COMPETITION LAW IN INDIA

1. INTRODUCTION
Competition is a process of economic rivalry between market players to attract
customers. It also refers to a situation in a business environment where businesses
independently strive for the patronage of customers in order to achieve their business
objective. Free and fair competition is one of the pillars of an efficient business
environment.
The Parliament of India passed the Competition Act, 2002 on January 13, 2003, which
repealed the Monopolies and Restrictive Trade Practices Act, 1969. It came into force on
March 31st, 2003. The Competition Act, 2002 was changed twice after its enactment,
with the Competition (Amendment) Act, 2007 and the Competition (Amendment) Act,
2009. It was a result of India’s drive for globalisation and economic liberalisation. The
primary goal of the Act is to control the anti-competitive behaviour of a firm or company
that has a negative impact on competition in India’s market. Furthermore, the Act seeks
to encourage and maintain market competition, safeguard the interests of consumers, and
safeguard market freedom in our country.
The Competition Act, 2002, was adopted in India to achieve the dual goals of regulating
anti-competitive conduct and lending support to the agreements of the World Trade
Organisation (WTO). The Act also establishes the Competition Commission of
India (CCI) as a market controller for stopping and controlling anti-competitive
behaviour in the country. It also establishes the Competition Appellate Tribunal
(COMPAT), a quasi-judicial authority formed to listen to and decide on appeals against
any direction issued or decision taken by the CCI.
Competition in the marketplace can be seen as rivalry between businesses, which in turn
benefits the consumers. It has now become a fundamental characteristic of the economy.
The motivation for the economic agents can be purely individual, but the result of the
competition is favorable to the society at large. Competition is beneficial for consumers,
businesses and economy as a whole. Competition offers broad array of choices to
consumers at fewer prices, it stimulates progress, productivity, and leads to optimum
allocation of resources.
Competition law is known as antitrust law in the United States of America. Anti-trust
laws regulate the market condition by stabilizing the monopoly and unfair business
practices. The term competition law is used in other jurisdictions than the U.S. ANiti-
trust law maintains and promotes market competition within the territorial boundaries of
a country. International competition agencies protect international competition. It aims to
protect the interest of the consumers.
In the recent years the Indian economy has been one of the best performers and is on high
growth path. Infusion of greater degree of competition can play a catalytic role in
unlocking the fuller growth potential in many critical areas of the economy. In the interest
of consumers, and the economy as whole, it is necessary to promote an environment that
facilitates fair competition outcomes in the market, restrain anti-competitive behavior and
discourage market players from adopting unfair trade practices. Therefore, competition
has become a driving force in the global economy.

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2. OBJECTIVE OF COMPETITION POLICY AND LAW

The main aim of competition law is to check the firm and enterprises flowing anti-
competitive practices. The full benefit of ecomimic reforems are felt to be better realized
under the condition of an effective competition regime. Another important goal of
competition law is consumer protection. It has been seen across jurisdictions that the
objectives of competition law vary from country to country and even within a country
they can change and evolve with variations in economic situation.

As per the judgment by the supreme court of India in 2010 the main objective and
advantage of competition law are: “The main objective of competition law is to promote
economic efficiency using competition as one of the means of assisting the creation of
market responsive to consumer preferences. The advantages of perfect competition are
three- fold: allocative efficiency, which ensures the effective allocation of resources,
productive efficiency, which ensures that costs of production are kept at a minimum and
dynamic efficiency, which promotes innovative practices.”

The common perception is that competition law and policy relates to matters of
competition and competitiveness; with the results,, among others, that goods and services
are sold at competitive prices and that consumer have a choice as to the products they
wish to purchase. Competition would also be a matter of larger application that of overall
governance and development of economy, that of better regional and global balances in
trade and development.

To understand the objectives of competition law, it is important to understand that

objectives can be final or intermediate. The distinction lies in the fact that intermediate
objectives are short-term intended outcomes, which will help in attainment of final
objectives, whereas the long term outcome will depend on the interplay of other
objectives, Likewise, competition policy also has final or intermediate objectives.

