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Essay on the Competition Act, 2002

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In this essay we will discuss about the Competition Act and Commission. After reading this essay you will learn about: 1. Subject Matter of Competition Act 2. Objectives of Competition Act, 2002 3. Main Features 4. Non-Applicability 5. Conclusion.

Contents:

  1. Essay on the Subject Matter of Competition Act
  2. Essay on the Objectives of Competition Act, 2002
  3. Essay on the Main Features of Competition Act, 2002
  4. Essay on the Non-Applicability of Competition Act
  5. Essay on the Conclusion to Competition Act 

Essay # 1. Subject Matter of Competition Act, 2002:

On December 16, 2002, the Lok Sabha passed a Bill to replace the MRTP (Monopolies and Restrictive Trade Practices) Act, 1969 which was enacted to curb the tendency to create monopoly in commerce, trade and industry. The Act is known as Competition Act, 2002 or Antitrust Law.

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In 1999, Government of India appointed a committee on “Competition Policy and Law” under the Chairmanship of Sri S.V.S. Raghvan. In the year 2000, this committee submitted its report. Accordingly, the competition Act, 2002 was framed and passed on the basis of recommendation of this committee.

This Act was enforced on 13th January 2003. Later on, the government made some amendments through passing of competition (Amendment) Bill, 2007. This Act covers whole of India except Jammu and Kashmir. This Act smoothly replaced the MRTP Act.

Under the new laws, hardly 100 of the 6,000 big industries would come under the purview of the Act. An industry having assets of Rs 1,000 crore Or more or having a annual turnover of Rs 3,000 crore or more would attract the provisions of the new law, i.e., Competition Law or Antitrust Law.

The Act provides for the constitution of Competition Commission of India (CCI) which is a corporate body with quasi-judicial powers. The order of this Commission can be challenged only in the Supreme Court. The Commission shall be headed by a Chairman and there would not be more than 10 members of the Commission to be appointed by the Government of India.

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After its formation, the CCI has taken over MRTP commission (MRTPC). Accordingly MRTPC was dissolved and all pending cases of MRTPC were either disposed within a year or shifted to CCI. The pending unfair Trade Practice (UTPs) cases have been shifted to concerned consumer courts formed under consumer protection Act. 1986.


Essay # 2. Objectives of Competition Act, 2002:

The competition Act 2002 was formulated with following objectives:

1. To promote healthy competition in the market.

2. To prevent those practices which are having adverse effect on competition.

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3. To protect the interests of concerns in a suitable manner.

4. To ensure freedom of trade in Indian markets.

5. To prevent abuses of dominant position in the market actively.

6. Regulating the operation and activities of combinations (acquisitions, mergers and amalgamation).

7. Creating awareness and imparting training about the competition Act.


Essay # 3. Main Features of Competition Act, 2002:

Following are some important features of the competition Act:

1. Competition Act is a very compact and smaller legislation which includes only 66 sections.

2. Competition commission of India (CCI) is constituted under the Act.

3. This Act restricts agreements having adverse effect on competition in India.

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4. This Act suitably regulates acquisitions, mergers and amalgamation of enterprises.

5. Under the purview of this Act, the central Government appointed director General for conducting detail investigation of anti-competition agreements for arresting CCI.

6. This Act is flexible enough to change its provisions as per needs.

7. Civil courts do not have any jurisdiction to entertain any suit which is within the purview of this Act.

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8. This Act possesses penalty provision.

9. Competition Act has replaced MRTP Act.

10. Under this Act, “Competition Fund” has been created.


Essay # 4. Non-Applicability of Competition Act:

Competition Act is not applicable in the following cases:

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1. Public Financial Institutions.

2. Foreign Institutional Investors (FIIs).

3. Banks.

4. Venture capital Funds (VCFs).

5. Agreements related to intellectual property rights (IPRs) such as trademarks, patents, copyrights etc.

6. Central Government has the authority to exempt any class of enterprises from the provisions of Act in the common interest of national security or public interest.


Essay # 5. Conclusion to the Competition Act:

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It can now be concluded that the competition Act, 2002 is landmark legislation. The main aim of this Act is to promote competition and curb all anti-competitive agreements. This Act restricts the abuses of dominant enterprises. It can also regulate any kind of combinations beyond a particular size. Thus this Act does not curb monopolies rather it curbs abuses of monopolies.

Thus, the competition Act is expected to play a responsible role in changing the control mechanism related to monopoly and restrictive trade practices and is also expected to protect the interest of the small and medium industries in the country besides giving consumers more powers to redress their grievances.


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