Competition act Aditi Chikurdekar

Competition is very good…as long as its healthy. Its what
makes one strive to be better…
“When world at large is a single platform for carrying out trade and
commerce, the need for Competition Act 2002”

Synopsis
I. Introduction
II. History of competition law- International & Indian
III. Objectives Of Competition Act 2002
IV. Important Dimensions of Competition Act 2002
V. Anti-competitive Agreements (Sec-3)
VI. Abuse of Dominant Position (Sec 4)
VII. Jurisdiction of authorities
VIII. Combination & it’s Regulation (Sec-5-6)
IX. Competition Commission Of India(Sec 7-17)
X. Competition advocacy (sec 49)
XI. Competition Fund(sec 51)
XII. Competition Appellate Tribunal (sec 53A-U)
XIII. Compliance to Competition Act
XIV. Conclusion
XV. Sherman Antitrust Act, 1890

INTRODUCTION
 In pursuit of globalization, India has responded positively by
opening up its economy to global players, removing controls and
resorting to liberalization.
 Indian Market needed to gear up and face competition from
within the country and outside. India was one of the first
developing countries to have a competition law in the form of the
Monopolies and Restrictive Trade Practices (MRTP) Act, 1969.
 However, with the advent of economic reforms in 1991, the law
was found inadequate for fostering competition in markets.
Hence, the Competition Act, 2002 was enacted by the Parliament
of India to establish the new competition regime in India and
MRTP was repealed.
 From ‘Command & Control’ economy to ‘Free Market’ economy.
India acquired wider perspective on regulation of market from
merely curbing monopoly to promoting competition

COMPETITION ACT
 The Competition Act, 2002 was passed by the
Parliament in the year 2002, to which the President
accorded assent in January, 2003. It was
subsequently amended by the Competition
(Amendment) Act, 2007.
 In accordance with the provisions of the
Amendment Act, the Competition Commission of
India and the Competition Appellate Tribunal have
been established. The Competition Commission of
India is now fully functional with a Chairperson and
six members. The provisions of the Competition Act
relating to anti-competitive agreements and abuse
of dominant position were notified on May 20, 2009

INTERNATIONAL HISTORY OF COMPETITION LAW
The history of competition law refers to attempts by governments to regulate
competitive markets for goods and services, leading up to the
modern competition or antitrust laws around the world today.
1. Roman legislations- Control price fluctuations and unfair trade practices.
2. Middle Ages in Europe- kings and queens repeatedly cracked down on
monopolies, including those created through state legislation.
3. Modern Age- United States antitrust - Sherman Act, Clayton Act of 1914. Both
the Sherman and Clayton Acts are now codified under Title 15 of the United
States Code.
4. European Union law - In 1957 six Western European countries signed the Treaty
of the European Community which over the last 50 years has grown into
a European Union of nearly half a billion citizens. EU law, under which
competition law falls. Healthy competition is seen as an essential element in the
creation of a common market free from restraints on trade.
5. International enforcement World Trade Organization, discussion includes the
prospect of competition law enforcement moving up to a global level. While it is
incapable of enforcement itself, the newly established International Competition
Network (ICN) is a way for national authorities to coordinate their own
enforcement activities.

HISTORY OF COMPETITION ACT IN INDIA
 Monopolies and Restrictive Trade Practices Act, 1969 first competition law was
enacted in India.
 Objectives of MRTP –
1. Prohibit concentration of economic power
2. Prohibit monopolistic trade practices
3. Prohibit restrictive trade practices
4. Prohibit unfair trade practices.
1991 policy & MRTPAct (LPG)
• Earlier in MRTP all big companies (which had assets of Rs. 100 crores or more)
were required to obtain clearance from the MRTP Commission for setting up any
new industrial unit, which was abolished by 1991 policy. Similarly many other
restrictions were abolished by 1991 policy to widen Indian economy for global
challenges and developments.
• Major changes in policy like De-Licensing, De-reservation, Liberalization
towards Foreign Capital were market friendly and aims at making the best use of
available entrepreneurial talent in industrial and market development.

