the concllentration of economic power

8/10/2019 The Concllentration of Economic Power

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INDIAN ECONOMY

TOPIC- Concerntration Of Economic

Power

Submitted to :- DR. Jasbir Singh

Submitted by :- Amit Verma

04314901813

BBA(B&I)-IIIrd sem

morning


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CONTENTS

.Definition of concentration

.definition of Economic power

.Meaning of concentration of economic

power

.Meaning of Different Terms and Concept

.Types of concentration

.Growth of concentration of economicpower

.Causes of concentration of economic power

.measures taken by government to regulateconcentration of economic power

-MRTP ACT 1969

-COMPETETION ACT 2002


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Income inequality

Problem of inequality in distribution of income is a serious problem of

indian economy inequality of distribution of income implies that a smallnumber of people of the country gets a very large share of national

capital. On the contrary a very large number of peoplegets a very small

number of national income.

Concentration of Economic Power

According to DR. P.S. Loknathan concentration of ownership and

control in few hands has been on important characteristics of industrial

development in india. To some extent this tendency is the result of lack

of industrial leadership and to some extent it is the result of lack of

industrial leadership and to some extent it is the result of thosecircumstances in which indian industrys developed in the early stage.


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Market Concentration

Ineconomics,market concentrationis afunction of thenumber offirms and their respective shares of thetotalproduction (alternatively, total capacity or totalreserves) in amarket. Alternative terms are Industryconcentrationand Seller concentration.[1]

Market concentration is related to industrialconcentration, which concerns the distribution ofproduction within anindustry, as opposed to a market.Inindustrial organization, market concentration mayused as a measure ofcompetition, theorized to bepositively related to therate of profit in the industry, forexample in the work ofJoe S. Bain

As an economic tool market concentration is usefulbecause it reflects the degree of competition in themarket.

There aregame theoretic models of market interaction

that predict that an increase in market concentration willresult in higher prices and lowerconsumer welfare evenwhencollusion in the sense ofcartelization is absent.Examples areCournot oligopoly,andBertrand oligopolyfor differentiated products.
http://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Function_(mathematics)http://en.wiktionary.org/wiki/firmhttp://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/wiki/Production,_costs,_and_pricinghttp://en.wikipedia.org/wiki/Market_(economics)http://en.wikipedia.org/wiki/Market_concentration#cite_note-1http://en.wikipedia.org/wiki/Market_concentration#cite_note-1http://en.wikipedia.org/wiki/Market_concentration#cite_note-1http://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Industrial_organizationhttp://en.wikipedia.org/wiki/Competitionhttp://en.wikipedia.org/wiki/Rate_of_profithttp://en.wikipedia.org/wiki/Joe_S._Bainhttp://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Welfare_economicshttp://en.wikipedia.org/wiki/Collusionhttp://en.wikipedia.org/wiki/Cartelhttp://en.wikipedia.org/wiki/Cournot_competitionhttp://en.wikipedia.org/wiki/Cournot_competitionhttp://en.wikipedia.org/wiki/Cournot_competitionhttp://en.wikipedia.org/wiki/Differentiated_Bertrand_competitionhttp://en.wikipedia.org/wiki/Differentiated_Bertrand_competitionhttp://en.wikipedia.org/wiki/Differentiated_Bertrand_competitionhttp://en.wikipedia.org/wiki/Differentiated_Bertrand_competitionhttp://en.wikipedia.org/wiki/Differentiated_Bertrand_competitionhttp://en.wikipedia.org/wiki/Differentiated_Bertrand_competitionhttp://en.wikipedia.org/wiki/Cournot_competitionhttp://en.wikipedia.org/wiki/Cartelhttp://en.wikipedia.org/wiki/Collusionhttp://en.wikipedia.org/wiki/Welfare_economicshttp://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Joe_S._Bainhttp://en.wikipedia.org/wiki/Rate_of_profithttp://en.wikipedia.org/wiki/Competitionhttp://en.wikipedia.org/wiki/Industrial_organizationhttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Market_concentration#cite_note-1http://en.wikipedia.org/wiki/Market_(economics)http://en.wikipedia.org/wiki/Production,_costs,_and_pricinghttp://en.wikipedia.org/wiki/Market_sharehttp://en.wiktionary.org/wiki/firmhttp://en.wikipedia.org/wiki/Function_(mathematics)http://en.wikipedia.org/wiki/Economics


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The Concentration of Economic Power

The world is full of people who worry about the"concentration of wealth" allegedly caused by freemarkets. Some of this worry is simply envy masked asa more socially acceptable sentiment. Mature andeconomically literate people do not envy the success ofothers; instead, they applaud it and understand that asuccessful producers wealth is created rather thanbeing extracted from the hides of the less-financiallysuccessful.

