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Competition Law

Unit I
Constitutional provision regulating trade :--
Answer:
Freedom of Trade Commerce and Intercourse
The Constitution of India in Part XIII wide Articles !"# to !"$ deals with freedom of Trade Commerce
and Intercourse% &ut of these articles Article !"# creates an overall limitation on all legislative powers of
the Union and the 'tate legislature% The (ar on state powers to interfere in the free trade commerce and
intercourse )Article !"#* is loosened (+ Article !",!"! and !"-% Article !"$ provides for state monopol+%
'tud+ of the Articles !", to !"$ will reveal when and how the Constitution of India permits the
government to restrict freedom of trade commerce and intercourse%
Article 301: The trade and commerce throughout the territor+ of India shall (e free and without restriction%
The restriction can generall+ ma+ (e wa+ of ta.es% The ta.es ma+ (e compensator+ where the+ are levied
for an+ service provided it is not ta/en as restriction%
0ut if the ta. is levied to regulate or to prevent certain people from carr+ing on (usiness it amounts to
restriction%
Thus the o(1ect of Article !"# is to (rea/ down the (arriers (etween the states and to ma/e the countr+
as one unit with a view to encourage trade and commerce%
Article 302: 2owever the Parliament can impose restrictions on freedom of trade commerce and
intercourse in pu(lic interest%
Article 303: The Parliament while imposing restrictions under Article !", cannot discriminate (etween
different state% 2owever the parliament can discriminate in case of scarcit+ of goods%
Article 304: It ena(les state legislature to impose ta.es on goods coming from other states if goods
produced within the state are su(1ected to such ta.es%
Article 305: An+ law passed (+ the Union there(+ creating the state monopol+ shall not (e affected (+
the provision of Part XIII of the Constitution of India%
Salient Features of New Competition Law
3une ,4 ,""#
The draft Competition 0ill ,""# and 5epeal of the 6onopolies and 5estrictive Trade Practices )65TP* Act
#787 which received the approval of the Union Ca(inet on 3une ,8 ,""# covers prohi(ition of anti-competitive
agreements prohi(ition of a(use of dominance regulation of com(inations such as ac9uisitions mergers and
amalgamation of certain si:e esta(lishment of Competition Commission of India )CCI* and functions and
powers of CCI%
The o(1ectives of the 0ill are to provide for the esta(lishment of a Commission to prevent practices having
adverse effect on competition to promote and sustain competition in mar/ets in India to protect the interests of
consumers and to ensure freedom of economic action of the participants in mar/et in India and for matters
connected therewith or incidental thereto%
The proposed ;aw will not appl+ to <overnment =epartments and enterprises performing sovereign functions
and polic+ ma/ing aspects of <overnmental activities )decision ma/ing (+ 6inistries>=epartments>&ffices of
Central <overnment or 'tate <overnments*> local (odies-li/e reservation for ''I preference in procurement
from ''I units>P'Us and such similar policies%
The proposed ;aw will also provide for e.emption of certain classes of enterprises and international
agreements from the applica(ilit+ of the Act (+ wa+ of specific notifications%
The ;aw would cur( those practices which would have an apprecia(le adverse effect on Competition% The
proposed ;aw identifies three such wa+s in which such practices could occur as under:
Anti-competitive Agreements: )2ori:ontal Agreements ?ertical Agreements* can (e in9uired into (+ CCI which
could impose a penalt+ or an amount upto #" per cent of its average turnover in the last three +ears for the
offence%
A(use of =ominant Position )The criteria for deciding the dominant position are (roader than one included in
65TP Act*% @n1o+ing a dominant position will not (e a crime (ut its a(use will (e a crime%
@limination> reduction of competitors in mar/et achieved through ac9uisitions amalgamations or mergers )The
proposed ;aw is not against ever+ ac9uisition merger or amalgamation (ut it refers onl+ to those ac9uisitions
mergers and amalgamation which are of a certain prescri(ed si:e-si:e in terms of )a* assets or )(* turnover%
The proposed ;aw provides for an ad1udicating relief machiner+ (+ wa+ of esta(lishing the Competition
Commission of India )CCI* which would (e a Auasi-3udicial 0od+% CCI will have a Chairperson and not less
than two and not more than ten other 6em(ers as ma+ (e specified (+ the Central <ovenrment%
The CCI will have the following powers: To issue BCease and =esistB &rders To grant such interim relief as
would (e necessar+ in each case To award compensation To impose fines on the guilt+ To order division of
dominant underta/ing Power to order de-merger Power to order costs for frivolous complaints
In addition to the ad1udication function the CCI will have the roles of advocac+ investigation prosecution and
merger control% The 'tatutor+ 5egulator+ Authorities can ma/e reference to CCI for advice%
The proposed ;aw provides for the post of =irector <enral )and a host of his deputies in various places* to
assist the Competition Commission in its in9uiries% Unli/e in 65TP Act the =irector <eneral will not have
powers to initiate investigations suo motu%
In view of the polic+ shift from cur(ing monopolies to promoting competition there is a need to repeal the
6onopolies and 5estrictive Trade Practices Act% 2ence the proposed Competition ;aw to (e (rought in aims
at doing awa+ with the rigidl+ structured 65TP Act% The Competition ;aw proposed is fle.i(le and (ehaviour -
oriented% &ther reasons are as follows:
65TP Act is (ased on the pre-reforms scenario whereas the new ;aw will (e (ased on the post-reforms
scenario% 65TP Act is (ased on the si:e as a factor whereas the new ;aw will (e (ased on the structure as a
factor% 65TP Act has #- per se offences negating the principles of natural 1ustice where the new ;aw has - per
se offences all the rest su(1ected to rule of reason% 65TP Act provides for 5egistration of agreements as
compulsor+ whereas in the new ;aw there is no re9uirement of registration of agreement% Under the new ;aw
dominance per se is not (ad (ut onl+ the a(use of dominance is considered (ad whereas under the 65TP
;aw dominance itself is (ad% Com(ination 5egulation mentioned in the 0ill ensures that Competition is not
reduced % Com(inations are not regulated (+ 65TP Act% 65TP Act has powers onl+ to pass BCease and
=esistB orders and did not have an+ other powers to prevent or punish whereas the Competition ;aw contains
punitive provisions% 65TP Act does not vest 65TP Commission to in9uire into cartels of foreign origin in a
direct manner% The proposed Competition ;aw see/s to regulate them%
The concept of C<roupC under the 65TP Act had wider import and was unwor/a(le whereas the concept has
(een simplified in the proposed ;aw%
The proposed ;aw provides for a Competition fund which shall (e utilised for promotion of competition
advocac+ creating awareness a(out competition issues and training in accordance with the rules that ma+ (e
prescri(ed%
Pending cases pertaining to Unfair Trade Practices other than those relating to tie in sales purchases or cases
falling under clause ).* of su(-section )#* of 'ection !8A the 6onopolies and 5estrictive Trade Practices Act
#787 under the repealed Act shall stand transferred to the Dational Commission constituted under the
Consumer Protection Act #748%
Introduction o Competition Act! 2002
'ince attaining Independence in #7-EIndia for the (etter part of half a centur+ thereafter adopted and followed policies
comprising what are /nown as Command-and-Control laws rules regulations and e.ecutive orders% The competition law
of India namel+ the 6onopolies and 5estrictive Trade Practices Act #787 )65TP Act for (rief* was one such% It was in
#77# that widespread economic reforms were underta/en and conse9uentl+ the march from Command-and-Control
econom+ to an econom+ (ased more on free mar/et principles commenced its stride% As is true of man+ countries
economic li(eralisation has ta/en root in India and the need for an effective competition regime has also (een recognised%
In the conte.t of the new economic polic+ paradigm India has chosen to enact a new competition law called the
Competition Act ,"",% The 65TP Act has metamorphosed into the new law Competition Act ,"",% The new law is
designed to repeal the e.tant 65TP Act% As of now onl+ a few provisions of the new law have (een (rought into force
and the process of constituting the regulator+ authorit+ namel+ the Competition Commission of India under the new Act
is on% The remaining provisions of the new law will (e (rought into force in a phased manner% For the present the
outgoing law 65TP Act #787 and the new law Competition Act ,"", are concurrentl+ in force though as mentioned
a(ove onl+ some provisions of the new law have (een (rought into force%
Competition ;aw for India was triggered (+ Articles !4 and !7 of the Constitution of India% These Articles are a part of the
=irective Principles of 'tate Polic+% Pegging on the =irective Principles the first Indian competition law was enacted in
#787 and was christened the "onopolies And #estricti$e rade %ractices! 1&'& )65TP Act*% Articles !4 and !7 of the
Constitution of India mandate inter alia that the 'tate shall strive to promote the welfare of the people (+ securing and
protecting as effectivel+ as it ma+ a social order in which 1ustice social economic and political shall inform all the
institutions of the national life and the 'tate shall in particular direct its polic+ towards securing%
#% That the ownership and control of material resources of the communit+ are so distri(uted as (est to su(serve the
common goodF and
,% That the operation of the economic s+stem does not result in the concentration of wealth and means of production to
the common detriment%
In &cto(er #777 the <overnment of India appointed a 2igh ;evel Committee on Competition Polic+ and Competition ;aw
to advise a modern competition law for the countr+ in line with international developments and to suggest a legislative
framewor/ which ma+ entail a new law or appropriate amendments to the 65TP Act% The Committee presented its
Competition Polic+ report to the <overnment in 6a+ ,""" Gthe report will (e referred to hereinafter as 2igh ;evel
Committee ),"""*H% The draft competition law was drafted and presented to the <overnment in Dovem(er ,"""% After
some refinements following e.tensive consultations and discussions with all interested parties the Parliament passed in
=ecem(er ,"", the new law namel+ the Competition Act ,"",%
Salient Features (f New Competition %olic)
I The Industries )=evelopment and 5egulation* Act #7$# ma+ no longer (e necessar+ e.cept for location )avoidance of
ur(an-centric location* for environmental protection and for monuments and national heritage protection considerations
etc%
I The Industrial =isputes Act #7-E and the connected statutes need to (e amended to provide for an eas+ e.it to the
non-via(le ill-managed and inefficient units su(1ect to their legal o(ligations in respect of their lia(ilities%
I The 0oard for Industrial Finance J 5estructuring )0IF5* formulated under the provisions of 'ic/ Industrial Companies
)'pecial Provisions* Act #74$ should (e a(olished%
I Korld Trade &rganistions )KT&*
There should (e necessar+ provision and teeth to e.amine and ad1udicate upon anti-competition practices that ma+
accompan+ or follow developments arising out of the implementation of KT& Agreements% Particularl+ agreements
relating to foreign investment intellectual propert+ rights su(sidies countervailing duties anti-dumping measures
sanitar+ and ps+tosanitar+ measures technical (arriers to trade and <overnment procurement need to (e rec/oned in the
Competition Polic+>;aw with a view to dealing with anti-competition practices% The competition law should (e made e.tra
territorial%
I 65TP Act
It is suggested that:
L The 65TP Act #787 ma+ (e repealed and the 65TP Commission wound up% The provisions relating to unfair trade