Distinction between MRTP Act and Competition Act
1. Based on command & control regime.
2. Competition concept & offences
implicit or not defined
3. Against dominance
4. Registration of agreements
compulsory
5. No combinations related regulation
6. No competition advocacy role for the
Competition Commission
7. Govt. Department outside the ambit of
MRTP
8. No power to impose penalty
9. Reactive and rigid
10. Rule of Law approach
1. Based on liberalized free market
2. Competition concept & offences
explicit and defined
3. Against abuse of dominance
4. No requirement of registration of
agreements
5. Combinations regulated beyond a high
threshold limit.
6. Competition Commission has
competition advocacy role
7. Govt. Department in the ambit of
Competition Act
8. Power to impose penalty
9. Proactive and flexible
10. Rule of reason approach

Objectives Of Competition Act 2002
1. Eliminate practices having an Appreciable Adverse Effect on Competition.
2. Promote & sustain competition.
3. Protect interests of Consumers.
4. Ensure the Freedom of Trade
Important Dimensions of Competition Act 2002
 Anti-competitive Agreement [Sec. 3]
 Abuse of Dominance [Sec. 4]
 Combinations - include acquisition of shares, voting rights,
assets/control, mergers, amalgamations and takeovers [Sec. 5 & 6]
 Competition Advocacy - maximum impact with least
intervention [S- 49]

Anti-competitive Agreements [Sec-3]
Sec (2) (b) Agreement includes arrangement, understanding or action in concert,
oral or in writing not necessarily enforceable by law.
Sec 3 (i) & (ii) Any agreement entered into by enterprise or association of
enterprise, person or association of person in respect of production, supply,
distribution, storage, acquisition or control of goods or provision of services
which causes or likely to cause appreciable adverse effect on competition
shall be void.
(iii) Horizontal agreements (in relevant markets, amongst competitor from
same stage) that include-
a) Cartels,
b) Price fixation,
c) Output control
d) Bid Rigging,
e) Market sharing
(HA are subject to Rule to per se; burden of proof lies on Defendant)

(iv). Vertical agreements means amongst enterprises or persons at different stage
or level of production chain ,in different markets that include-
a) Tie-in arrangements,
b) Exclusive supply agreements,
c)Exclusive distribution agreements
d) Refusal to deal
e) Resale price maintenance.
(subject to Rule to reason; burden of proof lies on prosecutor)
(v). The provision of Section 3 does not apply IPR & Exports
a). Agreements involving 6 IPR laws that impose reasonable restrictions
are out of purview of the general prohibition. However they will be examined
under ROR
(the Copyright Act, 1957, Patents Act, 1970, Trade Marks Act, 1958, the
Geographical Indications of Goods (Registration and Protection) Act, 1999,
the Designs Act, 2000, the Semi-conductor Integrated Circuits Layout-Design
Act, 2000)
b). Agreements exclusively for exports are excluded from the rigors of the
law

FACTORS TO DETERMINE ANTI COMPETITIVE
AGREEMENT SEC 19 (3)
 (a) creation of barriers to new entrants in the market;
 (b) driving existing competitors out of the market;
 (c) foreclosure of competition by hindering entry into the
market;
 (d) accrual of benefits to consumers;
 (e) improvements in production or distribution of goods
or provision of services; or
 (f) promotion of technical, scientific and economic
development by means of production or distribution of
goods or provision of services.

1. Ramakant kini vs. L. H. Hiranandani (CASE NO.39 OF 2012)
Act prohibits any agreement which causes an appreciable adverse effect on
competition within India. Therefore ambit of section 3 is extremely wide and
covers all kinds of commercial agreement even if they don’t fall in the category
of section 3 (3) & (4).
2.Bengal Chemist and Druggist Association (Suo moto )Case No. 02 of 2012
The CCI directed the BCDA and its office bearers & executive committee
members to seize and desist from indulging in anticompetitive practices and
CCI Imposes penalty of Rs. 18.38 crores on Bengal Chemist and Druggist
Association (BCDA).
3.M/s Arora Medical Hall, v. Chemists &Druggists Association, Ferozepur
(CDAF), the CCI ordered another judgment imposing a penalty of Rs. 55.42
lakhs on Ferozepur Chemists and Druggists Association.
4.Entertainment Network India Ltd Vs Super Cassets Industries Ltd.
Supreme court observed that while the copyright owner has the complete
freedom to charge royalty on the work through the issue of license, however this
right is not absolute when the owner of copyright exercises monopoly, any
transaction with unreasonable terms would amount to refusal.
CASES

