March 2023 - quiz sansar

29, Mar, 2023 0 Comments

What is Consumerism?

What is Consumerism?

Meaning of Consumerism

Consumerism is a social and economic order that encourages the acquisition of goods and services in ever-increasing amounts. With the industrial revolution, but particularly in the 20th century, mass production led to overproduction-the supply of goods would grow beyond consumer demand, and so manufacturers turned to planned obsolescence and advertising to manipulate consumer spending. In 1899, a book on consumerism published by Thorstein Veblen, called The Theory of the Leisure Class, examined the widespread values and economic institutions emerging along with the widespread “leisure time” in the beginning of the 20th century. In it Veblen “views the activities and spending habits of this leisure class in terms of conspicuous and vicarious consumption and waste. Both are related to the display of status and not to functionality or usefulness.”

In economics, consumerism may refer to economic policies which emphasise consumption. In an abstract sense, it is the consideration that the free choice of consumers should strongly orient the choice by manufacturers of what is produced and how, and therefore orient the economic organization of a society (compare producerism, especially in the British sense of the term). In this sense, consumerism expresses the idea not of “one man, one voice”, but of “one dollar, one voice”, which may or may not reflect the contribution of people to society.

In the almost complete absence of other sustained macro-political and social narratives, concern about global climate change notwithstanding, the pursuit of the ‘good life’ through practices of what is known as ‘consumerism’ has become one of the dominant global social forces, cutting across differences of religion, class, gender, ethnicity and nationality. It is the other side of the dominant ideology of market globalism and is central to what Manfred Steger calls the ‘global imaginary’.

The term consumerism has several definitions. These definitions may not be related to each other and confusingly, they conflict with each other.

1. One sense of the term relates to efforts to support consumers’ interests. By the early 1970s it had become the accepted term for the field and began to be used in these ways:

Consumerism is the concept that consumers should be informed decision makers in the marketplace. In this sense consumerism is the study and practice of matching consumers with trustworthy information, such as product testing reports.
Consumerism is the concept that the marketplace itself is responsible for ensuring social justice through fair economic practices. Consumer protection policies and laws compel manufacturers to make products safe.
Consumerism refers to the field of studying, regulating, or interacting with the marketplace. The consumer movement is the social movement which refers to all actions and all entities within the marketplace which give consideration to the consumer.

2. While the above definitions were becoming established, other people began using the term consumerism to mean “high levels of consumption”. This definition has gained popularity since the 1970s and began to be used in these ways:

Consumerism is the selfish and frivolous collecting of products, or economic materialism. In this sense consumerism is negative and in opposition to positive lifestyles of anti-consumerism and simple living.
Consumerism is a force from the marketplace which destroys individuality and harms society. It is related to globalization and in protest against this some people promote the “anti-globalization movement”.

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29, Mar, 2023 0 Comments

What are the Salient Features of Consumer Protection Act (India)?

What are the Salient Features of Consumer Protection Act (India)?

Salient Features of Consumer Protection Act

Salient features of consumer protection act are as follows:

Coverage of Items:

This Act is applicable on all the products and services, until or unless any product or service is especially debarred out of the scope of this Act by the Central Government.

Coverage of Sectors:

This Act is applicable to all the areas whether private, public or cooperative.

Compensatory Nature of Provisions:

Many Acts have been passed for the help of consumers. Consumers enjoy the benefits of these Acts but if a consumer wishes the Consumer Protection Act can provide extra help. As a result the nature of provisions of this Act is compensating for the loss or providing extra help. Consumer is totally free to enjoy the benefits provided in the Act.

Group of Consumer’s Rights:

This Act provides many rights to consumers. These rights are related to safety, information, choice, representation, redressal, education etc.

Effective Safeguards:

This Act provides safety to consumers regarding defective products, dissatisfactory services and unfair trade practices. So under the purview of this Act there is a provision to ban all those activities which can cause a risk for consumer.

Three-tier Grievances Redressal Machinery:

Consumer courts have been established so that the consumers can enjoy their rights. This Act presents Three- tier Grievances Redressal Machinery:

At District Level-District Forum
At State Level-State Commission
At National Level-National Commission.

Time Bound Redressal:

A main feature of the Act is that under this, the cases are decided in a limited time of period.