Through regulating and controlling practices, the intermediate objective of competition

policy can be regarded as the maintenance of competition process or free competition in
the economy or preventing unreasonable restriction on competition, in order to achieve
freedom of trade, freedom of choice and access to market. Achievement of these
objectives will play a critical part in the attainment of yet another intermediate objective
i.e economic efficiency.

Economic efficiency is attained in a market if there is no other way to reallocate the

transaction terms in the same market that can increase the sum of total surplus and total
consumer surplus. Economic efficiency can also be categorized into two: static and
dynamic. Static effency refers to maximization of total producer and consumer surplus in
a given market at a point in time, while dynamic efficiency refers to maximization of the
sum of such surplus over time or over a specific period to reflect innovation and technical
progress. Thus, one of the intermediate objectives of competition policy is the attainment
of static and dynamic efficiency in the economy.

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3. THE NEED OF COMPETITION REGULATIONS IN INDIA.

Firms while competing with one another, often adopt unfair means to restrict
competition. This relates to fixing prices with rivals, setting price which is lower than
cost in order to throw out competition from market, taking advantage of a monopoly
position and charging unreasonable price, and the like.

In view of the policy shift from curbing monopolies to promoting competition, there was
a need to repeal the Monopolies and Restrictive Trade Practices Act. Hence, the
Competition Law aims at doing away with the rigidly structured MRTP Act. The
Competition Law proposed is flexible and behavior oriented.

The competition law involves the formulation of a set of policies which promote
competition in the local markets and are aimed at preventing anti-competitive business
practices and unwanted government interference. Competition law is also framed with
the intention of curbing abuse of market power by a dominant company.
Further, competition law aims at eliminating monopolization of the production process
thereby encouraging new firms to enter into the market. The maximization of consumer
welfare and an increase in production value are some of the main objectives of
competition law. With this objective the competition law has also introduced the
provisions relating to the establishment of Competition Commission of India6.
However, the competition law has given sufficient powers to CCI to ensure that an
enterprise which indulges in anti-competitive practices suffers serious consequences.
“The ambit of the Act encompasses every enterprise, other than those excepted, within its
fold and enables the Commission to probe, investigate, inquire, regulate and adjudicate
any activity/matter of any person or enterprise. All PSUs, Societies, Scientific Societies,
Municipal Corporations etc., fall within the ambit of the Act.”

Competitive market ensures efficiency resulting in best possible choice of quality, lowest
prices and adequate supplies to consumers. This outcome emerges because of the
following three conditions:

Competition: there are a large number of producers supplying the same product, or close
substitutes, and no single producer dominates the market place

Full information: all consumers are fully informed about the options that the market
offers them

Low switching costs: the costs a consumer faces in switching from one option to another
is not high enough to deter this switch

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4. EVOLUTIONS AND DEVELOPMENT OF COMPETITION ACT

In October 1999, the Government of India constituted a High Level Committee under the
Chairmanship of Mr. SVS Raghavan ['Raghavan Committee'] 1 to advise a modern
competition law for the country in line with international developments and to suggest
legislative framework, which may entail a new law or suitable amendments in the MRTP
Act, 1969. The Raghavan Committee presented its report to the Government in May
2000.
On the basis of the recommendations of the Raghavan Committee, a draft competition
law was prepared and presented in November 2000 to the Government and the
Competition Bill was introduced in the Parliament, which referred the Bill to its Standing
Committee. After considering the recommendations of the Standing Committee, the
Parliament passed December 2002 the Competition Act, 2002.

The Monopolies and Restrictive Trade Practices Act, 1969 [MRTP Act] 2 repealed and
was replaced by the Competition Act, 2002, with effect from 1 September, 2009.

Economic liberalisation and the abolition of the MRTP Act in 1991

In 1991, economic liberalisation was introduced, which was a major turning point for
Indian markets in the globalised world. With the elimination of trade barriers, the nation
began to face competition from both within and beyond the country. As a result, in order
to pave the way for globalisation, India implemented plenty of new economic plans,
reduced government interference, and progressively started opening opportunities for
industry and international investment. Among such new provisions, plenty of changes
were made to India’s competitive system, such as:

Amendment to the Monopolies and Restrictive Trade Practices Act has eliminated-
the method of pre-entry critical examination of investment by MRTP Industries,
the scope of MRTP in mergers, acquisitions, and combination, and
the precondition of government permission for spreading and forming new enterprises.
Following economic liberalisation in 1991, it became essential to establish a competition
law system that was more relevant to domestic economic forces and compatible with
international practices.

