COMPETITON LAW

MRTP Act (Monopolies and Restrictive Competition Act, 2002

Trade Practices Act)
The MRTP Act is a legislation that was The Competition Act, 2002 is a legislation that was
established in 1969 with the primary objective established in 2002 with the primary objective of
of curbing monopolistic practices and promoting and protecting competition in the Indian
promoting competition in the Indian market. market.
The MRTP Act is regulated by the Ministry of The Competition Act, 2002 is regulated by the
Corporate Affairs. Competition Commission of India (CCI).
The MRTP Act has provisions for the regulation The Competition Act, 2002 has provisions for the
of monopolies and the prevention of restrictive prevention of anti-competitive agreements, the
trade practices. regulation of combinations (mergers and acquisitions),
and the prevention of abuse of dominant position.
Penalties for non-compliance under the MRTP Penalties for non-compliance under the Competition
Act include fines and imprisonment. Act, 2002 include fines and penalties for individuals
and companies.
The MRTP Act is not applicable to certain The Competition Act, 2002 applies to all sectors of the
sectors like agriculture, small-scale industries economy.
and services.
The MRTP Act does not have provision for The Competition Act, 2002 has provision for leniency
leniency policy. policy.
The MRTP Act does not have provision for The Competition Act, 2002 has provision for
settlement of cases. settlement of cases.

Competition Commission of India (CCI)

Competition Commission of India (CCI is an important statutory body Which acts as the competition
regulator in India. The Commission was established in 2003, and became fully functional only by
2009. It aims at establishing a competitive environment in the Indian economy through proactive
engagement with all the stakeholders, the government, and international jurisdiction. The objectives
of the Commission are:

• To prevent practices that harm the competition.

• To promote and sustain competition in markets.
• To protect the interests of consumers.
• To ensure freedom of trade.

COMPETITION ( AMENDMENT )BILL 2012

The Competition (Amendment) Bill, 2012 was introduced in the Lok Sabha on December 10, 2012 by
the Minister of Corporate Affairs, Sachin Pilot. The Bill seeks to amend the Competition Act, 2002.
The Competition Act, 2002 established the Competition Commission of India (CCI) – an expert body
regulating anti-competitive practices in the country. The Act also establishes the Competition
Appellate Tribunal to hear and dispose of appeals against decisions made by the CCI.
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In 2011, the government constituted an expert Committee to examine the Competition Act and
recommend modifications. Based on these recommendations, the government introduced the
Competition (Amendment) Bill, 2012.
Applicability of Act

The Competition Act prohibits any agreement that adversely affects competition in India. However,
the Act cannot restrict rights conferred by certain laws like the Copyright Act, Patent Act and the
Designs Act. The Bill extends the protection of rights to include any other intellectual property rights.
Currently, the Act prevents any enterprise or group to abuse its dominant position. The Bill extends
this by preventing any enterprise or group, jointly or singly, to abuse its dominant position.
Regulation of Combinations

Combinations - the acquisition, merger or amalgamation of enterprises - are defined and regulated by
the Act. A ‘group’ is defined as two or more enterprises where either enterprise can exercise 26% or
more voting rights in the other enterprise. The Bill raises the voting rights level to 50% or more.
The Bill empowers the central government to specify different value of assets and turnover for any
class of enterprises to further examine and regulate combinations.
Any enterprise proposing to enter a combination has to notify the CCI. If the CCI does not pass an
order or issue a direction, within 210 days of the notification, then the combination is considered to be
approved. The Bill reduces this time period to 180 days.
Selection Committee

Members of the CCI are appointed by the central government on the recommendation of a Selection
Committee. Currently, the Selection Committee is a six member body and includes two experts. The
Bill reduces the committee size to 5 members by including only one expert.
Reference to Statutory Authority

Any decision made by a statutory authority (i.e. another regulator) that could violate the provisions of
the Competition Act may be referred to the CCI. The Bill makes this reference mandatory.
Conversely, the Bill requires that CCI decisions contravening the provisions of any other act should
be referred to the relevant statutory authority.
Inquiry and Penalties

The CCI has the power to inquire into agreements and abuse of dominant position. The Director
General, appointed by the central government, conducts the inquiry and submits a report to the CCI.
Currently, if the CCI does not agree with the report’s findings it can launch a further inquiry. The Bill
empowers the CCI to make appropriate orders based on the report.
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Following an inquiry, the CCI can also impose penalties for anti-competitive agreements and
dominant position abuse. The Bill amends the Act to ensure that no penalty can be imposed
without the concerned party having an opportunity to be heard.
Other Amendments

In the Act, ‘turnover’ is defined as the value of sale of goods and services. The Bill amends this
definition to exclude any taxes levied on sales.
Powers of the Director General are derived from the provisions under the Companies Act, 1956
which apply to an inspector. The Bill removes this provision, replacing it with its own definition
of the Director General’s powers. These powers are similar to the inspector’s powers in the
Companies Act.

