GREETINGS TO DELEGATES OF NATIONAL TRAINING WORKSHOP ON COMPETITION POLICY AND LAW ADDIS ABABA 12 – 16 MAY 2008 1

GREETINGS TO DELEGATES OF

NATIONAL TRAINING WORKSHOP

ON

COMPETITION POLICY

AND

LAW

ADDIS ABABA 12 – 16 MAY 2008

1

Copyright - Dr. S. Chakravarthy 2

COMPETITION ACT, 2002 (AMENDED IN 2007)

THE NEW INDIAN COMPETITION LAW

Dr. S. CHAKRAVARTHY

(Profession : Civil Servant)

Formerly, Member, Monopolies and Restrictive Trade

Practices Commission, Member, High Level Committee on Competition Policy and Law And Member of

Committee for Drafting the Law.Presently, Adviser/Consultant Competition Policy and Law

HYDERABAD, INDIA


EXTANT COMPETITION LAW OF INDIA

MONOPOLIES AND

RESTRICTIVE

TRADE PRACTICES ACT, 1969

BROUGHT INTO FORCE IN 1970


THE NEW LAW

A NEW LAW CALLED COMPETITION ACT 2002 HAS BEEN ENACTED TO REPLACE THE EXTANT LAW, MRTP ACT 1969

THE NEW LAW WAS CHALLENGED IN THE SUPREME COURT ON THE GROUND THAT THE CHAIRPERSON SHOULD ONLY BE FROM THE JUDICIARY

THE NEW LAW HAS BEEN AMENDED ON 10 SEPT 2007 BY THE PARLIAMENT

NEW LAW LIKELY TO BE ENFORCED SHORTLY


FOUR COMPARTMENTS

ANTI-COMPETITION AGREEMENTS

ABUSE OF DOMINANCE

MERGERS, AMALGAMATIONS, ACQUISITIONS AND TAKE-OVERS

COMPETITION ADVOCACY


HORIZONTAL RESTRAINTS : :

CARTELS {FIXING PURCHASE

OR SALE PRICES (EXPORT

CARTELS EXEMPTED) }

BID-RIGGING (COLLUSIVE

TENDERING)

SHARING MARKETS BY

TERRITORY, TYPE ETC.

LIMITING PRODUCTION,

SUPPLY, TECHNICAL

DEVELOPMENT

THE ABOVE ARE “PER SE” ILLEGAL.

VERTICAL RESTRAINTS : :

TIE-IN ARRANGEMENTS

EXCLUSIVE SUPPLIES

EXCLUSIVE DISTRIBUTION

REFUSAL TO DEAL

RESALE PRICE MAINTENANCE

ADJUDICATION BY RULE OF REASON

ANTI - COMPETITION AGREEMENTS


WHO ARE PROHIBITED FROM ENTERING INTO SECTION 3 AGREEMENTS?

ENTERPRISES

PERSONS

DEPARTMENTS OF GOVERNMENT

WHO ARE ENGAGED IN ACTIVITIES RELATING TO PRODUCTION, STORAGE, SUPPLY, DISTRIBUTION, ACQUISITION OR CONTROL OF GOODS

AND

WHO ARE ENGAGED IN PROVIDING SERVICES OF ANY KIND

ALL GOVERNMENT ENTERPRISES FALL WITHIN THE MISCHIEF OF SECTION 3.


ABUSE OF DOMINANCE

DOMINANCE NOT LINKED TO ANY ARITHMETIC FIGURE OF MARKET SHARE

DOMINANCE MEANS A POSITION OF STRENGTH ENABLING AN ENTERPRISE TO OPERATE INDEPENDENTLY OF COMPETITIVE PRESSURE AND TO APPRECIABLY AFFECT THE RELEVANT MARKET,COMPETITION AND CONSUMERS.

ABUSE OF DOMINANCE ARISES IF AN ENTERPRISE

• IMPOSES UNFAIR /DISCRIMINATORY PURCHASE OR SALE PRICES (INCLUDING

PREDATORY PRICES)

• LIMITS PRODUCTION,MARKETS OR TECHNICAL DEVELOPMENT

• DENIES MARKET ACCESS

• CONCLUDES CONTRACTS SUBJECT TO OBLIGATIONS HAVING NO CONNECTION

WITH THE SUBJECT OF THE CONTRACTS.

