Competition Act 2002

Presented By Group 4

Contents
Objective Background of Competition Law in India What is Competition Act? Competition Commission of India Abuse of Dominant Position Duties, Powers , Functions and Penalties Distinction between MRTP and Competition act Case Study Conclusion

Background
Background of Competition Laws: 1) Back to Ancient India- Cartelization finds mention in Arthashastra, Kautilya. 2) In modern period, Monopolies and Restrictive Trade Practices Act was enacted in 1969 to; a) Prevent the concentration of economic power. b) Provide for the control of monopolies c) Prohibit monopolistic and restrictive trade practices.

ECONOMIC REFORMS OF 1991:

1) Post 1991 policy of Liberalization, Privatization and Globalization introduced. 2) MRTP Act was found inadequate to meet the challenges of a modern globalize economy. 3) Government of India in October 1999 appointed a high level Committee on Competition Policy and Law (the Raghavan Committee) to advise on the competition law in consonance with international developments.

THE COMPETITION ACT,2002

1) Acting on the report of the Committee, the Government of India passed the Competition Act in the year 2002; to which the president accorded assent in 2003. It was subsequently amended by the Competition (Amendment) Act,2007.

COMPETITION ACT
2) 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"

Contd..
Competition Act, 2002 notified in Gazette in January, 2003. Preamble's stated objectives is to establish the commission which has the duty to:

1) Eliminate practices having adverse effect on competition 2) Promote and sustain competition 3) Protect consumers interests 4) Ensure freedom of trade carried on by other participants in markets, in India.

COMPETITION ACT, 2002

1) It prohibits Anti-Competitive Agreements (Sec 3) 2) It regulates Acquisitions, Mergers and Combinations (Sec 5 & 6) 3) It prohibits Abuse of Dominant Position (Sec 4) 4) It mandates Competition Advocacy (Sec 49)

1) The Industries (Development and Regulation) Act, 1951 may

Salient Features Of New Competition Policy

no longer be necessary except for location (avoidance of urban-centric location), for environmental protection and for monuments and national heritage protection considerations, etc. 2) The Industrial Disputes Act, 1947 and the connected statutes need to be amended to provide for an easy exit to the nonviable, ill-managed and inefficient units subject to their legal obligations in respect of their liabilities.
3) The Board for Industrial Finance & Restructuring (BIFR) formulated under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 should be abolished.

Contd..
3) World Trade Organizations (WTO) There should be necessary provision and teeth to examine and adjudicate upon anti-competition practices that may accompany or follow developments arising out of the implementation of WTO Agreements. Particularly, agreements relating to foreign investment, intellectual property rights, subsidies, countervailing duties, anti-dumping measures, sanitary and psytosanitary measures, technical barriers to trade and Government procurement need to be reckoned in the Competition Policy/Law with a view to dealing with anti-competition practices. The competition law should be made extra territorial.

Contd..
4) MRTP Act The MRTP Act extends to the whole of India except the state of Jammu and Kashmir. This law was enacted:

Brief on The MRTP Act, 1969 Post independence, many new and big firms have entered the Indian market. They had little competition and they were trying to monopolize the market. The Government of India understood the intentions of such firms. In order to safeguard the rights of consumers, Government of India passed the MRTP bill. The bill was passed and the Monopolies and Restrictive Trade Practices Act, 1969, came into existence. Through this law, the MRTP commission has the power to stop all businesses that create barrier for the scope of competition in Indian economy.

Competition Act-What practices are stopped by it??

Under this act following are restricted practice and these practices are stopped by this act. 1. Price fixing:-

If two or more supplier fixes the same price for supply the goods then it will be restricted practice.
2. Bid ragging: If two or more supplier exchange sensitive information of bid, then it will also be restricted practice and against competition.

Contd..
3. Re-sale price fixation: If a producer sells the goods to the distributors on the condition that he will not sell any other price which is not fixed by producer. 4. Exclusive dealing: This is also restricted practice. If a distributor purchases the goods on the condition that supplier will not supply the goods any other distributor. Above all activities promote monopoly so under competition act these are void and action of competition commission will not entertain by civil court.