5. Cement Cartel Case
CCI imposes Rs 6,700 crore fine on 10 cement companies, including ACC,
Ultratech and Lafarge for cartelization Builder's Association of India against
Cement Manufacturers Association ("CMA") and 11 cement manufacturing
companies4, for alleged violation of S. 3 (anti-competitive agreement) and S. 4
(abuse of dominant position).
6. DLF Case
CCI imposed Rs 630 crore CCI penalty which upheld by COMPAT
• DLF was penalized by the competition regulator for allegedly abusing its
dominant position by imposing “unfair and discriminatory” terms on its buyers
through apartment buyers’ agreements.
• CCI said the construction of additional floors without intimating the buyers was
abusive of its dominant position and needed to be curbed.
• Interest Rate- If buyer fails to pay interest rate is 18% if DLF fails interest rate
will be 5% .
• The dispute arose in 2010, when the flat buyers’ associations approached to
CCI alleging delays in the projects and construction of more floors than had been
planned earlier, among others.
Supreme Court asks DLF to pay Rs 630 crore CCI penalty

Remedies to Anti-competitive Agreements
1. Cease and desist order (Sec 27 (a)) or not re-enter such
agreement; (scc-27)
2. Imposition of Penalties (Sec 27 (b))
Not more than 10% of the average of the turnover for the last
preceding financial years
3. Cartels - penalties mentioned above shall extend to each
producer, seller, distributor, trader or service provider
included in that cartel and the amount of penalty could
extend upto either three times of its profit for each year of
the agreement’s continuance or ten percent, whichever is
higher.
4. Modification of the agreement.
5. Pass any such order or direction as it may deem fit.

ABUSE OF DOMINANT POSITION (SEC 4)
 Dominant position is Position of strength enjoyed by an
enterprise in the relevant market which enables it to :(Expl Sec
2(a))
i) operate independently of competitive forces prevailing in
relevant market or
ii) Affect its competitors or consumers or the relevant market in
its favor
Predatory price means consideration below the cost of
production or provision of services with view to reduce
competition.

ABUSE OF DOMINANT POSITION INCLUDES SEC 4 (2)
1. Imposing unfair or discriminatory conditions
i) In purchase or sale or
ii) on Price including predatory pricing or,
2. Limiting or restricting production of goods or provision of
services or market itself
3. Limiting technical or scientific development to the prejudice
of consumers
4. Denial of market access in any manner
5. Tying & Bundling (Conclusion of contract subject to
supplementary obligation)
6. Use of dominant position in one relevant market to enter into
or protect other relevant market

CASES
1. DLF
 DLF abused its dominant position by imposing “unfair and discriminatory”
terms on its buyers through apartment buyers’ agreements. Conditions like
to increase in number of floor without permission of buyer, no rights over
common area .
 Interest Rate- If buyer fails to pay interest rate is 18% if DLF fails interest
rate will be 5% . Fine imposed on DLF by CCI was Rs. 630 crore & upheld
by COMPAT.
 DLF was directed to modified agreement.
2. Pragati Maidan case
 India Trade promotion organization which manages this maidan has seen to
be unfair & discriminatory towards others exhibitions & its own exhibitions.
E.g. – Booking dates – 15 days for cancellation period available to other
exhibitions & 45 days available to in own exhibitions
 CCI - Imposes penalty around Rs. 61 crore.
3. Adani Gas Case
 Abuse by gas manufacturing company adani gas which was supplying gas
in Faridabad area & user were using in that particular area Gas supply
Agreement has an abusive clauses.

4. Coal India Limited case v/s SIMA
 ( First time CCI charged penalty against public sector)
 Abuse of dominant position in providing coal supply to
electricity manufactures / plants as they didn’t have any other
option except import.
 Unfair fuel supply agreement ,Unfair sampling & testing
methods
 Not providing – coal which was paid for they were giving low
quality coal, stone were coming in that coal.
 CCI imposed penalty of Rs.17,7,305 corers i.e. 3% of the
average turnover of last proceeding 3 year was imposed on coal
India. Matter is under appeal before COMPAT.
 Advocacy by CCI = Observation of commission – Coal India
was not producing according to its capacity. Also if there would
be more players in the market for coal then it would be beneficial
to market.

5. M C X – S E vs. N S E case
 NSE was operational in different fields and MCX was only into currancy
derivative, NSE entered into MCX market taking advantage of its dominant
position to protecting and promote itself in the market.
 CCI held that in this case Zero pricing of promotional and predatory pricing is
dismissive & abusive
 2014 –COMPAT upheld the 2011 order of CCI that had found National Stock
Exchange guilty of abuse of dominant position, also upheld penalty of Rs 55.5
core levied by CCI.
6. Intel case (Intel or AMD -buying processors)
EC imposed a fine on Intel for abuse of dominate position in the market for
computer processing units (CPU) by offending rebates to the computers
manufacturers conditional upon them purchasing all the great majority of their
CPUs from it rebates should not be link with bindingness or foreclosure with
kill the competition.
7. Kapoor Glass case vs. Schott Glass
COMPAT allowed the appeal by Schott Glass thereby setting aside the order and
penalty awarded by CCI. Further it dismissed the appeal filled by Kapoor Glass
with cost, for lack of bon fide and imposed a fine of Rs 1,00,000.

