competition law: basics of Indian Competition act, 2002, Assignments of Law of Obligations

Download competition law: basics of Indian Competition act, 2002 and more Assignments Law of Obligations in PDF only on Docsity! ORIGIN OF COMPETITION LAW IN INDIA AND THE WORLD & BASICS OF MRTP ACT ,1969 Submitted By – MOHD UMAR Enrollment No. –A3221616029. Batch – 2016-2021 Amity Law School ,Noida In April, 2019 Under the guidance of Mrs. Aditi Bhati Introduction In India, the decade of 80s and 90s has been a crucial one, specifically due to the introduction of new economic policy and opening up of the Indian market to the world. The New Economic Policy of 1991 which brought about Liberalisation, Privatisation and Globalisation of the Indian Economy, progressively widened the space for market forces and reduced the role of Government in business and various other economic sectors. It was realised that a new competition law was also called for because the existing Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) had become obsolete in certain respects and that now there was a need to shift focus from curbing monopolies to promoting competition in the Indian market. A high-level committee was appointed in 1999 to suggest a modern competition law in line with international developments to suit the Indian conditions. The committee recommended the enactment of new competition law, called the Competition Act, and the establishment of a competition authority, the Competition Commission of India, along with repealing of the MRTP Act and the winding up of the MRTP Commission. It also recommended further reforms in Government policies as the foundation over which the edifice of new competition policy and law would be built. The Competition Act came into existence in January 2003 and the Competition Commission of India was established in October 2003. The Act states that it shall be the duty of the Commission to eliminate practices having an adverse effect on competition, to promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants, in markets in India. adopted competition laws in 1923 and 1917 respectively. Competition laws were introduced in Chile, Brazil and Colombia in the 1960s.[4] In the early 1990s, there were only about 35 developing countries with a competition law in place, but with rapid industrialization and integration into the world market, several other developing countries have taken steps to introduce competition laws and presently the number of developing countries with competition related statutes is estimated to exceed 100, with several more in the process of adopting a competition legislation very soon.[5] Evolution and Development of Competition Law in India India adopted its first competition law way back in 1969 in the form of Monopolies and Restrictive Trade Practices Act (MRTP). The Monopolies and Restrictive Trade Practices Bill was introduced in the Parliament in the year 1967 and the same was referred to the Joint Select Committee. The MRTP Act, 1969 came into force, with effect from, 1 June, 1970. However, with the changing nature of business, market, economy on the whole within and outside India, there was felt a necessity to replace the obsolete law by the new competition law and hence the MRTP Act was replaced with the Competition Act of 2002. The enactment of MRTP Act, 1969 was based on the socio – economic philosophy enshrined in the Directive Principles of State Policy contained in the Constitution of India. The MRTP Act, 1969 underwent amendments in 1974, 1980, 1982, 1984, 1986, 1988 and 1991. The amendments introduced in the year 1982 and 1984 were based on the recommendations of the Sachar Committee, which was constituted by the Govt. of India under the Chairmanship of Justice Rajinder Sachar in the year 1977. The Sachar Committee pointed out that advertisements and sales promotions having become well established modes of modern business techniques, representations through such advertisements to the consumer should not become deceptive. The Committee also noted that fictitious bargain was another common form of deception and many devices were used to lure buyers into believing that they were getting something for nothing or at a nominal value for their money. The Committee recommended that an obligation is to be cast on the seller to speak the truth when he advertises and also to avoid half truth, the purpose being preventing false or misleading advertisements. However, as the times changed, the need was felt for a new competition law. With introduction of new economic policy and opening up of the Indian market to the world, there was a need to shift focus from curbing monopolies to promoting competition in the Indian market. As pointed out by the then Finance Minister in his budget speech in February, 1999– “The MRTP Act has become obsolete in certain areas in the light of international economic developments relating to competition laws. We need to shift our focus from curbing monopolies to promoting competition. The Government has decided to appoint a committee to examine this range of issues and propose a modern competition law suitable for our conditions.” In October 1999, the Government of India constituted a High Level Committee under the Chairmanship of Mr. SVS Raghavan [‘Raghavan Committee’] to advise a modern competition law for the country in line with international developments and to suggest legislative framework, which may entail a new law or suitable amendments in the MRTP Act, 1969. The Raghavan Committee presented its report to the Government in May 2000. On the basis of the recommendations of the Raghavan Committee, a draft competition law was prepared and presented in November 2000 to the Government and the Competition Bill was introduced in the Parliament, which referred the Bill to its Standing Committee. After considering the recommendations of the Standing Committee, the Parliament passed December 2002 the Competition Act, 2002. Hence, the Monopolies and Restrictive Trade Practices Act, 1969 [MRTP Act] was repealed and was replaced by the Competition Act, 2002, with effect from 1 September, 2009. Salient Features of Competition Act, 2002 The Competition Act provides for establishment of a Competition Commission of India which will be a quasi judicial body bound by principles of rule of law (i.e. predictability in reasoning and uniform and consistent application of law) in giving decisions and the doctrine of precedents. The CCI has all the powers of a civil court for gathering evidence. There are three major elements in the Competition Act  Anti-competitive Agreements (Section 3)  Abuse of Dominant Position (Section 4)  Combinations (Section 5 and 6) Anti-competitive Agreements Anti-competitive Agreements are prohibited under the Competition Act. The following agreements entered into by enterprise, association or persons are considered as anti-competitive: obtained due to statute etc.; a social costs and obligations and contribution of enterprise enjoying dominant position to economic development. The Commission is also authorized to take into account any other factor which it may consider relevant for the determination of dominance. Regulation of Combinations As per the Competition Act, Combinations include Mergers, Acquisitions, and Amalgamations. The term combination according to the Act means:  Section 5(a): Acquisition of control, voting rights or assets;  Section 5(b): Acquisition of control by a person over an enterprise where such person has control over another enterprise in similar or identical business;  Section 5(c): Mergers and Acquisitions Conclusion India and the world was going through a new phase of globalisation, liberalisation and privatisation and these changing times were bringing newer challenges and the existing MRTP Act had become obsolete in the modern era. Hence the new Competition Act came into being in order to suit the need of the hour. The new act is based on the regulation of conduct or behaviour of the players in the market and is result oriented rather than being procedure oriented like the MRTP Act. Further its main purpose is to protect and promote competition in the market. Competition is very essential as it benefits: the Consumers as they get wider choice of goods and services, better quality and improved value for money; it benefits the Businesses as a level playing field is created and a redressal of anti-competitive practices is available, the inputs are competitive priced, they tend to have greater productivity and ability to compete in global markets and finally it also benefits the state as there is optimal realisation from sale of assets and there is enhanced availability of resources for social sector. Thus, by protecting competition in the market the competition law helps benefit all the players in the market which in turn is beneficial for the economy as a whole.