20
Exercises......
,% A deale" ag"ees to issue ne' gas
connections 'it! t!e sale of gas sto#es
onl&% *oes it in#ol#e anti-cometitionag"eement+
-
8/8/2019 BL Lecture 22
18/20
Exercises ........
•% A ban. "e/ui"es a custome" to .ee a
fi)ed deosit '!ile allotting !im a loc.e"%
*oes t!is amount to anti-cometitionag"eement+
-
8/8/2019 BL Lecture 22
19/20
Exercises.....
•An automobile deale"( '!ile selling !is
"oduct( includes t!e "ice of a
com"e!ensi#e insu"ance olic& and a
safet& de#ice in t!e "ice of t!e #e!icle%
*oes t!is affect cometition la'+
-
8/8/2019 BL Lecture 22
20/20
Exercises.......
•A deale" in "essu"e coo.e"s "e/ui"es t!e
u"c!ase"s( as a "econdition to sale of t!e
"essu"e coo.e"s( to u"c!ase containe"s
and sea"ato"s along 'it! t!e "essu"e
coo.e"s% *oes t!is amount to #iolation of
cometition la'+