Some of this worry, though, is genuine and sincere ifstill, in my judgment, unwarranted.

Regardless of ones reasons for wringing ones handsabout the inequality of wealth, its important to keep inmind that financial wealth is not the only source or formof inequality. Each Member of Congress arguably hasmore financial influence than does Bill Gates or othertycoons acting in the market.


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Types of concentration of economic

power

1- Product wise concentration in case of product wiseconcentration the product and distribution of a commodity or

service is controlled by a single person or a group of persons. The

commission has divided this type of concentration into four parts

(i) High concentration in this case, 75 percent or moretotal product of a commodity is produced by 3 or more

producer

(ii) Medium concentration 60 to 70 percent iscontrolled by 3 producer

(iii) Low concentration 50 to 60 percent is controlled by3 producer

(iv) Zero concentration share of top 3 producer is lessthen 10 percent

2- Country wise concentration in case of country wiseconcentration the production and distribution of large number of

different commodities are controlled by single person or a group ofpersons.


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Causes of Concentration of economic power

The main causes of concentration of economic power are as followed:-

(i) Expansion of scope of private sector- government ofindia in its industrial policy of 1956 had exclusively

reserved for public sector

(ii) Protected market on account of the import policy ofgovernment, india industrialist are insulated from foreign

competition. Rather than have been provided an protective

market, in such a protected market, big industries dont let small

industries develop

(iii) Inter corporate investment one of the causes ofconcentration of economic power is inter corporate investment.

Under this system one company purchases the shares of other

company as a result, directors of one company alsobecomes

director of others. Then the directors use the assets of bth the

company to capture the market.

(iv) Licensing policy government licensing policy is alsoresponsible for encouraging the concentration of economic

power

(v) Credit policy of institutions of industrial finance the banking industries liberaly grants loans to big corporate

companies easily because of huge profit and benefits of thebank and dont promote the small companies

(vi) Taxation policy to encourage the investment in privatesector, government have given some concession. It is the big

companies that have been taking the advantage of these tax

exemptions and concession


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(vii) Foreign collaboration in 1956 new industries were setwith the collaboration of foreign companies this help the large

industries houses to capture the market and the economy

(viii) Sale of foreign companies - In the post-independenceera, many British and other foreign companies had sold their

companies to big industrial houses of India like dalma, sahu

jain, birla, bangur, etc. as a result, letter got monopoly hold over

many industrial and in this way concentration of economic

power increased.

(ix) Industrial Development

during the period of planningmore opportunities were given to big industrial houses to set up

different industries in country in the interest of rapid industries

development. They were offered facility of diverse nature. Theywere also given opportunity to change their black money into

white money. It also facilitated concentration of economic power

(x) Managing agency system managing agency systemprevailed in India prior to and a few years after independence.

Under this system, some big industries houses controlled and

managed several companies. Even after the abolition of this

system, those companies remained under the control of theseindustrial houses. It also laid the foundation of concentration of

economic power.


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Effects of concentration of economic power

1- Beneficial effects of concentration

in the initial stage ofindustrialization of an underdeveloped country, as a result of

concentration of economic power, efficient and competent

entrepreneur get encouraged to develop industry. According to

Schumpeter, when concentration of economic power assumes the

form of monopoly, there is optimum use of capabilities of

entrepreneur and advantages of large scale production. Under

monopoly profits are inevitable much, an industrialist get

necessary stimulus for new development and research.2- Harmful effects of concentration members of monopoly

enquiry commission, shri R.C. Dutt and other aconomist hold that

concentration of economic power is harmful. Its detrimental affects

are as under:

(i) Ignore the quality of concentration- concentration of

economic power gives rise to tendency of monopoly. A

monopolist fear no competition. Hence, he supplies inferior

goods. He does not pay any attention on improving the

quality of his product. As a result, consumers stand to suffer

(ii) Unnecessary increase in price- a monopolist fixes higher

price of commodity there is no competitor of his product,

hence he charges price according ti his will. It results in the

exploitation of the consumer.

(iii) Increase in inequalityon account of concentration of

economic power. Rich become richer and poor becomes

poorer. Small entrepreneur do not get any opportunities to

develop. They are unable to compete with big industrials.

