COMPETITION ACT 2012

Biswajit-Deevanshu-Vaibhav-Spriha-Lalit-Ashwani

Historical Development

Constitutional Provisions -ownership and control of material resources -concentration of wealth & means of production
Development Strategy After Independence and its Impact -strategy of planned economic development -1956 Resolution-industrialization-Govt intervention and regulation

Historical Development

Trigger Causes -Committee chaired by Mr Hazari-industrial licensing proceduresdisproportionate growth of some big business -Committee set up in 1960-distribution & levels of income-10% of population cornered 40% income -MIC in 1964-enjoined to enquire extent & effects of concentration of economic power in private hands-prevalence of monopolistic & restrictive trade practices.

Thrust of MRTP Act

the prevention of concentration of economic power to the common detriment the control of monopolies the prohibition of restrictive trade practices the prohibition of monopolistic trade practices the prohibition of unfair trade practices

MRTP Act-Not Enough

Restrictive Trade Practices Unfair trade Practices Monopolistic Trade Practices Post 1991 Economic Reforms

Solution??-Competition Act

Anti Competitive Agreements a)Tie in agreement b)Exclusive supply agreement c)Exclusive distribution agreement d)Refusal to deal e)Resale price maintenance Abuse of dominance Cartel,collusion and Price Fixing Bid Rigging Predatory Pricing

 The amendment to section 41 of the act allows the director to search, seizure , raid or record the statement to facilitate the investigation as long as the Director General has the reason to believe that the person concerned has omitted or failed or would fail or would alter ,manipulate or destroy the document or information.

Such power can only be exercised with prior permission from CCI The time period for which any document or information seized can be retained by the director general is now left to his discretion .

Competition Act 2012

Under section 31, Stand Still Period is reduced. The time period to pass an order or issue directions with respect to combination is 210 which is reduced to 180 days. Abuse of dominant position by an Enterprise or group. Specifically mentioning two words jointly and singly in section 4(1) of the act to prohibit the abuse.

In Section 2, turnover is defined as the value of sale of goods and

services. The Bill amends this definition to exclude any taxes levied on

Competition Act 2012

Opportunity of hearing before imposition of penalty Prior to the imposition of penalty by CCI ,Under Section 27(b) of the act ,opportunity of hearing must be given to the party.

Appointment of Members of Commission The procedure for selection and appointment of member of CCI proposed to be altered to include the chairperson of the CCI in the selection committee for selecting the committee. Size of the committee is reduced to 5 from 6.

Competition Act 2012

Provision of service included in the definition of vertical arrangement Section 3 (4) already deals with the provision of services along with sale of goods. Different value or assets and turnover for class or classes of enterprise The Central Government has been empowered to specify different value of assets and turnover for any class or classes of enterprises under section 5(A).

Competition Act 2012

Intellectual property rights related exception to anti-competitive agreements. Provisions relating to anti-competitive agreements are defined under section 3(5) of the act. Definition of term Group

The definition of the term 'group' under the Act is a three prong test, namely (i) voting right test (ii) appointment of director test and/or (iii) control of management test under section 5.

Miscellaneous Provisions
Power to Issue Interim Orders. Appearance before Commission.

Rectification of Orders.
Execution of Orders of Commission Imposing Monetary Policy. Power of Central Government to Issue directions and Supersede Commission.

Advantages of Competition Act 2012

Helps to maintain fair competition in market Prevents formation of cartels, monopolies Fair bids during auctions Regulation of mergers & acquisitions Power to impose penalty factor

Advantages (Contd.)
Relatively more autonomy for the competition commission Proactive & flexible A faster pace of invention and innovation a) Consumers: i) Wider choice of goods, services and suppliers ii) Better quality and improved value for money.

Advantages (Contd.)
b) Businesses:

1.Level playing field

2.Redressal against anti competitive practices 3.Competitively priced inputs 4.Greater productivity and ability to compete in global markets. c) Governments (Central and State):

1.Savings of public money in procurement

2.Enhanced availability of resources for social sector.

IMPACT OF THE PROPOSED AMENDMENTS

Direct search and seizure- faster gathering of evidence substantial powers to go after cartels

mandatory for the competition panel to decide on corporate mergers and acquisitions (M&A) within a stipulated time limit of 180 days

CONCLUSION
competition is critical for economic development, and competition law seeks to protect this competitiveness in the economy. Maintaining the positive effect of competition in an economy's market, acts as a safeguard against misuse of economic power.