Anti Competition Agreement

Prohibition of Anti competition Agreement: Section 3 provides that no enterprise or person shall enter into any agreement in respect of production, supply, distribution, storage acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India.

Exemption for Copyrights, Patents, Exports etc

The provisions relating to anti-competitive agreements, as contained in Section 3 and discussed in the aforesaid paragraphs, do not apply to: (i) The right of any person to restrain any infringement of or to impose reasonable conditions, as may be necessary for protecting any of his rights which have been or may be conferred upon him under (a) Copyrights under the Copyright Act, 1957; (b) Patent or Exclusive right granted under the Patent Act, 1970. (c) Design registered under the Designs Act, 2000. (d) Layout-design registered under the semi conductor integrated circuits layout design act, 2000. (ii) The right of any person to export goods from India to the extent to which the agreements relates exclusively to the production, supply, distribution or control of goods or provision of services for such export [Section 3(5)]

An agreement entered into between competitors which:

(a)

directly or indirectly determines purchase or sale prices. (b) limits or controls production, supply, markets technical development, investment or provision of services. (c) shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way. (d) directly or indirectly results in bid rigging or collusive bidding shall be presumed to have an appreciable adverse effect on competition.

Adverse Effect on Competition

(a) Tie-in agreement (b) Exclusive Supply agreement

(c) Exclusive distribution agreement

(d) Refusal to deal (e) Resale Price maintenance

On World Scale
1) US Sherman Act, 1890 2) European Union introduced Competition Laws with Treaty of Rome in 1957. 3) Adoption of Competition Laws since 1991. In more than 120 Countries Competition law has been adopted.

Factors which causes Adverse Effects on Competition

The commission shall, while determining whether an agreement has an appreciable adverse effect on competition under Section3: (a) Creation of barriers to new entrants (b) Driving existing competitors out of market (c) foreclosure of competition by hindering entry into the market. (d) accrual of benefits to consumers (e) improvements in production or distribution of goods or provision of services (f) Promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services. [Section 19(3)]

Competition Commission Of India

a) In accordance with the provisions of the Competition Amendment Act, the Commission was duly constituted in March 2009. b) The Commission has a Chairperson and six members.

Establishment of Commission
1) Central

Government has appointed CCI as a governing Body. 2) The commission shall be a body corporate by the name aforesaid having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable. 3) The head office of the Commission shall be at such place as the Central Government may decide from time to time (New Delhi) 4) CCI (Competition commission of India) may also assign office in other places in India.

Composition of Commission
1) The Chairperson and other Members of the Commission shall be appointed by the Central Government. 2) Selection Committee includes Chief Justice of India or his nominee, Secretary in the Ministry of Corporate Affairs

Duties, Power, Functions and Penalties of Competition Commission of India:[Section 18] 1) It eliminate practices having adverse effect on competition
2) It promote and sustain competition 3) It protect the interest of customers 4) It ensures freedom of trade carried by other participants, in markets in India. 5) The commission may inquire into any alleged contravention of the provisions accompanied by such fee as may be determined by regulations 6) It includes Power to award compensation (Sec 34) 7) It includes power of commission to regulate its own procedure

DUTIES:
1) Creation of barriers to new entrants in the market driving existing competitors out of the market foreclosure of competition by hindering entry into the market accrual of benefits to consumers 2) Improvements in production or distribution of goods or provision of services
3) Promotion of technical. scientific and economic development by means of production or distribution of goods or provision of services.

Contd..
4) The commission shall, while inquiring whether an enterprise enjoys a dominant position. 5) Economic Power/market share/size/resources, Importance of the enterprise; vertical integration/ sale or service network of such enterprises; dependence of consumers on the enterprise. 6) Countervailing buying power; market structure and size of market; social obligations, social costs.

7) Relative advantage, by the way of the contribution to the economic development, by the enterprise enjoying a dominant position having or likely to have an appreciable adverse effect on competition; any other factor which the Commission may consider relevant for the inquiry.

