competion act 2002
TRANSCRIPT
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Competition??????
An economic rivalry amongst
enterprises to control greater
market power.
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Fair competition
Enterprises Offers wider
choice to consumers atlower prices. Leads to
optimal allocation of
resources.
Is an amalgam of factorsthat stimulate economic
rivalry
where two enterprises
adopt fair means such asproduction of fair
goods/services,
investment in R&D etc.
Competition is fair Is a tool to mount market
pressure to penalize
laggards and to reward
the enterprising
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Restrictive trade practices: Acombination of producers of any product
joined together to control its production,
sale, and price, so as to obtain aMonopolyand restrict competition in anyparticular industry or commodity. For e.g.forming the cartel, predatory pricing
INTRODUCTION
http://legal-dictionary.thefreedictionary.com/Monopolyhttp://legal-dictionary.thefreedictionary.com/Monopoly -
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Section 2(c) "cartel" includes an
association of producers, sellers,
distributors, traders or service providers who, by agreement
amongst themselves, limit, control
or attempt to control the production,
distribution, sale or price of, or, trade
in goods or provision of services;
Case: Jet Airways -Kingfisher
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Objectives
To prevent practices having adverse
effect on competition. To promote & sustain competition in the
markets.
To protect the interests of consumers. Ensure freedom of trade carried on by
participants in markets
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Anti-competitive agreements-
section 3Any agreement entered in to between
enterprise, person, association of
person, engaged in trade of goods orprovision of services. Which causes
Adverse effect on competition.
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Predatory Pricing
Predatory pricing refers to a practice of
driving rivals out of business of selling at
a price below the cost of production. PP is a commercial strategy by which a
dominant firm lowers its price to a level
which will ultimately force its rivals out of
the market when the latter have beensuccessfully expelled, the company can
raise the prices again and reap the
rewards
Case: US Microsoft Co
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Anti-competitive agreements
These are agreements between entities
in respect of production, supply,
distribution, storage, acquisition or
control of goods or provisions of servicesWhich are likely to cause an appreciable
adverse effect on competition (AAEC)
Legal assessment standard
Determining the prices
Limiting and controlling production ,
supply, markets, or provisions of
services
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Anti-competitive agreements
Section 3: Anti-competitive agreements
Tie-in-arrangement
Exclusive supply agreement
Exclusive distribution agreement
Exclusive refusal to deal
Resale price maintenance
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Cont..
Tie-in-arrangement
This is an arrangement by which a seller
agrees to sell a product known as the
tying item only on the condition thatbuyer agrees to buy a second product
known as the tied product from the seller
E.g. requiring a stabilizer to be boughtalong with the refrigerator
To buy tyre-lock, petrol tank lock, and
helmet along with a scooter
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Cont..
Requiring buyers of DTH service also to
buy /take rent the STBs (set top box)
In India, as on date there are 4 ways inwhich a viewer may receive broadcast of
TV programs:
a. Free to Air (FTA)
b. Cable TV
c. Direct To Home
d. IP TV-Internet Protocol Television
i. Dish TV India Limited
ii. Tata Sky Limited
iii. Reliance Big TVLimited
iv. Sun Direct TV Pvt.
Limited
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Exclusive supply agreement
This includes any agreement restricting
the purchaser in the course of his trade
from acquiring or dealing in any goodsother than those of the seller.
Its a agreement between distributor and
a supplier whereby a distribution of a
certain product engages a supplier on anexclusive basis to distribute and sell to
customers within a given territory.
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Exclusive distribution
agreement This includes any agreement which
restricts or is likely to restrict, or withhold
the output or supply of any goods orallocate any market area or market for
the disposal or sale of the goods.
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Cont..
Manish singh, kamal udyog vs US
Pharmacopeia where USP a non-profit
orgn based in USA terminated all itsdistributorship contracts with kamal
udyog and appointed LGC India pvt ltd
as its exclusive distributor
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Exclusive refusal to deal
This includes any agreement which restricts
person or class of persons to whom good are
sold or from goods are bought
A dealer of company complained to the
commission that the company was withholding
supply of goods to him. In the course of enquiry
it was found that on account of delayed
payments from dealer the company did so BATA restraining the small scale producers with
whom it entered in to arrangement for buying
footwear raw materials prohibits small scale
producers from selling additional raw materialsto an other art without batas a roval
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Resale price maintenance
Resale price maintenance (RPM) is a
form of price fixing , RPM exits with a
supplier specifying the minimum (ormaximum) price at which the product
must be re-sold to customers.
Exceptions
Copyright act
Patent act & other IPR
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Prohibition of abuse of
dominant position: Section 4 The expression dominant position
means a position of strength enjoyed by
an enterprise in the relevant market inIndia
No enterprise shall abuse its dominant
position
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Regulation of Combinations
The acquisition of one or more
enterprises by one or more persons or
acquiring of control or merger oramalgamation of enterprises under
certain circumstances as mention in
section 5
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THE COMPETITION
COMMISSION OF INDIA Is enabled to participate in the formulation
of policies and reviewing of policies relatingto competition at the instance of the
government. It can give opinion oncompetition issues .
Is required to create competition culture
Is required to act as competition advocate
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Cont..
Competition Advocacy is one of the main
pillars of modern competition law which
aims at creating, expanding andstrengthening awareness of competition
in the market. Section 49 of the
Competition Act, 2002 mandates the CCI
to undertake advocacy for promotingcompetition.
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COMPETITION COMISSION OF INDIA
(CCI)
Establishment of commission (sec -7)
Corporate body (sec -7(1))
Competition commission of India having perpetual
succession and a common seal . it can acquire , hold anddispose of property ,both movable and immovable
Composition of commission (sec -8)
Commission shall consist of a chairperson and not less than2 and 10 and other member appointed by central
government.To be qualified as Chairperson of CCI he must be the judge of
high court with 15 years of professional experienceineconomics ,business, commerce, law, finance ,accountancy, management , industry, etc
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Cont..
Government may by notification appoint a directorygeneral and as many additional ,joint, deputy generaletc.., as may think fit for the purposes of assisting thecommission in conduction.
Registrar and officer and other employees ofcommission
Commission may appoint a register and suchofficers and other employees as it consider necessary
for the efficient performance of its function under this act( sec 17(1))
Competition commission proposed staff strength : 125
( 50 economist , 50 lawyer and 25 finance professionals )
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Functions of CCI
(A) Eliminate practices having adverse effect oncompetition
(B)Inquiry whether an enterprise abuses dominantposition
. (C) Inquiry into certain anti-competitive agreements anddominant position of enterprise.
(D) CCI mandate to undertake competition advocacy
(E) CCI shall give opinion about competition issues to
central government
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Power of Commission
Power grant Interim Relief (Sec 33)
Power to award compensation (Sec 34)
Appearance before commission (Sec 35) Power to regulate its own procedures
(Sec 36)
CCI has same powers has vested in civilcourt like issue summons, production
documents, receive evidence,
examination of witness, exparte hearing
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Cont..
Review of orders of commission (Sec 37
& 40)
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Power of Commission
Execution of Orders (sec 39)
Order of CCI Similar as the decree of ahigh court
Independent Authority
Power to investigate
Penalties