Consumer Protection Council:

To favour consumer protection and to encourage consumer’s awareness there is a provision in this Act to establish Consumer Protection Councils.

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16, Mar, 2023 0 Comments

Meaning of Combination and its regulation under Competition Act

Meaning of Combination and its regulation under Competition Act?

Meaning of Combination

Section 5 of the Competition Act explains combination as:

‘Acquisition of one or more Enterprises by one or more persons or Merger or amalgamation of Enterprises Shall be a combination of Such Enterprises and Persons or Enterprises.

Thus, Combination within the Competition Law is the merger between two or more enterprises or firms or the business sector acquisitions (such as companies or firms) by other business enterprises. The Government controls combinations or mergers and acquisitions within the country to promote competition and thereby seeing to that small scale establishments are not overshadowed and swallowed by more reputed industries. This is because the merger of big shot companies not only reduce competition but also make it difficult and almost impossible for smaller firms to grow or profit from their business. The accumulation of wealth in certain sectors of business and the consumer concerns can lead to major economic and social discrepancies within the nation.

Regulation of Combinations under the Competition Law

A merger or a combination can be held valid under the purview of the Competition Act 2002 and its regulation policies only if the newly acquired or merged enterprise passes the threshold pertaining to the assets and the turnover mentioned in the Act. If not confined to the criteria then the attractancy of the new enterprise will be nil as far as the provisions of the Competition Act are concerned. Sections 5 and 6 of the Competition Act covers the definition and regulation of combinations.

The Procedural Aspects

Step 1: To Notify

Once the threshold is met the next step is to non optionally notify the Competition Commission of India (CCI) on the merger or combination as prescribed in section 6 (2) of the Competition Act. This is for the purposes of determining whether a combination would have the effect of or is likely to have an appreciable adverse effect on competition in the relevant market while regarding factors like the actual and potential level of competition through imports in the market; extent of barriers to entry into the market; level of combination in the market; degree of countervailing power in the market etc.

The CCI has been amended on the 8th of January 2016 bringing in key changes closing in to complete ease of doing business in India and also in the regulation of combinations through the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Amendment Regulation, 2016. Any new enterprise to be considered by the CCI will have to abide by the section 6(2) of the Competition Act read with Regulation 5 and Regulation 8 of the Combination Regulation (2016).

Step 2: Inspection of the Notice:

The CCI is to scrutinise the notice for defects or incompleteness on the premises of Regulation 14 of the CCI Amendment Regulation, 2016. After the process the parties to the merger are asked to remove the defects if any.

Step 3: Prima Facie Opinion

The Commission has to form a prima facie opinion under sub-section I of section 29 of the Act within thirty days of the receipt of said notice. The procedure related to forming a prima facie view is contained in Regulation 19. As per sub regulation 2 of Regulation 19, the Commission may, if considered necessary, require the parties to the combination to file additional information.

Further the parties are asked to publish the details of the combination as per section 29 (2) which creates an open invitation to the public to come forth with objections within fifteen working days from the publishing under section 29(3), which are to be pacified by the CCI accordingly. The CCI may call upon the parties for additional information pertaining to the merger under section 29(4) read with section 29(5).

Step 4: Proceeding to the Final Order:

After receiving the additional information the Commission decides as to whether or not the merger or combination will have unfavourable effects on the current competition market as per under section 31. If the commission has concluded after careful scrutiny that the combination at hand will not have harmful effects on the competition market then the Commission shall approve of the transaction under section 31(1) of the Act. On the other hand if the Commission has concluded negative on the transaction due to its adverse effect on the market, it shall hold the transaction null under Section 31(2) of the Act. In a third scenario the Commission can provide the parties with modifications to be made in the transaction to rinse out the provisions likely to be inharmonious to the competition market (Section 31(3)].

Conclusion

The regulation of combinations in a broad sense has two expressions. The first one being the procedural format to be followed by the parties and the CCI, starting off from the point of notifying the Commission proceeding to the dispensation of the final order. The transactions presented to the Commission through notification maybe countenanced, countenanced with modification or held null in accordance with the concerned provisions of the Act. At the centre of any resolution made by the Commission is the, COMPETITION APPRAISAL, markedly pertaining to vertical and horizontal combinations. Further in the challenge of steading the competition market what helps is the careful and erudite assessment of the unilateral and coordinated effects both quantitatively and qualitatively owing to specific cases. A number of factors come and go while assessing combinations but the overall guiding notion is a barter between the anti-competitive effects and the pro-competitive effects.

