COMPETITION LAW
ATTENDANCE
Introduction
Competition Act 2002 —- enforced in 2009
Competition Law —-Three Pillars——- Anti-competitive agreements (s.3), Abuse of Dominance (s.4),
Combinations (anti-competitive mergers) (s. 5 and 6)
Nodal Body —- CCI —— after the 2017 amendment the appeal goes to NCLAT —— prior to 2017 the appeal
would go to COMPAT —— next court of appeal in SC (S. 53T)
Competition Advocacy (s. 49)
Categories of Markets ——- Perfect Competition (hypothetical markets -ideal markets) and Imperfect
Competition
Imperfect Competition ——- 3 types —- monopoly, monopolistic, oligopoly
Acc to Fali S Nariman— Competition law and economics go hand in hand —-economics provides the
theoretical basis for the law and the tools to analyze markets and harms therein.
Definitions
Competition —— economic rivalry among the economic enterprises to control greater market power, the act of
endeavoring to gain what another endeavors to gain at the same time.
Acc. to world bank —- Competition is a situation in market in which firms or sellers independently strive for the
buyers patronage in order to achieve a particular business objective for example market share/profit share/sales.
Acc to UK Competition Commission —— Competition is the process of rivalry b/w the firms seeking to win
customers business over time.
Need for Competition
quality ; R & D ; pricing fairness (deter price discrimination); cheaper goods; variety; greater market efficiency
barriers to competition —-technological, technical, financial, IP
Markets
A market is a place where the buyers and sellers can meet to facilitate the exchange or transaction of goods and
services.
Features of Markets—- buying and selling, transactions for goods , goods & services, Buyers and sellers, Price
differentiation, geographical Area/digital, demand and supply
Types of Markets:
1. Perfect Competition
COMPETITION LAW 1
, Ideal markets that do not exist in reality
large no. of buyers and sellers
homogenous products
free entry and exit in the market —— market barriers
consumer has perfect knowledge of price and technology
no transportation costs
single prevailing price
no govt interference/restrictions
seller is the price taker and not price maker
2. Imperfect Competition
a. Monopoly
only one seller
firm is itself is the entire industry
firm/seller is the price maker not price taker
extensive entry barriers —technical, financial, etc.
there are no close substitutes of the product
Example: Indian railways, electricity , and coal
b. Oligopoly
few sellers and many consumers
products are similar but significantly differentiated
lot of entry and exit barriers
maximum competition law issues due to the interdependence of market players—for example cartels existing
in this type of market
some control over the pricing due to the interdependence of the firms in terms of comparative pricing
need for advertisement
example—-aviation, telecom, cement , automobiles
c. Monopolistic
lies b/w perfect competition and monopoly
many sellers
product differentiation —-differentiation but close substitutes are available
COMPETITION LAW 2
, advertising is very imp
free entry and exit
example—-clothing lines
Competition Law and Policy
Competition regime in India consists of competition law and competition policy
competition law policy envisages that all laws and policies enacted pertaining to other sectors have to be
competition law compliant.
competition policy addresses competition distortions in policy relating to trade , commerce , industry , business ,
investment, taxation, IPR, etc. —-it endeavors to provide competition neutrality and level playing field—-
ultimate goal of competition policy is to enhance consumer well being, to ensure that markets are free and fair
(function effectively) which will give impetus to economic efficiency and growth.
competition policy refers to the body of rules/governmental measures that govern the extent and the ability to
which the commercial undertakings can economically compete and thereby restrict practices that remove
competition in the market,
competition law is a subset of competition policy——governed by Competition Act 2002 —-frowns upon the
activities of the enterprises which affect the competition adversely
COMPETITION LAW 3
, 💡 Para 18 - Benefits of Competition Policy —- Excel Crop Care Ltd. v. CCI, AIR 2017 SC 2734
[Supreme Court of India]
[Case dealt with Anti-Competitive Practices—- Supreme Court upheld COMPAT finding that Excel Crop
Care, United Phosphorous, and Sandhya Organics had engaged in collusive tendering. The Court
clarified that Section 3(3) of the Competition Act applied to the entire bidding process, from tender
issuance to contract award. The appellants' deliberate non-participation in a tender was deemed a
concerted action aimed at restricting competition and manipulating bidding, satisfying Section 3(3)
(d) requirements.]
[Para 17 to 19] —-
Para 17 —
ultimate goal of competition policy is to enhance consumer well-being, ensuring that markets function
effectively. Competition policy towards the supply side of the market aims to ensure that consumers
have adequate and affordable choices. Another purpose in curbing anti-competitive agreements is to
ensure ‘level playing field’ for all market players that helps markets to be competitive. It sets ‘rules of
the game’ that protect the competition process itself, rather than competitors in the market. Reference to
ASEAN Regional Guidelines —- Main Objectives and Benefits of Competition Policy —-
1. Economic efficiency: refers to the effective use and allocation of the economy's resources——
Competition tends to bring about enhanced efficiency—-by disciplining firms to produce at the lowest
possible cost and pass these cost savings on to consumers, and motivating firms to undertake research and
development to meet customer needs.
2. Economic growth and development: Competition may bring about greater economic growth and
development through improvements in economic efficiency and the reduction of wastage in the
production of goods and services.
3. Consumer Welfare: Competition policy contributes to economic growth to the ultimate benefit of
consumers, in terms of better choice (new products), better quality and lower prices. Consumer welfare
protection may be required in order to redress a perceived imbalance between the market power of
consumers and producers. Competition policy may serve as a complement to consumer protection
policies to address market failures.