• USES DOMINANCE TO MOVE INTO OR PROTECT OTHER MARKETS

RELEVANT MARKET = RELEVANT PRODUCT MARKET + RELEVANT GEOGRAPHIC MARKET


COMBINATIONS MERGERS/AMALGAMATIONS

1. REDUCTION IN NUMBER OF PLAYERS

2. ACQUISITION OF ENORMOUS ECONOMIC STRENGTH

3. DISCOURAGEMENT OF NEW ENTRANTS

PEJORATIVE EFFECTS

4. DICTATION OF PRICES

5. DOMINANCE

1. COMPETITION LAW TO HAVE SURVEILLANCE OVER COMBINATIONS BEYOND A THRESHOLD LIMIT (Assets > Rs.1000 Crores or Turnover > Rs.3000 Crores )

2. NOTIFICATION OF COMBINATIONS MANDATORY

3. CCI MANDATED TO DECIDE WITHIN 210 WORKING DAYS ELSE DEEMED APPROVAL

REGULATION ON COMPETITION PERSPECTIVE


COMPETITION ADVOCACY

THE COMPETITION COMMISSION OF INDIA IS ENABLED TO PARTICIPATE IN THE

FORMULATION OF POLICIES AND REVIEWING OF POLICIES RELATING TO COMPETITION AT THE INSTANCE OF THE GOVERNMENT

IS REQUIRED TO CREATE COMPETITION CULTURE

IS REQUIRED TO ACT AS COMPETITION ADVOCATE


EXEMPTIONS

GOVERNMENT BY NOTIFICATION MAY EXEMPT FROM THE COMPETITION LAW

A ANY CLASS OF ENTERPRISES IN THE INTEREST OF NATIONAL SECURITY/PUBLIC INTEREST.

B. ANY PRACTICE/AGREEMENT ARISING OUT OF INTERNATIONAL TREATY/AGREEMENT

C. ANY ENTERPRISE PERFORMING A SOVEREIGN FUNCTION ON BEHALF OF GOVERNMENT

DIFFERENT PROVISIONS FROM DIFFERENT DATES IF, NEED BE.


EXTRA TERRITORIAL REACH

THE COMPETITION ACT, 2002 EXTENDS THE COMPETITION COMMISSION OF INDIA’S REACH BEYOND THE INDIAN SOIL

THE EXTRA TERRITORIAL REACH IS BASED ON “EFFECTS DOCTRINE”.


COMPETITION COMMISSION OF INDIA

COMPRISES :

• CHAIRPERSON

• MEMBERS (NOT LESS THAN TWO AND NOT MORE THAN SIX)

SELECTION BY A COLLEGIUM

THIS IS TO MINIMISE POLITICISATION

OF APPOINTMENTS


DEPOLITICISATION AND CASTING NET WIDE

RATIONALE FOR THE COLLEGIUM APPROACH IS TO MINIMISE POLITICISATION OF APPOINTMENTS

CHAIRPERSON OF CCI NEED NOT BE FROM THE JUDICIARY

CHAIRPERSON AND MEMBERS FROM FIELDS – JUDICIARY, ECONOMICS, LAW, INTERNATIONAL TRADE, BUSINESS, COMMERCE, INDUSTRY, FINANCE, ACCOUTANCY, MANAGEMENT, PUBLIC AFFAIRS, AND ADMINISTRATION


COMPETITION APPELLATE TRIBUNAL

WILL HEAR AND DISPOSE OF APPEALS AGAINST ORDERS OF CCI

WILL ADJUDICATE ON CLAIMS FOR COMPENSATION


COMPOSITION OF CAT

CAT WILL CONSIST OF CHAIRPERSON, WHO IS OR HAS BEEN A JUDGE OF THE SUPREME COURT OR THE CHIEF JUSTICE OF A HIGH COURT AND NOT MORE THAN TWO MEMBERS

SELECTION BY A COLLEGIUM


THE NEW LAW AND IPRs

SECTION 3(5) OF THE COMPETITION ACT, 2002 EXCLUDES ALL IPRs FROM ITS APPLICABILITY

INTELLECTUAL PROPERTY RIGHT CARRIES WITH IT A BUNDLE OF RIGHTS IN THE INTEREST OF CREATIVITY AND INNOVATION

ANY CONDITION OR OBLIGATION OUTSIDE THE BUNDLE OF RIGHTS CANNOT BE COUNTENANCED IF IT TRENCHES COMPETITION

THE ACT HAS THEREFORE BROUGHT UNDER ITS SURVEILLANCE UNREASONABLE PRACTICES THAT MAY ACCOMPANY THE EXPLOITATION OF IPRs

VISIONWhere the mind is without fear

And the head is held highWhere the knowledge is free

Where the world has not been broken up into fragmentsBy narrow domestic walls

Where the words come out from the depth of truthWhere tireless striving stretches

Its arms towards perfectionWhere the clear stream of reason has not lost its way

Into the dreary desert sand of dead habitWhere the mind is led forward by theeInto ever widening thought and action

Into that heaven of freedomMy father, let my country awake

-Gurudev Rabindranath Tagore: "Gitanjali"

Gurudev saw the ultimate goal being realised through thepursuit of knowledge, competition, innovativeness andability to connect with each other.

THANK YOU

FOR YOUR

KIND ATTENTIONCopy right Dr. S. Chakravarthy

Documents

GREETINGS TO DELEGATES OF NATIONAL TRAINING WORKSHOP ON COMPETITION POLICY AND LAW ADDIS ABABA 12 – 16 MAY 2008 1