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16, Mar, 2023 0 Comments

Why MRTP Act was replaced by Competition Act ?

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 behaviour oriented.

After the Act was placed on the web-site and came into the public domain, a question often asked is whether it is not still the old law in substance although not in form. A clear answer to this question is in the title of this section. The Act is a new wine in a new bottle. The differences between the old law (namely the MRTP Act, 1969) and the new law (the Competition Act, 2002) may perhaps be best captured in the form of a table displayed below:

s.no.	MRTP Act,1969	competition Act, 2002
1.	Based on the pre-reforms scenario	Based on the post-reforms scenario
2.	Based on size as a factor	Based on structure as a factor
3.	Competition offence. implicit or not defined	Competition offences explicit and defined
4.	Complex in arrangement and language	Simple in arrangement and language and easily comprehensible
5.	14 per se offences negating the principles of natural justice	4 per se offences and all the rest subjected to rule of reason
6.	Frowns upon dominance	Frowns upon abuse of dominance
7.	Registration of agreements compulsory	No requirement of registration of agreements
8.	No combinations regulation	Combinations regulated beyond a high threshold limit.
9.	Competition Commission appointed by the Government	Competition Commission selected by a Collegium (search committee)
10.	Very little administrative and financial autonomy for the Competition Commission	Relatively more autonomy for the Competition Commission
11.	No competition advocacy role for the Competition Commission	Competition Commission has competition advocacy role
12.	No penalties for offences	Penalties for offences
13.	Reactive and rigid	Proactive and flexible
14.	Unfair trade practices covered	Unfair trade practices omitted
15.	Does not vest MRTP Commission to inquire into cartels of foreign origin in a direct manner.	Competition Law seeks to regulate them.
16.	Concept of Group Act had wider import and was unworkable	Concept has been simplified

The Act is therefore a new wine in a new bottle. Wine gets better as it ages. The proposed Law provides for a Competition fund, which shall be utilised for promotion of competition advocacy, creating awareness about competition issues and training in accordance with the rules that may be prescribed. The extent MRTP Act 1969 has aged for more than three decades and has given birth to the new law (the Act) in line with the changed and changing economic scenario in India and rest of the world and in line with the current economic thinking comprising liberalization, privatization and globalization.

Conclusion

The message is loud yet clear that a well planned exhaustive competition compliance programme can be of great benefit to all enterprises irrespective of their size, area of operation, jurisdiction involved, nature of products supplied or services rendered and the same is essential for companies, its directors and the delegate key corporate executives to avoid insurmountable hardships of monetary fines, civil imprisonment, beside loss of hard-earned reputation when the Competition Authorities, the media and others reveal the misdeeds in public.

In the changed scenario, India do needs a fresh law for competition and a new regulatory authority, which under this policy is the ‘Competition Commission of India’. The law will serve the purpose only if it is made independently, runs independently and is less expensive.

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16, Mar, 2023 0 Comments

What is Competition Act, 2002?

What is Competition Act, 2002?

Competition Act, 2002

Since attaining Independence in 1947, India, for the better part of half a century thereafter, adopted and followed policies comprising what are known as Command-and-Control laws, rules, regulations and executive orders. The competition law of India, namely, the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act, for brief) was one such. It was in 1991 that widespread economic reforms were undertaken and consequently the march from Command-and-Control economy to an economy based more on free market principles commenced its stride. As is true of many countries, economic liberalisation has taken root in India and the need for an effective competition regime has also been recognized.

In the context of the new economic policy paradigm, India has chosen to enact a new competition law called the Competition Act, 2002. The MRTP Act has metamorphosed into the new law, Competition Act, 2002. The new law is designed to repeal the extant MRTP Act. As of now, only a few provisions of the new law have been brought into force and the process of constituting the regulatory authority, namely, the Competition Commission of India under the new Act, is on. The remaining provisions of the new law will be brought into force in a phased manner. For the present, the outgoing law, MRTP Act, 1969 and the new law, Competition Act, 2002 are concurrently in force.

