Professional Documents
Culture Documents
• It’s when one business tries to win over another business’ customers or
clients by offering different products, better deals, or by other means .
• A good competition policy , along with a sound competition law should help in
fostering competition , economic efficiency , consumer satisfaction and
freedom of trade .
Competition Laws and their needs
• In pursuit of Globalisation, India has responded positively by opening up its
economy to global players , removing controls and resorting to Liberalisation .
So , markets need to gear up to face competition from within and outside .
• India was one of the first countries to have a competition law in the form of
the MRTP Act , 1969 .
• However , with the advent of economic reforms in 1991 , the law was found
inadequate for fostering competition in markets .
• Hence , the Competition Act , 2002 was enacted by the Parliament to establish
the new Competition regime in India and the embattled MRTP Act was
repealed .
• Thus , with the increasing integration of the Indian Economy with International
Markets , the Govt has acquired a wider perspective on regulation from
merely curbing monopoly to promoting competition .
MRTP Act
The Monopolistic and Restrictive Trade Practices Act, 1969, was enacted –
• To ensure that the operation of the economic system does not result in
the concentration of economic power in hands of few .
• Misleading representation regarding usefulness, need, quality, standard, style etc of goods and services.
This provision was added by the 1984 Amendment and was counterproductive to the
extent that petty consumer issues started embattling the Commission and it started
digressing from its initial objectives .
Faltering leading to Transition
• There was a lot of criticism around the MRTP Act that it prohibited growth.
• A perusal of the Act will show that there is neither definition not even
mention of certain offending and restrictive trade practices like “Abuse of
Dominance, Cartels, collusions and Price Fixing ,Bid Rigging and Predatory
Pricing” .
• A 2000 survey concerning the Economic Resources at its disposal will show
that its allocation in proportion to the Annual Budget was Minuscule .
• Hence a question arose on the effectiveness of the Act and the need to
replace it with a new Legislation . One strong argument is favor of enacting a
new law was that the Law had to fit the changing scenarios on the economic
and trade front .
• The Raghavan committee submitted its report in May 2000 and the Govt
passed a new law in December 2000 named the “The Competition Act 2002”.
The Competition Act, 2002
• The Act seeks to ensure fair competition by prohibiting trade practices which
cause appreciable adverse effect on competition .
• Various regulators at present ensure its implementation like the SEBI , NSE,
BSE etc .
• However the CCI could also charge firms of abuse without evidence of an
Appreciable Adverse Affect on Competition which is very problematic .
• There were institutional issues since the CCI didn’t have complete authority
and the government could supersede it and reconstitute it if it felt it wasn’t
functioning properly .
CONCLUSION
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