Aims & Objects

 Promote Fair Competition: Encourage healthy competition among enterprises to

increase efficiency and benefit consumers.
 Prevent Anti-Competitive Practices: Identify and take action against practices that
restrict competition, such as cartels and abuse of dominant positions.
 Protect Consumer Interests: Safeguard the rights and interests of consumers by
ensuring they have access to a variety of goods and services at competitive prices.
 Ensure Freedom of Trade: Remove barriers to trade within the Indian market, ensuring
businesses can compete on a level playing field.
 Development of Markets: Foster innovation and development within various sectors of
the economy.

Salient Features

 Establishment of Competition Commission of India (CCI): A statutory body created

to enforce the Competition Act and promote competition across markets.
 Regulation of Anti-Competitive Agreements: Prohibits agreements that can have an
appreciable adverse effect on competition, such as cartels and collusive bidding.
 Prohibition of Abuse of Dominant Position: Prevents enterprises from using their
market power to stifle competition, such as predatory pricing and limiting production.
 Regulation of Combinations: Monitors mergers, acquisitions, and amalgamations to
ensure they do not negatively impact market competition.
 Competition Advocacy: The CCI undertakes initiatives to promote awareness and
understanding of competition principles among businesses and consumers.
 Legal Recourse and Remedies: Provides mechanisms for affected parties to seek redress
through the CCI and appellate tribunals.
 International Cooperation: The Act encourages cooperation with international
organizations and foreign competition authorities for better enforcement and
understanding of global competition issues.

Monopolies and Restrictive Trade Practices (MRTP) Act, 1969

 Objective: To prevent concentration of economic power and to control monopolistic,

restrictive, and unfair trade practices.
 Regulatory Authority: MRTP Commission.
 Scope: Primarily focused on controlling monopolies and preventing unfair trade
practices.
 Key Features:
o Regulation of monopolistic practices.
o Control over restrictive trade practices.
o Prohibition of unfair trade practices.
o Protection of consumer interests.
o Limited focus on promoting competition.
Competition Act, 2002

 Objective: To promote and sustain competition in markets, protect consumer interests,

and ensure freedom of trade.
 Regulatory Authority: Competition Commission of India (CCI).
 Scope: Comprehensive focus on promoting competition and regulating anti-competitive
practices.
 Key Features:
o Prohibition of anti-competitive agreements.
o Prevention of abuse of dominant position.
o Regulation of mergers and acquisitions (combinations).
o Competition advocacy and awareness.
o Broader focus on maintaining a competitive market environment.

Key Differences

 Objective: The MRTP Act aimed at preventing economic concentration and controlling
monopolistic practices, while the Competition Act aims to promote competition and
prevent anti-competitive practices.
 Regulatory Authority: The MRTP Act was enforced by the MRTP Commission,
whereas the Competition Act is enforced by the Competition Commission of India (CCI).
 Scope: The MRTP Act had a narrower focus on monopolies and unfair trade practices,
while the Competition Act has a broader scope, including anti-competitive agreements,
abuse of dominant positions, and regulation of combinations.
 Approach: The MRTP Act was more preventive in nature, aiming to control monopolies
and restrictive practices, while the Competition Act is proactive and aims to promote
competition through various measures.
 Consumer Protection: The Competition Act places a greater emphasis on consumer
protection and advocacy compared to the MRTP Act.

Similarities

 Regulation of Trade Practices: Both acts aim to regulate trade practices to prevent
unfair and restrictive activities.
 Consumer Interests: Both acts seek to protect the interests of consumers.
 Legal Framework: Both acts provide a legal framework for addressing anti-competitive
practices and ensuring fair competition in the market.

The transition from the MRTP Act to the Competition Act represents a shift towards a more
comprehensive and proactive approach to promoting and sustaining competition in the Indian
market.
Competition in the market refers to the rivalry between businesses or entities striving to achieve
superior outcomes, such as higher sales, greater market share, or superior product offerings, by
satisfying consumer demands. Here are some key aspects that constitute competition:

 फर्मों के बीच प्रतिद्वंद्विता: Businesses actively compete against each

other to attract customers by offering better products, services, prices, or innovations.
 Consumer Choice: Competition ensures that consumers have multiple options to choose
from, leading to better quality and lower prices.
 Market Dynamics: Competitive markets are characterized by constant changes and
movements as firms vie for market leadership.
 Innovation and Efficiency: Companies are driven to innovate and improve efficiency to
gain a competitive edge and meet consumer needs more effectively.
 Economic Welfare: Competition contributes to economic welfare by promoting resource
allocation efficiency and fostering economic growth.
 Legal Framework: Competition laws and policies are in place to prevent anti-
competitive practices and ensure fair competition in the market.

1. Prevention of Anti-Competitive Agreements (Section 3)

 Legal Provision: Section 3 of the Competition Act, 2002 prohibits agreements that cause
or are likely to cause an appreciable adverse effect on competition within India. This
includes agreements such as cartels, collusive bidding, and price-fixing.
 Example: Agreements that limit or control production, supply, markets, or technical
development.