Competition Law for India was triggered by Articles 38 and 39 of the Constitution of India. These Articles are a part of the Directive Principles of State Policy. Pegging on the Directive Principles, the first Indian competition law was enacted in 1969 and was christened the Monopolies And Restrictive Trade Practices, 1969 (MRTP Act). Articles 38 and 39 of the Constitution of India mandate, inter alia, that the State shall strive to promote the welfare of the people by securing and protecting as effectively, as it may, a social order in which justice social, economic and political shall inform all the institutions of the national life, and the State shall, in particular, direct its policy towards securing:

1. That the ownership and control of material resources of the community are so distributed as best to subserve the common good; and

2. That the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.

In October 1999, the Government of India appointed a High Level Committee on Competition Policy and Competition Law to advise a modern competition law for the country in line with international developments and to suggest a legislative framework, which may entail a new law or appropriate amendments to the MRTP Act. The Committee presented its Competition Policy report to the Government in May 2000 [the report will be referred to hereinafter as High Level Committee (2000)]. The draft competition law was drafted and presented to the Government in November 2000. After some refinements, following extensive consultations and discussions with all interested parties, the Parliament passed in December 2002 the new law, namely, the Competition Act, 2002.

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15, Mar, 2023 0 Comments

Explain various Types Of Combinations

Explain various Types Of Combinations.

Types Of Combinations

1. Horizontal Combinations

Horizontal Combinations involve the merging of enterprises or firms with identical level of production process, with substitute goods and are competitors. The horizontal combination is primarily a friendly merger between companies, although it can be a takeout of one by the other. Of course the synergy formed by this combination enhances the business performance, financial gains and shareholder value in the long run. The cost efficiency with the staff cut-offs leads to the increased margins of the company. However this tends to pave way for reduced competition as a monopolist agenda emerges from the combinations of powerful enterprises, along with the unemployment that follows which has a very drastic and adverse effect on the economy of the country. It is also bad for the consumers as the reduced competition gives the companies a “higher pricing power.” Therefore these merges are the chief focus and are often scrutinised by the Competition Law Authority for the above given reasons.

2. Non-Horizontal Combinations

The non-horizontal combinations are of two types: Vertical and Conglomerate combinations.

Vertical Combinations

Vertical merging is “combining of business firms engaged in different phases of the manufacture and distribution of a product into an interacting whole”. This leads to increased competitiveness, a greater process control, wider market share, a better supply chain co-ordination and decline in cost as this sort of integration is the structuring of supply chain of companies under a particular company..

Conglomerate Combinations

Conglomerate combinations involve firms or enterprises in unrelated business fields. Such combination happens when two companies that provide different services and goods or are integrated into varying sectors of business merge together. This sort of merger happens when the companies achieve a stronger stand in the market both in products and services and profit management unlike when they are individual enterprises.

Conglomerate merges can lead to an ascend in “market share, synergy and cross selling”. Here diversification takes a major roll and thereby reduces the “risk exposure” factor. The cons of this particular combination

can be the monopolization of a company over a certain market and the over expansion of the conglomerate can seriously affect the quality of functioning of the company and result in the collapse of the system. Such coalescence can be detrimental as it restricts business options for newly formed enterprises in the market. However it is to be note that Non Horizontal Conglomerations do not promote loss of direct competition and are therefore not anti-competitive within an overall framework.

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15, Mar, 2023 0 Comments

Competition Appellate Tribunal Notes

Write a note on Competition Appellate Tribunal?

Competition Appellate Tribunal

1. Competition Appellate Tribunal was established in accordance with the provisions of the Amendment Act, 2002.

2. Its function is to hear and dispose of appeals against any direction issued or decision made or order passed by the Competition Commission of India.

3. The Appellate Tribunal shall also adjudicate on claim for compensation that may arise from the findings of the Competition Commission of India or the orders of the Appellate Tribunal in an appeal against any findings of the Competition Commission of India and pass orders for the recovery of compensation.

4. It consists of the chairperson, an ex or current judge of Supreme Court or the Chief Justice of a High Court, and two other persons with a professional experience of not less than twenty-five years in, competition matters, including competition law and policy, international trade, economics, business, commerce, law, finance, accountancy, management, industry, public affairs, administration or in any other matter which in the opinion of the Central Government, may be useful to the Appellate Tribunal, appointed by the central government of India.

