Upload
adiwani
View
124
Download
2
Embed Size (px)
Citation preview
2
EXTANT COMPETITION LAW OF INDIA
MONOPOLIES AND RESTRICTIVE
TRADE PRACTICES ACT,1969
BROUGHT INTO FORCE IN 1970
3
MRTP ACT’S ROOT
A LODE STAR
• CONSTITUTION OF INDIA - DIRECTIVE PRINCIPLES OF STATE POLICY
B PRINCIPLES
• SOCIAL JUSTICE WITH ECONOMIC GROWTH
• WELFARE STATE
• REGULATING CONCENTRATION OF ECONOMIC POWER TO THE COMMON DETRIMENT
• CONTROLLING MONOPOLISTIC, UNFAIR AND RESTRICTIVE TRADE PRACTICES
4
THREE STUDIES SHAPE THE MRTP ACT
HAZARI COMMITTEE REPORT ON INDUSTRIAL LICENSING PROCEDURE, 1955 – WORKING OF THE LICENSING SYSTEM HAS RESULTED IN DISPROPORTIONATE GROWTH OF SOME BIG HOUSES
MAHALANOBIS COMMITTEE REPORT ON DISTRIBUTION AND LEVELS OF INCOME, 1964 – TOP 10 % OF THE POPULATION CORNERED 40 % OF INCOME AND BIG BUSINESS HOUSES WERE EMERGING BECAUSE OF PLANNED ECONOMY MODEL
MONOPOLIES INQUIRY COMMISSION REPORT OF DAS GUPTA, 1965 – THERE WAS CONCENTRATION OF ECONOMIC POWER AND A FEW INDUSTRIAL HOUSES WERE CONTROLLING A LARGE NUMBER OF COMPANIES AND THERE EXISTED LARGE SCALE RTP & MTP.
5
OBJECTIVES OF THE MRTP ACT
PREVENTION OF CONCENTRATION OF ECONOMIC POWER TO THE COMMON DETRIMENT
CONTROL OF MONOPOLIES PROHIBITION OF MONOPOLISTIC TRADE
PRACTICES (MTP) PROHIBITION OF RESTRICTIVE TRADE
PRACTICES (RTP) PROHIBITION OF UNFAIR TRADE PRACTICES
(UTP)
6
1984 AMENDMENTS TO THE MRTP ACT
HIGH - POWERED EXPERT COMMITTEE REPORT OF JUSTICE SACHAR
THE REPORT RECOMMENDED THAT A SEPARATE CHAPTER SHOULD BE ADDED TO THE MRTP ACT DEFINING UTPs ESSENTIALLY IN THE INTERESTS OF CONSUMERS.
ADVERTISEMENT AND REPRESENTATION TO CONSUMERS SHOULD NOT BECOME DECEPTIVE BUT SHOULD BE TRANSPARENT.
7
RESTRICTIVE TRADE PRACTICES
REFUSAL TO DEAL TIE-UP SALES FULL LINE FORCING EXCLUSIVE DEALINGS PRICE DISCRIMINATION RE-SALE PRICE MAINTENANCE AREA RESTRICTION
8
UNFAIR TRADE PRACTICES
MISLEADING ADVERTISEMENT AND FALSE REPRESENTATION
BARGAIN SALE, BAIT AND SWITCH SELLING
OFFERING OF GIFTS OR PRIZES WITH THE INTENTION OF NOT PROVIDING THEM AND CONDUCTING PROMOTIONAL CONTESTS
PRODUCT SAFETY STANDARDS HOARDING OR DESTRUCTION OF GOODS
9
MONOPOLISTIC TRADE PRACTICES
1. UNREASONABLE PRICING 2. PREVENTING OR LESSENING
COMPETITION IN SUPPLY/DISTRIBUTION OF GOODS/SERVICES
3. LIMITING TECHNICAL DEVELOPMENT, CAPITAL INVESTMENT OR PRODUCTION/SUPPLY
4. UNREASONABLE PROFITS (PROFITEERING)
10
1991 REFORMS AND SINCE
RECENT POLICY CHANGES FROM 1991 ONWARDS INCLUDE:
DEREGULATION AND SIMPLIFICATION OF LICENSING AND APPROVAL PROCEDURES
EXEMPTION OF A LARGE NUMBER OF INDUSTRIES FROM LICENSES, APPROVALS AND QUOTAS
