Introduction and definition of the terms in Competition Act,2002

1. COMPETITION ACT, 2002
Presented
by
A.SUSITRA
MBA Tourism Mangement
Anna University,Chennai,
India

2. COMPETITION ACT, 2002
Presented
by
SUSITRA A

3. HISTORY
• The Competition Bill, 2001 was introduced
in Lok Sabha by Finance Minister Arun
Jaitley on 6 August 2001
• It replaced the archaic The Monopolies and
Restrictive Trade Practices Act, 1969.
• This act is not applicable to the State of
Jammu and Kashmir.
• It has Competition (Amendment) Act, 2007
and Competition (Amendment) Act, 2009.

4. DEFINITION AND PURPOSE
• Competition law is a law that promotes or seeks to maintain market competition by
regulating anti-competitive conduct by companies.
• It is a tool to implement and enforce competition policy and to prevent and punish anti-
competitive business practices by firms and unnecessary Government interference in the
market.

5. DUTIES OF COMPETITION COMMISSION OF
INDIA
• To protect the interests of the free and fair
competition and the interests of consumers.
• To prohibit the agreements or practices that have or
are likely to have an appreciable adverse effect on
competition in a market in India.
• To prohibit the abuse of dominance in a market.
• To prohibit acquisitions, mergers, amalgamations
etc. between enterprises which have or are likely to
have an appreciable adverse effect on competition in
Indian market.

6. WHY REPLACEMENT?
MRTP Act, 1969 Competition Act, 2002
 MRTP Act is a competition
law, that was created in
India, in 1970 to prevent
concentration of economic
power in few hands.
 Competition Act emerged as
an improvement over MRTP
act to shift the focus from
controlling monopoly to
initiating competition in the
economy.
 The MRTP Commission
plays only advisory role.
 Commission has a number
of powers which promotes
suo moto and levies
punishment to those firms
which affects the market in a
negative way.

7. VERY NEAR TO MONOPOLY

8. DEFINTIONS
PRICE FIXING
If two or more supplier fixes the same price for supplying the goods then it will be restricted
practice.

9. BID RAGGING
If two or more supplier exchange sensitive information of bid, then it will also
be restricted practice and against competition.

10. EXCLUSIVE DEALING
If the distributor purchases the goods on a condition that supplier will
not supply the goods to any other distributor.

12. ACQUISITION
Acquisition means, directly or indirectly,
acquiring or agreeing to acquire shares, voting
rights or assets of any enterprise or control
over management or assets of any enterprise.
Here, one party buys another by acquiring all
of its assets.
 The acquired entity ceases to exist as a
corporate body, but the buyer sometimes
retains the name of the acquired company, and
may use it as its own name.
EXAMPLE
Walmart acquired Flipkart
Ola acquired Food Panda

13. MERGER
A merger is a legal consolidation of two entities into one entity.
Mergers are more common when the parties have similar size and
power.

14. AMALGAMATIONS
 Amalgamation is the combination of one or more companies into a
new entity.
An amalgamation is distinct from a merger because neither of the
combining companies survives as a legal entity; a completely new
entity is formed to house the combined assets and liabilities of both
companies.
EXAMPLE
Maruti Motors operating in India and Suzuki based in Japan
amalgamated to form a new company called Maruti Suzuki
(India) Limited.

15. PREDATORY PRICING
Predatory pricing means the sale of goods or provision of services, at a
price which is below the cost of production of the goods or provision of
services, with a view to reduce competition or eliminate the competitors.

16. AGREEMENT
It includes any arrangement or understanding or action in concert
(i) Whether or not, such arrangement, understanding or action is formal
or in writing; or
(ii) Whether or not such arrangement, understanding or action is
intended to be enforceable by legal proceedings.

17. CONSUMER
Any person who buys any goods for a consideration.
It also includes any user of the goods other than the person
who buys them for consideration paid or promised to be paid in
the above manner.
When such use is made with the approval of the owner, it
makes no difference whether the purchase of goods is for resale
or for any commercial purpose or for personal use.

18. ENTERPRISE
It means a person or a department of the Government, who or which is, or has been or is
proposed to be, engaged in any activity, relating to the
(i) production,storage,supply,distribution, acquisition, or control of articles or goods, or
(ii) provision of services of any kind, or
(iii) investment, or in the business of acquiring, holding, underwriting or dealing with shares,
debentures or other securities of any other body corporate, either directly or through one or
more of it’s units or divisions or subsidiaries.

19. GOODS
• Goods are defined to mean every type of movable property other than actionable
claims and money.
• The term comprises stock and shares, rising crops, grass, and things attached to,
or forming part of the land which are agreed to be served before sale or under the
contract of sale.

20. PERSON
It includes
 an individual
 a Hindu undivided family
 a company
 a firm
 an association of persons or a body of individuals, whether
incorporated or not, in India or outside India
 any body corporate incorporated by or under the laws of a
country outside of India
 a co-operative society registered under any law relating to co-
operative societies
 local authority
 every artificial judicial person, not falling within any of the
preceding sub-clauses.

21. PRICE
• Price is an essential ingredient for all transactions of sale
and in the absence of the price or the consideration, the
transfer is not regarded as a sale.
• The transfer by way of sale must be in exchange for a price. It
has been held that price normally means money.
• The price can be paid fully in cash or it can be partly paid
and partly promised to be paid in future.
• The price can be fixed by the agreement between the parties
before the conveyance of the property.

22. SERVICE
It means service of any description which is made available to
potential users.
It includes the provision of services in connection with
business of any industrial or commercial matters such as
banking, communication,
education, financing, accounting,
insurance, chit funds,
real estate, transport,
storage, material treatment ,
processing, supply of electrical or
other energy, boarding, lodging,
entertainment, amusement,
construction, repair, conveying of information and advertising.

23. SHARES
 Shares are small pieces of a company.
 Shares can be bought by humans, companies, and mutual funds.
When buying shares in a company, the buyer owns a small part of that company.
The price of a share can be based on many different things.

24. TRADE
It means any trade, business industry, profession or occupation relating to the
production,supply,distribution,storage or control of goods and includes the
provision of any services.

25. TURNOVER
 It includes value of sale of goods or services.
 It is defined as the the amount of money taken by a business in a particular period.
 Also defined as the rate at which employees leave a workforce and are replaced.

26. PROHIBITION OF AGREEMENTS
SECTION 3
Provides for prohibition of entering in
to anticompetitive agreements.
SECTION 4
Prohibits abuse of dominant position
by any enterprise.
SECTION 5
Deals with combination of enterprises
and persons
SECTION 6
Provides that no person or enterprise
shall enter in to combination which is
likely to cause or causes an appreciable
adverse effect on competition within
the relevant market in India.