Inquiry into disclosures under sub-section 2 of section 6. Orders of Commission on certain combinations. Acts taking place outside India but having an effect on competition in India.
Power to issue interim orders. Appearance before Commission. Power of Commission to regulate its own procedure. Rectification of orders. Execution of orders of Commission imposing monetary penalty. Director General to investigate contravention. Contravention of orders of Commission.
Section 42A. Compensation in case of contravention of orders of Commission. Penalty for failure to comply with directions of Commission and Director General. Section 43A. Power to impose penalty for non-furnishing of information on combinations. Penalty for making false statement or omission to furnish material information.
Penalty for offences in relation to furnishing of information. Power to impose lesser penalty. Crediting sums realised by way of penalties to Consolidated Fund of India. Contravention by companies.
Competition advocacy. Grants by Central Government. Constitution of Fund. Accounts and audit. Furnishing of returns, etc. Section 53A. Establishments of Appellate Tribunal. Section 53B. Appeal to Appellate Tribunal. Section 53C.
Composition of Appellate Tribunal. Section 53D. Qualifications for appointment of Chairperson and Members of Appellate Tribunal. Section 53E. Selection Committee. Section 53F. Term of office of Chairperson and Members of Appellate Tribunal. Section 53G. Terms and conditions of service of Chairperson and Members of Appellate Tribunal. Section 53H. Section 53I. Resignation of Chairperson and Members of Appellate Tribunal. Section 53J. Member of Appellate Tribunal to act as its Chairperson in certain cases.
Section 53K. Removal and suspension of Chairperson and Members of Appellate Tribunal. Section 53L. Restriction on employment of Chairperson and other Members of Appellate Tribunal in certain cases. Section 53M. Staff of Appellate Tribunal. Horizontal agreements see Table 1 They are Agreements between parties in the same line of production.
Example - agreement between manufactures, agreement between distributors. Agree to limit; or ii. Control or attempt to control production, distribution, sale or price. Eg- Agreements to share information Sellers agree either to meet any price, the buyer is able to obtain from another supplier or release the buyer to purchase from another seller.
Eg- Agreement not to advertise agreements to limit business hours. It also give a relevant opportunity to the members because of its invaluable networking opportunities. It is also considered as an important platform to discuss the trends in the market place, any legislation or policy proposed by the government. So it is definite that business can reap well by joining relevant trade associations.
Thereby, collusion of trade associations can tend to make agreements which is anti-competitive in nature. Vertical Agreements see Table 1 Vertical agreement are those agreements between non-competition undertakings operating at different levels of manufacturing and distribution process.
They are prohibited if such agreements cause or are likely to cause AAEC. Types of Vertical Agreements 1. Tie-in arrangement Any agreement between manufacturer and distributor not to sell manufactures product at or above a price floor at or below a price ceiling. It requires a purchaser of goods to purchase some other goods as a condition of such purchase.
Exclusive supply arrangement An agreement restricting the purchase in course of trade from acquiring the goods of trade from acquiring the goods of any other seller i. For e. Exclusive distribution arrangement Any agreement to limit or restrict the output or supply of any goods to ant market or area e. Now if ABC manufacturer enters in to an agreement with the distributors to refuse the deals between XYZ manufacturers who uses the raw material of the ABC manufacturer to produce a particular product as produced by the ABC manufacturer then it can be considered as refusal to deal agreement.
Resale price maintenance Any agreement to sell goods on condition that the price to be charged on the resale by the purchaser shall be stipulated by the seller unless it is clearly stated that prices lower than those prices may be charged. Selling goods with the condition on resale at stipulated prices. Section 3 1 of the Act — Any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services by enterprise or association of enterprises or person or association of persons which causes or is likely to cause an appreciable adverse effect on competition within India.
Section 4 1 of the Act — Abuse of dominant position. Inquiry [under section 19] Step -2 In the case of any agreement mentioned under section 3, comes before the CCI shall conduct an inquiry and adjudicate on whether the agreement has any adverse effect on competition based on the following facts: 1.
Whether there is a creation of any barrier to new entrants into the market. Whether the agreement drives out existing competitors in the markets. Whether there is any foreclosure of competition by hindering the entry into the market.
Whether there is any accrual of benefits to the consumers. Whether the agreement can produce any improvement in production, distribution or supply of goods. Whether the agreement promotes technical scientific or economic development. Orders by Commission after inquiry into agreements [Section 27] Step-3 If the commission finds that the agreement under section 3 is Anti-competitive, it can pass the following orders: 1.
Direct any enterprise or person to engage in such agreement to discontinue such agreement. Modified the agreement to such extent and manner specified by the CCI. Order for payment of the cost.
Any other orders as the CCI may deem fit. The exception to Section 3 Any agreement protecting rights conferred under: 1. Meaning of Relevant Market sec 2 r In order to ascertain whether an enterprise has a dominant position, it is to be determined on what the relevant market is. There are two kinds of the relevant market: a. Relevant product Market sec 2 t On the demand side, relevant product market includes all the close substitutes to which the consumer will shift to if the price of the product increases.
