Dr.

KUMUDHA RATHNA
ABUSE OF DOMINANT POSITION (AOD):
Definitions:
DOMINANT POSITION [S.4(2) Expln (a)]:
Definition:
The dictionary meaning of the word dominant is overriding/influential.
In simple terms, abuse of dominant position refers to the conduct of an
enterprise that enjoys a dominant position (as defined by the Act).
In substance-dominant position-means the position of strength enjoyed by an
enterprise that enables it to act independently of competitive forces prevailing in
the relevant market. Such an enterprise will be in a position to disregard market
forces & unilaterally impose trading conditions, fix prices etc.
The elements that constitute a dominant position are:-
A position of strength;
That position being enjoyed in a relevant market in India;
Such a position that gives the enterprise the power to operate
independently of competitive forces in the relevant market (i.e., it can at
will, disregard market forces/conditions & impose its own trading
conditions (Eg: prices at which the enterprise is prepared to supply
goods/services).
Explanation to S.4(2)(a) exempts such unfair/discriminatory trading
conditions/prices [& predatory pricing-S.4(2)(a)(i & ii)]-stating that-when
enterprises are engaged in bonafide competition & readjusting their trading
strategies to meet the terms of offers of competitors in a market as it evolves,
there is no abuse by any of the enterprises. They are only responding to the
market situation. (Eg: If prices fall in the market, for reasons not the action of
an enterprise, a reduction in the price by that enterprise to match its prices to
the new prices cannot be termed unfair pricing or predatory pricing).
Dr. KUMUDHA RATHNA
Concept of DP as explained in HOFFMANN-LA ROCHE & CO. AG. BASLE
v. COMMISSION OF THE EUROPEAN COMMUNITIES IN BRUSSELS:-
The concept of abuse is an objective concept relating to the behaviour of an
undertaking in a DP which is such as to influence the structure of a market
where, as a result of the very presence of the undertaking in question, the
degree of competition is weakened and which, through recourse to methods
different from those which condition normal competition in products/services
on the basis of the transactions of commercial operations, has the effect of
hindering the maintenance of the degree of competition still existing in the
market or the growth of that competition.
A 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/consumers/relevant market in its favour.
Thus a dominant enterprise is one that has the power to disregard market forces
(Competitors, customers & others) & to take unilateral decisions that would
benefit itself & also, in the process, cause harm to the process of free
competition, injuring the consumers by saddling them with higher prices,
limited supplies etc.
This capacity to engage in the market is called Market Power.
GROUP [S.5 Expln (b)]:
2 or more enterprises which, directly/indirectly are in a position to-
i. Exercise 26% or more of the voting rights in the other enterprise OR
ii. Appoint more than 50% of the members of the Board of Directors in the
other enterprise OR
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iii. Control the management/affairs of the other enterprise.
CONSUMER [S.2(e)]:
Any person who-
i. Buys any goods for a consideration which has been paid or promised or
partly paid & partly promised or under any system of deferred payment-
includes any user of such goods other than the person who buys such
goods-when such use is made with the approval of such person, whether
such purchase of goods is for resale or for any commercial purpose or
for personal use;
ii. Hires/avails of any services for a consideration which has been paid or
promised or.....and includes any beneficiary of such services other than
the person who hires or avails of the with the approval of the first
mentioned person whether such hiring or availing of services is of any
commercial purpose or for personal use.
DOMINANT POSITION ITSELF ISNT PROHIBITED:
Some acts are bonafide & not taken to hamper competition. S.4(2)(a) exempts
such unfair or discriminatory trading conditions/prices or predatory pricing
referred to in S.4(2)(a)(i) & (ii), setting out those practices as an abuse of
dominant position, from being considered as an abuse of a dominant position,
when they are adopted to meet competition. REASON-When enterprises are
engaged in bonafide competition & readjusting their trading strategies to meet
the terms of offers of competitors in a market as it evolves, there is no abuse of
any of the enterprises. They are only responding to the market situation.
Eg: If prices fall in the market, for reasons not the action of an enterprisea-a
reduction in the price by that enterprise to match its prices to the new prices
cannot be termed unfair/predatory pricing.
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FACTORS TO BE CONSIDERED WHILE DECIDING WHETHER AN
ENTERPRISE HAS A DOMINANT POSITION (DP):
The Commission shall (while inquiring whether an enterprise enjoys a DP or
not u/s.4) have due regard to all or any of the following factors-
a) Market share of the enterprise;
b) Size & resources of the enterprise;
c) Size & resources of the competitors;
d) Economic power of the enterprise including commercial advantage over
competitors;
e) Vertical integration of the enterprises or sale or service network of such
enterprises;
f) Dependence of consumers on the enterprise;
g) Monopoly/dominant position whether acquired as a result of any Statute
or by virtue of being a Govt. Company or a public sector undertaking or
otherwise.
h) Entry barriers including barriers such as regulatory barriers, financial
risk, high capital cost of entry, marketing entry barriers, technical entry
barriers, economics of scale, high cost of substitutable goods or service
for consumers;
i) Countervailing buying power;
j) Market structure & size of market;
k) Social obligations & social costs;
l) Relative advantage, by way of the contribution to the economic
development, by the enterprise enjoying a dominant position having or
likely to have appreciable adverse effect on competition.
m) Any other factor which the Commission may consider relevant for the
enquiry.
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WHAT IS ABUSE OF DOMINANT POSITION [S.4(2)]:
If an enterprise or group follows any of the following practices-it is abuse-NO
further PROOF of any damage/loss is required.
Unfair/Discretionary Conditions In Purchase/Sale [S.4(2)(a)]:
Unfair/discretionary conditions in purchase/sale of goods/services OR
Price in purchase/sale (including predatory price) of goods/services is
abuse of dominant position.