4.1 COMPETITION ACT, 2002 3

The Indian Parliament enacted the Competition Act in 2002 to govern the anti-
competitive behaviour of firms in the Indian market. It was introduced to avoid
behaviours that have an Appreciable Adverse Effect on Competition (AAEC). The goal
of the Competition Act, 2002 is to develop and preserve an open, just, competitive, and
creative environment that will protect the interests of consumers and foster long-term
economic progress in the nation.

1
Raghavan Committee, A high Level Committee on Competition Policy and Law, October 1999.
2
Monopolies and Restrictive Trade Practices Act, 1969 .
3
Competition Act 2002.

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According to the Act, MRTP has become outdated and unnecessary as a result of
worldwide economic trends. Hence, there is a need to switch from ‘curtailing
monopolies’ to ‘supporting competition’.
The Competition Act, 2002 was modified by the Competition (Amendment) Act 2007,
which came into effect on May 20, 2009, when the Indian government notified some
sections of the Competition Act relating to anti-competitive agreements and abuse of
dominant positions.

After three more years, in June 2011, certain provisions related to acquisition control
came into force.

4.2 IMPORTANCE OF COMPETITION ACT, 2002

The Competition Act is concerned with enforcing rules to ensure that firms and
corporations compete effectively with one another. This promotes entrepreneurship and
productivity, increases customer choices and helps reduce prices and enhance quality. 4

Low prices: Offering a lower price is the easiest approach for a firm to achieve a large
market share. Prices are driven down in a competitive market. This is not simply
beneficial to consumers; where more people can afford to buy items; it motivates firms to
produce and helps the economy as a whole.

Innovation: To develop high-quality products, firms must be innovative in their product

concepts, design, manufacturing processes, services, and so on.

Better quality: The Competition Act encourages firms to enhance the quality of their
goods and services in order to attract more consumers and extend their customer base.
Quality can refer to a variety of things, including items that last longer or perform better,
better after-sales or technical advice, and better service.

More options: In a competitive market, firms will seek to differentiate their products
from the competition. As a result, consumers have more options, allowing them to choose
the product that provides the most value for money.

4.3 THE FOLLOWING ARE SOME OF THE MAIN FEATURES OF THE

COMPETITION ACT:

Anti-competitive agreements: The competition law forbids any agreement involving

two or more firms or individuals to maintain market competition and serve the public
interest in India.

Dominance-abuse prevention: Any firm that exploits its dominating position will be
penalised.

4
ibid

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Anti-cartels: Any agreement between businesses or individuals that harms competition is
a civil offence.

Mergers and acquisitions: The Commission will only approve mergers and acquisitions
if they do not undermine market competition.
Informative nature of this act: In order to provide clarity and avoid misunderstandings
between companies or people, a business must notify CCI of any interactions that are
likely to harm market competition prior to adopting such action or engaging in such an
agreement.

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5. KEY CONCEPTS OF COMPETITION ACT, 2002

The Competition Act, 2002 primarily covers four aspects.

5.1 Anti-competitive agreements
5.2 Abuse of the dominant position
5.3 Combinations and their regulation
5.4 The Competition Commission of India
5.5 Competition advocacy
5.6 Sections 60 and 61 of the Act give further teeth to the Commission

5.1 Anti-Competitive Agreements

Anti-competitive agreements are agreements among companies in a commercial

transaction that have the ability to weaken competition in a specific market or enrich one
specific group at the cost of the others. Such anti-competitive contracts are prohibited by
the Competition Act, 2002.

The word ‘agreement’, as mentioned in Section 2(b) of the Competition Act, 2002 5 does
not necessitate the use of a legal instrument to be signed by the parties. It may or may not
be in writing. The definition provided is evidently broad rather than exhaustive, and it
includes a number of issues. The primary reason for having a wider definition of
‘agreement’ under the Competition Act, 2002 is that those individuals who engage in
anti-competitive behaviour are unable to get into an official written contract in order to
suppress their conduct.