FACTORS TO DETERMINE DOMINANCE SEC 19 (4)
1. Market share of the enterprise;
2. Size and resources of the enterprise;
3. Size and importance of the competitors;
4. Economic power of the enterprise including commercial advantages over competitors;
5. Vertical integration of the enterprises or sale or service network of such enterprises;
6. Dependence of consumers on the enterprise;
7. Monopoly or dominant position whether acquired as A result of any statute or by
virtue of being A government company or A public sector undertaking or otherwise;
8. Entry barriers including barriers such as regulatory barriers, financial risk, high
capital cost of entry, marketing entry barriers, technical entry barriers, economies of
scale, high cost of substitutable goods or service for consumers;
9. Countervailing buying power;
10. Market structure and size of market;
11. Social obligations and social costs;
12. Relative advantage, by way of the contribution to the economic development, by the
enterprise enjoying A dominant position having or likely to have appreciable adverse
effect on competition;
13. Any other factor which the commission may consider relevant for the inquiry.

REMEDIES FOR AOD
1. Cease and desist order (Sec 27 (a))
2. Imposition of Penalties (Sec 27 (b))
-Not more than 10% of the average of the turnover for the last 3
proceeding financial years
3. Division of enterprise enjoying dominant position (Sec 28 (1))
4. Such other order or directions as may be deemed fit by
commission (Sec 27 (g))

JURISDICTION OF AUTHORITIES
Supreme Court
Competition appellate
tribunal (COMPAT)
Competition
Commission
of India
CCI can initiate
investigation :
1. Suo moto
2. On receipt of
any information
3. Reference
from central,
state Govt or
statutory
authority
DG can:
1. Summon &
enforce
attendance
2. examine on
oath
3. receive
evidence on
oath
4.Commission
for
examination of
witness &
documents
Director
General
60 days
60 days

“COMBINATION” (SEC-5) MEANS
1. Acquisition of Business (shares, voting rights or assets) [Section 5(a)]
Acquisition of shares, voting rights, assets or control of enterprise by
person
2. Acquisition of control (by a person over an enterprise where such person
has control over another enterprise engaged in similar or identical
businesses) [Section 5(b)]
3. Mergers and Amalgamations [Section 5(c)]
 Reportable when- The combining parties exceed the thresholds set in Sec
5 and as modified by the Government Notifications
 Which “combinations” are prohibited/void-
Those which cause or are likely to cause “appreciable adverse effect on
competition” within the “relevant market” in India [Sec 6(1) read with Sec
20(4)]

Thresholds For Filing Notice to CCI* Sec 5
Criteria Assets Turnover
In India
Enterprise
level
Rs. 2000 cr Rs. 6000 cr
Group
Level
Rs. 8000 cr Rs. 24000 cr
In India &
Worldwide
Enterprise
level
UDS 1 billion with at
least Rs. 1000 crore in
India
UDS 3 billion with at least
Rs. 3000 crore in India
Group
Level
US $ 4 billion
with at least Rs. 1000 cr
in India
US $ 12 billion
with at least Rs. 3000 cr
in India
•Assets include intangible assets, for instance, brand value, value of
goodwill, or value of copyright, patent, permitted use, collective mark,
etc.
•Turnover- includes value of sales or services.
24

CLASSIFICATION OF COMBINATION
1. Horizontal combinations are those that are between rivals and are most
likely to cause appreciable adverse effect on competition.
2. Vertical combinations are those that are between enterprises at different
stages of the production chain and are less likely to cause appreciable
adverse effect on competition.
3. Conglomerate combinations are those that are between enterprises not in
the same line of business or in the same relevant market and are least likely
to cause appreciable adverse effect on competition.
 The combination under the Act is usually expected to take place before it
comes into effect with an idea of preventing a possible anti-competitive
behavior which may adversely affect the consumers. Combinations likely to
have an anti-competitive effect can be permitted after such effects are
removed by modifications.