PENALTIES:
1) If any person, without reasonable clause, fails to comply with the orders or directions of the act, he shall be punishable with fine which may extend to rupees 1 Lac for each day during which such noncompliance occurs, subject to a maximum of rupees 10 Cr, as the Commission may determine. 2) If any person does not comply with the orders or directions issued, or fails to pay the fine imposed be punishable with imprisonment for a term which may extend to 3 years, or with fine which may extend to rupees 25 CR.

1) Policies which governs the entry and exit of firms or individuals into or out of market 2) Policies which controls price or production levels 3) Policies which restricts the quality, level or location of goods and services available. 4) Policies which restricts advertising and promotional activities. 5) policies which restricts price or type of inputs used in the production process 6) Policies which confers significant costs on business 7) Policies provides advantages to some firms over others.

Few Governments Activities which are Prone to Raise Competition Concerns:

DOMINANCE
What is Dominance? -Position of strength enjoyed by an enterprise in the relevant market which enables it to: 1) Operate independently of competitive forces prevailing in relevant market. 2) Affect its competitors or consumers or the relevant market in its favor. It involves two distinct parts: 1) Determining whether firm has dominant position 2) Examining whether conduct of the dominant firm falls within the definition of abuse.

Stages in Dominance
Stages: i) Determining the relevant market ii) Determining whether the firm is dominant in that relevant market. iii)Examining whether conduct of the dominant firm falls within the definition of abuse.

FACTORS TO BE CONSIDERED IN DETERMINING DOMINANCE

1) Market share of enterprise 2) Size and resources of enterprise 3) Size and importance of competitors 4) Commercial advantage of enterprise over competitors. 5) Vertical Integration 6) Dependence of consumers 7) Dominant position as a result of a statue 8) Entry Barriers 9) Social obligations and costs 10) Market structure and size of market. 11) Countervailing Buying Power 12) Contribution to economic structure.

Elements of Dominance
It is the ability to prevent effective competition and ability to behave independently of two sets of market actors, namely: a) Competitors b) Consumers

PREDATORY PRICE
It means the sale of goods or provision of services at a price which is below cost with a view to reduce competitors or eliminate competitors. ISSUES in Predatory Price: 1) Intent to oust and selling below "cost" necessary for a successful charge of predation 2) Spare capacity to absorb additional demand

Provisions on Abuse of Dominance

a) As

per Section 4 of Indian Competition Act, enterprises or groups are prohibited from abusing their dominant position. b) The Act defines dominant position as a position of strength, enjoyed by an enterprise, in the relevant market in India, which enables it to. c) Operate independently of the competitive forces prevailing in the relevant market. d) Affect its competitors or consumers or the relevant market in its favor. e) Act provides that there shall be an abuse of dominant position if an enterprise or group.

Abuse of Dominance
i) Directly or indirectly, imposes unfair or discriminatory 1) Condition in purchase or sale of goods or services 2) Price in purchase or sale of goods or services ii) Limits or restricts 1) Production of goods or provision of services or market 2) Technical or scientific development relating to gods or services to the prejudice of customers.

Dominance
1) It indulges in practice or practices in denial of market access in any manner. 2) It makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts 3) It uses its dominant position in one relevant market to enter into or protect, other relevant market.

Orders By Commission after Inquiry into Agreement [Section 27]

It may pass any of the following orders: (a) Direct any enterprise or association of enterprises or person or association of persons, involved in such agreement, or abuse of dominant position, to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position;

Orders By Commission after Inquiry into Agreement [Section 27]

(b) Impose such penalty, a penalty equivalent to three times of the amount of profits made out of such agreement by the cartel or ten per cent of the average of the turnover of the cartel for the last preceding three financial years, whichever is higher. (c) Award compensation to parties in accordance with the provisions contained in Section 34; (d) Direct that the agreement shall stand modified to the extent and in the manner as may be specified in the order by the Commission.

Orders By Commission after Inquiry into Agreement [Section 27]

(e) Direct the enterprises concerned to abide by such other orders as the Commission may pass and comply with the directions, including payment of costs. (f) Recommend to the Central Government for the division of an enterprise enjoying dominant position. (g) Pass such other order as it may deem fit.