Section 3 of the Competition Act, 2002 6 makes it illegal to enter into any agreement
pertaining to the manufacturing, sale, transport, warehousing, purchasing, or management
of goods and services that has or is likely to have an adverse effect on the market in
India. Section 3(2) further specifies that any agreement entered into in contravention of
this provision is null and void.

The Competition Act aims to govern two types of agreements:

Horizontal Agreements, and
Vertical Agreements.

Horizontal Agreements
Section 3(3) of the Competition Act, 2002 7 talks about horizontal agreements. These are
agreements between two or more business entities working at the same level of
production and distribution. Under the Competition Act, some forms of horizontal
agreements are deemed to have an appreciable adverse effect on competition in India.
This assumption does not suggest that all horizontal agreements are always anti-
competitive; the companies involved in such a contract must produce proof that their
contract will not have an appreciable adverse effect on competition.

5
Section 2(b) of the Competition Act, 2002
6
Section 3 of the Competition Act, 2002
7
Section 3(3) of the Competition Act, 2002

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An example of horizontal agreement is when two manufacturers of a particular
commodity fix the price of their commodity.

Some horizontal agreements that are prohibited under the Competition Act, 2002 are as
follows:
Agreements involving the explicit or implicit setting of the commodity’s buying or
selling price.
Contracts that limit or regulate the manufacturing, sales, expenditure, or service
provisions for specific goods and numbers.
Contract related to market sharing.
Contracts for bid rigging: Section 3(3)(d) 8 defines bid rigging as an agreement between
two parties engaged in a similar business that has the effect of removing or lowering bid
competition or adversely affecting or influencing bidding.
Agreements in the form of cartels: Cartels, in reality, are confidential contracts between
corporations that exist only to fix prices or share markets. They pose a substantial danger
to competition and, as a consequence, choke free trade.

Vertical Agreements
Section 3(4) of the Competition Act, 2002 9 talks about vertical agreements. These are the
agreements formed between firms or individuals at various levels or tiers of the
manufacturing chain. Vertical agreements are normally allowed unless it has been proven
that they create, or are likely to induce, an appreciable adverse effect on competition in
the Indian markets. The Competition Act contains an inclusive list of vertical agreements
that may be banned based on their impact on competition situations in India.
For example, an agreement between a producer and a supplier that has the ability to affect
competition in the market can be termed a vertical agreement.

Various vertical agreements permitted under the Competition Act, 2002 are as follows:
Tie-in agreement
Exclusive supply agreement
Exclusive distribution agreement
Refusal to deal
Maintenance of resale prices

5.2 Abuse of dominant position

When an individual or a firm is in a stronger position, which allows them to act freely
irrespective of competitive pressures in the market sector, they are said to be in a
dominant position. They also have a positive influence on their rivals, customers, or the
current market situation. A dominant position refers to a company’s power in a particular
market in India that allows it to function freely irrespective of business pressures.
To establish an abuse of dominant position, a corporation must first have a dominant
position in terms of a specific product and the geographic market for that product.

8
Section 3(3)(d) of the Competition Act, 2002
9
Section 3(4) of the Competition Act, 2002

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Section 4 of the Competition Act, 2002 10, focuses on the prohibition of such misuse. It
implies that no firm or organisation should use its dominating position to its benefit. It
also illustrates what activities can be considered an abuse of a dominant position. Such
activities are as follows:
Imposing unfair or discriminatory terms on the purchase or sale of goods and services, or
increasing costs on the purchase or sale of goods and services (particularly aggressive
rates), either explicitly or implicitly
To the harm of customers, reducing or controlling the manufacturing of goods or
services, or constraining scientific or technological advancement related to goods or
services.
Participating in activities that restrict access to markets in any manner.
Taking advantage of a dominating position in the market to defend or enter another
particular market.

Following are a few cases related to the abuse of dominant position:

M/s Saint Gobain Glass India Ltd. v. M/s Gujarat Gas Company Limited 11

The CCI evaluated elements to be considered for defining the significant geographic
market as well as the appropriate product market while identifying the ‘relevant market’.
According to the CCI, when defining the ‘relevant product market’, the commission must
take into account all or any of the following criteria: the cost of goods or services, the
rejection of in-house manufacturing, physical features or final goods, customer tastes, the
presence of specialised manufacturers, and also the categorization of manufactured
goods, in compliance with the conditions contained in.