COMPOSITION OF CCI

▪ Composition:
o The Commission consists of one Chairperson and six Members who shall be
appointed by the Central Government.
o The commission is a quasi-judicial body which gives opinions to statutory
authorities and also deals with other cases. The Chairperson and other Members
shall be whole-time Members.
▪ Eligibility criteria of members of CCI:
o The Chairperson and every other Member shall be a person of ability, integrity
and standing and who, has been, or is qualified to be a judge of a High Court, or,
has special knowledge of, and professional experience of not less than fifteen
years in international trade, economics, business, commerce, law, finance,
accountancy, management, industry, public affairs, administration or in any
other matter which, in the opinion of the Central Government, may be useful to
the Commission.

The Establishment of the Competition Commission of India (CCI) is outlined as follows:

1. **Establishment (Section 7)**:

- A **Competition Commission of India** (CCI) will be established from the date notified
by the Central Government.
- The CCI is a **body corporate** with perpetual succession, having the authority to
acquire, hold, and dispose of property (movable and immovable), as well as enter into
contracts. It can sue or be sued in its corporate name.
- The **head office** of the Commission will be decided by the Government and it may
establish offices at other locations across India.
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2. **Composition of the Commission (Section 8)**:

- The CCI will consist of a **Chairperson** and **not less than two but not more than six
Members**, all appointed by the Central Government.
- The Chairperson and Members must be individuals with **ability, integrity, and
standing**, possessing at least **fifteen years of professional experience** in areas such as
international trade, economics, commerce, law, finance, accountancy, management, industry,
public affairs, or competition matters, which would be valuable to the Commission.
- The Chairperson and the Members are required to serve as **whole-time members**.

The **Selection Committee for the Chairperson and Members of the Competition
Commission of India (CCI)** is detailed as follows:

**APPOINTMENT PROCESS** (SECTION 9):

- The Chairperson and other Members of the CCI are to be appointed by the **Central
Government.
- The appointment is made from a panel of names recommended by a Selection Committee

2. **Composition of the Selection Committee**:

- The **Chief Justice of India** or their nominee – **Chairperson** of the committee.
- The **Secretary in the Ministry of Corporate Affairs** – **Member**.
- The **Secretary in the Ministry of Law and Justice** – **Member**.
- Two experts of repute with specialized knowledge and professional experience in fields
such as international trade, economics, business, commerce, law, finance, accountancy,
management, industry, public affairs, or competition matters, including competition law and
policy.

3. **Term and Selection Manner**:

- The term of the Selection Committee and the procedure for selecting the panel of names
shall be as prescribed by regulations.

THE **TERM OF OFFICE OF THE CHAIRPERSON AND MEMBERS OF THE

COMPETITION COMMISSION OF INDIA (CCI)** IS OUTLINED AS FOLLOWS:

1. **TERM LENGTH** (SECTION 10(1)):

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- The Chairperson and Members will hold office for a term of five years from the date they
assume office.
- They are eligible for re-appointment, but they cannot hold office beyond the age of **65
year

2. **FILLING VACANCIES** (SECTION 10(2)):

- If a vacancy arises due to resignation, removal, death, or other reasons, it will be filled by
a **fresh appointment** following the process outlined in **Section 9**.

3. **OATH OF OFFICE** (Section 10(3)):

- Before assuming office, the Chairperson and Members must take an **oath of office and
secrecy** in the prescribed form and manner before an authority as specified by regulations.

4. **TEMPORARY CHAIRPERSON** (Section 10(4)):

- If a vacancy occurs in the office of the Chairperson due to death, resignation, or other
reasons, the **senior-most Member** will act as the Chairperson until a new Chairperson is
appointed.

5. **TEMPORARY ABSENCE** (Section 10(5)):

- If the Chairperson is unable to perform their duties due to absence, illness, or other causes,
the **senior-most Member** will perform the Chairperson's functions until the Chairperson
resumes their duties.

THE PROVISIONS DESCRIBE THE PROCESS FOR RESIGNATION, REMOVAL, AND

SUSPENSION OF THE CHAIRPERSON AND OTHER MEMBERS: SECTION 11

1. **Resignation**: The Chairperson or any Member can resign by submitting a written

notice to the Central Government. However, they must continue in office for up to three
months, or until a successor is appointed, or their term ends—whichever is sooner—unless
allowed to leave earlier by the Central Government.