Division of Enterprise Enjoying Dominant Position [Section 28]

The Central government, on recommendations by the Commission under Section27(f), may, in writing, direct division of an enterprise enjoying dominant position to ensure that such enterprise does not abuse its dominant position [Section 28(1)]. This order may provide for all or any of the following matters, namely:

Division of Enterprise Enjoying Dominant Position [Section 28]

(a) The transfer or vesting of property, rights, liabilities or obligations (b) The adjustment of contracts either by discharge or reduction of any liability or obligation or otherwise (c) The creation, allotment, surrender or cancellation of any shares, stocks or securities. (d) The payment of compensation to any person who suffered any loss due to dominant position of the enterprise. (e) The formation or winding up of an enterprise or the amendment of the memorandum of association or articles of association or any other instruments regulating the business of any enterprise. (f) The extent to which, and the circumstances in which, provisions of the order affecting an enterprise may be altered by the enterprise and the registration thereof; (g) Any other matter which may be necessary to give effect to the division of the Enterprise [Section 28(3)]

Combination
Combination covers: 1) Merger & Amalgamation 2) Acquisition 3) Acquiring control Any combination which causes or is likely to cause appreciable adverse effect on competition (AAEC) in markets in India is void.

Meaning of Combination(Section 5)
The acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises shall be treated as Combination of such enterprises & persons or enterprises in following cases: (a) Acquisition by Large Enterprises (b) Acquisition by Group (c) Acquisition of Enterprise having similar Goods/Services (d) Acquisition Enterprise having Similar goods/services by a Group (e) Merger of Enterprises (f) Merger in Group Company

Regulation of Combination (Section 6)

Section 6(1) prohibits any person or enterprise to enter into a combinations which causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India and such a combination shall be void [Section6(1)] Exemption: Any person or enterprise, who or which proposes to enter into a combination, may, at his or its option, give notice to the Competition Commission of India (hereinafter referred to as CCI of India) and the fee which may be determined by regulations, disclosing the details of the proposed combination, within 7 days of (a) Approval of the proposal relating to merger or amalgamation referred to in Section 5, by the Board of Directors of the enterprises concerned with such merger or amalgamation, as the case may be. (b) Execution of any agreement or other document for acquisition referred to in Section 5(a) or acquiring of control referred to in Section 5(b) [Section 6(2)]

NON Applicability of Section 6

The provisions of Section 6 shall not apply to share subscription or financing facility or any acquisition, by a public financial institution, foreign institutional investor, bank or venture capital fund, pursuant to any covenant of a loan agreement or investment agreement [Section6(4)]. Power to Grant Interim Relief [Section 33] Power to award Compensation [Section 34]

Investigation of Combinations [Section 29]

(a) issue of Notice (b) Written Objections
(c) Additional Information

Orders of Commission on Certain Combinations [Section 31]

1) Combination does not , or is not likely to, have an appreciable adverse effect on competition, it shall approve that combination including the combination in respect of which a notice has been given to the Commission under Section 6(2) [Section 31(1)].

Contd..
2) Combinations has, or is likely to have, an appreciable adverse effect on competition, it shall direct that the combination shall not take effect [Section 31(2)] 3) Combination has an appreciable adverse effect on competition but such adverse effect can be eliminated by suitable modification to such combination, it may propose appropriate modification to the combination, to the parties to such combination [Section 31(3)].

Section 32
It empowers the commission to inquire into an agreement or abuse of dominant position or combination, if such agreement or dominant position or combination has, or is likely to have, an appreciable adverse effect on competition in India even, if such agreement or abuse of dominant position or combination takes place outside India or the party to such agreements abusing the dominant position is outside India.

MERGER
Competition Law: As Merger Control Provision: On January 31, 2007, the steel goliath Tata Steel Limited concluded one of the biggest Indian cross-border merger deals by acquiring the Anglo-Dutch steel company, Corus Group Plc. for $13.70 billion. The merged enterprise, Tata-Corus, employs 84,000 people across 45 countries. It has the capacity to produce 27 million tons of steel per annum, making it the fifth largest steel producer in the world. The merger also gave Tata Steel access to Corus strong distribution networks in Europe.