M/s Fast Track Call Cab Private Limited v. ANI Technologies 12

it was found that Ola had provided refunds, rewards, loyalty, and unfair discounts. The
Commission remarked that Ola’s conduct of giving large discounts to its customers and
rewarding its staff at the expense of incurring losses seems to be a well-planned strategy
by the firm to exclude other market competitors from the particular market. This case
demonstrates that CCI’s stance on the security of regular taxi service providers has been
modified.

5.3 Combinations and their regulation

A combination, as defined in Section 5 of the Competition Act, 2002 13, is the active or
passive procurement of shares, voting power, or resources, or command over
management or supervision over assets of more than one enterprise by one or even more
people. It is the merger or amalgamation among companies. In the context of the

10
Section 4 of the Competition Act, 2002
11
AIR 174 , 2016
12
CCI CASE NO 6 & 7 OF 2015
Section 5 of the Competition Act, 2002,
13

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competition law, a combination is defined as the merging of two or more businesses or
organisations, or the takeover of a business sector (such as a company or firm) by another
commercial entity. In India, mergers can be of two types:

Merger through absorption: Absorption is the amalgamation of two or more businesses

into one ‘established business’. Apart from one, all firms lose their identities in such a
combination.
Merger by consolidation: A merger by consolidation is the merger of two or more
businesses into a ‘new organisation’. All firms are officially abolished in this type of
merger, and a new company is formed.
The Competition Act contains some rules and regulations regarding combinations to
ensure that such mergers do not harm competition in the market. These rules are as
follows:
No organisation can enter into any merger that is likely to provoke an appreciable adverse
effect on competition.

Section 6(1) 14 prevents the establishment of combinations that seem to have an

appreciable adverse effect on competition in the pertinent market in the country, and thus
further says that certain combinations should be regarded as void.
If any individual or firm intends to create an amalgamation, the CCI must approve the
creation of the combination.
The following procedures should be followed before the CCI issues a permission or
disapproval decision for the proposed merger:
Give notice to the Commission;
CCI will conduct an inquiry into the merger in accordance with Section 29 15 of the
Competition Act, 2002;
Following an investigation, if the Commission determines that a merger does not have, or
is unlikely to have, a significant negative impact on competition, the combination is
permitted.

5.4 Competition Commission of India

The Chapter 3 section 7 to 17 provides for the formation of a CCI. It acts as the regulator
of competition in the Indian market. The commission was founded in 2003, but it did not
become fully operational until 2009. The central government appoints a chairman and six
members to the CCI. It is the commission’s responsibility to eradicate anti-competitive
activities, encourage and maintain competition, safeguard consumer rights, and guarantee
free trade in India’s marketplaces. It is a quasi-judicial body tasked with the following
duties:
Prevent practices that have a negative effect on competition.
Encourage and maintain market competition.
Safeguard the interests of all consumers.

14
Section 6(1) of the Competition Act, 2002

15
Section 29 of the Competition Act, 2002

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Safeguard commercial liberty.
5.5 Competition advocacy

Competition Act broadens the jurisdiction of CCI beyond just monitoring the rules to
include competition advocacy and the creation of a competitive environment.
Competition advocacy, as mentioned in Section 49 of the Competition Act, 2002 16, refers
to initiatives that raise public awareness about the importance of a competitive industry.
The customers, whose wellbeing is the primary goal of the legislation, are obligated to
take responsibility for advocating for competition law by the CCI. The CCI has
undertaken competition advocacy activities in both the Union and State governments, in
collaboration with other sectors such as corporate entities, consumer activists, and
regulatory organisations composed of experts such as attorneys, chartered accountants,
and corporate executives. Based on a government’s political and financial context,
competitive advocacy can perform a variety of functions.