2. **Removal**: The Central Government can remove the Chairperson or any Member if
they:
- Are declared insolvent,
- Engage in paid employment during their tenure,
- Are convicted of a crime involving moral turpitude,
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- Have acquired interests that conflict with their duties,

- Have abused their position, or
- Become physically or mentally unfit for the role.

3. **Judicial Review**: For removal based on acquiring conflicting interests or abusing their
position, the Supreme Court must conduct an inquiry and report in favor of the removal,
following a reference from the Central Government.

FUNCTIONS OF CCI

The Competition Commission of India (CCI) has several functions, including:

1. Promoting competition: The CCI's goal is to foster a competitive
environment where businesses can compete fairly and innovate.
2. Protecting consumers: The CCI ensures that consumers have access to
fair prices and high-quality products and services.
3. Preventing anti-competitive practices: The CCI identifies and curbs
anti-competitive agreements, such as cartels, and monitors activities that
abuse market dominance.
4. Regulating mergers and acquisitions: The CCI scrutinizes and regulates
mergers and acquisitions to prevent the creation of monopolies.
5. Facilitating market entry: The CCI eliminates barriers for new
businesses to enter the market.
6. Enhancing market efficiency: The CCI encourages the efficient use of
resources within markets.
7. Creating awareness: The CCI creates awareness about its activities
through publications, training programs, and conferences.
8. Acting as an antitrust ombudsman: The CCI acts as an antitrust
ombudsman for small organizations.
9. Ensuring cooperation with other regulating authorities: The CCI
ensures that sectoral regulatory laws are agreeable with the competition
laws.
APPELLATE TRIBUNAL
Section 53A establishes the National Company Law Appellate Tribunal
(NCLAT) under companies Act 2013 as the designated appellate tribunal under
the Competition Act, following the Finance Act, 2017. Key provisions include:
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• NCLAT's Role: From the commencement of the Finance Act, 2017, the
NCLAT will act as the Appellate Tribunal for appeals arising under the
Competition Act.
• Hearing Appeals: It will handle appeals against directions, decisions, or
orders made by the Competition Commission of India (CCI) under
various sections of the Act (e.g., sections 26, 27, 28, 31, etc.).
• Adjudicating Compensation Claims: NCLAT will adjudicate claims for
compensation based on the findings of the CCI or its own orders, and
pass recovery orders as per the provisions of the Act (under sections 42A,
53Q, and 53N).

AWARD COMPENSATION
Section 53N outlines the process for awarding compensation in cases where
there has been a violation of Chapter II of the Act. Here's a brief summary:

1. **Application for Compensation (Sub-section 1)**: The Central or State

Government, local authority, enterprise, or any person may apply to the
Appellate Tribunal for compensation if they suffer loss or damage due to a
violation of Chapter II by an enterprise. The application must be based on
findings by the Commission or orders of the Appellate Tribunal, or under
specific sections (42A or 53Q(2)) of the Act.

2. **Application Requirements (Sub-section 2)**: The application must

include the findings of the Commission (if any) and the prescribed fees.

3. **Tribunal's Inquiry (Sub-section 3)**: The Appellate Tribunal will

conduct an inquiry into the compensation claim and may order the enterprise to
pay the determined compensation. The Tribunal may seek recommendations
from the Commission before making its decision.

4. **Group Claims (Sub-section 4)**: If multiple people with the same

interest suffer loss or damage, one or more of them can apply for compensation
on behalf of the group, subject to Tribunal approval. This process is governed
by rules similar to group litigation under the Code of Civil Procedure, 1908.
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5. **Clarifications (Explanation)**:
- Compensation can only be claimed after the Commission or the Appellate
Tribunal has determined that a violation occurred.
- The inquiry is only for determining eligibility and the amount of
compensation, not for reassessing the original findings of violation.

Section 53O
THE PROCEDURES AND POWERS OF THE APPELLATE TRIBUNAL.

1. **Procedure Flexibility (Sub-section 1)**: The Appellate Tribunal is not

bound by the Code of Civil Procedure, 1908. Instead, it follows principles of
natural justice and has the authority to regulate its own procedure, including
deciding where its sittings will be held, subject to the Act and any rules set by
the Central Government.

2. **Powers of a Civil Court (Sub-section 2)**: For carrying out its functions,
the Appellate Tribunal has the same powers as a civil court under the Code of
Civil Procedure, 1908, including:
- Summoning and enforcing the attendance of persons.
- Requiring discovery and production of documents.
- Receiving evidence on affidavit.
- Requisitioning public records or documents.
- Issuing commissions to examine witnesses or documents.
- Reviewing its decisions.
- Dismissing cases for default or deciding ex parte.
- Setting aside ex parte or default dismissal orders.
- Any other prescribed matters.