practices need not figure in the Indian Competition Act as the+ are presentl+ covered (+ the Consumer Protection Act
#748%
L The pending UTP cases in the 65TP Commission ma+ (e transferred to the concerned consumer Courts under the
Consumer Protection Act #748% The pending 6TP and 5TP Cases in 65TP Commission ma+ (e ta/en up for
ad1udication (+ the CCI from the stages the+ are in%
Components (f Competition Act
The ru(ric of the new law Competition Act ,"", )Act for (rief* has essentiall+ four compartments:
I Anti - Competition Agreements
I A(use of =ominance
I Com(inations 5egulation
I Competition Advocac+
Anti Competition A*reements
Firms enter into agreements which ma+ have the potential of restricting competition% A scan of the competition laws in the
world will show that the+ ma/e a distinction (etween hori:ontal and vertical agreements (etween firms% The former
namel+ the hori:ontal agreements are those among competitors and the latter namel+ the vertical agreements are those
relating to an actual or potential relationship of purchasing or selling to each other% A particularl+ pernicious t+pe of
hori:ontal agreements is the cartel% ?ertical agreements are pernicious if the+ are (etween firms in a position of
dominance% 6ost competition laws view vertical agreements generall+ more lenientl+ than hori:ontal agreements as
prima facie hori:ontal agreements are more li/el+ to reduce competition than agreements (etween firms in a purchaser -
seller relationship% An o(vious e.ample that comes to mind is an agreement (etween enterprises dealing in the same
product or products% 'uch hori:ontal agreements which include mem(ership of cartels are presumed to lead to
unreasona(le restrictions of competition and are therefore presumed to have an apprecia(le adverse effect on
competition% In other words the+ are per se illegal% The underl+ing principle in such presumption of illegalit+ is that the
agreements in 9uestion have an apprecia(le anti-competitive effect% 0arring the aforesaid four t+pes of agreements all
the others will (e su(1ect to the rule of reaso test in the Act%
A+use (f ,ominance
=ominant Position has (een appropriatel+ defined in the Act in terms of the position of strength en1o+ed (+ an enterprise
in the relevant mar/et in India which ena(les it to )i* operate independentl+ of competitive forces prevailing in the
relevant mar/etF or )ii* affect its competitors or consumers or the relevant mar/et in its favour%
'ection - en1oins Do enterprise shall a(use its dominant position% =ominant position is the position of strength en1o+ed (+
an enterprise in the relevant mar/et which ena(les it to operate independentl+ of competitive forces prevailing in the
mar/et or affects its competitors or consumers or the relevant mar/et in its favour% =ominant position is a(used when an
enterprise imposes unfair or discriminator+ conditions in purchase or sale of goods or services or in the price in purchase
or sale of goods or services% Again the philosoph+ of the Competition Act is reflected in this provision where it is clarified
that a situation of monopol+ per se is not against pu(lic polic+ (ut rather the use of the monopol+ status such that it
operates to the detriment of potential and actual competitors%
At this point it is worth mentioning that the Act does not prohi(it or restrict enterprises from coming into dominance% There
is no control whatsoever to prevent enterprises from coming into or ac9uiring position of dominance% All that the Act
prohi(its is the a(use of that dominant position% The Act therefore targets the a(use of dominance and not dominance per
se% This is indeed a welcome step a step towards a trul+ glo(al and li(eral econom+%
-e Act on Com+inations #e*ulation
The Competition Act also is designed to regulate the operation and activities of com(inations a term which contemplates
ac9uisitions mergers or amalgamations% Thus the operation of the Competition Act is not confined to transactions strictl+
within the (oundaries of India (ut also such transactions involving entities e.isting and>or esta(lished overseas%
2erein again lies the /e+ to understanding the Competition Act% The intent of the legislation is not to prevent the e.istence
of a monopol+ across the (oard% There is a realisation in polic+-ma/ing circles that in certain industries the nature of their
operations and economies of scale indeed dictate the creation of a monopol+ in order to (e a(le to operate and remain
via(le and profita(le% This is in significant contrast to the philosoph+ which propelled the operation and application of the
65TP Act the trigger for which was the e.istence or impending creation of a monopol+ situation in a sector of industr+%
The Act has made the pre-notification of com(inations voluntar+ for the parties concerned% 2owever if the parties to the
com(ination choose not to notif+ the CCI as it is not mandator+ to notif+ the+ run the ris/ of a post-com(ination action (+
the CCI if it is discovered su(se9uentl+ that the com(ination has an apprecia(le adverse effect on competition% There is
a rider that the CCI shall not initiate an in9uir+ into a com(ination after the e.pir+ of one +ear from the date on which the
com(ination has ta/en effect%
Competition Ad$ocac)
In line with the 2igh ;evel CommitteeCs recommendation the Act e.tends the mandate of the Competition Commission of
India (e+ond merel+ enforcing the law )2igh ;evel Committee ,"""*% Competition advocac+ creates a culture of
competition% There are man+ possi(le valua(le roles for competition advocac+ depending on a countr+Cs legal and
economic circumstances%
The 5egulator+ Authorit+ under the Act namel+ Competition Commission of India )CCI* in terms of the advocac+
provisions in the Act is ena(led to participate in the formulation of the countr+Cs economic policies and to participate in the
reviewing of laws related to competition at the instance of the Central <overnment% The Central <overnment can ma/e a
reference to the CCI for its opinion on the possi(le effect of a polic+ under formulation or of an e.isting law related to
competition% The Commission will therefore (e assuming the role of competition advocate acting pro-activel+ to (ring
a(out <overnment policies that lower (arriers to entr+ that promote deregulation and trade li(eralisation and that promote
competition in the mar/et place%
Perhaps one of the most crucial components of the Competition Act is contained in a single section under the chapter
entitled competition advocac+%
Competition %olic) In -e International Conte.t
The international dimension of competition polic+ in particular the case for a multilateral agreement on competition
)6AC*% The relationship (etween trade and competition polic+ was one of the four 'ingapore Issues which were given
that la(el (ecause the+ were put on the KT& agenda for stud+ and discussion )not negotiations* at the #778 'ingapore
6inisterial Conference% 0ut the issue of international competition polic+ is actuall+ much older% It figured prominentl+ at an
international forum for the first time as earl+ as #7-8 in the 2avana Charter which laid the groundwor/ for an International
Trade &rgani:ation )IT&*%
The #778 'ingapore 6inisterial resolved to set up wor/ing groups on each of the 'ingapore issues% The mandate of the
Kor/ing <roup on the Interaction (etween Trade and Competition Polic+ )K<TCP* was to stud+ issues raised (+
6em(ers relating to the interaction (etween trade and competition polic+ including anticompetitive practices in order to
identif+ an+ areas that ma+ merit further consideration in the KT& framewor/% Conse9uentl+ the relevant paragraphs of
the ,""# =oha 6inisterial =eclaration tried to give a development-friendl+ slant to the issue% K<TCP discussions during
the first few +ears of its e.istence were diffused and non-converging% Faced with a lac/ of consensus on so man+ issues
the =oha =eclaration of the ,""# 6inisterial Conference of the KT& limited further discussion at the K<TCP to the issue
of hard-core cartelsF application of the fundamental KT& principles of non- discrimination transparenc+ and procedural
fairness in competition polic+F capacit+ (uilding in developing countriesF and voluntar+ cooperation (etween 6em(ers%
Can Competition Act #eplace "#% AC
In view of the polic+ shift from cur(ing monopolies to promoting competition there was a need to repeal the 6onopolies
and 5estrictive Trade Practices Act% 2ence the Competition ;aw aims at doing awa+ with the rigidl+ structured 65TP
Act% The Competition ;aw proposed is fle.i(le and (ehaviour oriented%
After the Act was placed on the we(-site and came into the pu(lic domain a 9uestion often as/ed is whether it is not still
the old law in su(stance although not in form% A clear answer to this 9uestion is in the title of this section% The Act is a new
wine in a new (ottle% The differences (etween the old law )namel+ the 65TP Act #787* and the new law )the Competition
Act ,"",* ma+ perhaps (e (est captured in the form of a ta(le displa+ed (elow:
S/No "#% Act! 1&'& Competition Act! 2002
1 0ased on the pre-reforms scenario 0ased on the post-reforms scenario
2 0ased on si:e as a factor 0ased on structure as a factor
3 Competition offences implicit or not defined Competition offences e.plicit and defined
4 Comple. in arrangement and language 'imple in arrangement and language and easil+
comprehensi(le
5 #- per se offences negating the principles of
natural 1ustice
- per se offences and all the rest su(1ected to rule of
reason%
' Frowns upon dominance Frowns upon a(use of dominance
0 5egistration of agreements compulsor+ Do re9uirement of registration of agreements
1 Do com(inations regulation Com(inations regulated (e+ond a high threshold limit%
& Competition Commission appointed (+ the
<overnment
Competition Commission selected (+ a Collegium
)search committee*
10 ?er+ little administrative and financial autonom+
for the Competition Commission
5elativel+ more autonom+ for the Competition
Commission
11 Do competition advocac+ role for the
Competition Commission
Competition Commission has competition advocac+ role
12 Do penalties for offences Penalties for offences
13 5eactive and rigid Proactive and fle.i(le
14 Unfair trade practices covered Unfair trade practices omitted )consumer fora will deal
with them*
15 =oes not vest 65TP Commission to in9uire into
cartels of foreign origin in a direct manner%
Competition ;aw see/s to regulate them%
1' Concept of M<roupN Act had wider import and
was unwor/a(le
Concept has (een simplified

The Act is therefore a new wine in a new (ottle% Kine gets (etter as it ages% The proposed ;aw provides for a Competition
fund which shall (e utilised for promotion of competition advocac+ creating awareness a(out competition issues and
training in accordance with the rules that ma+ (e prescri(ed% The e.tent 65TP Act #787 has aged for more than three
decades and has given (irth to the new law )the Act* in line with the changed and changing economic scenario in India
and rest of the world and in line with the current economic thin/ing comprising li(eralisation privatisation and
glo(alisation%
Conclusion
The message is loud +et clear that a well planned e.haustive competition compliance programme can (e of great (enefit
to all enterprises irrespective of their si:e area of operation 1urisdiction involved nature of products supplied or services
rendered and the same is essential for companies its directors and the delegatee /e+ corporate e.ecutives to avoid
insurmounta(le hardships of monetar+ fines civil imprisonment (eside loss of hard-earned reputation when the
Competition Authorities the media and others reveal the misdeeds in pu(lic%
In the changed scenario India do needs a fresh law for competition and a new regulator+ authorit+ which under this
polic+ is the OCompetition Commission of IndiaN% The law will serve the purpose onl+ if it is made independentl+ runs
independentl+ and is less e.pensive%
History and Dynamics of the MRTP Act and Competition Act in the Realm of Mergers and
Acquisitions
by Kartik Bajpai
Categories: Uncategorized
Tags: No Tags
Comments: No Comments
Published on: May 26, 2!!