Concentration of economic power wipes out small

occupations it has an adverse effect on economic

development and social welfare. Monopoly enquiry

commission was also of a view that small occupations aregood training centres for occupational and managerial ability.


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wiping out of small units in the industry is harmful to the

interest of the entire industry. Decay these units gives rise tothe shortage of skilled entrepreneur and managers

(iv) Obstacles in capital formation

theoretically speaking,concentration of economic power should result in mare

capital formation but in actual practice, due to several causes

it brings down the rate of capital formation

(i) new entrepreneur have less opportunities to invest,

because they do not like to enter those industries

where they are to face competition from big industries.

(ii) Big industries spend more of their income on luxury

goods such as rate of capital formation fall

(iii) Big industries encourage speculative tendency which

adversely affect capital formation. Big entrepreneur

spend large part of their wealth on unproductive

activities and gold and silver ornaments. Consequently

capital formation slows down.

(V) Defective investment on account of concentration of

economic power, investment is not made adequate and

planned manner. Big entrepreneurs make huge investment on

capital goods industries or luxury goods in order to augment their

assets. Such an investment has an adverse effect the production

of consumer goods. Their production goes down, their prices go

up and consumer stand to suffer. In the word or DR. Loknathan

concentration of economic power leads to misdirection of

investment.

(vi) Increase in Corruption concentration of economic power

gives rise to corruption large enterprise bribe politicians and

bureaucrats and use the questionable means in order to get more

credit facilities from financial institutions.


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What is Economic power?

Condition of having sufficientproductive resources atcommand that give thecapacity to makeandenforce economicdecisions, such asallocation ofresources and apportioning ofgoods and services.

Most economists define market power as the ability tocontrol price and exclude rivals.1In turn,economic

power is often assumed to be essentially the same asmarket power, but this equivalence raises seriousproblems. Real world economic power encompasses

much more than market power, despite efforts by manyeconomists to ignore the distinction. For example, arecent article in Forbesvoluminously reports on theeconomic power of General Electric Corporation withoutever even mentioning the companys market powerin jetengines or television broadcasting. It states that duringthe first six years of the 1980s GE changed dramatically,

reshuffling its ...corporate portfolio like a riverboatgambler, acquiring 338 business and product lines for$11.1 billion:

Nothing like this has been seen in corporate Americasince the conglomerator days of LTVs Jimmy Ling andGulf & Westerns Charles Bluhdorn. With GE, its a case

of enormous financial might, coupled with the readinessto acquireor to dump. Says one former GE official,
http://www.businessdictionary.com/definition/condition.htmlhttp://www.businessdictionary.com/definition/productive-resources.htmlhttp://www.businessdictionary.com/definition/capacity.htmlhttp://www.businessdictionary.com/definition/enforce.htmlhttp://www.businessdictionary.com/definition/decision.htmlhttp://www.businessdictionary.com/definition/allocation-of-resources.htmlhttp://www.businessdictionary.com/definition/allocation-of-resources.htmlhttp://www.businessdictionary.com/definition/goods-and-services.htmlhttp://www.businessdictionary.com/definition/goods-and-services.htmlhttp://www.businessdictionary.com/definition/allocation-of-resources.htmlhttp://www.businessdictionary.com/definition/allocation-of-resources.htmlhttp://www.businessdictionary.com/definition/decision.htmlhttp://www.businessdictionary.com/definition/enforce.htmlhttp://www.businessdictionary.com/definition/capacity.htmlhttp://www.businessdictionary.com/definition/productive-resources.htmlhttp://www.businessdictionary.com/definition/condition.html


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Meaning of Different Terms and Concept

. MONOPOLY

A monopoly is one which is big in the sense that it can influence themarket priceof its product. criteria of such a bigness, adopted in india till

recent, are: size off the assets which a firm controls. Under the

monopolies and restrictive trade practices act (MRTP), 1969 all firms

with assets above a certain size

. Dominant Undertaking

Adominant undertaking was that, which controlled at least one fourth

production or market of a product and had assets of at least 3 crore rs

Eearlieron this limit was 1 crore rs

. Monopolistic trade practice

A monopolistic trade practice is a trade practice which has, or is likely to

have, the effect of:

- Maintaining price at unreasonable level

- Unreasonable preventing or lessening competition

- Limiting technical development or capital, investment, or

- Allowing the quality to deteriorate

. Unfair trade practice

Unfair trade practice includes:


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- Publication of a false statement, made orally or in written or by

visible representation,or

- Publication of any advertisement for sale at bargaining price, or

- Enticement by gift or contest

- Supply of substandard goods

- hoarding or destruction of goods or refusal to sell goods or

services

Growth of concentration of economic power

1- during 1960and 1970s there has been extreme concentration of

power at the top. The longest business in term of assets was tat

followed by birla. The third largest house was martin burn, which

was only one-fourth of the top two business houses (in termofassets and turnover)

2- during 1980 and 1990 ther was again extreme concentration at the

top. As in dec 1991, the largest business house in term of asstes

was tata. Followed by birla and reliance

3- in the post liberalisation period 1991-2009, the private sector

corporate giants flourished. The largest private sector company interm of assets and net sales was reliance industry followed by tata

steel and hindalco.

All these trends indicate increasing concentration of economy power in

the hands of largest industrial houses


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The causes that have led for concentration of economic power are:-

In a study on monopoly and restrictive trade practices, the centralproblem is the concentration of economic power since monopoly andrestrictive trade practices may be appropriately considered to befunctions of such concentration. Confining to industries, two main kindsof concentration of economic power may be said to prevail in industries.The first is, where production and distribution of any particularcommodity or service is controlled by a single family or a few families orbusiness houses, whether by reason of ownership of capital orotherwise.

This concentration of economic power may be called as product wiseconcentration. Where the industry is engaged in the production of oneproduct, it may sometimes be called industry wise concentration. Thesecond kind of concentration arises where a large number of concernsengaged in the production and distribution of different commodities arein the controlling hands of one individual or family or group of persons,

whether incorporated or not, connected closely by financial or otherbusiness interests. This has been called the country-wise concentration.Having thus defined concentration of economic power, the causes canbe identified for the same and the following are some of the importantcauses:

The evolution of the corporation has made it possible for industrialists touse these economies of scale to the greatest advantage by putting themin control of large amounts of capital contributed by many. Since the

holding of shares is dispersed amongst a large number of shareholders,they prefer to leave the decision and the management to a few whoshow an active interest.

The very attributes of skill and enterprise which helped someindustrialists for the purpose of acquiring a commanding position in oneor two concerns induced them often to try to achieve greater and greatercontrol over the capital supplied by other people. This accelerated theprocess of more and more industrial units coming under the control of a

limited number of successful businessmen.


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The system of managing agency was also responsible for increasing theconcentration of economic power. Managing skill forms almost asimportant a part in the successful running of a business as the supply ofcapital. And for many years, it was even scarcer. As such, the supply of

managerial skill in different forms and diverse ways has proved a fruitfulsource of concentration of economic power.

For many years, the main source of supply or managerial skill acompany is entrusted to another company or a firm or an individual, inreturn for payment for the services. It is no exaggeration to say that forall practical purposes, the board of directors abdicates the power ofcontrol to the managing agents. It generally happened that onecorporation or firm becomes managing agent for not one but a numberof enterprises whether in the same line of production or not.


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Government measures to regulate concentrationof economic power

In the wake of liberalization and privatization that was triggered in Indiain early nineties, a realization gathered momentum that the existing

Monopolistic and Restrictive Trade Practices Act, 1969 ("MRTP Act")was not equipped adequately enough to tackle the competition aspect ofthe Indian economy. With starting of the globalization process, Indianenterprises started facing the heat of competition from domestic playersas well as from global giants, which called for level playing field andinvestor-friendly environment. Hence, need arose with regard tocompetition laws to shift the focus from curbing monopolies toencouraging companies to invest and grow, thereby promotingcompetition while preventing any abuse of market power.

Competition: meaning and benefits

Competition is a situation in market, in which sellers independently strivefor buyers patronage to achieve business objectives.Competition andliberalization, together unleash the entrepreneurial forces in theeconomy. Competition offers wide array of choices to consumers atreasonable prices, stimulates innovation and productivity, and leads tooptimum allocation of resources.

Abuse of market and need for new law

In an open market economy, some enterprises may undermine themarket by resorting to anti-competitive practices for short-term gains.These practices can completely nullify the benefits of competition. It isfor this reason that, while countries across the globe are increasinglyembracing market economy, they are also re-inforcing their economiesthrough the enactment of competition law and setting up competitionregulatory authority.