The Union government may seek advice from the CCI or establish its own judgement on
the possible implications of a strategy in the development or any applicable competition
law. The Commission is required to provide its recommendation to the Union
government within sixty days after taking such a recommendation. As a result, the CCI
will be assumed as the competition advocate, working to develop government policies
that support free trade, decrease entry barriers, and increase competition in the market.
The Act intends to establish a direct link between competition law enforcement and
competition advocacy. One of the primary goals of competition advocacy is to create
environments that favour corporate conduct and more competition in the market structure
without the CCI’s penalties. In the framework of the law, the opinion of CCI will be a
significant factor contributing to the government to execute its law or policy.

5.6 Sections 60 and 61 of the Act give further teeth to the Commission.

Under Section 6017 of the Act it is provided that 'the provisions of this Act shall have
effect notwithstanding anything inconsistent therewith contained in any other law for the
time being in force'.

Section 6118 says that 'no civil court shall have jurisdiction to entertain any suit or
proceeding in respect of any matter which the Commission is empowered by or under this
Act to determine and no injunction shall be granted by any court or other authority in
respect of any action taken or to be taken in pursuance of any power conferred by or
under this Act.'

Section 60 is a 'Non - obstinate' clause and the principle laid down by the Supreme Court
in this regard is given hereinafter.

16
Section 49 of the Competition Act, 2002,
17
Section 60 of the Competition Act, 2002,
18
Section 61 of the Competition Act, 2002,

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"The enacting part of the statute must, where it is clear, be taken to control the non-
obstinate clause where both cannot be read harmoniously; for, even apart from such
clause a later law abrogates earlier laws clearly inconsistent with it"

"A non-obstinate clause is a legislative device usually employed to give overriding effect
to certain provisions over some contrary provisions that may be found either in the same
enactment or some other enactment, that is to say to avoid the operation and effect of all
contrary provisions."

Therefore, it becomes interesting to note that when we consider the case of an Enterprise
or a Person or any Statutory Authority regulating production, supply or provision of any
service and such a case if happens to deal with competition issues then the jurisdiction of
the Commission may not possibly be ignored. That appears to be the intentions of the
Legislatures.

In Re British Basic Slag Ltd.19

It was held that there should have been a course of conduct. It should involve some sort
of communication between the parties. Each party is led to expect that the others will act
in a certain way. There must be an opportunity for the conduct to be observed. The
parties should recognize the implications. There should be mutually. As a result of the
communication- which may be through their conduct or behavior- the parties adopt a
course of conduct.

In Re Delhi Automobiles (P) Ltd 20. It was held that joint advertisements by the dealer
offering uniform sale price for certain brand of cars was an arrangement or an
undertaking.

In R.R.T.A. Vs W.H. Smith and Son Ltd. And Others 21

“People who combine together to keep up prices do not shout it from the house tops.
They keep it quiet. They make their own arrangements in the cellar where no one can see.
They will not put anything into writing nor even into words. A nod or wink will do.
Parliament was well aware of this. So, it includes not only an “agreement” properly so
called but arrangement, however informal.”

19
(1963) 2 ALL ER 807
20
(1962) L.R. 3 R.P. 178
21
(1976) 46 Com. Cas. 610

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6. DEVELOPMENT OF COMPETITION LAW IN 2022

The central government has proposed the Competition (Amendment) Bill, 2022 22, which
proposes to alter the system of governance of the CCI.
About the bill in brief
The bill intends to amend the fundamental provisions to accommodate the demands of the
modern market.
It also intends to check anti-competitive practices in the online business, a field that has
faced significant legal and regulatory concerns.
It also intends to strengthen the regulatory framework by boosting the CCI’s
responsibility, adaptability, and implementation capacity.

Amendments proposed by the bill

The following are some of the main amendments proposed by the bill:
A board of directors composed of part-time experts to oversee CCI operations.
CCI must establish punishment criteria and provide explanations for any discrepancies.
The merger evaluation time has been reduced from 210 to 150 days.
The establishment of a green channel for merger proposals.
CCI can bring appeals to the National Company Law Appellate Tribunal
(NCLAT) conditional on a pre-deposit of not more than 25 percent of the CCI’s
punishment.
CCI would be capable of engaging in structured conversations with parties and reach an
amicable solution without the need to go through long-established processes, bringing it
up to speed with the Securities and Exchange Board of India (SEBI).