Factors having effect on Combination

(a) Actual & Potential level of competition through imports in the market. (b) Extent of barriers to entry to the market (c) Level of combination in the market (d) degree of countervailing power in the market (e) likelihood that the combination would result in the parties to the combination being able to significantly and sustainably increase prices or profit margins

Contd..
(f) Extent of effective competition likely to sustain in a market. (g) extent to which substitutes are available or are likely to be available or are likely to be available in the market (h) Market share , in the relevant market, of the persons or enterprise in a combination, individually and as a combination.

Contd..
(i) likelihood that the combination would result in the removal of a vigorous and effective competitor or competitors in market. (j) Nature and extent of vertical integration (k) Possibility of a failing business (l) Nature & extent of innovation (m) Relative advantage by way of contribution to the economic development, by way of combination having or likely to have appreciable adverse effect on competition (n) whether the benefits of the combination outweigh the adverse impact of the combination, if any [Section 20(4)]

WHY REGULATE MERGERS?

1) Mergers are likely to have adverse effect on competition i) Unilateral effects: Due to increase in market power of the merged entity. Higher concentration is associated with higher market power, which enables post merger prices to move up, in spite of efficiency gains of merger. "A Merger may be profitable even in the absence of efficiency gains" ii) Coordinated effects: Merger may raise the prospects of coordinated effects arising in which a reduction in the number of industry participants increases the threat of tacit coordination.

MERGERS
2) Avoid

Heavy Social Cost

i) De-merger could have high social and economic costs ii) Collusive enterprises could escape punishment by resorting to merger, thereby defeating purpose of law. iii) Mergers then would have to be dealt with as agreements under Sec.3

Contd..
3) Market

power from merger not same as that gained through fair competition/sheer efficiency in operation. Sec 4 does not suffice.

i) Merger involves willful acquisition of market power as distinct from growth or development on account of superior product, business acumen or historical accident. ii) When two enterprises combine to increase their profitability the source of profitability may be increased 'market power' and not increased 'efficiency'.

Contd..
4) Conglomerate mergers can harm competition through agreement to remove potential competitors.

i) Conglomerate mergers in neighboring markets (markets for substitutes or complements) result in leveraging problems like: Tying, Pure bundling, Financial leverage and predation ii) Market extension/product extension mergers.

Contd..
5) While horizontal merger works through higher market power, vertical mergers give rise to market fore-closure. i) For example, depriving rival producer of a distribution network if a producer merger with a retail chain (Case of vertical integration) ii) "Foreclosure of a share of the market otherwise open to competitors" e.g. the acquisition of ready mixed concrete firms by cement suppliers was said to foreclose the market for cement to non-integrated cement suppliers iii) By raising rival's costs, through: i) Input foreclosure ii) Customer fore-closure

Contd..
6) Anti competitive issues raised by vertical

mergers are similar to exclusive dealing:

VERTICAL MERGER: ANTI-COMPETITIVE THEORIES:

i) Vertical mergers may put potential competition at a disadvantage by raising the cost of entry (entry deterrence)
ii) A Vertical merger may put existing competitors at a disadvantage by raising their costs (Raising rival's costs) (e.g. by locking up rival's necessary inputs)

COMPETITON APPELLATE TRIBUNAL

To hear and dispose of appeals against any direction issued or decision made or order passed by the Commission To adjudicate on claim for compensation that may arise from the findings of the Commission or the orders of the Appellate Tribunal in an appeal against any finding of the Commission and pass orders for the recovery of compensation under Very appeal shall be filed within a period of 60 days from the date on which a copy of the direction or decision or order made by the Commission is received by the Central Government or the State Government or a local authority or enterprise accompanied by such fee as may be prescribed

Condemnation of delay

COMPETITION ADVOCACY
The Central Government may, including review of laws related to competition in formulating a policy on competition as the case may be, make a reference to the Commission for its opinion on possible effect of such policy on competition and on the receipt of such a reference, the Commission shall, within sixty days of making such reference, give its opinion to the Central Government, or the State Government, as the case may be, which may thereafter take further action as it deems fit. The opinion given by the Commission shall not be binding upon the Central Government or the State Government, as the case may be in formulating such policy. The Commission shall take suitable measures for the promotion of competition advocacy, creating awareness and imparting training about competition issues