NEW ECONOMIC ADJUSTMENT MEASURES
DIVESTITURE AND SALE OF GOVERNMENT ASSETS
GRADUAL DECLINE IN THE INTERVENTIONIST ROLE OF THE PUBLIC SECTOR
PRIVATISATION
ENCOURAGING COMPETITION
11
1991 AMENDMENTS TO MRTP ACT
1. SIZE CONCEPT GIVEN UP
2. CURBS ON GROWTH OF MONOPOLY COMPANIES DELETED
3. MERGER CONTROL REMOVED
4. MORE EMPHASIS ON PROHIBITION OF RTPs, UTPs AND MTPs
IN SUM, BIG BECOMING BIGGER IS NO MORE UGLY
12
EXPERIENCE IN THE LAST THREE DECADES
NO MENTION OR DEFINITION OF OFFENCES LIKE NO MENTION OR DEFINITION OF OFFENCES LIKE (ILLUSTRATIVE)(ILLUSTRATIVE)
•ABUSE OF DOMINANCE
•CARTELS, COLLUSION AND PRICE FIXING
•BID RIGGING
•BOYCOTTS AND REFUSAL TO DEAL
•PREDATORY PRICING
LARGE NUMBER OF INTERPRETATIONS & CASE LAWS LARGE NUMBER OF INTERPRETATIONS & CASE LAWS AFFECTING THE INTENT/SPIRIT OF THE MRTP ACTAFFECTING THE INTENT/SPIRIT OF THE MRTP ACT
WTO FALL OUT OBLIGATIONSWTO FALL OUT OBLIGATIONS
13
HIGH LEVEL COMMITTEE
GOVERNMENT APPOINTED A HIGH LEVEL COMMITTEE TO ADVISE A MODERN COMPETITION LAW FOR INDIA IN LINE WITH INTERNATIONAL DEVELOPMENTS AND TO SUGGEST A LEGISLATIVE FRAME WORK.
THE COMMITTEE INCLUDED COMPETITION EXPERT, REPRESENTATIVES OF INDUSTRY AND CONSUMERS, ECONOMIST, CHARTERED ACCOUNTANT, ADVOCATE ETC.
14
TRIGGER FOR METAMORPHOSIS FROM MRTP ACT TO COMPETITION ACT
RECOMMENDATIONS OF EXPERT GROUP RECOMMENDATIONS OF HIGH LEVEL COMMITTEE RECOMMENDATIONS OF STANDING COMMITTEE OF
PARLIAMENT UNANIMITY TO REPEAL MRTP ACT AND TO ENACT A NEW
LAW APPRECIATION THAT THE MRTP ACT WAS MORE
CONCERNED WITH CURBING MONOPOLIES RATHER THAN WITH PROMOTING COMPETITION
APPRECIATION THAT PRE-1991 LPG HAS CHANGED TO POST-1991 LPG
RECOGNITION THAT INDIAN ENTERPRISES ARE SMALL IN SIZE AND NEED TO GROW TO BECOME GLOBALLY COMPETITIVE
15
FOUR COMPARTMENTSFOUR COMPARTMENTS
ANTI-COMPETITION AGREEMENTS
ABUSE OF DOMINANCE
MERGERS, AMALGAMATIONS, ACQUISITIONS AND TAKE-OVERS
COMPETITION ADVOCACY
16
ANTI - COMPETITION AGREEMENTS HORIZONTAL RESTRAINTS ::
CARTELS {FIXING PURCHASE OR SALE PRICES (EXPORT CARTELS EXEMPTED) }
BID-RIGGING (COLLUSIVE TENDERING)
SHARING MARKETS BY TERRITORY, TYPE ETC.
LIMITING PRODUCTION, SUPPLY, TECHNICAL DEVELOPMENT
VERTICAL RESTRAINTS : :
TIE-IN ARRANGEMENTS
EXCLUSIVE SUPPLIES
EXCLUSIVE DISTRIBUTION
REFUSAL TO DEAL
RESALE PRICE MAINTENANCE
ADJUDICATION BY RULE OF REASON
17
ABUSE OF DOMINANCE
DOMINANCE NOT LINKED TO ANY ARITHMETIC FIGURE OF MARKET SHARE
DOMINANCE MEANS A POSITION OF STRENGTH ENABLING AN ENTERPRISE TO OPERATE INDEPENDENTLY OF COMPETITIVE PRESSURE AND TO APPRECIABLY AFFECT THE RELEVANT MARKET,COMPETITION AND CONSUMERS.