Mergers and amalgamations may be deined as the combining o t!o or more companies"
generally by oering the stockholders o one company securities in the ac#uiring company in
e$change or the surrender o their stock% &n case o mergers and amalgamations" both the assets
and liabilities are transerred to the ne!ly ormed entity%
'c#uisition on the other hand" may be deined as a scheme !hich may mean" directly or
indirectly" ac#uiring or agreeing to ac#uire the shares" (oting rights or assets o an enterprise or"
control o(er management or control o(er assets o an enterprise% &n this scheme t!o parties being
in(ol(ed are" the )'c#uirer* and the )'c#uired*%
'ter !inning &ndependence against the political competition posed by the British +ulers or
many years" &ndia" post independence" started its era o ighting against economic competition"
the only dierence being that the threat !hich &ndia aced !as no! not only restricted to the
British rulers but to the !hole !orld !hich considered &ndia as a dream destination or
celebrating the ad(antages o ),lobalization and -iberalization*%
.inning &ndependence ga(e !ay to the entrance o many big irms into the &ndian market
e$ploring opportunities in (arious trades and businesses% The condition o the &ndian market !as
(ery !eak and (ulnerable to ace the might o these oreign irms" because &ndia at that time
neither had the resources nor the skilled !orkorce to con(ert" i at all" such resources to compete
!ith these oreign irms%
The &ndian ,o(ernment" although did not ha(e the !eapons to !age !ar against such ierce
competition against the oreign irms but the ,o(ernment did not ail to rule out the possible
deences to resist the competition posed by the oreign irms to protect its o!n domestic market%
The )Monopolies and +estricti(e Trade Practices 'ct o /010* turned out to be the most sought
ater )2eence Mechanism*%
The Monopolies and +estricti(e Trade Practices 'ct came into e$istence on 34
th
2ecember"
/010% The preamble to this enactment pro(ided it to be An Act to provide that the operation of
the economic system does not result in the concentration of the economic power to the common
detriment, for the control of monopolies, for the prohibition of monopolistic and restrictive trade
practices and for matters connected therewith or incidental thereto. Thereore" in common
parlance" the M+TP 'ct" /010 aimed at pre(enting economic po!er concentration in a e!
hands" the intention behind this !as to a(oid damage" !ith the end result protecting consumer
interest and the economic society at large%
H"#T$R% $& TH' MRTP ACT, !(6(
Post independence" !hen the Constitution o &ndia" that is" the Blanket5co(er regulator" !as
being enacted and adopted" the most important 'rticles !hich pro(ided or recognising the eect
o the M+TP 'ct" and pre(enting and a(oiding damage !ere 'rticle 67 and 'rticle 60 o the
Constitution" !hich !as adopted and enacted and came into eect on the 31
th
day o No(ember"
/080%
'rticle 67 o the Constitution pro(ides or the 2irecti(e Principles o 9tate Policy !hich
mandates upon 9tates to secure a social order or the promotion and !elare o the people% This
pro(ision recognised the need to eliminate and minimise the ine#ualities in income" !hich
applied not only to the indi(iduals but also to the groups in dierent areas% :o!e(er" the M+TP
'ct o /010 o!es its e$istence to the pro(ision pro(ided under 'rticle 60;c< o the Constitution
o &ndia !hich pro(ided that the 9tates shall stri(e to secure that the operation of the economic
system does not result in the concentration of wealth and means of production to the common
detriment% The preamble to the M+TP 'ct rests on this (ery pro(ision o the Constitution o
&ndia%
&n the case o State of Bihar (% Kameshwar Singh " the Court !as o the opinion" that" a la!
aimed at doing a!ay !ith the concentration o big blocks o land in the hands o a e!
indi(iduals !ould sub5ser(e the directi(es laid do!n in sub5clauses ;b< and ;c< o 'rticle 60 o
the Constitution o &ndia%
Taking this judgment into perspecti(e" the preamble to the M+TP 'ct" /010 gets reinstated
!here the objecti(e or the intention o the legislature behind enacting such an 'ct is to a(oid
damage by concentration o economic po!er in the hands o only a e! and thereby causing
damage%
:o!e(er" the MT+P 'ct !as not a result o just the t!o pro(ision o the Constitution o &ndia%
'ter enacting the aorementioned articles" the ,o(ernment o &ndia assumed the responsibility
o o(erall de(elopment o the country% &t !as incidentally that the ,o(ernment appointed the
)Mahalanobis Committee* on the 2istribution o &ncome and -e(els o -i(ing in =ctober /01>%
The main task at hand or this Committee !as identiying the pattern o !ork o large business
houses under the )planned economy* regime and !hether there !as any concentration o
economic po!er% &t !as ater this Committee that the Monopolies &n#uiry Commission ;M&C<
!as set5up in /018 !hich reported that there !as high concentration o economic po!er in o(er
7?@ o industries in &ndia at that point in time%
This triggered the legislature to enact a legislation to curb such practice and a(oid damages
!hich !ere being posed on such disastrous le(els%
TH' M"CR$#$&T CA#'
The .orld*s largest sot!are company also became the !ell5!orth (ictim o the M+TP la!
!here it !as ound abusing its dominant position in marketing its personal computers operating
systems% Aor abusing its dominant position and by reason o its enjoying monopoly" the
Buropean Commission has imposed a hea(y ine o U9C 1/3 million !hich in its &ndian
e#ui(alent amounts to +s% 316> crores%
Microsot is undisputedly the most di(erse o computer system manuacturers in the !orld% The
most sought ater programs" !hether it is M9 =ice" M9 B$cel or M9 =utlook !hich is an
online database" Microsot has had its business in all the products" !hich !ere uni#ue and came
at competiti(e pricing% &t !as this character !hich landed Microsot in a suit deending the issue
o )lo! prices*%
&n the case brought against Microsot" the judge !hile taking up the issue o )lo! pricing* as an
indicator o monopolistic or anti5trust based nomenclature" held that it is generally understood
that a irm has monopoly po!er !hen it has the sustained ability to increase price or e$clude
competitors% Thereore" this !as percei(ed as a step to cut out competition by ha(ing monopoly
in the ield o marketing computers resulting in the di(ision o Microsot into separate entities%
M)A *+D'R TH' MRTP ACT, !(6(
Part ' o Chapter &&& o the M+TP 'ct" /010" consisting o section 3> to section 31" dealing !ith
Mergers and 'c#uisitions" pro(iding or the )Concentration o Bconomic Po!er* !as omitted by
the M+TP ;'mendment< 'ct" /00/" !%e%% 34505/00/%
:o!e(er" prior to such omission the most prominent pro(ision under the M+TP 'ct" /010 as
regards Mergers" 'malgamations and Takeo(ers !as pro(ided under section 36 o the 'ct%
9ection 36 laid do!n strict criteria in ormation o any o the aorementioned combinations
!here the oremost being that no such scheme !as to take eect unless it !as sanctioned by the
Central ,o(ernment%
9ection 36 o the 'ct pro(ided or both the 9tatutory as !ell as the Procedural re#uirements
!here or getting sanction rom the Central go(ernment an application in the prescribed orm is
mandatorily re#uired to be made along !ith the copy o the scheme anne$ed to such application%
9ection 36 is al!ays read !ith section 3;d< !hich deined a Dominant Undertaing!" ho!e(er"
this also aced the !rath o being substituted and omitted !%e%% 34505/00 and it !as deined as:
DE55Fi Esupport-istsG55H i. DE55FendiG55HAn undertaing which, by itself or along with other
inter"connected undertaings, produces, supplies, distributes or otherwise controls not less than
one"fourth of the total goods that are produced, supplied or distributed in #ndia or any
substantial part thereof$ or
DE55Fi Esupport-istsG55H ii. DE55FendiG55HAn undertaing which provides or otherwise controls
not less than one"fourth of any services that are rendered in #ndia or any substantial part
thereof.