 Section 6
1)No person or enterprise shall enter into a combination which
causes an appreciable adverse effect on competition within the
relevant market in India and such a combination shall be void.
2) any person or enterprise, who or which proposes to enter into a
combination, may, at his or its option, give notice to the
Commission, in the form as may be specified, and the fee which
may be determined, by regulations, disclosing the details of the
proposed combination, within 3o days of
i) approval of the proposal
ii) execution of any agreement or other document

3) Commission shall, after receipt of notice under sub-section (2),
deal with such notice in accordance with the provisions
contained in sections 29, 30 and 31.
4) The provisions of this section shall not apply to share
subscription or financing facility or any acquisition, by a public
financial institution, foreign institutional investor, bank or
venture capital fund, pursuant to any covenant of a loan
agreement or investment agreement.
Exp: If defaulter company if loan made by pi, later company is
unable to return loan or investment and ask to take shares in the
company. After acquisition filling form III is compulsory.

 5) The public financial institution, foreign institutional investor,
bank or venture capital fund, referred to in sub-section (4), shall,
within seven days from the date of the acquisition, file, in the
form as may be specified by regulations, with the Commission
the details of the acquisition including the details of control, the
circumstances for exercise of such control and the consequences
of default arising out of such loan agreement or investment
agreement, as the case may be. Explanation.—For the purposes
of this section, the expression—
 (a) “foreign institutional investor” has the same meaning as
assigned to it in clause (a) of the Explanation to section 115AD
of the Income-tax Act, 1961 (43 of 1961);
 (b) “venture capital fund” has the same meaning as assigned to it
in clause (b) of the Explanation to clause (23FB) of section 10 of
the Income-tax Act, 1961 (43 of 1961).

STEP OF COMBINATION
 Regulatory procedure in cases of prima facie
opinion on AAEC.
1. Show cause notice (CCI)
2. Receipt of Response from the parties (Reply)
3. Option to call the report from the DG.
4. Directing party to publish the details of the
combination.
5. Inviting objection from any person or member of
public affected or likely to be affected by the same
combination.
6. Going back to the parties for the additional
information.
7. Proceed for final order (sec 31).

PENALTY UNDER SEC 43 (A) IN THE
COMPETITION ACT
 43A Power to impose penalty for non-furnishing of
information on combinations. —
If any person or enterprise who fails to give notice to the
Commission under sub-section (2) of section 6, the
Commission shall impose on such person or enterprise a
penalty which may extend to 1 % of the total turnover
or the assets, whichever is higher, of such a
combination.

Example:
 Combination of Jet Airways & Etihad Airways (2013)
The Jet Airways & Etihad Airways are engaged in the business of providing
international air transportation services. In investment agreement Etihad had
shown interest in having 24% stake in Jet Airways to enhance the Airlines
business through Joint initiative. Etihad‟s acquisition of 24% stake & right
to nominate two directors out of six shareholders directors, including the
Board of Director of Jet.
Direction of the CCI
 Considering the facts on record and the details provided in the notice, the
Commission is of the opinion that the proposed combination is not likely to
have appreciable adverse effect on competition in India and therefore, the
Commission hereby approves the same.
 It is however to be noted, that the Commission is granting the present
approval, under section 31(1) of the Act, and that such approval is being
granted, pursuant to the underlying competition assessment, based upon the
information/details provided by the Parties. This approval should not be
construed as immunity in any manner from subsequent proceedings before
the Commission for violations of other provisions of the Act.
 This order shall stand revoked if, at any time, the information provided by
the Parties is found to be incorrect.

 Example: Combination Tata Steel & Corus Group:
On January 31st 2007 Tata Steel conducted one of the
biggest cross border merger deal by acquiring the anglo-
dutch steel company, Corus Group Plc. for $ 13.70
Billion. The merged company Tata-Corus employs 84000
people across 45 countries. It has a capacity to produce
27 million tons of steel per annum, making it fifth largest
steel producer in the world. The merger also gave Tata
Steel access to the Corus strong distribution network in
Europe.