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In line with the international trend and to cope up with the changingrealities India, consequently, enacted the Competition Act,2002 (hereinafter referred to as "the Act"). Designed as an omnibuscode to deal with matters relating to the existence and regulation of

competition and monopolies, the Act is intended to supersede andreplace the MRTP Act. It is procedure intensive and is structured in anuncomplicated manner that renders it more flexible and compliance-oriented. Though the Act is not exclusivist and operates in tandem withother laws, the provisions shall have effect notwithstanding anythinginconsistent therewith contained in any other law.

Objectives of MRTP Act

In a significant departure from the letter and spirit of the MRTP Act, the

Act hinges on the "Effect Theory" and does not categorically decry orcondemn the existence of a monopoly in the relevant market, rather theuse of the monopoly status such that it operates to the detriment of thepotential and actual competitors is sought to be curbed.

The earlier legislation, considered draconian in the changedscenario, was based on size as a factor, while the new law isbased on structure as a factor, aimed at bringing relief to theplayers in the market.

The Act empowers CCI to impose penalty on delinquententerprises, whereas in the MRTP Act there were no provisionsregarding such enterprises

MRTP Act could only pass "cease and desist" orders and did nothave any other powers to prevent or punish while the new lawcontains punitive provisions.

MRTP Act was applicable to Private and Public sector

undertakings only, whereas, the new Act extends its reach togovernmental departments engaged in business activities.

As regards agreements, compulsory registration has been doneaway with.

The most path-breaking chapter in the Act has been the emphasison Competition Advocacy that was not at all contemplated by theMRTP Act.

OBJECTS TO BE ACHIEVED


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I. To check anti-competitive practices

II. To prohibit abuse of dominance

III. Regulation of combinations.

IV. To provide for the establishment of CCI, a quasi-judicial bodytoperform below mentioned duties:

Prevent practices having adverse impact on competition

Promote and sustain competition in the market

Protect consumer interests at large

Ensure freedom of trade carried on by other participants in themarket

Look into matters connected therewith or incidental thereto.

1. ANTI-COMPETITIVE AGREEMENTS

The departure is reflected in section 3 of the Act, which states thatenterprises, persons or associations of enterprises or persons, including

cartels, shall not enter into agreementsin respect of production, supply,distribution, storage, acquisition or control of goods or provision ofservices, which cause or are likely to cause an "appreciable adverseimpact"on competition in India. Such agreements would consequentlybe considered void.

The species of agreement which would be considered to have anappreciable adverse impact" would be those agreements which:

Directly or indirectly determine sale or purchase prices;

Limit or control production, supply, markets, technicaldevelopment, investment or provision of services;

Share the market or source of production or provision of servicesby allocation of inter alia geographical area of market, nature ofgoods or number of customers or any other similar way

Directly or indirectly result in bid rigging or collusive bidding.


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Further, the agreements, which are entered into in respect of variousintellectual property rights and which recognize the proprietary rights ofone party over the other in respect of trademarks, patents, copyrights,geographical indicators, industrial designs and semi conductors have

been withdrawn from the purview of "anti competitive agreements". Theinherently monopolistic rights created in favour of bona fide holders ofvarious forms of intellectual property have been treated as sacrosanct.

2. ABUSE OF DOMINANT POSITION

Section 4 of the Act enjoins, "no enterprise shall abuse its dominantposition". Dominant position is the position of strength enjoyed by anenterprise in the relevant market, which enables it to operateindependently of competitive forces prevailing market, or affect its

competitors or consumers or the relevant market in its favour. Thereshall be an abuse of dominant position if an enterprise indulges into thebelow mentioned activities:

Directly or indirectly imposing discriminatory conditions in thepurchase or sale of goods or service, or setting prices in thepurchase or sale (including predatory pricing) of goods or services;

Limiting or restricting the production of goods or provision of

services or market therefore; or limiting technical or scientificdevelopment relating to goods or services to the prejudice ofcustomers;

Indulging in practice or practices resulting in the denial of marketaccess

Making conclusion of contracts subject to acceptance by otherparties of supplementary obligations, which has no connection withthe subject of such contract;

Utilization of the dominant position in one relevant market to enterinto, or protect, another relevant market.

3. COMBINATIONS

The Act is designed to regulate the operation and activitiesof "combinations", a term, which contemplates acquisition, mergersor amalgamations. Combination that exceeds the threshold limits

specified in the Act in terms of assets or turnover, which causes or is


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likely to cause an appreciable adverse impact on competition within therelevant market in India, can be scrutinized by the Commission.