7. RELEVANCE OF COMPETITION LAW IN THE DIGITAL ERA

22
Competition (Amendment) Bill, 2022

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The usage of digital platforms has increased during the past few years. Under the
Competition Act, 2002, CCI has implemented aggressive regulating procedures and taken
proactive action against digital platforms engaged in anti-competitive activities. CCI
examines network effects, internet privacy, data manipulation, data collection,
incorporation, and exchange to enhance competition regulation in digital markets. CCI
has revised the particular market by confining itself primarily to online market segments,
rather than its previous practice of integrating online and offline marketplaces, thereby
bringing additional technology platforms under investigation. While competition laws
successfully regulate digital markets, there is an opportunity for competitive markets to
be strengthened through proper modifications to keep up with the intricacies of evolving
technologies. The future of antitrust regulation of digital marketplaces looks to be bright.
Landmark cases on competition law

Google Inc. & Ors v. Competition Commission of India 23

Fact
The CCI received a complaint alleging that Google Inc. misused its dominating position
in the online advertising market by marketing its vertical online services such
as YouTube, Google News, Google Maps, and so on. In other words, regardless of their
popularity or relevancy, such services display prominently on the Google search engine
result page.

Issues
The main question was whether an administrative authority, such as CCI, has inherent
rights to examine or recall a decision issued under Section 26(1) without any particular
provisions in the Competition Act 2002.

Decision
The Delhi High Court stated that the CCI has the authority to recall or reconsider its
decision in accordance with specific conditions and that this should be done selectively
but not in all cases in which the investigation has been conducted without a thorough
inquiry.

Mohit Manglani v. M/s Flipkart India Pvt. Ltd. & Ors 24

Facts
Mohit Manglani challenged four prominent firms in the Indian e-commerce sector:
Flipkart, Jasper Infotech, Xerion Retail, and Amazon Vector E-commerce (collectively,
the ‘Opposite Parties’). The complainant claimed that the opposite parties established
exclusive selling and distribution contracts with producers of goods and services to
engage in anti-competitive acts in contravention of the Competition Act, 2002. He further
claimed that as a result of such exclusive contracts, the opposite parties had obtained a

23
CA (AT) NO. 01 OF 2023
24
C NO.80 OF 2014

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product-specific monopoly, i.e., all of the opposite parties had a hundred percent market
domination for commodities that were solely offered on their websites.
Issue
Is it a violation of the Competition Act to engage in exclusive agreements for the sale and
acquisition of products via e-commerce?

Decision
The Commission found that the OPs’ digital distribution channels allow consumers to
compare prices as well as the benefits and disadvantages of the service. It also offers the
choice of delivery at their leisure. As a result, it appears that the exclusive agreement
between manufacturers and e-portals does not result in AAEC in the industry.
Shortcomings in the Competition Act

The basic idea of collective dominance is missing in the Competition Act despite its
critical importance in a changing economy like India. The omission of the idea of
“collective dominance” in the Indian competition law has often prevented the CCI from
taking appropriate remedies whenever necessary. Collective dominance refers to a
situation wherein two or more separate companies, united by economic relations,
collectively retain a superior position to the other traders. Collective dominance is visible
in both vertical and horizontal markets. As a result, parties in a dominating position do
not need to be a member of an anti-competitive agreement or cartelization.

Furthermore, some say that because of the complexity of competition law analysis, along
with the lack of organisational endowment in most emerging economies, adopting a
competition law regime may end up doing more harm than benefit, as the risk of making
incorrect conclusions is quite high.

The government has the authority to overrule the CCI. Such limitations have a significant
impact on the CCI’s autonomy and effectiveness. In reality, discussion with the CCI by
the Central Government under developing competition policy should be made necessary,
rather than optional, as provided for in the Act. Furthermore, the Act does not cover
infringements on intellectual property rights, which are monopoly rights for a limited
period of time.

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8. CONCLUSION

The Competition Act in India was designed to fulfil the requirements of growth in the
economy and worldwide economic trends concerning competition law. As a result, the
competition law of 2002 is recognized as a historic law. This legislation does not allow
misuse of power. This law primarily promotes competition in the market while also
providing flexibility in the distribution of income to firms of all sizes in order to boost the
industry’s commercial viability. Though the entire law has still not been implemented,
the adoption of the entire Act will undoubtedly increase market competitiveness on a
national and worldwide scale.

