Through ensuring fair competition in the market, the governments cause to make available the widest range of goods and services for the common man and thus maximizing the social and common good. The objective of the competition law (The Competition Act, 2002) is to ensure the achievement of this objective.
The Act provides the rules for prohibiting anti competitive agreements, abuse of dominant position by enterprises and regulates combinations such as mergers and acquisitions which cause or are likely to cause an adverse impact on the competition environment in India. Competition Commission of India has been set up to achieve the objectives of the Act. The Commission has been functioning since October 2003. The task of the Commission is to ensure fair competition by eliminating the practices having adverse effect on the competition and ensure freedom of trade in India. The Commission also gives the opinion on the competition issues on a reference received from a statutory authority, create public awareness and provide training on competition issues.
Free and fair competition is one of the pillars of an efficient market economy. Competition law and Intellectual property Rights policies are bound together by the economics of innovation and an intricate web of legal rules that seek to balance the scope and effect. In other words innovators or IPRs holders are rewarded with a temporary monopoly by the law to recoup the cost incurred in the research and innovation process. As a result, IPRs holders are earn rightful and reasonable profits, so that they have incentives to engage in further innovation.
Competition Act 2002
The broad objectives of the Competition Act, AS laid down in its preamble are:
“To prevent practices having adverse effect on competition, to promote and sustain competition in markets to protect the interest of the consumers and to ensure freedom of trade carried on by other participants in markets in India.”
Objectives of the Act
Established commission to prevent practices having adverse effect on competition.
Promote and sustain competition in markets.
Protect the interest of consumers.
Ensure freedom of trade in the Indian market.
Ambit of the Act
Regulates anti – competitive agreements – ex post facto, operational.
Regulates abuse of dominant position – ex post facto, operational.
Regulates combination – mergers and acquisitions
Covers both goods and provision of services.
Remedies and Penalties
After inquiry the commission may pass all or any of the following orders
- Cease and desist
- Impose such penalty as it may deem fit not exceeding 10% of the average of the turn over for the last three preceding financial years upon each of person or enterprise.
- Direct that agreements shall stand modified to the extent and in the manner as may be specified
- Direct the enterprises concerned to abide by such other orders as the commission may pass and comply with the directions, including payment of costs if any.
- Pass any other or issue directions as it may deem fit.
Competition Commission of India
The objective of CCI is to play an extensive role as a market regulator across all sectors with the focus on anti-competitive behavior of enterprises. Competition Commission of India is a body of the Government of India responsible for enforcing the Competition Act 2002 throughout India and to prevent activities that have an adverse effect on Competition in India.
Duties of Commission
The duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade, in Indian markets.
– To promote fair competition in economy
– Discouraging anti-competitive agreements
– To check the abuse of dominant position
– To help common man by providing goods and services at convenient prices.
– Creating equivalent chances for all producers
– To create awareness among people.
– Ensure freedom of trade carries on by other participants in market in India.
Powers of commission
The Commission shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules made by the Central Government, the Commission shall have the powers to regulate its own procedure Composition of the Competition Commission comprises a Chairperson and six members.