3. **Judicial Proceedings (Sub-section 3)**: All proceedings before the

Appellate Tribunal are deemed judicial under certain sections of the Indian
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Penal Code and Code of Criminal Procedure, treating the Tribunal as a civil
court for these purposes.
SECTION 53P: EXECUTION OF ORDERS OF THE APPELLATE
TRIBUNAL

1. **Enforcement of Orders (53P.1)**: The Appellate Tribunal's orders are

enforced as if they were court decrees. If the Tribunal is unable to enforce an
order:
- For companies, it may send the order to the court where the company’s
registered office is located.
- For individuals, it may send the order to the court where the individual
resides, works, or conducts business.

2. **Alternative Enforcement (53P.2)**: The Tribunal may also transmit an

order to a local civil court, which will execute it as if it were its own decree.

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SECTION 53Q: CONTRAVENTION OF ORDERS OF THE APPELLATE

TRIBUNAL

1. Penalties for Non-compliance (53Q.1)**: If a person, without reasonable

cause, contravenes an order of the Appellate Tribunal, they may face:
- A penalty up to ₹1 crore,
- Imprisonment for up to three years, or
- Both penalties, as determined by the Chief Metropolitan Magistrate, Delhi.
- Note: The Magistrate will only act on a complaint by an authorized Tribunal
officer.

2. **Compensation for Non-compliance (53Q.2)**: Affected individuals may

apply to the Tribunal for compensation if they suffer loss or damage due to an
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enterprise's unreasonable contravention of or delay in complying with the

Tribunal’s orders.

These sections ensure the enforceability of the Tribunal’s orders and provide for
penalties and compensation in cases of non-compliance.

SECTION 53T: APPEAL TO SUPREME COURT

- **Right to Appeal**: The Central Government, any State Government, the

Commission, statutory or local authorities, enterprises, or any aggrieved person
may appeal a decision or order of the Appellate Tribunal.
- **Time Limit**: The appeal must be filed within 60 days of receiving the
Tribunal’s decision or order.
- **Extension of Time**: The Supreme Court may allow late appeals if there is
a valid reason for the delay.

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SECTION 53U: POWER TO PUNISH FOR CONTEMPT

- Contempt Jurisdiction: The Appellate Tribunal has the same authority as a

High Court to punish for contempt, governed by the Contempt of Courts Act,
1971.
- **Modifications**:
- References to the High Court in the Act apply to the Appellate Tribunal.
- References to the Advocate-General are interpreted as a Law Officer
specified by the Central Government.

These provisions provide for appeals to the Supreme Court and empower the
Tribunal to address contempt, ensuring authority and compliance.
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SECTION 53Q: CONTRAVENTION OF ORDERS OF THE APPELLATE

TRIBUNAL

Penalties for Contravention: If a person knowingly disregards an order from the

Appellate Tribunal without reasonable justification, they may face:

A penalty up to ₹1 crore,
Imprisonment for up to three years, or
Both, as decided by the Chief Metropolitan Magistrate in Delhi.
Complaint Requirement: The Chief Metropolitan Magistrate cannot initiate
action unless an authorized officer of the Appellate Tribunal files a formal
complaint.

Application for Compensation: Any person who has suffered due to an

enterprise’s failure or delay in complying with an Appellate Tribunal order may
apply to the Tribunal for compensation for their loss or damage.

SECTION 53T: APPEAL TO SUPREME COURT

Right to Appeal: The Central or State Government, the Commission, any

statutory or local authority, any enterprise, or any aggrieved person can appeal a
decision or order of the Appellate Tribunal to the Supreme Court.

Timeframe for Filing: The appeal must be filed within 60 days from the date the
decision or order is communicated.

Extension of Time: The Supreme Court may allow appeals filed after 60 days if
it is satisfied that the delay was due to a valid reason.
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SECTION 49: COMPETITION ADVOCACY

Competition advocacy is a set of activities that promote competition in a
market, and is a key goal of competition law. It includes activities that are not
related to enforcement, such as:
Raising awareness: Increasing public awareness of the benefits of competition
Working with other authorities: Engaging with other government entities that
are responsible for regulation or rule making
Competition advocacy is important because it helps to: Create a competitive
market environment, Ensure that businesses comply with competition law,
Encourage cooperation between businesses and the public, and Gain support
from policymakers.

Advisory Role of the Commission:

The Central or State Government, when formulating a policy (including

competition-related laws), can seek the Commission’s opinion on the policy’s
potential effects on competition.
Upon receiving such a reference, the Commission must provide its opinion
within 60 days.
Non-Binding Opinion:

The opinion provided by the Commission is advisory only and does not bind the
Central or State Government in their policy-making decisions.
Promotion of Competition Advocacy:

The Commission is responsible for promoting competition advocacy, raising

public awareness, and offering training on competition-related issues.