This article has been written by Jessica Fernandez from Lloyd Law College. Edited and published by Risha Fatema.

Table of Contents

INTRODUCTION:

On January 13, 2003, the Parliament of India passed the Competition Act of
2002, repealing the Monopolies and Restrictive Trade Practices Act of 1969. It came into effect on March 31, 2003. The Competition Act of 2002 was amended twice after its enactment, in 2007 and 2009. It was the product of India’s push for globalisation and economic liberalisation. The Act’s principal purpose is to control anti-competitive
behavior of a firm or company that harms competition in India’s market. Furthermore, the Act aims to promote and maintain market competition, protect consumer interests, and preserve market freedom in our country.
The Competition Act of 2002 was passed in India with the dual goals of
curbing anti-competitive behavior and supporting World Trade Organization (WTO) accords. The Act also establishes the Competition Commission of India (CCI) as a market regulator responsible for preventing and managing anti-competitive behavior in the country. It also establishes the Competition Appellate Tribunal (COMPAT), a
quasi-judicial body that hears and decides appeals against any CCI instruction or decision.

DEVELOPMENT OF COMPETITION LAW IN INDIA:

The Monopolistic and Restrictive Trade Practices Act, 1969-The Monopolies and
Restrictive Trade Practices Act (1969) was India’s first competition law. The MRTP Act went into effect on June 1st, 1970, with the purpose of guaranteeing that the market structure did not result in the concentration of power in a few hands. It also outlawed monopolistic and discriminatory practices that hurt the population at large.
Economic liberalisation and the abolition of the MRTP Act in 1991-

Economic liberalisation was established in 1991, and it was a watershed moment for Indian markets in the globalised world. With the removal of trade restrictions, the nation faced
competition from both within and beyond the country. As a result, in order to pave the way for globalisation, India launched a slew of new economic policies, reduced government intervention, and gradually began to open up chances for industry and
international investment.
Emergence of Competition Act, 2002-

In 2002, the Indian Parliament passed the Competition Act, which governs anti-competitive behavior by enterprises in India’s market. It was created to prevent behaviors that have a significant adverse effect on competition (AAEC). The Competition Act of 2002 aims to create and retain an open, just, competitive, and creative environment that protects consumers’ interests while also fostering long-term economic success in the country. According to the Act, MRTP has
become obsolete and unneeded due to global economic changes. As a result, the focus should shift from ‘curtailing monopolies’ to ‘supporting competition’. The Competition Act, 2002 was modified by the Competition (Amendment) Act 2007, which came into effect
on May 20, 2009, when the Indian government notified some sections of the
Competition Act relating to anti-competitive agreements and abuse of dominant positions.

IMPORTANCE OF COMPETITION LAW AND COMPETITION ACT,2002:

The Competition Act is focused to enforcing laws so that businesses and companies can compete effectively with one another. This encourages entrepreneurship and productivity, expands customer options, and helps to lower prices and improve quality.

Low prices:

Offering a lower price is the simplest way for a company to gain a
significant market share. Prices are reduced in a competitive market. This is not only advantageous to consumers; as more people can afford to buy goods,
corporations are motivated to produce, which benefits the economy as a whole.

Innovation:

To produce high-quality products, businesses must be inventive in their product concepts, design, manufacturing methods, services, and so on.

Better quality:

The Competition Act encourages businesses to improve the
quality of their products and services in order to attract more customers and
expand their clientele. Quality can relate to a multitude of things, such as
longer-lasting or better-performing products, better after-sales or technical
support, and better service.

More options:

In a competitive market, businesses will strive to distinguish their items from the competition. As a result, buyers have more options, allowing them to select the product with the best value for money.

FEATURES OF COMPETITION ACT, 2002:

Anti-competitive agreements:

The competition law in India prohibits any agreement between two or more enterprises or individuals to maintain market competition and serve the public interest.

Dominance-abuse prevention:

Any company that abuses its dominant position will be
penalized.

Anti-cartel:

Any agreement between businesses or persons that impedes competition
is a civil offense.

Mergers and acquisitions:

The Commission will only allow mergers and acquisitions that do not harm market competition.

COMPETITION COMMISSION OF INDIA:

The Competition Act allows for the formation of a CCI. It regulates competitiveness in the Indian market. The commission was established in 2003, but it did not begin full operations until 2009. The federal government chooses a chairman and six members of the CCI. It is the commission’s role to eliminate anti-competitive practices, promote and
preserve competition, protect consumer rights, and ensure free trade in India’s markets. It is a quasi-judicial body charged with the following responsibilities:
● Prevent anti-competitive practices.
● Promote and preserve market competitiveness.
● Protect the interests of all customers.
● Preserve commercial liberty.
● Investigate issues linked to or supplementary to trading.

GOOGLE INC. & ORS V. COMPETITION COMMISSION OF INDIA:

In this case, the CCI received a complaint saying that Google Inc. abused its dominant position in the online advertising market by promoting its vertical web services such as YouTube, Google News, Google Maps, and so on. In other words, regardless of their
popularity or relevance, such services appear prominently on Google’s search engine result pages. The fundamental challenge was whether an administrative entity, such as the CCI, has inherent rights to reconsider or recall a judgment given under Section 26(1) in the absence of any specific provisions in the Competition Act 2002.
The Delhi High Court held that the CCI has the authority to recall or reconsider
its decision in accordance with specific conditions and that this should be done
selectively but not in all cases in which the investigation has been conducted without a thorough inquiry.

SHORTCOMINGS IN THE ACT:

The fundamental concept of collective dominance is missing from the Competition Act, despite its crucial role in a developing economy like India. The absence of the concept of “collective dominance” in Indian competition law has frequently hampered the CCI
from pursuing proper remedies when needed. Collective dominance refers to a situation in which two or more distinct companies, linked by economic relations, collectively maintain a superior position over other traders. Collective dominance is evident in both vertical and horizontal marketplaces. As a result, parties in a dominant position are not required to be members of anti-competitive agreements or cartels.
Furthermore, others argue that because of the complexities of competition
law analysis, as well as the lack of organisational endowment in most emerging economies, implementing a competition law regime may end up doing more harm than good, as the chance of reaching wrong findings is significant.

CONCLUSION:

The Competition Act of India is fairly comprehensive, and it was developed to meet the needs of economic growth and global economic trends in competition law. As a result, the 2002 competition law is acknowledged as historic. This act prohibits the misuse of power. This law primarily fosters market competition while also allowing enterprises of
all sizes to distribute income more freely, thereby increasing the industry’s commercial viability. Although the complete law has yet to be enacted, its acceptance will surely boost market competitiveness on a national and global scale.