Competition Law in India
Competition is generally denoted as healthy economic rivalry between market players to attract customers. Businesses always would aspire to get customers in order to achieve growth. While competition encourages economic growth in a market economy, it is equally important to ensure that free and fair competition is ensured so that crony capitalism do not stall healthy business environment. A wee defined Competition law is an essential ingredient for unlocking full growth potential in critical areas of economy.
In India the first competition law was enacted in 1969 i.e. Monopolies and Restrictive Trade Practices Act, 1969 [‘MRTP Act, 1969’]. The Monopolies and Restrictive Trade Practices Bill was introduced in the Parliament in the year 1967. The MRTP Act, 1969 came into force, with effect from, 1 June, 1970.
The enactment of MRTP Act, 1969 was based on the socio – economic philosophy enshrined in the Directive Principles of State Policy contained in the Constitution of India. The MRTP Act, 1969 underwent amendments in the 1974, 1980, 1982, 1984, 1986, 1988 and 1991. Later based on international developments there was a realisation that rather than restricting ourselves to merely curbing restrictive trade practises the real aim needs to be to promote competition. Accordingly, the Monopolies and Restrictive Trade Practices Act, 1969 [MRTP Act] repealed and was replaced by the Competition Act, 2002, with effect from 1 September, 2009.
The Competition Act, 2002 was enacted to provide for the establishment of a Commission to prevent practices having adverse effect on competition, and to promote and sustain competition in the business environment and to protect the interest of consumers and also to ensure freedom of trade carried on by other participants in markets in India and for matters connected therewith or incidental thereto. The Competition Act, 2002 came into existence in January, 2003 and the Competition Commission of India [‘CCI’] was established on 14 October, 2003. CCI functions as market regulator for preventing and regulating anti – competitive practices in the country.
The Act was subsequently amended by the Competition (Amendment) Act, 2007 and Competition (Amendment) Act, 2009. The provisions of the Competition Act relating to anti-competitive agreements and abuse of dominant position were notified on 20May, 2009.
Introduction of the Act was a key step towards facing competition. The Competition Act, 2002 is not intended to prohibit competition in the market. The legislation prohibits anti-competitive agreements, abuse of dominant position and regulates mergers, amalgamations and acquisitions.