ABUSE OF DOMINANCE ARISES IF AN ENTERPRISE
• IMPOSES UNFAIR /DISCRIMINATORY PURCHASE OR SALE PRICES (INCLUDING
PREDATORY PRICES)
• LIMITS PRODUCTION,MARKETS OR TECHNICAL DEVELOPMENT
• DENIES MARKET ACCESS
• CONCLUDES CONTRACTS SUBJECT TO OBLIGATIONS HAVING NO CONNECTION
WITH THE SUBJECT OF THE CONTRACTS.
• USES DOMINANCE TO MOVE INTO OR PROTECT OTHER MARKETS
RELEVANT MARKET = RELEVANT PRODUCT MARKET + RELEVANT GEOGRAPHIC RELEVANT MARKET = RELEVANT PRODUCT MARKET + RELEVANT GEOGRAPHIC MARKETMARKET
18
COMBINATIONS MERGERS/AMALGAMATIONS
1. REDUCTION IN NUMBER OF PLAYERS
2. ACQUISITION OF ENORMOUS ECONOMIC STRENGTH
3. DISCOURAGEMENT OF NEW ENTRANTS
4. DICTATION OF PRICES
5. DOMINANCE
1. COMPETITION LAW TO HAVE SURVEILLANCE OVER COMBINATIONS BEYOND A THRESHOLD LIMIT (Assets > Rs.1000 Crores or Turnover > Rs.3000 Crores )
2. NOTIFICATION OF COMBINATIONS VOLUNTARY AND NOT MANDATORY
3. CCI MANDATED TO DECIDE WITHIN 90 WORKING DAYS ELSE DEEMED APPROVAL
REGULATION ON COMPETITION PERSPECTIVE
19
COMPETITION ADVOCACY
THE COMPETITION COMMISSION OF INDIA IS ENABLED TO PARTICIPATE IN THE
FORMULATION OF POLICIES AND REVIEWING OF POLICIES RELATING TO COMPETITION AT THE INSTANCE OF THE GOVERNMENT
IS REQUIRED TO CREATE COMPETITION CULTURE
IS REQUIRED TO ACT AS COMPETITION ADVOCATE
20
EXEMPTIONSEXEMPTIONS
GOVERNMENT BY NOTIFICATION MAY EXEMPT FROM THE GOVERNMENT BY NOTIFICATION MAY EXEMPT FROM THE COMPETITION LAW COMPETITION LAW
A ANY CLASS OF ENTERPRISES IN THE INTEREST OF NATIONAL SECURITY/PUBLIC INTEREST.
B. ANY PRACTICE/AGREEMENT ARISING OUT OF INTERNATIONAL TREATY/AGREEMENT
C. ANY ENTERPRISE PERFORMING A SOVEREIGN FUNCTION ON BEHALF OF GOVERNMENT
DIFFERENT PROVISIONS FROM DIFFERENT DATES IF, NEED BE.DIFFERENT PROVISIONS FROM DIFFERENT DATES IF, NEED BE.
21
COMPETITION NEEDS TO BE INCORPORATED IN
•INDUSTRIAL POLICY
•RESERVATIONS FOR SSI
•TRADE POLICY (TARIFFS, SUBSIDIES ETC)
•STATE MONOPOLIES POLICY
•LABOUR POLICY
•REFORMS POLICY (PRIVATISATION ETC)
COMPETITION LAW CAN NOT OPERATE IN A VACUUM UNLESS PRE-REQUISITES OF COMPETITION POLICY ARE ALSO IN PLACE
22
IS A COMPETITION LAW REQUIRED AT ALL?
WITH GLOBALISATION, THERE IS LIKELY TO BE SIGNIFICANT RESTRUCTURING OF MANUFACTURE, TRADE AND SERVICES
DOMESTIC CONSOLIDATION AND ENTRY OF FOREIGN ENTITIES ANTI-COMPETITION PRACTICES MAY SURFACE AS A
CONSEQUENCE WTO FALL OUT OBLIGATIONS NEED TO BE ADDRESSED REGULATORY AND ADVOCACY FUNCTIONS NEED TO BE POSITED EXISTING MRTP ACT IS INADEQUATE NEW COMPETITION LAW WILL SUPPLANT MRTP ACT WITHOUT A COP, TRADE TRAFFIC MAY PREJUDICE CONSUMER
INTEREST COMPETITION LAW WILL BE A COP AND A FRIEND