EXAMPLE
Flipkart's acquisition of e-bay India.
Axis Bank’s acquisition of free-charge
Vodafone-Idea merger
Google’s acquisition of Hallis labs
Airtel -Telenor merger
Tata & Corus
Flipkart-Myntra
OLA & Taxi for sure

 SPE Investments/SPE Holdings
If the acquisition of a minority shareholding leads to acquisition of
joint or sole control, notice to CCI is needed.
 DE-MERGER: The notice for de-merger also needs to be filed to
CCI, if it is included in the composite scheme of re-structuring;
(IVRCL Limited/IVRCL Assets & Holdings Ltd.)
 NON-COMPETE CLAUSES- The duration of the non-compete
obligations should be “reasonable”, i.e., not more than 3 years.
(Torrent Pharmaceuticals Limited/Elder Pharmaceuticals Limited)

 JOINT-VENTURE- Google/Johnson & Johnson. CCI has
entertained filings by joint venture companies relating them
to the acquisition of an ‘enterprise’ under section 5 of the
Act. This clearly suggests that joint ventures are included in
the merger control provisions of the Act.; For instance, in JV
between Google/Johnson & Johnson.
 Jet/Etihad ( INR 1 cr), Trent/Tesco (INR 3 cr)
Colloquial term used for belated filing of notice before CCI
and it may attract a penalty up to 1% of the total turnover
or the assets ,whichever is higher ,of such a combination
,under Section 43A of the Act. For instance, in fines on
Jet/Etihad ( INR 1 cr), Trent/Tesco (INR 3 cr)

Competition Commission Of India
Competition Commission of India (CCI) was established under the
Competition Act, 2002 for administration, implementation &
enforcement of the Act.
 Composition-Chairperson and six members.

COMPETITION COMMISSION OF INDIA
CHAPTER III (SECTION 7-17)
 Sec 7-Establishment of commission.
 Establish by Central Govt. by notification
 Body corporate, common seal
 Govt. will decide head office.
 Sec 8-Composition of Commission
 Chair Person (not less than 2 & not more than 6)
 A person of ability, integrity and standing and who has special
knowledge of, and such professional experience of not less than
fifteen years in, international trade, economics, business,
commerce, law, finance, accountancy, management, industry,
public affairs or competition matters, including competition law and
policy, which in the opinion of the Central Government, may be
useful to the Commission.
 The Chairperson and other Members shall be whole-time Members

 Sec 9-Selection Committee for Chairperson and Members of
Commission
a) the CJI or his nominee - Chairperson
b) the Secretary in the MCA -Member
c) the Secretary in the Ministry of Law&Justice -Member
d) two experts of special knowledge& Experience-Member
 Sec 10- Term of office of Chairperson and other Members
 5 years, eligible for appointment up to age of 65 Years.
 Make an subscribe an oath of office and of secrecy in such form,
manner and before such authority, as may be prescribed.
 In case of vacancy most senior person shall act as a chairperson.
 Sec 11- Resignation, removal and suspension of Chairperson
and other members.
 Sec 12- Restriction on employment of Chairperson and other
Members in certain cases .
 Members shall not for period of 2 Years from the date of cease of
office , accept any employment .

 Sec 13-Administrative powers of Chairperson
• Powers to grant supretendance
• Direction & control
 Sec 14- Salary and allowances and other terms and
conditions of service of Chairperson and other
Members
• Travelling expenses
• House rent
• Conveyance facility
• Sumptuary allowances
• Medical facilities e.t.c
 Sec 15- Vacancy, etc. not to invalidate proceedings of
Commission
 Sec 16- Appointment of Director General, etc.
• By central govt.
 Sec 17- Appointment of Secretary, experts, professionals
and officers and other employees of Commission
• By competition commission of India

Powers & Functions of the Commission (Chapter IV)
1. Duties of commission (Sec 18)
2. Inquiry into certain Agreement (Sec 19)
3. Inquiry whether an enterprise enjoys dominant position (Sec 19)
4. Inquiry into combinations (Sec 20)
5. Reference by statutory authority (sec 21)
6. Power to award compensation (Sec 34)
7. Power to regulate its own procedure (Sec 36)
8. Power to review its own orders (Sec 37)
9. Power to impose lesser penalty

1. The Central/ State Govt may, in formulating or reviewing a
policy on competition make a reference to the Commission
for its opinion on possible effect of such policy and on such a
reference, the Commission shall, within 60 days of making
such reference, give its opinion to the Central /State Govt,
which may thereafter take further action as it deems fit.
2. The opinion given by the Commission shall not be binding
upon the Central /State Government, in formulating such
policy.
3. The Commission shall take suitable measures for the
promotion of competition advocacy, creating awareness and
imparting training about competition issues.