9ection 36 pro(ides that none o these pro(ision !ould apply to any scheme o takeo(er by the
o!ner o an undertaking !here the ac#uired undertaking is not a )dominant undertaking*%
Ainally !here the abo(e mandates are ulilled" the Central ,o(ernment shall call upon the
applicant to satisy that the scheme in no !ay leads to )concentration o economic po!er* and
!here the Central ,o(ernment is o the opinion that the criteria laid do!n are ulilled" it shall
ater receipt o the M+TP Commission" pass the re#uisite orders% 9ection 38 o the 'ct pro(ided
that !here the central go(ernment o the opinion that any (iolation o section36 re#uirement has
been committed" it may in consultation !ith the M+TPC direct the o!ner to cease or desist rom
such contra(ention in addition to ordering )penalty*%
Thereore" this pro(ision ga(e absolute po!ers to the Central ,o(ernment in matters relating to
the Mergers and 'malgamations in relation to M+TP Companies% :o!e(er" the ill5eect o this
absolute po!er !as that all Mergers and 'malgamations became the e$clusi(e jurisdiction o the
Central ,o(ernment and it !as not bound to ollo! the recommendations made by the M+TP
Commission%
The pro(isions !ere into play until the economic liberalization measures in the early nineties" the
prominent e$ception ho!e(er being in /07? that" the minimum asset limit or reerring a
company to the M+TP Commission !as raised rom 3> Crores to a />> Crores" impliedly
rela$ing the stringent re#uirements or companies ha(ing assets (alued at less than a />> Crores%
H,,-T$MC$ CA#'
=ne o the most contro(ersial incidents regarding post /00/ merger !as seen in the case o the
:--5T=MC= case" !here :industan -e(er -imited and Tata =il Mills Company -imited !ere
not under a statutory duty to get a green lag rom the ,o(ernment to mo(e ahead !ith the
merger" the sole reason being that post /00/ amendments there !as no la! under the M+TP 'ct
!hich re#uired a merger to be sanctioned by the M+TPC%
The :on*ble 9upreme Court in this case ruled that" since the /00/ amendment deleted the
pro(isions regarding appro(al by the central go(ernment" no scheme had to go through the test o
sanction and the merger or any other scheme could only be #uestioned under the rele(ant
pro(isions o the Companies 'ct ;section 60/ to section 601'< or !here it !as pro(ed that such
a scheme !as eected by reason o raud or !as prima5acie illegal%
AD.'+T $& TH' C$MP'T"T"$+ ACT
The competition 'ct" 3>>3 recei(ed assent o the president o &ndia on Ianuary /6" 3>>6 and !as
published in the ,azette o &ndia on Ianuary /8" 3>>6% 9ome o the sections o the 'ct !ere
brought into orce on March 6/" 3>>6 and majority o the other sections on Iuly /0" 3>>6%
Though M+TP 'ct !as the need o the hour at the time o post5independence to resist the
oreign irms rom in(ading the economy o the country and !as considered the need o the hour
being appreciated in resisting and a(oiding damage !hich could ha(e had disastrous
conse#uences to the economy o the country" but the pro(ision o the 'ct" especially ater
deletion o the important pro(isions o Mergers and 'malgamations rom the 'ct" started being
construed as being obsolete and ha(ing too much o a restricti(e character rather than ha(ing a
promotional character% This !as at this time it !as thought o gi(ing a graceul are!ell to the
age5old M+TP 'ct and to bring in a la! !hich could ser(e the need o the hour and this !as
!hen or the irst time in 3>>/ the Competition Bill !as tabled" the agenda o the policy5makers
being to )protect" promote and to sustain competition* in &ndia%
The best eature o this Competition Bill" unlike its predecessor" the M+TP 'ct" !hich !as to
a(oid damage to the domestic market" !as in addition to a(oid damage to the domestic market
also promote healthy competition rom oreign irms%
The main eatures o the Bill !ere:
DE55Fi Esupport-istsG55H i% DE55FendiG55HPre(ent non5competiti(e practices"
DE55Fi Esupport-istsG55H ii% DE55FendiG55HPromote and sustain competition"
DE55Fi Esupport-istsG55H iii% DE55FendiG55HProtect consumer interest" and
DE55Fi Esupport-istsG55H i(% DE55FendiG55HTo endure ree trade or participants in the market
Keeping all the abo(e points in perspecti(e the Competition 'ct !as enacted in 3>>6" and the
Commission commenced its unctioning !%e%% May 3>
th
" 3>>0 !ith enorcement o section 6 and
section 8 o the 'ct coming into eect% The Preamble to the legislation pro(ides or An Act to
provide, eeping in view of the economic development of the country, for the establishment of a
%ommission to prevent practices having adverse effect on competition, to promote and sustain
competition in marets, to protect the interests of consumers and to ensure freedom of trade
carried on by other participants in marets, in #ndia, and for matters connected therewith or
incidental thereto.
The constitutionality o the Competition 'ct" 3>>3 also rests on 'rticles 67 and 'rticles 60 o
the Constitution o &ndia" as being a part o the 2irecti(e Principles o 9tate Policy%
RA/HA.A+ C$MM"TT''
The +agha(an Committee deined )Competition* as a process by !hich cost eicient production
is achie(ed in a structure !here entry and e$it are easy" a reasonable number o players
;producers and consumers are present< and close substitution bet!een products o dierent
players in a gi(en industry e$ists%
Keeping in (ie! the economic de(elopments o the country" remo(al o controls and !orld
coming together by reason o globalization and liberalization" the Competition 'ct" 3>>3 !as
enacted pursuant to the +agh(an Committee +eport% The principle elements o the +agh(an
Committee +eport being:
DE55Fi Esupport-istsG55H i% DE55FendiG55HProhibit 'nti5Competiti(e agreements"
DE55Fi Esupport-istsG55H ii% DE55FendiG55HProhibit 'buse o 2ominant position by enterprises"
and
DE55Fi Esupport-istsG55H iii% DE55FendiG55H+egulate Combinations e$ceeding threshold limits in
terms o prescribed turno(er and assets%
M)A *+D'R TH' C$MP'T"T"$+ ACT, 22
The Competition 'ct" 3>>3 pro(ides or the deinition o )Combinations* under section ? o the
'ct" !hich includes mergers" amalgamations and ac#uisitions% :o!e(er" the corollary to this
being that it co(ers only certain mergers" amalgamations and ac#uisitions !hich satisy the
threshold limit" because the schemes !hich all belo! the threshold limits are not go(erned by
the Competition 'ct" 3>>3%
The criteria laid do!n being:
i% 'ny ac#uisition !here" in &ndia" the assets (alue o the combining parties is +s% />>> crores =+ the turno(er
o the combining parties is +s% 6>>> crores% 'nd in &ndia or outside &ndia" the assets o the (alue o U9C ?>> mn =+ the turno(er
o U9C /?>> mn%
ii% 'ny ac#uisition" !hich in(ol(es an enterprise belonging to a group" the assets (alue o the combining parties
is +s% 8>>> crores =+ the turno(er o the combining parties is +s% /3>>> crores% 'nd in &ndia or outside &ndia" the assets o the
(alue o U9C 3 bn =+ the turno(er o U9C 1 bn%
These pro(isions apply e#ually to mergers and amalgamations recognised under section ?;c< o
the 'ct%
R'/*,AT"$+ $& C$M0"+AT"$+#
9ection 1 o the 'ct pro(ides or the )regulatory mechanism* as ar as the combinations under
section ? are concerned%
9ection pro(ides that no person or enterprise shall enter into a combination !hich cause or likely
to cause an )'ppreciable 'd(erse Bect* !ithin the rele(ant market in &ndia and !here such
combinations are ormed" they shall be (oid% Under the said pro(ision" any person or enterprise
proposing to enter into a combination shall mandatorily be re#uired to notiy the commission
!ithin 6> days o appro(al o proposal relating to the merger or amalgamation%
'PP+BC&'B-B '2JB+9B BAABCT
'ppreciable ad(erse eect on Competition may include but may not be limited to:
i% Creation o barrier to ne! entrants"
ii% 2ri(ing e$isting market outside the market"
iii% Aore5closure o competition by hindering entry into market"
i(% 'ccrual o beneit to customer"
=ne o the most prominent e$amples o )'ppreciable 'd(erse Bect* could be the ormation o
Cartels" !hich also has been statutorily recognised by the Competition 'ct" 3>>3 under section
3;c< as an association o producers" sellers" distributors" traders or ser(ice pro(iders !ho by
agreement amongst themsel(es" limit control or attempt to control the production" sale or price
o" or" trade in goods or pro(ision o ser(ices%
Under section 1 o the 'ct" any person or enterprise !ho or !hich proposes to enter into a
combination shall gi(e notice to the commission" in the orm as prescribed along !ith the
re#uisite ee" gi(ing details o the said combination !ithin 6> days o the appro(al% Jide the
Competition ;'mendment< 'ct" 3>>4" under section 1;3'<" no combination shall come into orce
until t!o hundred and ten days ha(e passed rom the day !hen the notice has been gi(en to the
Commission =+ as per the orders o the Commission" !hiche(er is earlier%
Under section 3> o the 'ct" the Commission shall ha(e the po!er and authority to set up in#uiry
into combinations to ascertain !hether any such combination is causing )'ppreciable 'd(erse
Bect* on competition" !ithin &ndia% The pro(ision gi(es the Commission statutory authority to
in#uire into any combinations either suo5motu" that is" upon its o!n kno!ledge or by !ay o an
application recei(ed by the commission% :o!e(er" the commission shall not be able to initiate
such in#uiry ater a period o one year has passed rom the coming into eect o the