2. Regulation of Dominant Positions (Section 4)

 Legal Provision: Section 4 of the Competition Act, 2002 prohibits the abuse of dominant
position by any enterprise. This includes practices like predatory pricing, limiting
production or supply, and discriminatory pricing.
 Example: A company using its dominant market position to drive competitors out of the
market by selling products at unreasonably low prices.

3. Control of Mergers and Acquisitions (Combinations) (Sections 5 and 6)

 Legal Provision: Sections 5 and 6 of the Competition Act, 2002 regulate mergers,
acquisitions, and amalgamations that exceed certain financial thresholds and may have an
adverse effect on competition. These sections require mandatory notification to the
Competition Commission of India (CCI) for approval.
 Example: A merger between two large companies that could potentially reduce
competition in the market.

4. Consumer Protection

 Legal Provision: Although consumer protection is a broad concept under competition

law, the Competition Act, 2002 emphasizes safeguarding consumer interests by ensuring
 fair competition in the market. This includes prohibiting unfair trade practices and
promoting consumer welfare.
 Example: Preventing practices that deceive consumers or restrict their choices in the
market.

5. Competition Advocacy (Section 49)

 Legal Provision: Section 49 of the Competition Act, 2002 empowers the Competition
Commission of India (CCI) to undertake competition advocacy, create awareness, and
impart training on competition issues.
 Example: Organizing seminars and workshops to educate businesses and consumers
about the benefits of competition and the provisions of the Competition Act.

6. Legal Enforcement (Section 19)

 Legal Provision: Section 19 of the Competition Act, 2002 grants the Competition
Commission of India (CCI) the authority to inquire into any alleged contravention of the
Act based on complaints, information received, or its own knowledge.
 Example: Investigating a company's alleged abuse of dominance or anti-competitive
agreement based on a complaint filed by a competitor or consumer.

Objectives of Competition Law

Competition law aims to create and maintain a healthy and competitive market environment.
Here are the primary objectives:

1. Promoting Fair Competition

o Goal: Ensure that businesses compete on a level playing field.
o Impact: Encourages innovation, efficiency, and consumer choice, leading to
better products and services.
2. Preventing Anti-Competitive Practices
o Goal: Identify and eliminate practices that restrict competition, such as cartels,
price-fixing, and abuse of dominant positions.
o Impact: Protects smaller businesses and promotes a diverse marketplace.
3. Protecting Consumer Interests
o Goal: Ensure consumers have access to a variety of goods and services at
competitive prices.
o Impact: Safeguards consumer rights and prevents exploitation by monopolistic
practices.
4. Ensuring Freedom of Trade
o Goal: Remove barriers to trade and promote open markets.
o Impact: Facilitates free movement of goods and services, enhancing market
integration.
5. Promoting Innovation and Economic Growth
o Goal: Foster an environment where businesses are motivated to innovate and
improve.
 o Impact: Drives economic development and enhances global competitiveness.
6. Consumer Welfare
o Goal: Improve the quality of life for consumers by ensuring they benefit from
competitive prices, quality products, and diverse choices.
o Impact: Enhances overall consumer satisfaction and trust in the market.
7. Legal Enforcement and Advocacy
o Goal: Enforce competition laws and promote awareness of competition
principles.
o Impact: Ensures adherence to legal standards and educates stakeholders about the
importance of competition.

History of Competition Law (USA, UK & Europe)

USA: The Sherman Antitrust Act of 1890 was the first federal legislation aimed at curbing
monopolies and promoting fair competition. It was followed by the Clayton Act in 1914 and the
Federal Trade Commission Act, which further strengthened antitrust laws2.

UK: Competition law in the UK evolved from the common law doctrine of restraint of trade. The
Monopolies and Restrictive Practices (Inquiry and Control) Act 1948 was one of the early
statutes, and the Competition Act 1998 marked a significant modernization of UK competition
law.

Europe: European competition law developed post-World War II, with the Treaty of Rome in
1957 establishing the European Economic Community. The Treaty included provisions to ensure
competition, which were later expanded by the Treaty of Lisbon in 2007.

Relevant Provisions of Sherman's Act

The Sherman Antitrust Act of 1890 has two main provisions:

1. Section 1: Prohibits contracts, combinations, or conspiracies that restrain trade.

2. Section 2: Addresses monopolization or attempts to monopolize any part of interstate
commerce.

Indian Scenario with an Overview of MRTP Act, 1969

The Monopolistic and Restrictive Trade Practices (MRTP) Act, 1969 was enacted to prevent the
concentration of economic power in the hands of a few and to prohibit monopolistic and
restrictive trade practices. It was replaced by the Competition Act, 2002, which established the
Competition Commission of India to oversee and enforce competition laws6.