5. The Chairperson or a Member of the Appellate Tribunal shall hold office for a term of five years and shall be eligible for re-appointment. Provided that no Chairperson or other Member of the Appellate Tribunal shall hold office after he has attained the age of sixty-eight years or sixty- five years respectively.

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15, Mar, 2023 0 Comments

What is Sustainable development?

What is Sustainable development?

Sustainable development

Environmental governance advocates sustainability as the supreme consideration in managing all human activities-political, social and economic. The concept of sustainability relies on sustainable development. Sustainable development can be explained in various ways, but the most widely recognized definition was phrased by the Brundtland Commission in 1987:

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Sustainable development is based on the three pillars of sustainability: economic, environmental and social sustainability. It is only achieved when there is balance or a trade-off between these three aspects (see figure below)

Relationships in sustainable development - environmental, social and economic concerns. — Relationships in sustainable development – environmental, social and economic concerns.

However, some authors have expanded this approach and added a fourth pillar (for example cultural, political or institutional), it is most important to understand that sustainable development is a holistic, integrated approach, meaning that in order to achieve sustainable development, there needs to be a balance between different spheres of life.

At the United Nations Sustainable Development Summit in 2015, world leaders adopted the 2030 Agenda for Sustainable Development, which includes a set of 17 Sustainable Development Goals (SDGs) aimed at ending poverty, fighting inequality and injustice and tackling climate change by 2030. These 17 goals, listed below, are all accompanied by specific targets -169 in total.

Sustainable Development Goals

1. End poverty in all its forms everywhere

2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture

3. Ensure healthy lives and promote well-being for all at all ages

4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

5. Achieve gender equality and empower all women and girls

6. Ensure availability and sustainable management of water and sanitation for all

7. Ensure access to affordable, reliable, sustainable and modern energy for all

8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

10. Reduce inequality within and among countries

11. Make cities and human settlements inclusive, safe, resilient and sustainable

12. Ensure sustainable consumption and production patterns

13. Take urgent action to combat climate change and its impacts

14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development

15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

17. Strengthen the means of implementation and revitalize the global partnership for sustainable development.

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13, Mar, 2023 0 Comments

What is meant by competition Act, 2002 ? Provisions and Salient features of Competition Act, 2002

What is meant by competition Act, 2002 ?

Meaning of Business competition – Business competition is a contest or rivalry between firms to win revenue. It is a fundamental economic force that benefits customers as firms are under pressure to constantly improve products and offer attractive prices.

The Competition Act, 2002

The Competition Act, 2002 was enacted by the Parliament of India and governs Indian competition law. It replaced the archaic The Monopolies and Restrictive Trade Practices Act, 1969. Under this legislation, the Competition Commission of India was established to prevent the activities that have an adverse effect on competition in India. This act extends to whole of India except the State of Jammu and Kashmir.

It is a tool to implement and enforce competition policy and to prevent and punish anti-competitive business practices by firms and unnecessary Government interference in the market. Competition laws is equally applicable on written as well as oral agreement, arrangements between the enterprises or persons.

The Competition Act, 2002 was amended by the Competition (Amendment) Act, 2007 and again by the Competition (Amendment) Act, 2009.

The Act establishes a Commission which is duty bound to protect the interests of the free and fair competition (including the process of competition), and as a consequence, protect the interests of consumers. Broadly, the Commission’s duty is:-

1. To prohibit the agreements or practices that have or are likely to have an appreciable adverse effect on competition in a market in India, (horizontal and vertical agreements / conduct);

2. To prohibit the abuse of dominance in a market;

3. To prohibit acquisitions, mergers, amalgamations etc. between enterprises which have or are likely to have an appreciable adverse effect on competition in market(s) in India.

In addition to this, the Competition Act envisages its enforcement with the aid of mutual international support and enforcement network across the world,

Definitions

1. Acquisition: Acquisition means, directly or indirectly, acquiring or agreeing to acquire shares, voting rights or assets of any enterprise or control over management or assets of any enterprise.

2 Cartel: Cartel includes an association of producers, sellers, distributors, traders or service providers who, by agreement among themselves, limit control or attempt to control the production, distribution. sale or price of goods or provision of services.

3. Dominant position: It means a position of strength, enjoyed by an enterprise, in the relevant market which enables it to operate independently of competitive forces prevailing in the market or affect its competitors or consumers in its favour.

