Topic-"Scope of Competition Law": B.A., LL.B. (H .) E L S - Ix

School of Law
University of Petroleum and Energy Studies
Dehradun
B.A., LL.B. (HONS.) ENERGY LAW

SEMESTER- IX
TOPIC- “SCOPE OF COMPETITION LAW”
Name of the Student- Dhiraj singh.
Enrollment no- R450215037.
Submitted under the guidance of:
Mr. SAKET SHARMA.

Scope of Competition Law
What is Competition Law?
Competition law, also known as anti-trust law in some jurisdictions is that branch of law which
is designed to protect the interest of the consumer by protecting ‘competition’ in the market.
This ‘competition’ is protected by protecting trade and commerce from restraints, monopolies,
price-fixing, and price discrimination. A perfect competition exists in “a completely efficient
market situation characterized by numerous buyers and sellers, a homogenous product, perfect
information for all parties, and complete freedom to move in and out of the market (Black’s Law
Dictionary)”. Even though perfect competition is a utopian concept, it is used as a standard for
measuring market performance.1
Even though the history of competition law can be traced back to Roman empire, the modern day
competition law has its genesis in the American antitrust statutes like Sherman Act of 1890 and
Clayton Act of 1914. But it was only after the Second World War that the American concept of
Competition law became widely accepted. European Community incorporated the provisions of
Competition law in Articles 81 and 82 of Treaty of Rome, signed in 1957. Subsequently most of
the major countries, like China, Brazil, Russia, Singapore, South Korea and Japan established
their own competition regimes. Today, over hundred jurisdictions have their competition regimes
in place and any enterprise having aspirations to go multinational cannot afford to ignore this
law.
Indian Parliament passed the Competition Act in 2002 and it received the President’s assent in
January, 2003. To fulfill the objectives of the Act, government established CCI with effect from
October 14, 2003. Certain provisions of the Act were challenged in the Hon’ble Supreme Court
and Hon’ble Chennai High Court. In response, Government promised to carry out certain
amendments to the Act. This amendment bill was introduced in Parliament in 2006 and was
adopted in 2007. Dhanendra Kumar, Former Executive Director of the World Bank took over as
the Chairman of CCI on 28th February, 2009.2
Competition Act, 2002
1
https://en.wikipedia.org/wiki/The_Competition_Act,_2002
2
https://www.cci.gov.in/competition-act
Competition Act, 2002 (“CA02”) is the Indian Statute which provides for the establishment of
CCI to achieve the following goals:
 Prevent practices having adverse effect on competition;
 Promote and sustain competition in the market;
 Protect the interests of consumers; and
 Ensure freedom of trade carried on by participants in markets.
For achieving the abovementioned goals, CA02 prohibits the following:

 Anti-competitive agreements – These are agreements between entities in respect of
production, supply, distribution, storage, acquisition or control of goods or provisions of
services, which cause or are likely to cause an appreciable effect on competition within
India. Commonly these agreements are entered into with the following objective:
 Determining prices;
 Limiting and controlling production, supply, markets, technical
development, investment or provisions for services;
 Allocating market; and
 Bid rigging or Collusive bidding.3
Such an agreement need not be in writing and can be at any level of production or sale. It may be
a horizontal agreement (eg. Cartels) at the same level of production/supply or it may be a
Vertical Agreement. Following are some of the most common examples of anti-competitive
agreements:
 agreement to limit production & supply

 agreement to allocate markets
 agreement to fix price
 bid rigging or collusive bidding
 conditional purchase/sale (tie-in arrangement)
 exclusive supply/distribution arrangement
 resale price maintenance
 refusal to deal
 Abuse of dominant position – Dominant position means a position of strength enjoyed
by an enterprise in the relevant market in India which allows it to:
3
 Operate independently of competitive forces prevailing in the relevant
market; or
 Affect its competitors or consumers or the relevant market in its favour.4
However, dominance per se is not considered bad by the statute. It’s the abuse of this position of
dominance that is prohibited. That statute lays down an exhaustive list of actions which will be
considered to be abuse of dominance. These are:
 Imposing unfair or discriminatory condition or price in purchase or sale of goods or
services; or
 Limiting or restricting:
 production of goods or provision of services or market therefore;
 technical or scientific development relating to goods or services to the
prejudice of consumers.
 Indulging in practices which amount to denial of market access.
 Making unrelated supplementary obligations a condition precedent for
entering into a contract.
 Using the dominant position in one relevant market to enter into or protect its
position in another relevant market.5
Regulation of Combinations – Apart from prohibiting the above mentioned anti-competitive

actions, CA02 also empowers CCI to regulate Combinations. Combination has not been defined
in the act but includes the following, when they exceed the threshold limits specified in CA02 in
terms of assets or turnovers:6
 Acquisition of controls, shares, voting rights or assets;
 Acquisition of control by a person over an enterprise where such person has control
over another enterprise engaged in competing business;
 Merger or amalgamation between or amongst enterprises
Any entity which proposes to enter into a Combination has to notify CCI and seek its approval
before entering the Combination. If CCI concludes that the proposed combination will cause or
is likely to cause an appreciable adverse effect on competition within the relevant market in
India, it can either prohibit it or propose suitably modification to the proposal.7
4
5
6
7
http://www.diplomacydialogue.org/images/files/Schwager&Gachuiri_Combined%20PPT%20on%20comp
%20lawandpolicy%20institu%20framework.pdf

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School of Law

University of Petroleum and Energy Studies

B.A., LL.B. (HONS.) ENERGY LAW

TOPIC- “SCOPE OF COMPETITION LAW”

Name of the Student- Dhiraj singh.

Enrollment no- R450215037.

Submitted under the guidance of:

Mr. SAKET SHARMA.

Competition Act, 2002

For achieving the abovementioned goals, CA02 prohibits the following:

 agreement to limit production & supply

Regulation of Combinations – Apart from prohibiting the above mentioned anti-competitive

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