Flow control is controlled by the receiving side.

It ensures that the sender only sends what the receiver can handle. Think of a situation where someone with a fast fiber connection might be sending to someone on dialup or something similar. The sender would have the ability to send packets very quickly, but that would be useless to the receiver on dialup, so they would need a way to throttle what the sending side can send. Flow control deals with the mechanisms available to ensure that this communication goes smoothly. Congestion control is a method of ensuring that everyone across a network has a "fair" amount of access to network resources, at any given time. In a mixed-network environment, everyone needs to be able to assume the same general level of performance. A common scenario to help understand this is an office LAN. You have a number of LAN segments in an office all doing their thing within the LAN, but then they may all need to go out over a WAN link that is slower than the constituent LAN segments. Picture having 100mb connections within the LAN that ultimately go out through a 5mb WAN link. Some kind of congestion control would need to be in place there to ensure there are no issues across the greater network. TCP's four congestion control algorithms include: slow start, congestion avoidance, fast retransmit, and fast recovery. Congestion control basically states that a network device can transmit only a certain number of packets and can not add more packets to a network until an acknowledgement is received. http://www.ecse.rpi.edu/Homepages/shivkuma/research/congpapers.html has some good papers on the topic. Flow control works by refusing new connections until congestion is resolved. In serial transmissions, Xon/Xoff is used for flow control. It is a handshaking mechanism that will keep a sender from sending data faster than a receiver can receive it.
Flow control is used to balance the rate at which bits are produced by the sender with the rate at which bits are consumed by the receiver. This matches the speed of a sender with the capabilities of a receiver. Congestion control is used to regulate the rate at which senders generate traffic in order to avoid the over-utilization of the resources available within network. This prevents network congestion which if pronounced, could lead to a network collapse. Flow control means preventing the source from sending data that the sink will end up dropping because it runs out of buffer space. This is fairly easy with a sliding window protocol--just make sure the source's window is no larger than the free space in the sink's buffer. TCP does this by letting the sink advertise its free buffer space in the window field of the acks. Congestion control means preventing (or trying to prevent) the source from sending data that will end up getting dropped by a router because its queue is full. This is more complicated, because packets from different sources travelling different paths can converge on the same queue.

Flow Control vs Congestion Control Flow control is a mechanism used in computer networks to control the flow of data between a sender and a receiver, such that a slow receiver will not be outran by a fast sender. Flow control provides methods for the receiver to control the speed of transmission such that the receiver could handle the data transmitted by the sender. Congestion control is a mechanism that controls data flow when congestion actually occurs. It controls data entering in to a network such that the network can handle the traffic within the network. What is Flow Control? Flow control is a mechanism that controls the flow of data between a sender and a receiver such that a slower receiver would not be overwhelmed by the amount of data transmitted by a fast sender. This situation can occur due to several reasons such as receivers lack of processing power than the sender or receiver having a heavy traffic load than the sender. Mechanisms used in flow control could be categorized based on whether the receiver sends feedback to the sender. In the Open-loop flow control mechanism, receiver does not send any feedback to the sender and it is the most widely used flow control method. In Closed-loop flow control, congestion information is transmitted back to the sender. Commonly used types of flow control are network congestion, windowing flow control and data buffer. What is Congestion Control? Congestion control provides methods to regulate the traffic entering in to a network such that it could be managed by the network itself. Congestion control prevents a network from reaching a congestive collapse where little or no useful communication is happening due to congestion. Congestion control is mainly applied to packet switching networks. Goal of congestion control is to keep the number of packets within the network below a level that would reduce the performance dramatically. Congestion control is implemented in Transmission Control Protocol (TCP) and User Datagram Protocol (UDP) transport layer protocols. Slow start and exponential backoff algorithms are used in TCP. Congestion control algorithms are classified based on the amount of feedback received from the network and the aspect of performance it aims to improve. Furthermore, they are classified based on criteria like modifications need to be done on the current network and the fairness criterion used by the algorithm. What is the difference between Flow Control and Congestion Control? Although, Flow control and congestion control are two network traffic control mechanisms used in computer networks, they have their key differences. Flow control is an end to end mechanism that controls the traffic between a sender and a receiver, when a fast sender is transmitting data to a slow receiver. On the other hand, congestion control is a mechanism that is used by a network to control congestion in the network. Congestion control prevents loss of packets and delay caused due to congestion in the network. Congestion control can be seen as a mechanism that makes sure that an entire network can handle the traffic that is coming to the network. But, flow control refers to mechanisms used to handle the transmission between a particular sender and a receiver.