4. Predatory pricing: Predatory pricing means the sale of goods or provision of services, at a price which is below the cost of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors.

5. Rule of reason: It is the analysis of any activity under the challenge on the basis of business justification, competitive intent, market impact, impact on competition and on consumer. It is the logic behind the conclusion for any order.

Salient Features: Provisions

Anti Agreements

Enterprises, persons or associations of enterprises or persons, including cartels, shall not enter into agreements in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which cause or are likely to cause an “appreciable adverse impact” on competition in India. Such agreements would consequently be considered void. Agreements which would be considered to have an appreciable adverse impact would be those agreements which-

1. Directly or indirectly determine sale or purchase prices.

2. Limit or control production, supply, markets, technical development, investment or provision of services,

3. Share the market or source of production or provision of services by allocation of inter alia geographical area of market, nature of goods or number of customers or any other similar way,

4. Directly or indirectly result in bid rigging or collusive bidding.

Types of agreement

A ‘horizontal agreement’ is an agreement for co-operation between two or more competing businesses operating at the same level in the market. A vertical agreement is an agreement between firms at different levels of the supply chain. For instance, a manufacturer of consumer electronics might have a vertical agreement with a retailer according to which the latter would promote their products in return for lower prices.

Abuse of dominant position

There shall be an abuse of dominant position if an enterprise imposes directly or indirectly unfair or discriminatory conditions in purchase or sale of goods or services or restricts production or technical development or create hindrance in entry of new operators to the prejudice of consumers. The provisions relating to abuse of dominant position require determination of dominance in the relevant market. Dominant position enables an enterprise to operate independently or effect competitors by action.

Combinations

The Act is designed to regulate the operation and activities of combinations, a term, which contemplates acquisition, mergers or amalgamations. Combination that exceeds the threshold limits specified in the Act in terms of assets or turnover, which causes or is likely to cause adverse impact on competition within the relevant market in India, can be scrutinized by the Commission.

Competition Commission of India

Competition Commission of India is a body corporate and independent entity possessing a common seal with the power to enter into contracts and to sue in its name. It is to consist of a chairperson, who is to be assisted by a minimum of two, and a maximum of six, other members. It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India. The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.

Commission has the power to inquire into unfair agreements or abuse of dominant position or combinations taking place outside India but having adverse effect on competition in India, if any of the circumstances exists:

An agreement has been executed outside India
Any contracting party resides outside India
Any enterprise abusing dominant position is outside India
A combination has been established outside India
A party to a combination is located abroad.
Any other matter or practice or action arising out of such agreement or dominant position or combination is outside India.

To deal with cross border issues, Commission is empowered to enter into any Memorandum of Understanding or arrangement with any foreign agency of any foreign country with the prior approval of Central Government.

Review of orders of Commission

Any person aggrieved by an order of the Commission can apply to the Commission for review of its order within thirty days from the date of the order. Commission may entertain a review application after the expiry of thirty days, if it is satisfied that the applicant was prevented by sufficient cause from preferring the application in time. No order shall be modified or set aside without giving an opportunity of being heard to the person in whose favour the order is given and the Director General where he was a party to the proceedings.

Appeal

Any person aggrieved by any decision or order of the Commission may file an appeal to the Supreme Court within sixty days from the date of communication of the decision or order of the Commission. No appeal shall lie against any decision or order of the Commission made with the consent of the parties.

Penalty

If any person fails to comply with the orders or directions of the Commission shall be punishable with fine which may extend to ? 1 lakh for each day during which such non compliance occurs, subject to a maximum of? 10 crore.

If any person does not comply with the orders or directions issued, or fails to pay the fine imposed under this section, he shall be punishable with imprisonment for a term which will extend to three years, or with fine which may extend to ? 25 crores or with both.

Section 44 provides that if any person, being a party to a combination makes a statement which is false in any material particular or knowing it to be false or omits to state any material particular knowing it to be material, such person shall be liable to a penalty which shall not be less than ? 50 lakhs but which may extend to? 1 crore

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13, Mar, 2023 0 Comments

Top 4 Components of Competition Act 2002

Explain Components of Competition Act ?