 (1) There shall be constituted a fund to be called the “Competition Fund” and
there shall be credited thereto—
 all Government grants received by the Commission
 the fees received under this Act;
 the interest accrued on the

 (2) The Fund shall be applied for meeting—
(a) the salaries and allowances payable to the Chairperson and other Members and
the administrative expenses including the salaries, allowances and pension
payable to the Director General, Additional, Joint, Deputy or Assistant Directors
General, the Registrar and officers and other employees of the Commission;
(b) the other expenses of the Commission in connection with the discharge of its
functions and for the purposes of this Act.
 (3) The Fund shall be administered by a committee of such Members of the
Commission as may be determined by the Chairperson.
 4) The committee appointed under sub-section (3) shall spend monies out of the
Fund for carrying out the objects for which the Fund has been constituted.

COMPETITION APPELLATE TRIBUNAL (SEC 53A-U)
 The Tribunal shall consist of a Chairperson and not more
than two other members to be appointed by the Central
Government.
 Every appeal shall be filed within a period of sixty days
from the date on which a copy of the direction or
decision or order made by the Commission is received
by the Central Government or the State Government or a
local authority or enterprise or any person

 Compliance is important because consequences of non compliance
are potentially serious:
- Investigation, penalty, damages, voidance of agreements, adverse
publicity.
 Businesses advised to raised awareness among employees, especially
those in sales, marketing, purchasing.
 Large businesses advised to have formal compliance programme
with four suggested features:
1. Support of senior management.
2. Appropriate policies and procedures; compliance manual
incorporating clear policy statements, giving provision of competition
law, example of prohibited behavior etc
3. Training Program
4. Regular evaluation

CCI has been serving India in growing as a well
managed and competitive market and has helped in
increasing the allocative, productive and economic
efficiency.
It has also worked to protect the interests of the
consumers and ensuring the freedom of trade in a
well-designed manner.
Conclusion

Introduction:-
The act was aimed at regulating business.
Sherman Antitrust Act was first federal antitrust law,
authorised federal action against any combination in the
form of trust or otherwise or conspiracy, in restraint of
trade.
 Purpose:-
The purpose of Sherman Act is not to protect business from
the working of the market, it is to protect the public from
the failure of the market.
The law directs itself not against conduct which is
competitive, even severely show, but against conduct
which unfairly tends to destroy competition it self.

PROVISION OF SHERMAN ANTITRUST ACT (1890)
 Section 1. Trusts, etc., in restraint of trade illegal; penalty
Every contract, combination in the form of trust or otherwise,
or conspiracy, in restraint of trade or commerce among the
several States, or with foreign nations, is declared to be
illegal. Every person who shall make any contract or engage
in any combination or conspiracy hereby declared to be
illegal shall be deemed guilty of a felony, and, on conviction
thereof, shall be punished by fine not exceeding $10,000,000
if a corporation, or, if any other person, $350,000, or by
imprisonment not exceeding three years, or by both said
punishments, in the discretion of the court.

 Section 2. Monopolizing trade a felony; penalty
Every person who shall monopolize, or attempt to
monopolize, or combine or conspire with any other person
or persons, to monopolize any part of the trade or
commerce among the several States, or with foreign
nations, shall be deemed guilty of a felony, and, on
conviction thereof, shall be punished by fine not exceeding
$10,000,000 if a corporation, or, if any other person,
$350,000, or by imprisonment not exceeding three
years, or by both said punishments, in the discretion of the
court.

Section 3. Trusts in Territories or District of Columbia illegal;
combination a felony
Every contract, combination in form of trust or otherwise, or
conspiracy, in restraint of trade or commerce in any Territory
of the United States or of the District of Columbia, or in
restraint of trade or commerce between any such Territory and
another, or between any such Territory or Territories and any
State or States or the District of Columbia, or with foreign
nations, or between the District of Columbia and any State or
States or foreign nations, is declared illegal. Every person who
shall make any such contract or engage in any such combination
or conspiracy, shall be deemed guilty of a felony, and, on
conviction thereof, shall be punished by fine not exceeding
$10,000,000 if a corporation, or, if any other person, $350,000,
or by imprisonment not exceeding three years, or both said
punishments, in the discretion of the court.