combination%
Aurther" under section 37 o the 'ct" the Commission shall ha(e the authority to )2i(ide the
Bnterprise* enjoying dominant position to ensure that the enterprise does not abuse its dominant
position by !ay o entering into any scheme o merger" amalgamation or ac#uisition by (irtue o
section ? o the 'ct% ' similar e$ercise !as noticed in the case o Microsot case%
M)A *+D'R TH' C$MPA+"'# ACT ) #'0" TA1'$.'R R'/*,AT"$+#
C=MP'N&B9 'CT" /0?1
Under the Companies 'ct" /0?1" the pro(ision relating to Mergers and 'malgamation are
contained under section 60/ to section 601'% B(en under the Companies 'ct" /0?1" any
proposed merger or amalgamation comes into orm only ater it has under!ent the scrutiny o
the Central ,o(ernment% The peculiar eature under the Companies 'ct merger and
amalgamation being" that such schemes come into eect through schemes o arrangement
appro(ed by the :igh Courts%
&n the case o &industan 'ever (mployees! Union" the :on*ble 9upreme Court held that" K's a
result o amalgamation" i it is ound that the !orking o the company is being conducted in a
!ay !hich brings it !ithin the mischie o the M+TP 'ct" it !ould be open to the authority
under the M+TP 'ct to go into and decide the contro(ersy as it thinks itL%
This decision by the :on*ble 9upreme Court !as reiterated in the recent case o )e 'arsen and
*ubro 'imited%
9BB& ;9UB9T'NT&'- 'CMU&9&T&=N =A 9:'+B9 'N2 T'KB=JB+< +B,U-'T&=N9"
/004
Under the 9BB& regulations a detailed procedure is pro(ided or starting rom the appointment o
a merchant banker to carry or!ard the scheme" the mandatory need or making a Public
announcement o ac#uisition shares" (aluation o )Aair Price* by the 9BB&" Minimum =er
Price" Minimum Public =er not to be less than 3> per cent" =bligations on the part o the
'c#uirer and the 'c#uired to pass board resolutions consenting or the transer o shares and
(oting rights" a air e$ercise o the )Competiti(e Bids* and opening o Bscro! account especially
or the purpose o ac#uisition o shares%
R'/*,AT"$+ $& C$M0"+AT"$+# A# "T #TA+D# T$DA%
The Competition Commission o &ndia (ide Notiication No% 07 dated //
th
May" 3>// pro(ides
that the regulations regarding section ? )Combinations* regulated under section 1 o the 'ct"
shall come into orce on /
st
Iune" 3>//% ;Jide Airst Notiication<
'ccording to the 9econd Notiication issued under section 3>;6<" the threshold or #ualiying the transaction as a combination
under section ? ha(e been increased by ?>@ on the basis o increase in .P& ;.holesale Price &nde$<%
'ccording to the Third Notiication issued under section ?8;a<" the target enterprise" !hose control" shares" (oting rights or assets
are being ac#uired ha(ing assets o the (alue o not more than +s% 3?> crores or turno(er not more than +s% 4?> crores ha(e been
e$empted rom the pro(isions o section ? or a period o ? years%
The salient eatures o Aourth Notiication issued by the CC& being:
i% The regulation pro(ide or the orm o notice !hich the applicant has to make use o gi(ing notice to the
Commission o the proposed combination and unlike section 1;3'< o the 'ct" 3>>3" the regulation pro(ide or taking a decision
regarding the combination !ithin /7> days rom the date o inorming to the commission%
ii% Pro(ides that in case o a proposed combination" both the parties to the scheme shall jointly ile the notice in
Aorm & and Aorm &&%
iii% The ee in case o merger" amalgamation or ac#uisition shall be +s% 8> lakhs%
i(% The regulations pro(ide or (oluntary pre5merger consultation on a speciic re#uest made by the parties"
ho!e(er" the (ie!s o CC& shall not be binding%
(% The regulations pro(ide that any proposed change shall be intimated to the commission at the earliest during
the continuation o proceedings under the 'ct%
(i% 'ny re#uest or conidentiality o inormation or documents submitted shall be duly considered by the
Commission%
(ii% The regulations !ill not ha(e retrospecti(e eect" that is" they !ill not go(ern )combination* prior to the
enorcement o this 'ct%
C$+C,*#"$+
This gradual succession rom the M+TP 'ct o /010 to the Competition 'ct o 3>>3 has thus
acted and contributed as one o the most important milestones as ar as economic reorms in the
ield o Competition la!s are concerned% Arom the stage o )'(oiding damage* to the domestic
markets shiting concern o(er )'(oiding damages* coupled !ith )Promoting healthy
Competition* itsel sho!s the recognition o the go(ernment o the economy*s sel5conidence
o(er domestic industries that can gi(e a healthy ight to oreign irms and not only or the sake o
competition" but keeping the end result in perspecti(e" being )Customer &nterest*%
Thereore" competition can no! successully be classiied as )Means to 'chie(e the Bnd* rather
than just an end in itsel%
Salient features of the Consumer Protection Act, 1986
The salient features of the Act are as follows:
1) The Act provides speedy redressal to consumer Redressal Forum in every district, a commission at
the State level and the National commission at the Centre The Forum in the !istrict will have
ori"inal #urisdiction to redress complaints up to claim of Rs 1la$h %after amendment up to 1& la$hs)
The National Commission can entertain any claim for dama"es a'ove Rs 1& la$hs %after amendment
a'ove (& la$hs) The State Commission will 'e vested with appropriate Appellate and Revisional
powers
() To promote voluntary consumer movement and to ensure involvement of consumers The )ill
provides for the esta'lishment of Consumer *rotection Councils in centre and the states These
Councils will have 'oth non+official and official mem'ers The o'#ects of the Council will 'e to
promote and protect the ri"hts of the consumers
,) -t shall apply to all "oods and classes of "oods or all services or classes of services e.cept those
which are specially e.empted 'y notification 'y the central "overnment
/) The provisions of the )ill shall 'e in additional to and not in dero"ation of any other law for the
time 'ein" in force
0) Necessary penal and punitive provisions have 'een corporate to ensure that the proposed
le"islation is effective in protectin" consumers
1) The complain can 'e filed 'y a consumer or an or"ani2ation 'ein" a society re"istered under the
Societies Re"istration Act, or a company re"istered under the Companies Act, representin"
consumers or 'y the central or state "overnment
3) The complaint can 'e field on account of any unfair trade practices resultin" in loss or dama"e,
defect in the "oods, deficiency in the services, prices char"ed in e.cess of the prices fi.ed 'y or under
any law or displayed on the "oods4pac$ets
*nit -2
#herman Antitrust Act !2(
S-erman Antitrust Act
Arom .ikipedia" the ree encyclopedia
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9en% Iohn 9herman ;+N=:<" the principal author o the 9herman 'ntitrust 'ct%
The #herman Antitrust Act ;#herman Act"
F/G
Iuly 3" /70>" ch% 184" 31 9tat% 3>0" /?
U%9%C% OO / P4< is a landmark ederal statute on United 9tates competition la! passed by
Congress in /70>% &t prohibits certain business acti(ities that ederal go(ernment
regulators deem to be anticompetiti(e" and re#uires the ederal go(ernment to in(estigate
and pursue trusts" companies" and organizations suspected o being in (iolation% &t !as
the irst ederal statute to limit cartels and monopolies" and today still orms the basis or
most antitrust litigation by the United 9tates ederal go(ernment% :o!e(er" or the most
part" politicians !ere un!illing to reer to and enorce this la! until Theodore
+oose(eltQs Presidency ;/0>/P/0>0< and beyond%
The 9herman 'ntitrust 'ct is named ater its author" 9enator Iohn 9herman" an =hio
+epublican" the chairman o the 9enate Ainance Committee" !ho !as also +ockeellerQs
colleague%
F3G
'ter being ratiied in the 9enate on 'pril 7" /70> by a (ote o ?/5/" the
9herman 'ct passed unanimously ;3835>< in the :ouse o +epresentati(es on Iune 3>"
/70>" and !as then signed into la! by President Benjamin :arrison on Iuly 3" /70>%
F3G
2espite its name" the 'ct has airly little to do !ith RtrustsR in the ordinary sense o the
term% 'round the !orld" !hat U%9% la!makers and attorneys call RantitrustR is more
commonly kno!n as Rcompetition la!%R The purpose o the 'ct !as" to #uote 9herman:
RTo protect the consumers by pre(enting arrangements designed" or !hich tend" to
ad(ance the cost o goods to the consumer%R
F6G
&t has since" more broadly" been used to oppose the combination o entities that could
potentially harm competition" such as monopolies or cartels%
'ccording to its authors" it !as not intended to impact market gains obtained by honest
means" by beneiting the consumer more than the competitors% 9enator ,eorge :oar o
Massachusetts" another author o the 9herman act" said the ollo!ing:
R%%% Fa personG !ho merely by superior skill and intelligence%%%got the !hole business
because nobody could do it as !ell as he could !as not a monopolist%%;but !as i< it
in(ol(ed something like the use o means !hich made it impossible or other persons to
engage in air competition%R
F8G
&ts reerence to trusts today is anachronistic% 't the time o its passage" the trust !as
synonymous !ith monopolistic practice" because the trust !as a popular !ay or
monopolists to hold their businesses" and a !ay or cartel participants to create
enorceable agreements%
F?G
&n /740" C% T% 2odd" an attorney or the 9tandard =il Company o =hio" de(ised a ne!