Distinction between MRTP and Competition ACT

Competition Act
Competition concepts expressly defined Provision of regulation of combination Power to impose penalty factor Statutory authority can seek CCI's opinion

MRTP
Competition concepts not expressly defined No regulations of combinations No power to impose penalty No provision for statutory authorities to seek opinion

Distinction between MRTP and Competition ACT

Competition

MRTP
Government department outside its ambit
Based on pre reforms scenario

Government department within its ambit

Based on the post reforms scenario

Based on structure as a factor

Combinations regulated beyond a threshold limit. Relatively more autonomy for the competition commission

Based on size as a factor

No combinations regulation

Very little administrative and financial autonomy

Distinction between MRTP and Competition ACT

Competition
Competition Commission selected by Search committee.

MRTP
Competition Commission appointed by the Government

Penalties for offences

Proactive & flexible Unfair trade practices omitted Frowns upon abuse of dominance

No penalties for offences

Reactive & Rigid Unfair trade practices covered Frowns upon dominance

BENEFITS OF COMPETITION
The benefits of Competition work through the economy by enhancing allocative, productive and dynamic efficiency and thereby benefit the consumers, businesses and the government. a) Consumers: i) Wider choice of goods, services and suppliers ii) Better quality and improved value for money.

BENEFITS.
b) Businesses: i) Level playing field ii) Redressal against anti competitive practices iii) Competitively priced inputs iv) Greater productivity and ability to compete in global markets. c) Governments (Central and State) i) Optimal realization from sale of assets ii) Savings of public money in procurement iii) Enhanced availability of resources for social sector.

National Manufacturing Competitiveness Council(NMCC)

The NMCC has been set up by the government. The Council will be an apex body which will provide inputs for policy making as well as suggest measures for enhancing the competitiveness in the Indian industry. The role of the NMCC will include: (i) Identification of manufacturing sectors, which have potential for global competitiveness, problems and constraints in such sectors with respect to structure and size of industry, technology gaps etc.

Contd..
(ii) Evolving sector-specific strategies for enhancing competitiveness of manufacturing sector. (iii) Recommending measures to create common infrastructure and facilities such as testing, quality, design, HRD skills, training institutes, etc. (iv) Providing forum for dialogue between the public and private sectors, labor and academic sectors.

CASE STUDY: ABUSE OF DOMINANT POSITION

FINE ON INTEL: On 13 May 2009 the European Commission fined computer chipmaker Intel 1.06 bn ( 948m) (Approx 6400 Crs) for infringing Article 82 EC after being found to have paid manufacturers and a major retailer to favour its central processing units (CPUs) over those of its main rival, Advanced Micro Devices(AMD).

THE LAW: Article 82:

1) Article 82 prohibits the abuse of a dominant position which affects trade between Member States. 2) The decision is another example of the huge fines that the Commission is prepared to impose as it seeks to send out a deterrence message to businesses.

THE ISSUE:
1) The CPUs (a type of computer chip) are an integral part of the computer, similar to the engine of a car. In 2008 Intel made 80.5% of the CPUs used in computers compared to AMD's 12%. 2) The Commission's 3 year investigation followed various complaints lodged by AMD in 2000, 2003 and 2006.

FINDINGS:
1) The Commission found that Intel had infringed Article 82 through its strategy of offering generous rebates to some computer manufacturers if they bought at least 80% of their CPUs from Intel. 2) The effect of this was that, in order to be able to compete on price, any rival would have to sell its CPUs at a loss.

DIRECT PAYMENTS:
The Commission also found that Intel had made direct payments to a major retailer, Media Saturn Holding, to sell only Intelbased computers.

BIGGEST EVER:
This fine is Europe's biggest ever penalty for anti-competitive practices, a fact which reflects Intel's strong dominance and, according to the European Commission, the losses suffered by millions of consumers, who may have been denied the opportunity to buy cheaper or more innovative products.