Section 4. Jurisdiction of courts; duty of United States
attorneys; procedure The several district courts of the
United States are invested with jurisdiction to prevent and
restrain violations of sections 1 to 7 of this title; and it shall
be the duty of the several United States attorneys, in their
respective districts, under the direction of the Attorney
General, to institute proceedings in equity to prevent and
restrain such violations.
Procedure:-
1. Such proceedings may be by way of petition.
2. Court shall proceed with the petition.
3. Hearing & determination of the case.
4. Final order ( temporary restraining order or final order)

 Section 5. Bringing in additional parties
Whenever it shall appear to the court before which any proceeding
under section 4 of this title may be pending, that the ends of
justice require that other parties should be brought before the
court, the court may cause them to be summoned, whether they
reside in the district in which the court is held or not; and
subpoenas to that end may be served in any district by the marshal
thereof.
 Section 6. Forfeiture of property in transit
Any property owned under any contract or by any combination, or
pursuant to any conspiracy (and being the subject thereof)
mentioned in section 1 of this title, and being in the course of
transportation from one State to another, or to a foreign country,
shall be forfeited to the United States, and may be seized and
condemned by like proceedings as those provided by law for the
forfeiture, seizure, and condemnation of property imported into the
United States contrary to law.

 Section 6a. Conduct involving trade or commerce with foreign
nations
Sections 1 to 7 of this title shall not apply to conduct involving trade
or commerce (other than import trade or import commerce) with
foreign nations unless –
● (1) such conduct has a direct, substantial, and reasonably
foreseeable effect –
❍ (A) on trade or commerce which is not trade or commerce with
foreign nations, or on import trade or import commerce with
foreign nations; or
❍ (B) on export trade or export commerce with foreign nations, of a
person engaged in such trade or commerce in the United States; and
 ● (2) such effect gives rise to a claim under the provisions of
sections 1 to 7 of this title, other than this section. If sections 1 to 7
of this title apply to such conduct only because of the operation of
paragraph (1)(B), then sections 1 to 7 of this title shall apply to
such conduct only for injury to export business in the United States.

 Section 7. ''Person'' or ''persons'' defined
The word ''person'', or ''persons'', wherever used in sections 1 to
7 of this title shall be deemed to include corporations and
associations existing under or authorized by the laws of either
the United States, the laws of any of the Territories, the laws
of any State, or the laws of any foreign country.

CASES
 E. C. Knight Case, 1985
United States v. E.C. Knight Company, byname Sugar Trust Case,
(1895), legal case in which the U.S. Supreme Court first interpreted
the Sherman Antitrust Act of 1890. The case began when the E.C.
Knight Company gained control of the American Sugar Refining
Company. By 1892 American Sugar enjoyed a virtual monopoly of
sugar refining in the United States, controlling 98 percent of the
industry.
President Grover Cleveland ordered the government to sue the Knight
Company under the provisions of the Sherman Act, and the case
reached the Supreme Court in 1895. The court ruled 8 to 1 against
the government, declaring that manufacturing (i.e., refining) was a
local activity not subject to congressional regulation of interstate
commerce.
The decision, permitting combinations of manufacturers, put most
monopolies beyond the reach of the Sherman Antitrust Act. Not until
serious trust-busting began under presidents Theodore
Roosevelt and William Howard Taft were teeth put into the antitrust
laws and the power of monopolies somewhat curtailed.
(no provisions for acquisition in this act)

CASES
 ADDYSTON PIPE COMPANY CASE
ADDYSTON PIPE COMPANY CASE, 175 U.S. 211 (1899).
The Supreme Court, by a unanimous decision based on the
Sherman Antitrust Act, permanently enjoined six producers of
cast-iron pipe from continuing an agreement that eliminated
competition among themselves. Justice Rufus Peckham,
speaking for the Court, denied that the United States v. E. C.
Knight Company decision should prevail in this case. He argued
that here was a definite conspiracy to interfere with the flow of
inter-state commerce and a positive scheme to limit
competition and fix prices. This decision, which gave teeth to
the Sherman Antitrust Act, encouraged increased federal anti-
trust actions after 1900.

CASES
 SPECTRUM SPORTS, INC. v. MCQUILLAN, (1993)
United States Supreme Court
The purpose of the Sherman Act is not to protect business
from the working of the market, it is to protect public
from the failure of the market.
The law directs itself not against conduct which is anti
competitive but against conduct which unfearly tends to
destroy competition itself.

CRITICISM OF SHERMAN ACT
 Controversial provisions.
 Criticism on act is whether the act improves competition
benefits to consumers or merely aids inefficient business
at the expenses more innovative ones.(it was destroying
innovation)
 Anti trust should attack monopoly not competition.
 The act should attack bad monopoly not all monopoly.
 Act should attack conspiracy not merger and
concentration on combination.
 This act was ambiguous.
 Definitions are not provided.
 Price lowering mechanism is harmful to the scale of
economy.
 Interpretation of this act is unequal.

Competition act Aditi Chikurdekar

Competition act Aditi Chikurdekar

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