The Indian Competition Act, 2002 is very much comprehensive and enacted to meet the
requirements of the economic growth and international economic developments relating
to competition laws. The legislation is in synchronization with other policies such as
trade policy, FDI norms, FEMA etc, which would ensure uniformity in overall
competition policy.

The Competition Act ushers in a new Competition Regime in India. The new regime will
herald a paradigm shift to the business environment in India. A significant section of
Indian industry is, perhaps rightly so, apprehensive about this new enactment and its
possible impact on them. Industry is also anxious that the advantages to various sectors
arising out of competition should percolate to consumers and businesses for a level
playing field, redressal against anti competitive practices, competitively priced inputs and
optimal realization from sale of assets. While the objective of the Competition Act, 2002,
as stated in its preamble, is undoubtedly laudable and needless to say that this dynamic
statute can and will touch and change the way Corporate India functions on a day to day
basis, what is important is that the investigations and inquiries under the provisions of the
Act should be concluded as expeditiously as possible and timing issues need to be
addressed.

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8. BIBLIOGRAPHY

BOOKS

1. Roy Abir and Kumar Jayant “ competition law in india ”Eastern Law House Private
Ltd 4nd edi 2008

JOURNAL ARTICLES

1. Agarwal K. Anurag, (2005), “Competition Law in India: Need to go slowly and

steady”, Indian Institute of Management,Ahmedabad,WP 2005-10-05.

2. Chidambaram,P(2003), “Law and Commerce: And the Twin shall meet”, The Sunday
Express, Ahmedabad,October,26.

3. Dr. S. Chakravarthy : “India: Pros and Cons Of Competiton”

4. Iyer Ranjana “Competition Law and Policy: ABrief Overview of the Indian Perspective”

5. Jenny,F(1999),”Globalization, competition and Trade Policy: Issues and challenges”,

In Rger Zach ed. Towards WTO competition Rules, Key issues and comments on the
WTO Report on the Trade and Competition, Kluer Law International.

6. Khemani and Mark A Ditz, “The instruments of Competition Policy and their
relevancy for Economic policy”, PSD occasional paper no. 26, World Bank, Washington
DC (1996).

LEGISLATURES

1. Sick Industrial Companies (Special Provisions) Act, 1985

2. The Companies Act, 1956
3. The Competition Act, 2002
4. The Constitution of India
5. The Consumer Protection Act, 1986.
6. The Industrial Disputes Act, 1947
7. The Industries (Development and Regulation) Act, 1951
8. The MRTP Act, 1969
9. World Trade Organisation (WTO) Agreement

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 WEBSITE REFERENCES
1. www.manupatra.com
2. www,judis.nic.in
3. www.indialawinfo.com
4. www.helplinelaw.com
5. www.legalserviceindia.com
6. www.twocircles.net
7. www.lexisnexisindia.com
8. www.westlaw.com
9. www.livemint.com/2009/08/17224209/Corporate-affairs-ministry-set.html
10. www.mca.gov.in/Ministry/pdf/Draft_National_Competition_Policy.pdf
11. antitrustasia.com/competition-law?region=south+asia&country=india

LIST OF CASES

1. Google Inc. & Ors v. Competition Commission of India , CA (AT) NO. 01 OF 2023

2. In Re British Basic Slag Ltd. (1963) 2 ALL ER 807

3. In Re Delhi Automobiles (P) Ltd . (1962) L.R. 3 R.P. 178

4. In R.R.T.A. Vs W.H. Smith and Son Ltd. And Others, (1976) 46 Com. Cas. 610

5. Mohit Manglani v. M/s Flipkart India Pvt. Ltd. & Ors , C NO.80 OF 2014

6. M/s Fast Track Call Cab Private Limited v. ANI Technologies , CCI CASE NO
6 & 7 OF 2015

7. M/s Saint Gobain Glass India Ltd. v. M/s Gujarat Gas Company Limited,
AIR 174 , 2016

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