BASIS:
1) The fine was based on the value of Intel's CPU sales in the EEA over the 5 year and 3 month period of the infringement.

2) The fine represents 4.15% of Intel's total 2008 global turnover. The commission has the power to levy a fine of up to 10% of global turnover so in theory the fine could have been anything up to 2.8 bn (2.5bn)

Defence:
1) Intel argued that it was offering a straightforward business deal which involved a discount for bulk buying. 2) It does not accept that there has been any harm to consumers and states that it was merely discounting its products to compete in a highly competitive marketplace, passing on to its customers the benefits of economies of scale.

FILING APPEAL:
Intel is appealing the decision in order to clear its name and exonerate the company; however, as the appeal process runs its course Intel will work with the Commission to comply with the decision requiring it to "cease the illegal practices immediately to the extent that they are still ongoing".

Conclusion (Competition Act)

The Act is therefore a new wine in a new bottle. Wine gets better as it ages. The proposed Law provides for a Competition fund, which shall be utilized for promotion of competition advocacy, creating awareness about competition issues and training in accordance with the rules that may be prescribed. The extent MRTP Act 1969 has aged for more than three decades and has given birth to the new law (the Act) in line with the changed and changing economic scenario in India and rest of the world and in line with the current economic thinking comprising liberalization, privatization and globalization.

Conclusion
The message is loud yet clear that a well planned exhaustive competition compliance programme can be of great benefit to all enterprises irrespective of their size, area of operation, jurisdiction involved, nature of products supplied or services rendered and the same is essential for companies, its directors and the delegate key corporate executives to avoid insurmountable hardships of monetary fines, civil imprisonment, beside loss of hard-earned reputation when the Competition Authorities, the media and others reveal the misdeeds in public.

Advantages of Competition
1) Lower prices for consumers
2) A greater discipline on producers/suppliers to keep their costs down 3) Improvements in technology with positive effects on production methods and costs 4) A greater variety of products (giving more choice) 5) A faster pace of invention and innovation

Advantages of Competition
6) Improvements to the quality of service for consumers 7) Better information for consumers allowing people to make more informed choices 8) Competition between different firms leads to increased efficiency, as firms do whatever is necessaryincluding laying off workersto lower their costs; 9) Most people work harder (the threat of losing ones job is a great motivator);

10) Foreign investment is attracted as word gets out about the new opportunities for earning profit

The overall impact of increased competition should be an improvement in economic welfare.

Conclusion
Open competitive markets are the engine of economic growth Competition Law is therefore an important institutional pillar for a thriving market economy as competitive pressures hone production efficiency and stimulate product and process innovation fundamental to competitiveness and economic growth.

SUGGESTIONS
Some Suggestion on Competition Act 2002: 1) Needed a National Competition Policy: competition impact assessment, competition neutrality, essential facility doctrine, separation of policy/regulation/operation/incentives for reform at state level, etc. 2) Sector Regulation's primary objective should include a duty to promote effective competition, and in assessing the interests of consumers, the Regulator should have due regard to the views of enterprises. 3) Immediate commencement of enforcement of Competition Act. 4) Mandate close co-operation between Sector Regulators and Competition Commission of India.

Competition Act 2002

However, even in this era of globalization; the emergence of multinational corporations, interdependence of economies and the role of private enterprises in economic development is emerging as a watershed in the regulatory and reform thinking. The Indian Competition Act, 2002 is one such form of regulatory mechanism. A macro-level overview of the Act shows that it was drafted with the noble intention of curbing anti-competitive combinations in the Indian economy. This intention alone does not lend perfection to the Act as there exist various loopholes that need to be rectified.

BIBLIOGRAPHY:
1) Business Environment C.B.Gupta(7.237.33) 2) www.cci.gov.in 3)http://answers.google.com/Competitionact 4) http://www.tax4india.com/indianlaws/consumer-rights/mrtp/mrtp.html 5)http://www.legalserviceindia.com/articles/compet.ht
m

GIVE COMPETITION A CHANCE ! Be a partner in Countrys Growth