Components of Competition Act 2002

The rubric of the new law, Competition Act, 2002 (Act, for brief) has essentially four compartments:

Anti-Competition Agreements
Abuse of Dominance
Combinations Regulation
Competition Advocacy

1. Anti Competition Agreements

Firms enter into agreements, which may have the potential of restricting competition. A scan of the competition laws in the world will show that they make a distinction between horizontal and vertical agreements between firms. The former, namely the horizontal agreements are those among competitors and the latter, namely the vertical agreements are those relating to an actual or potential relationship of purchasing or selling to each other. A particularly pernicious type of horizontal agreements is the cartel. Vertical agreements are pernicious, if they are between firms in a position of dominance. Most competition laws view vertical agreements generally more leniently than horizontal agreements, as, prima facie, horizontal agreements are more likely to reduce competition than agreements between firms in a purchaser – seller relationship. An obvious example that comes to mind is an agreement between enterprises dealing in the same product or products. Such horizontal agreements, which include membership of cartels, are presumed to lead to unreasonable restrictions of competition and are therefore presumed to have an appreciable adverse effect on competition. In other words, they are per se illegal. The underlying principle in such presumption of illegality is that the agreements in question have an appreciable anti-competitive effect. Barring the aforesaid four types of agreements, all the others will be subject to the rule of reason test in the Act.

2. Abuse of Dominance

Dominant Position has been appropriately defined in the Act in terms of the position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to (i) operate independently of competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant market, in its favour.

Section 4 enjoins, No enterprise shall abuse its dominant position. Dominant position is the position of strength enjoyed by an enterprise in the relevant market which enables it to operate independently of competitive forces prevailing in the market or affects its competitors or consumers or the relevant market in its favour. Dominant position is abused when an enterprise imposes unfair or discriminatory conditions in purchase or sale of goods or services or in the price in purchase or sale of goods or services. Again, the philosophy of the Competition Act is reflected in this provision, where it is clarified that a situation of monopoly per se is not against public policy but, rather, the use of the monopoly status such that it operates to the detriment of potential and actual competitors.

At this point it is worth mentioning that the Act does not prohibit or restrict enterprises from coming into dominance. There is no control whatsoever to prevent enterprises from coming into or acquiring position of dominance. All that the Act prohibits is the abuse of that dominant position. The Act therefore targets the abuse of dominance and not dominance per se. This is indeed a welcome step, a step towards a truly global and liberal economy.

3. The Act on Combinations Regulation

The Competition Act also is designed to regulate the operation and activities of combinations, a term, which contemplates acquisitions, mergers or amalgamations. Thus, the operation of the Competition Act is not confined to transactions strictly within the boundaries of India but also such transactions involving entities existing and/or established overseas.

Herein again lies the key to understanding the Competition Act. The intent of the legislation is not to prevent the existence of a monopoly across the board. There is a realisation in policy-making circles that in certain industries, the nature of their operations and economies of scale indeed dictate the creation of a monopoly in order to be able to operate and remain viable and profitable. This is in significant contrast to the philosophy, which propelled the operation and application of the MRTP Act, the trigger for which was the existence or impending creation of a ‘monopoly situation in a sector of industry.

The Act has made the pre-notification of combinations voluntary for the parties concerned. However, if the parties to the combination choose not to notify the CCI, as it is not mandatory to notify, they run the risk of a post-combination action by the CCI, if it is discovered subsequently, that the combination has an appreciable adverse effect on competition. There is a rider that the CCI shall not initiate an inquiry into a combination after the expiry of one year from the date on which the combination has taken effect.

4. Competition Advocacy

In line with the High Level Committee’s recommendation, the Act extends the mandate of the Competition Commission of India beyond merely enforcing the law (High Level Committee, 2000). Competition advocacy creates a culture of competition. There are many possible valuable roles for competition advocacy, depending on a country’s legal and economic circumstances.

The Regulatory Authority under the Act, namely, Competition Commission of India (CCI), in terms of the advocacy provisions in the Act, is enabled to participate in the formulation of the country’s economic policies and to participate in the reviewing of laws related to competition at the instance of the Central Government. The Central Government can make a reference to the CCI for its opinion on the possible effect of a policy under formulation or of an existing law related to competition. The Commission will therefore be assuming the role of competition advocate, acting pro-actively to bring about Government policies that lower barriers to entry, that promote deregulation and trade liberalisation and that promote competition in the market place.

Perhaps one of the most crucial components of the Competition Act is contained in a single section under the chapter entitled competition advocacy.

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