type o trust agreement to o(ercome prohibitions in =hio against corporations o!ning
stock in other corporations% ' trust is an other!ise neutral" centuries5old orm o a
contract !hereby one party entrusts its property to a second party% The property is then
used to beneit the irst party%
The la! attempts to pre(ent the artiicial raising o prices by restriction o trade or
supply%
F1G
&n other !ords" innocent monopoly" or monopoly achie(ed solely by merit" is
perectly legal" but acts by a monopolist to artiicially preser(e his status" or nearious
dealings to create a monopoly" are not% Put another !ay" it has sometimes been said that
the purpose o the 9herman 'ct is not to protect competitors" but rather to protect
competition and the competiti(e landscape% 's e$plained by the U%9% 9upreme Court in
Spectrum Sports, #nc. v. +c,uillan ?>1 U%9% 884 ;/006<"
RThe purpose o the F9hermanG 'ct is not to protect businesses rom the !orking o the
marketS it is to protect the public rom the ailure o the market% The la! directs itsel not
against conduct !hich is competiti(e" e(en se(erely so" but against conduct !hich
unairly tends to destroy competition itsel%
F4G
This ocus o U%9% competition la!" on
protection o competition rather than competitors" is not necessarily the only possible
ocus or purpose o competition la!% Aor e$ample" it has also been said that competition
la! in the Buropean Union ;BU< tends to protect the competitors in the marketplace" e(en
at the e$pense o market eiciencies and consumers%R
F7G
Rele3ant pro3isions of Clayton Act !(!4
The Clayton 'ct made both substanti(e and procedural modiications to ederal antitrust
la!% 9ubstanti(ely" the act seeks to capture anticompetiti(e practices in their incipiency
by prohibiting particular types o conduct" not deemed in the best interest o a
competiti(e market% There are 8 sections o the bill that proposed substanti(e changes in
the antitrust la!s by !ay o supplementing the 9herman 'ct o /70>% &n those sections"
the 'ct thoroughly discusses the ollo!ing our principles o economic trade and
business:
price discrimination bet!een dierent purchasers i such a discrimination
substantially lessens competition or tends to create a monopoly in any line o
commerce ;'ct 9ection 3" codiied at /? U%9%C% O /6 S
sales on the condition that ;'< the buyer or lessee not deal !ith the competitors o
the seller or lessor ;Re$clusi(e dealingsR< or ;B< the buyer also purchase another
dierent product ;RtyingR< but only !hen these acts substantially lessen
competition ;'ct 9ection 6" codiied at /? U%9%C% O /8 <S
mergers and ac#uisitions !here the eect may substantially lessen competition
;'ct 9ection 4" codiied at /? U%9%C% O /7 < or !here the (oting securities and
assets threshold is met ;'ct 9ection 4a" codiied at /? U%9%C% O /7a <S
any person rom being a director o t!o or more competing corporations" i those
corporations !ould (iolate the anti5trust criteria by merging ;'ct 9ection 7S
codiied at /? U%9%C% O /0 <%
Rele3ant pro3isions of the &ederal Trade commission Act
The &ederal Trade Commission ;&TC< is an independent agency o the United 9tates
go(ernment" established in /0/8 by the Aederal Trade Commission 'ct% &ts principal
mission is the promotion o consumer protection and the elimination and pre(ention o
anti5competiti(e business practices" such as coerci(e monopoly%
The Aederal Trade Commission 'ct !as one o President .oodro! .ilsonQs major acts
against trusts% Trusts and trust5busting !ere signiicant political concerns during the
Progressi(e Bra% 9ince its inception" the ATC has enorced the pro(isions o the Clayton
'ct" a key antitrust statute" as !ell as the pro(isions o the ATC 'ct" /? U%9%C% O 8/ et
se#% =(er time" the ATC has been delegated the enorcement o additional business
regulation statutes and has promulgated a number o regulations ;codiied in Title /1 o
the Code o Aederal +egulations<%
#alient features of *1 Competition Act !((2
The Competition Act came into force on #st 6arch ,"""% The act addresses two /e+ areas of anti-
competitive (ehaviour:

Anti-competitive agreements
Abuse of dominant market position

The Act was partl+ introduced as a result of continued allegations of Brip-offB 0ritain in areas such as retail
sales particularl+ (+ the leading supermar/ets and car manufacturers%

The Act will (e enforced (+ the =irector <eneral of Fair Trading however the utilit+ regulators will also have
the same enforcement powers in their respective industries%

Anti2Competiti$e A*reements
The Act prohi(its agreements which are intended to or have the effect of Bpreventing restricting or distorting
competition in the UPB% The Act also covers situations where there is no actual agreement (ut where the
actions of trade associations or companies acting together has the same effect%

A+use of ,ominant %osition
The Act also prohi(its the a(use of a dominant position in the UP or part of the UP% 'uch actions include
Blimiting production mar/ets or technical development to the detriment of the consumerB%

%enalties
The Act is intended to address (ehaviour or practices that have an Bapprecia(le effect on competitionB%
Fines of up to #"Q of UP turno$er can (e imposed under the Act%
*nit -5
The Competition Act 22
Preliminary
C3A%4# I: %#4LI"INA#5
#%
'hort title e.tent and commencement
,%
=efinitions
1/ S-ort title! e.tent and commencement/2 )#* This Act ma+ (e called the Competition Act
,"",%
),* It e.tends to the whole of India e.cept the 'tate of 3ammu and Pashmir%
)!* It shall come into force on such date as the Central <overnment ma+ (+ notification in the
&fficial <a:ette appoint:
%ro$ided t-at different dates ma+ (e appointed for different provisions of this Act and an+
reference in an+ such provision to the commencement of this Act shall (e construed as a
reference to the coming into force of that provision%
/ ,efinitions/2 In this Act unless the conte.t otherwise re9uiresR
)a* Bac9uisitionB means directl+ or indirectl+ ac9uiring or agreeing to ac9uireR
)i* shares voting rights or assets of an+ enterpriseF or
)ii* control over management or control over assets of an+ enterpriseF
)(* BagreementB includes an+ arrangement or understanding or action in concertR
)i* whether or not such arrangement understanding or action is formal or in writingF or
)ii* whether or not such arrangement understanding or action is intended to (e enforcea(le (+
legal proceedingsF
)(a*SAppellate Tri(unalT means the Competition Appellate Tri(unal esta(lished under su(-section
)#* of 'ection $!AT
)c* BcartelB includes an association of producers sellers distri(utors traders or service providers
who (+ agreement amongst themselves limit control or attempt to control the production
distri(ution sale or price of or trade in goods or provision of servicesF
)d* BChairpersonB means the Chairperson of the Commission appointed under su(-section )#* of
section 4F
)e* BCommissionB means the Competition Commission of India esta(lished under su(-section)#* of
section EF
)f* BconsumerB means an+ person whoR
)i* (u+s an+ goods for a consideration which has (een paid or promised or partl+ paid and partl+
promised or under an+ s+stem of deferred pa+ment and includes an+ user of such goods other
than the person who (u+s such goods for consideration paid or promised or partl+ paid or partl+
promised or under an+ s+stem of deferred pa+ment when such use is made with the approval of
such person whether such purchase of goods is for resale or for an+ commercial purpose or for
personal useF
)ii* hires or avails of an+ services for a consideration which has (een paid or promised or partl+
paid and partl+ promised or under an+ s+stem of deferred pa+ment and includes an+ (eneficiar+
of such services other than the person who hires or avails of the services for consideration paid or
promised or partl+ paid and partl+ promised or under an+ s+stem of deferred pa+ment when
such services are availed of with the approval of the first-mentioned person whether such hiring or
availing of services is for an+ commercial purpose or for personal useF
)g* B=irector <eneralB means the =irector <eneral appointed under su(-section )#* of section #8
and includes an+ Additional 3oint =eput+ or Assistant =irectors <eneral appointed under that
sectionF
)h* BenterpriseB means a person or a department of the <overnment who or which is or has (een
engaged in an+ activit+ relating to the production storage suppl+ distri(ution ac9uisition or
control of articles or goods or the provision of services of an+ /ind or in investment or in the
(usiness of ac9uiring holding underwriting or dealing with shares de(entures or other securities
of an+ other (od+ corporate either directl+ or through one or more of its units or divisions or
su(sidiaries whether such unit or division or su(sidiar+ is located at the same place where the
enterprise is located or at a different place or at different places (ut does not include an+ activit+
of the <overnment relata(le to the sovereign functions of the <overnment including all activities
carried on (+ the departments of the Central <overnment dealing with atomic energ+ currenc+
defence and space%
4.planation/26For the purposes of this clauseR
)a* Bactivit+B includes profession or occupationF
)(* BarticleB includes a new article and BserviceB includes a new serviceF
)c* BunitB or BdivisionB in relation to an enterprise includesR
)i* a plant or factor+ esta(lished for the production storage suppl+ distri(ution ac9uisition or
control of an+ article or goodsF
)ii* an+ (ranch or office esta(lished for the provision of an+ serviceF
)i* BgoodsB means goods as defined in the 'ale of <oods Act #7!" )! of #7!"* and includesR
)A* products manufactured processed or minedF
)0* de(entures stoc/s and shares after allotmentF
)C* in relation to goods supplied distri(uted or controlled in India goods imported into IndiaF
)1* B6em(erB means a 6em(er of the Commission appointed under su(-section )>* of section4 and
includes the ChairpersonF
)/* BnotificationB means a notification pu(lished in the &fficial <a:etteF
)l* BpersonB includesR
)i* an individualF
)ii* a 2indu undivided famil+F
)iii* a compan+F
)iv* a firmF
)v* an association of persons or a (od+ of individuals whether incorporated or not in India or
outside IndiaF
)vi* an+ corporation esta(lished (+ or under an+ Central 'tate or Provincial Act or a <overnment
compan+ as defined in section 8#E of the Companies Act #7$8 )# of #7$8*F
)vii* an+ (od+ corporate incorporated (+ or under the laws of a countr+ outside IndiaF
)viii* a co-operative societ+ registered under an+ law relating to cooperative societiesF
)i.* a local authorit+F
).* ever+ artificial 1uridical person not falling within an+ of the preceding su(-clausesF
)m* BpracticeB includes an+ practice relating to the carr+ing on of an+ trade (+ a person or an
enterpriseF
)n* Bprescri(edB means prescri(ed (+ rules made under this ActF
