Keywords
Anti-trade practices
abuse of dominant position
competition advocacy
regulating of combination
competition commission
Mrtp act
Abstract
Competition law aims to avoid anti-trade practices in the market by ensuring the protection to the customers. A legislation was enacted for regulating this purpose which is known as competition act 2002. This legislation aims at upholding the ethical behaviour in the market by the manufactures, producers and the customers as well. This law promotes fair trade with freedom by enabling fair competition. This law eliminates domination from the strong trading enterprises aganist the small ones. Not only allowing fair trade competition act 2002 also protects the intrests of the consumers.
Competition Law
Introduction
After Independence mixed economic policy was introduced in India. Many principles were taken from others countries like Russia, America etc., Nehru ji being the first Prime Minister of India gave importance to both the public sector and the private sector. Monopolies And Restrictive Trade Practices (MRTP) 1969 was the first competition law in India. This act was mainly enacted to ensure consumer protection in the market. Many loop holes were found in the MRTP act, creating rigid environment in the market. Where licenses were not so easily given to the private sector. Big corporations and Industries were to be set up as the Public corporations or the government departments. These Controversies with this act kept on growing as private sector was developing tremendously. Corruption and Mal administration were on a raise. The monopolies and restrictive trade practices failed to achieve its objectives to serve the purpose for its enactment. These situations have created the great need for the modern policies which could look deep into the flaws of the market and could guide and put the market in the proper manner. A committee called High Level Committee on Competition Policy was appointed to suggest a Legislative standard framework which solves all the existing problems and regulates the market. The committee presented its report in May, 2000. The draft competition law was drafted and presented to the government in November 2000. After thoroughly looking into the draft parliament passed the Competition act in 2002 December which has come into force with effect from 31st of March 2003.
Competition Act 2002
Competition law for India was triggered by Article 38 and 39 of the constitution of India. The competition act 2002 was enacted to fill the gaps which were left open by the MRTP act. Competition law aims at promoting consumers intrests, sustaining competition in the markets and to protect intrests of the consumers and ensuring freedom of trade. As MRTP act became obselete in dealing with certain International economic developments relating to competition laws. Competition act 2002 sets up a commission called competition commision of India (CCI) which mainly focuses on eliminating practices which adversly affects the market and to promote and protect the intrests of the consumers.
Scope of the act
Enquire into Anti competitive agreements.
Enquire abuse of dominant position
regulating combination and mergers
Undertaking competition advocacy
Anti-Competitive Agreements
Anti-competitve agreements aims at eliminate or to conduct unfair trade practices in the market. Competition is good for market because it saves consumers from being charged high for the goods and lets companies to offer better goods at the lower prices. Anti-Competitive measures like price fixing hampers the growth of the market. Competition law puts check to all such contraversial agreements by section 3 of competition act 2002. Section 3 of competition act 2002 states that No enterprise shall enter into any agreement regarding any trade practices which adversly affects the market. If entered such agreements shall be void. Two kinds of agreements can be identified in the market (i) Horizontal agreements (ii) Vertical agreements.
=> Horizontal agreements:- These are taken place in between parties of same line of production for example agreement between manufactures, agreements between distributors. Types of Horizontal agreements are,
Price fixing agreements
Facilitating practices
Quiet life agreements
Group Boycotts
Trade associations
=> Vertical agreements:- Vertical agreements are between Non-competition operating at different levels of processes for example agreement between producers, whole sellers and retailers. Types of Vertical agreements are,
Tie -in Arrangement
Refusal to deal
Resale price maintenance
Exclusive supply agreement
Exclusive Distribution agreement.
Such agreements are likely to cause adverse effect on the market.
Abuse of Dominant Position
This refers to the misuse of its position by the good firm or dominant firm in the market. Anti competitive trade practices may be conducted by the Dominant firms to maintain or increase its Dominant position in the market. If such practices by dominant firms found controversial such practices are to be considered as abusive or improper exploitation of monopolistic control of a market which aims at restricting the competiton in the market. These firms may cause an adverse affect in the market by effecting small firms or individual and independent competitors. Competition act 2002 prohibits such agreements which may interrupt fair trade practice in the market. It aims at eliminating abuse or missuse of dominant position in the market.
Regulation of combinations
An illegal combination in the market which aims at eliminating competition in certain locality in which conspirators agree to use devices or to combine for misleading the market for example price fixing agreements. Competition act 2002 aims at regulating such combinations to avoid illegal combinations. Only competition commission of India shall give the approval.
Competition Advocacy
International competition Network defined competition advocacy as those activities conducted by the authorities for promoting market economic environment and competitive environment for economic activities by means of non enforcement mechanisms and by increasing public awareness of the benefits of competition. Section 49 of the competition act 2002 narrates about competition advocacy. Competition advocacy was enacted in the new law. The role of commission is advisory.
Conclusion
Competition act 2002 enables fair competition in markets by eliminating unfair trade practices and provides freedom of trade. This act establishes competition commission for regulation and proper supervision. This act prohibits certain agreements such as Anti-Competitive agreements, Abuse of dominant position, Regulation of combinations and competition advocacy were the major areas where competition act focus. Such modern acts are compulsory for regulating fair trade practices in the market.