[Para 18 — Advantages of incorporating competition—-
COMPETITION LAW 4
ATTENDANCE
Introduction
Competition Act 2002 —- enforced in 2009
Competition Law —-Three Pillars——- Anti-competitive agreements (s.3), Abuse of Dominance (s.4),
Combinations (anti-competitive mergers) (s. 5 and 6)
Nodal Body —- CCI —— after the 2017 amendment the appeal goes to NCLAT —— prior to 2017 the appeal
would go to COMPAT —— next court of appeal in SC (S. 53T)
Competition Advocacy (s. 49)
Categories of Markets ——- Perfect Competition (hypothetical markets -ideal markets) and Imperfect
Competition
Imperfect Competition ——- 3 types —- monopoly, monopolistic, oligopoly
Acc to Fali S Nariman— Competition law and economics go hand in hand —-economics provides the
theoretical basis for the law and the tools to analyze markets and harms therein.
Definitions
Competition —— economic rivalry among the economic enterprises to control greater market power, the act of
endeavoring to gain what another endeavors to gain at the same time.
Acc. to world bank —- Competition is a situation in market in which firms or sellers independently strive for the
buyers patronage in order to achieve a particular business objective for example market share/profit share/sales.
Acc to UK Competition Commission —— Competition is the process of rivalry b/w the firms seeking to win
customers business over time.
Need for Competition
quality ; R & D ; pricing fairness (deter price discrimination); cheaper goods; variety; greater market efficiency
barriers to competition —-technological, technical, financial, IP
Markets
A market is a place where the buyers and sellers can meet to facilitate the exchange or transaction of goods and
services.
Features of Markets—- buying and selling, transactions for goods , goods & services, Buyers and sellers, Price
differentiation, geographical Area/digital, demand and supply
Types of Markets:
1. Perfect Competition
COMPETITION LAW 1
, Ideal markets that do not exist in reality
large no. of buyers and sellers
homogenous products
free entry and exit in the market —— market barriers
consumer has perfect knowledge of price and technology
no transportation costs
single prevailing price
no govt interference/restrictions
seller is the price taker and not price maker
2. Imperfect Competition
a. Monopoly
only one seller
firm is itself is the entire industry
firm/seller is the price maker not price taker
extensive entry barriers —technical, financial, etc.
there are no close substitutes of the product
Example: Indian railways, electricity , and coal
b. Oligopoly
few sellers and many consumers
products are similar but significantly differentiated
lot of entry and exit barriers
maximum competition law issues due to the interdependence of market players—for example cartels existing
in this type of market
some control over the pricing due to the interdependence of the firms in terms of comparative pricing
need for advertisement
example—-aviation, telecom, cement , automobiles
c. Monopolistic
lies b/w perfect competition and monopoly
many sellers
product differentiation —-differentiation but close substitutes are available
COMPETITION LAW 2
, advertising is very imp
free entry and exit
example—-clothing lines
Competition Law and Policy
Competition regime in India consists of competition law and competition policy
competition law policy envisages that all laws and policies enacted pertaining to other sectors have to be
competition law compliant.
competition policy addresses competition distortions in policy relating to trade , commerce , industry , business ,
investment, taxation, IPR, etc. —-it endeavors to provide competition neutrality and level playing field—-
ultimate goal of competition policy is to enhance consumer well being, to ensure that markets are free and fair
(function effectively) which will give impetus to economic efficiency and growth.
competition policy refers to the body of rules/governmental measures that govern the extent and the ability to
which the commercial undertakings can economically compete and thereby restrict practices that remove
competition in the market,
competition law is a subset of competition policy——governed by Competition Act 2002 —-frowns upon the
activities of the enterprises which affect the competition adversely
COMPETITION LAW 3
, 💡 Para 18 - Benefits of Competition Policy —- Excel Crop Care Ltd. v. CCI, AIR 2017 SC 2734
[Supreme Court of India]
[Case dealt with Anti-Competitive Practices—- Supreme Court upheld COMPAT finding that Excel Crop
Care, United Phosphorous, and Sandhya Organics had engaged in collusive tendering. The Court
clarified that Section 3(3) of the Competition Act applied to the entire bidding process, from tender
issuance to contract award. The appellants' deliberate non-participation in a tender was deemed a
concerted action aimed at restricting competition and manipulating bidding, satisfying Section 3(3)
(d) requirements.]
[Para 17 to 19] —-
Para 17 —
ultimate goal of competition policy is to enhance consumer well-being, ensuring that markets function
effectively. Competition policy towards the supply side of the market aims to ensure that consumers
have adequate and affordable choices. Another purpose in curbing anti-competitive agreements is to
ensure ‘level playing field’ for all market players that helps markets to be competitive. It sets ‘rules of
the game’ that protect the competition process itself, rather than competitors in the market. Reference to
ASEAN Regional Guidelines —- Main Objectives and Benefits of Competition Policy —-
1. Economic efficiency: refers to the effective use and allocation of the economy's resources——
Competition tends to bring about enhanced efficiency—-by disciplining firms to produce at the lowest
possible cost and pass these cost savings on to consumers, and motivating firms to undertake research and
development to meet customer needs.
2. Economic growth and development: Competition may bring about greater economic growth and
development through improvements in economic efficiency and the reduction of wastage in the
production of goods and services.
3. Consumer Welfare: Competition policy contributes to economic growth to the ultimate benefit of
consumers, in terms of better choice (new products), better quality and lower prices. Consumer welfare
protection may be required in order to redress a perceived imbalance between the market power of
consumers and producers. Competition policy may serve as a complement to consumer protection
policies to address market failures.
[Para 18 — Advantages of incorporating competition—-
COMPETITION LAW 4