)o* BpriceB in relation to the sale of an+ goods or to the performance of an+ services includes
ever+ valua(le consideration whether direct or indirect or deferred and includes an+
consideration which in effect relates to the sale of an+ goods or to the performance of an+ services
although ostensi(l+ relating to an+ other matter or thingF
)p* Bpu(lic financial institutionB means a pu(lic financial institution specified under section -A of the
Companies Act #7$8 )# of #7$8* and includes a 'tate Financial Industrial or Investment
CorporationF
)9* BregulationsB means the regulations made (+ the Commission under section 8-F
)r* Brelevant mar/etB means the mar/et which ma+ (e determined (+ the Commission with
reference to the relevant product mar/et or the relevant geographic mar/et or with reference to
(oth the mar/etsF
)s* Brelevant geographic mar/etB means a mar/et comprising the area in which the conditions of
competition for suppl+ of goods or provision of services or demand of goods or services are
distinctl+ homogenous and can (e distinguished from the conditions prevailing in the neigh(ouring
areasF
)t* Brelevant product mar/etB means a mar/et comprising all those products or services which are
regarded as interchangea(le or su(stituta(le (+ the consumer (+ reason of characteristics of the
products or services their prices and intended useF
)u* BserviceB means service of an+ description which is made availa(le to potential users and
includes the provision of services in connection with (usiness of an+ industrial or commercial
matters such as (an/ing communication education financing insurance chit funds real estate
transport storage material treatment processing suppl+ of electrical or other energ+ (oarding
lodging entertainment amusement construction repair conve+ing of news or information and
advertisingF
)v* BsharesB means shares in the share capital of a compan+ carr+ing voting rights and includesR
)i* an+ securit+ which entitles the holder to receive shares with voting rightsF
)ii* stoc/ e.cept where a distinction (etween stoc/ and share is e.pressed or impliedF
)w* Bstatutor+ authorit+B means an+ authorit+ (oard corporation council institute universit+ or
an+ other (od+ corporate esta(lished (+ or under an+ Central 'tate or Provincial Act for the
purposes of regulating production or suppl+ of goods or provision of an+ services or mar/ets
therefor or an+ matter connected therewith or incidental theretoF
).* BtradeB means an+ trade (usiness industr+ profession or occupation relating to the
production suppl+ distri(ution storage or control of goods and includes the provision of an+
servicesF
)+* BturnoverB includes value of sale of goods or servicesF
):* words and e.pressions used (ut not defined in this Act and defined in the Companies Act
#7$8 )# of #7$8* shall have the same meanings respectivel+ assigned to them in that Act%

C3A%4# II: %#(3I7II(N (F C4#AIN A8#44"4NS! A79S4 (F ,("INAN %(SII(N AN,
#489LAI(N (F C("7INAI(NS
%ro-i+ition of a*reements
!%
Anti-competitive agreements
%ro-i+ition of a+use of dominant position
-%
A(use of dominant position
#e*ulation of com+inations
$%
Com(ination
8%
5egulation of com(inations
%ro-i+ition of a*reements
3/ Anti2competiti$e a*reements/2 )#* Do enterprise or association of enterprises or
person or association of persons shall enter into an+ agreement in respect of production
suppl+ distri(ution storage ac9uisition or control of goods or provision of services which
causes or is li/el+ to cause an apprecia(le adverse effect on competition within India%
),* An+ agreement entered into in contravention of the provisions contained in su(section
)#* shall (e void%
)!* An+ agreement entered into (etween enterprises or associations of enterprises or
persons or associations of persons or (etween an+ person and enterprise or practice
carried on or decision ta/en (+ an+ association of enterprises or association of persons
including cartels engaged in identical or similar trade of goods or provision of services
whichR
)a* directl+ or indirectl+ determines purchase or sale pricesF
)(* limits or controls production suppl+ mar/ets technical development investment or
provision of servicesF
)c* shares the mar/et or source of production or provision of services (+ wa+ of allocation
of geographical area of mar/et or t+pe of goods or services or num(er of customers in the
mar/et or an+ other similar wa+F
)d* directl+ or indirectl+ results in (id rigging or collusive (idding shall (e presumed to have
an apprecia(le adverse effect on competition:
%ro$ided t-at nothing contained in this su(-section shall appl+ to an+ agreement entered
into (+ wa+ of 1oint ventures if such agreement increases efficienc+ in production suppl+
distri(ution storage ac9uisition or control of goods or provision of services%
4.planation/6For the purposes of this su(-section B(id riggingB means an+ agreement
(etween enterprises or persons referred to in su(-section )!* engaged in identical or similar
production or trading of goods or provision of services which has the effect of eliminating
or reducing competition for (ids or adversel+ affecting or manipulating the process for
(idding%
)-* An+ agreement amongst enterprises or persons at different stages or levels of the
production chain in different mar/ets in respect of production suppl+ distri(ution storage
sale or price of or trade in goods or provision of services includingR
)a* tie-in arrangementF
)(* e.clusive suppl+ agreementF
)c* e.clusive distri(ution agreementF
)d* refusal to dealF
)e* resale price maintenance shall (e an agreement in contravention of su(-section )#* if
such agreement causes or is li/el+ to cause an apprecia(le adverse effect on competition
in India%
4.planation/6For the purposes of this su(-sectionR
)a* Btie-in arrangementB includes an+ agreement re9uiring a purchaser of goods as a
condition of such purchase to purchase some other goodsF
)(* Be.clusive suppl+ agreementB includes an+ agreement restricting in an+ manner the
purchaser in the course of his trade from ac9uiring or otherwise dealing in an+ goods other
than those of the seller or an+ other personF
)c* Be.clusive distri(ution agreementB includes an+ agreement to limit restrict or withhold
the output or suppl+ of an+ goods or allocate an+ area or mar/et for the disposal or sale of
the goodsF
)d* Brefusal to dealB includes an+ agreement which restricts or is li/el+ to restrict (+ an+
method the persons or classes of persons to whom goods are sold or from whom goods
are (oughtF
)e* Bresale price maintenanceB includes an+ agreement to sell goods on condition that the
prices to (e charged on the resale (+ the purchaser shall (e the prices stipulated (+ the
seller unless it is clearl+ stated that prices lower than those prices ma+ (e charged%
)$* Dothing contained in this section shall restrictR
)i* the right of an+ person to restrain an+ infringement of or to impose reasona(le
conditions as ma+ (e necessar+ for protecting an+ of his rights which have (een or ma+ (e
conferred upon him underR
)a* the Cop+right Act #7$E )#- of #7$E*F
)(* the Patents Act #7E" )!7 of #7E"*F
)c* the Trade and 6erchandise 6ar/s Act #7$4 )-! of #7$4* or the Trade 6ar/s Act #777
)-E of #777*F
)d* the <eographical Indications of <oods )5egistration and Protection* Act #777 )-4 of
#777*F
)e* the =esigns Act ,""" )#8 of ,"""*F
)f* the 'emi-conductor Integrated Circuits ;a+out-=esign Act ,""" )!E of ,"""*F
)ii* the right of an+ person to e.port goods from India to the e.tent to which the agreement
relates e.clusivel+ to the production suppl+ distri(ution or control of goods or provision of
services for such e.port%

%ro-i+ition of a+use of dominant position
4/ A+use of dominant position/2 )#*Do enterprise or group shall a(use its dominant position%
),* There shall (e an a(use of dominant position under su(-section )#* if an enterprise or a
group%R-
)a* directl+ or indirectl+ imposes unfair or discriminator+R
)i* condition in purchase or sale of goods or serviceF or
)ii* price in purchase or sale )including predator+ price* of goods or service%
4.planation/6 For the purposes of this clause the unfair or discriminator+ condition in purchase
or sale of goods or service referred to in su(-clause )i* and unfair or discriminator+ price in
purchase or sale of goods )including predator+ price* or service referred to in su(-clause )ii* shall
not include such discriminator+ condition or price which ma+ (e adopted to meet the competitionF
or
)(* limits or restrictsR
)i* production of goods or provision of services or mar/et thereforF or
)ii* technical or scientific development relating to goods or services to the pre1udice of consumersF
or
)c* indulges in practice or practices resulting in denial of mar/et access in an+ mannerF or
)d* ma/es conclusion of contracts su(1ect to acceptance (+ other parties of supplementar+
o(ligations which (+ their nature or according to commercial usage have no connection with the
su(1ect of such contractsF or
)e* uses its dominant position in one relevant mar/et to enter into or protect other relevant
mar/et%
4.planation/6For the purposes of this section the e.pressionR
)a* Bdominant positionB means a position of strength en1o+ed (+ an enterprise in the relevant
mar/et in India which ena(les it toR
)i* operate independentl+ of competitive forces prevailing in the relevant mar/etF or
)ii* affect its competitors or consumers or the relevant mar/et in its favour%
)(* Bpredator+ priceB means the sale of goods or provision of services at a% price which is (elow
the cost as ma+ (e determined (+ regulations of production of the goods or provision of
services with a view to reduce competition or eliminate the competitors%
)c*SgroupT shall have the same meaning as assigned to it in clause )(* of the @.planation to
section $%
#e*ulation of com+inations
5/ Com+ination/2 The ac9uisition of one or more enterprises (+ one or more persons or
merger or amalgamation of enterprises shall (e a com(ination of such enterprises and
persons or enterprises ifR
)a* an+ ac9uisition whereR
)i* the parties to the ac9uisition (eing the ac9uirer and the enterprise whose control shares
voting rights or assets have (een ac9uired or are (eing ac9uired 1ointl+ haveR
)A* either in India the assets of the value of more than rupees one thousand crores or
turnover more than rupees three thousand croresF or
)0* in India or outside India in aggregate the assets of the value of more than five hundred
million U' dollars including at least rupees five hundred crores in India or turnover more
than fifteen hundred million U' dollars including at least rupees fifteen hundred crores in
IndiaF or
)ii* the group to which the enterprise whose control shares assets or voting rights have
(een ac9uired or are (eing ac9uired would (elong after the ac9uisition 1ointl+ have or would
1ointl+ haveR