Threshold limitsthat would invite the scrutiny are specified below:

For acquisition:

Combined assets of the firm more than Rs 3,000 crore (theselimits are US $ 500 millions in case one of the firms is situatedoutside India).

The limits are more than Rs 4,000 crore or 12,000 crore and US $2 billion and 6 billion in case acquirer is a group in India or outsideIndia respectively.

For mergers:

Assets of the merged/amalgamated entity more than Rs 1,000crore or turnover more than Rs 3,000 crore (these limits are US $500 millions and 1,500 millions in case one of the firms is situatedoutside India).

These limits are more than Rs 4,000 crore or Rs 12,000 crore andUS $ 2 billions and 6 billions in case merged/amalgamated entitybelongs to a group in India or outside India respectively.

Further, such combination, which causes or is likely to cause"appreciable adverse impact" on competition, would be treated as void.

A systemis provided under the Act wherein at the option of the personor enterprise proposing to enter into a combination may givenotice tothe Competition Commission of India of such intention providingdetails of the combination. The Commission after due deliberation,

would give its opinion on the proposed combination to approach theCommission for this purpose. However, public financial institutions,foreign institutional investors, banks or venture capital funds which arecontemplating share subscription financing or acquisition pursuant toany specific stipulation in a loan agreement or investor agreement arenot required to approach the CCI for this purpose.

4. COMPETITION COMMISSION OF INDIA

CCI, entrusted with eliminating prohibited practices, is a body corporateand independent entity possessing a common seal with the power to


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enter into contracts and to sue in its name. It is to consist of achairperson, who is to be assisted by a minimum of two, and a maximumof ten, other members.

Acts taking place outside India

CCI has the power to enquire into unfair agreements or abuse ofdominant position or combinations taking place outside India but havingadverse effect on competition in India, provided that any of the belowmentioned circumstances exists:

An agreement has been executed outside India

Any contracting party resides outside India

Any enterprise abusing dominant position is outside India

A combination has been established outside India

A party to a combination is located abroad.

Any other matter or practice or action arising out of suchagreement or dominant position or combination is outside India.

To deal with cross border issues, CCI is empowered to enter into anyMemorandum of Understanding or arrangement with any foreign agencyof any foreign country with the prior approval of Central Government.

Benches

For the execution of duties, the Act contemplates the exercise of thejurisdiction, powers and authority of CCI by number of Benches. Ifnecessary, a Bench would be constituted by the chairperson of at least

two members; it being mandated that at least one member of eachBench would be a "Judicial Member". The Bench over which thechairperson presides is to be known as the Principal Benchand theother Benches known as Additional Benches. However, the Act furtherempowers the chairperson to further constitute one or more Benchesknown as Mergers Benches exclusively to deal with combination andthe regulation of combinations.

Extension of the executive powers

The Act contemplates the extension of theexecutive powers of CCI bythe appointment of a Director Generaland as many other persons for


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the purpose of assisting it in conducting enquiries into contraventions ofthe provisions of the Act as well as conducting cases before theCommission.

CCI is empoweredto conduct enquiries into:

1. "Certain agreements and dominant position of enterprise"2. "Combinations"

CCI, either on its own motion, on receipt of a complaint or on a referencemade to it by the Centre or State Government may enquire into anyalleged contravention regarding the nature of the agreement, which issuspected to be inherently anti-competitive, or the abuse of dominantposition. Any person, consumer, consumer association or trade

association can make a complaint.

An enquiry into a combination, existing or proposed, may be initiatedupon the knowledge or information in the possession of CCI or uponnotice of the person or entity proposing to enter into a combination orupon a reference made by a statutory authority. Limitation of time forinitiation of enquiry is one year from the date on which the combinationhas taken effect when CCI conducts such enquiry.

Jurisdiction

An enquiry or complaint could be initiated or filed before the Bench ofCCI if within the local limits of its jurisdiction the respondent\s actually orvoluntarily resides, carries on business or works for personal gain, orwhere the cause of action wholly or in part arises.

CCI has been vested with the powers of a civil court includingthose provided under sections 240 and 240A of the Companies Act,1956 on an "Inspector of Investigation"while trying a suit, including

the power to summon and examine any person on oath, requiring thediscovery and production of documents and receiving evidence onaffidavits. CCI is also vested with certain powers of affirmativeaction to act in an expedited manner. Civil courts or any otherequivalent authority will not have any jurisdiction to entertain any suit orproceeding or provide injunction with regard to any matter which wouldordinarily fall within the ambit of CCI.

the concllentration of economic power

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