On the supply side, relevant product market includes all the producers who can produce substitutes with the existing production facility. Relevant Geographical Market sec 2 s The geographic dimension within which competition can take place in the relevant market can be local, national, international or global depending upon the product. Here the pattern of consumption, transportation are important factors.
Enterprise or group shall not abuse its dominant position. Agreement by enterprise or group abusing its dominant position is prohibited. Market Share. Economic power of the enterprise including commercial advantage. Vertical integration of the enterprise. Dependence of consumers. Monopoly enjoyed by means of being a Government company or PSU. Counter veiling buying power. Market Structure. Relative advantage by way of contribution to economic development. Any other relevant factor which shall be deem fit to be considered by CCI.
Orders by Commission after inquiry into agreements [Section 27] If the commission finds that the Act constitutes Abuse of Dominant position, it can pass the following orders: 1.
Direct any enterprise or person to engage in such agreement to discontinue such agreement; 2. Modified the agreement to such extent and manner specified by CCI; 4. Order for payment of the cost; 5. Transfer of any existing liability or property; 2. Adjustment or discharge of any Contract; 3. Regulation of Combination Section 5 to 6 What is Combination?
The Acquisition of one or more enterprises by way of merger or amalgamation or control over enterprise is regarded as a combination. A Combination is an acquisition of one or more enterprises by one or more persons, merger or amalgamation of enterprises, if it meets the prescribed monetary thresholds and involves: a. Any acquisition of control, shares, voting rights or assets of any enterprise; b.
Any merger or amalgamation of enterprises. Combinations as per the defined monetary thresholds require filing and prior approval of the CCI before they can be made effective. Entering into a combination which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India is prohibited and such combination shall be void.
Trigger Event d. When acquisition, mergers or amalgamation would constitute a combination: When in individual f. Either the combined assets of the enterprises would value more than INR 1, crores in India or the combined turnover of the enterprise is more than INR 4, crores in India; or g.
The term Group is as explained in the Act. Group Rs. Regulation of Combination Section 6 Any combination which has an adverse effect on the competition can be declared void by the CCI. No combination shall come into effect until days from the day on which notice has been given to Commission or order has been passed. In this case the parties shall submit the modified combination within 30 Working days if the CCI agrees with the modification, it can accept the combination.
Step 3 If the CCI is not satisfied by the modification effected by the parties, it can grant 30 Days further to the party to accept that modification proposed by the Commission. Competition Commission of India The Competition Commission of India CCI is a statutory body of the Government of India responsible for enforcing the Competition Act, throughout India and to prevent activities that have an appreciable adverse effect on competition in India.
It was established on 14th October The main aim of the CCI is to implement the modern competition laws and philosophy of the Competition Act, It ensures that have a negative impact on healthy competition. This is because healthy competition is good for the consumer of a market. It is a quasi- judicial body to hear and dispose of matter. The headquarters of the CCI is in the Delhi. The Website of CCI is cci. Promote and help sustain healthy competition in market. Look after the interest of consumer, Create Awareness and advocate for Competition Practices.
Ensure freedom of trade in the market. A short summary of this paper. Justify it with Case Laws. The Competition Act, focuses to sustain competition, protect the interests of the consumers and ensure freedom of trade in markets in India.
It enables a healthy competitive culture that inspires the business to be fair, competitive and innovative. This enhances consumer welfare and supports economic growth. The Competition Act, monitors such unfair trade practices preventing sound market approach. Steel Authority of India Ltd.
This Note captures the highlights of the decision for readers of this Blog! Jindal Steel had filed a complaint before CCI alleging anti-competitive practices and abusive behaviour by SAIL while it entered into an exclusive supply agreement with Indian Railways. SAIL requested for an extension of time upto six weeks to file the required information.
CCI in its meting deliberated on the request and decided not to grant any further extension. SAIL challenged this direction before the Tribunal claiming that CCI could not have formed a prima facie opinion without hearing it first. CCI thus filed an application before Tribunal for impleading itself as a necessary and proper party and also assailed the very maintainability of appeal.
It further noted that CCI was neither a necessary nor a proper party in appeals filed by an aggrieved party before the Tribunal. The Tribunal also noted that CCI did not record any reasons while declining to grant extension of time and hence it in violation of principles of natural justice. The Court noted that right to appeal is a substantive right which derives its legitimacy from the operation of law or statute.
If the Statute does not provide for an appeal, the Court cannot presume such right. The direction to cause an investigation into a matter is passed under Section 26 1 of the Act does not determine any right or obligation of the parties to the lis. It does not find mention in Section 53A 1 of the Act and hence, the Court found that such orders would not be appealable under the Act.
Issue 2 and 5: The Court noted that the exclusion of principles of natural justice PNJ is a well known concept and the legislature has the competence to enact such laws.
Whether the exclusion of application of PNJ would vitiate the entire proceedings would depend upon the nature and facts of every case in the light of the Act or Rules and Regulation applicable to the case.
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