)A*either in India the assets of the value of more than rupees four thousand crores or
turnover more than rupees twelve thousand croresF or
)0*in India or outside India in aggregate the assets of the value of more than two (illion U'
dollars including at least rupees five hundred crores in India or turnover more than si. (illion
U' dollars including at least rupees fifteen hundred crores in IndiaF or
)(* ac9uiring of control (+ a person over an enterprise when such person has alread+ direct
or indirect control over another enterprise engaged in production distri(ution or trading of a
similar or identical or su(stituta(le goods or provision of a similar or identical or su(stituta(le
service ifR
)i* the enterprise over which control has (een ac9uired along with the enterprise over which
the ac9uirer alread+ has direct or indirect control 1ointl+ haveR
)A* either in India the assets of the value of more than rupees one thousand crores or
turnover more than rupees three thousand croresF or
)0* in India or outside India in aggregate the assets of the value of more than five hundred
million U' dollars including at least rupees five hundred crores in India or turnover more
than fifteen hundred million U' dollars including at least rupees fifteen hundred crores in
IndiaF or
)ii* the group to which enterprise whose control has (een ac9uired or is (eing ac9uired
would (elong after the ac9uisition 1ointl+ have or would 1ointl+ haveR
)A* either in India the assets of the value of more than rupees four thousand crores or
turnover more than rupees twelve thousand croresF or
)0* in India or outside India in aggregate the assets of the value of more than two (illion U'
dollars including at least rupees five hundred crores in India or turnover more than si. (illion
U' dollars including at least rupees fifteen hundred crores in IndiaF or
)c* an+ merger or amalgamation in whichR
)i* the enterprise remaining after merger or the enterprise created as a result of the
amalgamation as the case ma+ (e haveR
)A* either in India the assets of the value of more than rupees one thousand crores or
turnover more than rupees three thousand croresF or
)0* in India or outside India in aggregate the assets of the value of more than five hundred
million U' dollars including at least rupees five hundred crores in India or turnover more
than fifteen hundred million U' dollars including at least rupees fifteen hundred crores in
IndiaF or
)ii* the group to which the enterprise remaining after the merger or the enterprise created as
a result of the amalgamation would (elong after the merger or the amalgamation as the
case ma+ (e have or would haveR
)A* either in India the assets of the value of more than rupees four-thousand crores or
turnover more than rupees twelve thousand croresF or
)0*in India or outside India in aggregate the assets of the value of more than two (illion U'
dollars including at least rupees five hundred crores in India or turnover more than si. (illion
U' dollars including at least rupees fifteen hundred crores in IndiaF
4.planation/6 For the purposes of this sectionR
)a* BcontrolB includes controlling the affairs or management (+R
)i* one or more enterprises either 1ointl+ or singl+ over another enterprise or groupF
)ii* one or more groups either 1ointl+ or singl+ over another group or enterpriseF
)(* BgroupB means two or more enterprises which directl+ or indirectl+ are in a position to R
)i* e.ercise twent+-si. per cent% or more of the voting rights in the other enterpriseF or
)ii* appoint more than fift+ per cent% of the mem(ers of the (oard of directors in the other
enterpriseF or
)iii* control the management or affairs of the other enterpriseF
)c* the value of assets shall (e determined (+ ta/ing the (oo/ value of the assets as shown
in the audited (oo/s of account of the enterprise in the financial +ear immediatel+ preceding
the financial +ear in which the date of proposed merger falls as reduced (+ an+ depreciation
and the value of assets shall include the (rand value value of goodwill or value of cop+right
patent permitted use collective mar/ registered proprietor registered trade mar/ registered
user homon+mous geographical indication geographical indications design or la+out-design
or similar other commercial rights if an+ referred to in su(-section )$* of section !%

/ #e*ulation of com+inations/2 )#* Do person or enterprise shall enter into a com(ination which
causes or is li/el+ to cause an apprecia(le adverse effect on competition within the relevant
mar/et in India and such a com(ination shall (e void%
),* 'u(1ect to the provisions contained in su(-section )#* an+ person or enterprise who or which
proposes to enter into a com(ination shall give notice to the Commission in the form as ma+ (e
specified and the fee which ma+ (e determined (+ regulations disclosing the details of the
proposed com(ination within thirt+ da+s ofR
)a* approval of the proposal relating to merger or amalgamation referred to in clause )c* of
section $ (+ the (oard of directors of the enterprises concerned with such merger or
amalgamation as the case ma+ (eF
)(* e.ecution of an+ agreement or other document for ac9uisition referred to in clause )a* of
section $ or ac9uiring of control referred to in clause )(* of that section%
),A*Do com(ination shall come into effect until two hundred and ten da+s have passed from the
da+ on which the notice has (een given to the Commission under su(-section),* or the
Commission has passed orders under section !# whichever is earlier%
)!* The Commission shall after receipt of notice under su(-section ),* deal with such notice in
accordance with the provisions contained in sections ,7 !" and !#%
)-* The provisions of this section shall not appl+ to share su(scription or financing facilit+ or an+
ac9uisition (+ a pu(lic financial institution foreign institutional investor (an/ or venture capital
fund pursuant to an+ covenant of a loan agreement or investment agreement%
)$* The pu(lic financial institution foreign institutional investor (an/ or venture capital fund
referred to in su(-section )-* shall within seven da+s from the date of the ac9uisition file in the
form as ma+ (e specified (+ regulations with the Commission the details of the ac9uisition
including the details of control the circumstances for e.ercise of such control and the
conse9uences of default arising out of such loan agreement or investment agreement as the
case ma+ (e%
4.planation/6For the purposes of this section the e.pressionR
)a* Bforeign institutional investorB has the same meaning as assigned to it in clause )a* of the
@.planation to section ##$A= of the Income-ta. Act #78#)-! of #78#*F
)(* Bventure capital fundB has the same meaning as assigned to it in clause )(* of the @.planation
to clause ),! F0* of section #" of the Income-ta. Act #78#)-! of #78#*F%
C3A%4# I:: ,9I4S! %(;4#S AN, F9NCI(NS (F C(""ISSI(N
11/ ,uties of Commission/2 'u(1ect to the provisions of this Act it shall (e the dut+ of the
Commission to eliminate practices having adverse effect on competition promote and sustain
competition protect the interests of consumers and ensure freedom of trade carried on (+ other
participants in mar/ets in India:
%ro$ided t-at the Commission ma+ for the purpose of discharging its duties or performing its
functions under this Act enter into an+ memorandum or arrangement with the prior approval of
the Central <overnment with an+ agenc+ of an+ foreign countr+%
33/ %ower to issue interim orders/2 Khere during an in9uir+ the Commission is satisfied that
an act in contravention of su(-section )#* of section ! or su(-section )#* of section - or section 8
has (een committed and continues to (e committed or that such act is a(out to (e committed the
Commission ma+ (+ order temporaril+ restrain an+ part+ from carr+ing on such act until the
conclusion of such in9uir+ or until further orders without giving notice to such part+ where it
deems it necessar+%

3'/ %ower of Commission to re*ulate its own procedure/2 )#*In the discharge of its functions
the Commission shall (e guided (+ the principles of natural 1ustice and su(1ect to the other
provisions of this Act and of an+ rules made (+ the Central <overnment the Commission shall
have the powers to regulate its own procedure%
),* The Commission shall have for the purposes of discharging its functions under this Act the
same powers as are vested in a Civil Court under the Code of Civil Procedure #7"4 )$ of #7"4*
while tr+ing a suit in respect of the following matters namel+:-
)a* summoning and enforcing the attendance of an+ person and e.amining him on oathF
)(* re9uiring the discover+ and production of documentsF
)c* receiving evidence on affidavitF
)d* issuing commissions for the e.amination of witnesses or documentsF )e* re9uisitioning
su(1ect to the provisions of sections #,! and #,- of the Indian @vidence Act #4E, )# of #4E,*
an+ pu(lic record or document or cop+ of such of record or document from an+ office%
)!* The Commission ma+ call upon such e.perts from the field of economics commerce
accountanc+ international trade or from an+ other discipline as it deems necessar+ to assist the
Commission in the conduct of an+ in9uir+ (+ it%
)-* The Commission ma+ direct an+ person:
)a* to produce (efore the =irector <eneral or the 'ecretar+ or an officer authori:ed (+ it such
(oo/s or other documents in the custod+ or under the control of such person so directed as ma+
(e specified or descri(ed in the direction (eing documents relating to an+ trade the e.amination
of which ma+ (e re9uired for the purposes of this ActF
)(* to furnish to the =irector <eneral or the 'ecretar+ or an+ other officer authori:ed (+ it as
respects the trade or such other information as ma+ (e in his possession in relation to the trade
carried on (+ such person as ma+ (e re9uired for the purposes of this Act%
41/ ,irector 8eneral to in$esti*ate contra$ention/2 )#* The =irector <eneral shall when so
directed (+ the Commission assist the Commission in investigating into an+ contravention of the
provisions of this Act or an+ rules or regulations made thereunder%
),* The =irector <eneral shall have all the powers as are conferred upon the Commission under
su(section ),* of section !8%
)!* Kithout pre1udice to the provisions of su(-section ),* sections ,-" and ,-"A of the
Companies Act #7$8 )# of #7$8* so far as ma+ (e shall appl+ to an investigation made (+ the
=irector <eneral or an+ other person investigating under his authorit+ as the+ appl+ to an
inspector appointed under that Act%
4.planation/6For the purposes of this section --
)a* the words Sthe Central <overnmentT under section ,-" of the Companies Act #7$8 )# of
#7$8* shall (e construed as Sthe CommissionTF
)(* the word S6agistrateT under section ,-"A of the Companies Act #7$8 )# of #7$8* shall (e
construed as Sthe Chief 6etropolitan 6agistrate =elhiT%

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