Expln: Above practice isnt abuse if adopted to meet competition.
Limiting/Restricting Production/Development [S.4(2)(b)]:
Limiting/restricting-production of goods or provision of services or
market there for OR
Limiting/restricting-technical or scientific development relating to goods
or services to the prejudice of consumers, is an abuse of DP.
Denial Of Market Access [S.4(2)(c)]:
(in any manner), is abuse of dominant position.
Supplementary Obligations Unconnected To Main Contract: [S.4(2)(d)]
Making conclusion (formation) of contract subject to acceptance by other
parties who are not connected to the nature/subject matter of the contract-is
abuse of dominant position.
Using Dominant Position To Enter Another Market: [S.4(2)(e)]
Using dominant position in one relevant market to enter into another relevant
market-is abuse of dominant position. (Eg: Microsoft used its DP in disk
operating system to dominate browser market & ruined Netscape).
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DIVISION OF ENTERPRISE ENJOYING DOMINANT POSITION: [S.28
Incorporated into the Act in 2009]]
The Competition Commission may direct-division of an enterprise enjoying
dominant position to ensure that an enterprise enjoying dominant position,
doesnt abuse it.
Such Order may provide for any/all of the below mentioned matters:-
Transfer/vesting of pty/rights/liabilities/obligations;
Adjustment of contracts either by discharge or reduction of
liability/obligation or otherwise;
Creation/allotment/surrender/cancellation of any shares / stocks or
securities;
Formation/winding-up of an enterprise or the amendment of the MoA or
AoA or any other instrument regulation the business of any enterprise;
Extent to which, & the circumstances in which, provision of the Order
affecting an enterprise may be altered by the enterprise & the registration
thereof;
Any other matter which may be necessary to give effect to the division of
the enterprise.
No Compensation to Officer of Company [s.28(3)]:
No Officer of a company who ceases to hold office as such in consequene of the
division of an enterprise shall be entitled to claim any compensation for such
cesser. This is not withstanding any other Law for the time being in force OR
in any contract OR in MoA OR AoA.


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INQUIRY INTO AGREEMENTS-AS TO-ABUSE OF DOMINANT
POSITION:
Enquiry by CCI:
CCI may enquire-into-any alleged contravention of provisions of Ss.3(1) &/or
4(1)-
Suo Motu OR
On receipt of any info (in the manner & with fee as determined by
regulations)-from any person/consumer/their association or trade
association OR
On a reference made to it by C.Govt/St.Govt/Statutory authority [S.19(1)].
Director General has not the power to enquire on his own.
Procedure For Enquiry u/s.19: (S.26)
o On receipt of info or suo motu-if CCI opines that there exists a-prima facie
case..
o Shall issue a direction (as per Regulation.18 of CCI (General) Regulations,
2009) to the Director General (DG) to cause an investigation to be made into
the matter. This direction shall be deemed to be commencement of an
inquiry u/s.26.
o If on such receipt of info or suo motu-if CCI opines that there exists no
prima facie case-shall close the matter forthwith & pass such Orders as it
deems fit; Copy of the Order to be sent to C.Govt/St.Govt/Statutory
Authority/parties concerned (as per Regulation.19 of CCI (General)
Regulations, 2009).
o DG shall submit a report of his findings-within such period as may be
specified by the CCI..CCI may forward a copy of the report to the parties
concerned.
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o If investigation was made on ref by C.Govt/St.Govt.Statutory Authority-CCI
shall forward a copy of report of DG to concerned Authority.
Investigation & report by DG shall be as per Regulation.20 of CCI (General)
Regulations,2009.
o If report of DG states that there is no contravention of provisions of
Competition Act, the CCI shall invite objections from C.Govt
/St.Govt/Statutory Authority/Parties Concerned.
o If after consideration of objections/suggestions-CCI agrees with the
recommendations of the DG-it shall close the matter forthwith & pass such
Orders as it deems fit.
o Copies of Order shall by communicated to concerned to the parties.
o If CCI opines that further investigation is called for-May-
Direct DG for further investigation OR
Cause further enquiry to be made OR
Itself enquire into the contravention as per provisions of Act.
o Further enquiry by CCI: If DG-opines (report) that there is a contravention
of any provisions of the Act & the CCI also opines similarly-CCI shall
conduct such enquiry.
o Order by CCI after enquiry: May pass all or any of the following Orders:-
Order to discontinue agreement/abuse & not re-enter such agreement;
Penalty S.27-upon each of the parties to the agreement/abuse-as CCI
deems fit-BUT shall not be more than 10% of the average of the turnover
for the immediately preceding 3 financial yrs [S.27(b)]
If Cartel-penalty is equivalent to 3 times of the amount of
profits made out of such ag by cartel or 10% of the avg of the
turnover of the cartel in the immediately preceding 3 financial
yrs..whichever is higher- will be imposed on each producer,
seller, distributor, trader, service provider included in the cartel
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If penalty is proposed to be imposed on a person-show cause
notice duly signed by Secretary shall be given asking for
submission of explanation-in writing-within 15 days.
CCI may direct that the agreement be modified to the extent & in the
manner as maybe specified by CCI [S.27 (d)].
Other Orders & payment of costs [S.27(e)].
Order against any group company: If the enterprise which violated the
provisions of Competition Act (i.e., Ss.3-4) is a member of the group & if
other members of the group are also responsible for the contravention, the
CCI can pass Orders against any member of the group [S.27-Proviso].
CASE LAW:
HOFFMANN-LA ROCHE & CO. AG, BASLE v. COMMISSION OF
THE EUROPEAN COMMUNITIES IN BRUSSELS Held (by The
European Commission)-
Roche was in a dominant position within the common market, on the
markets for certain vitamins, abused that position by concluding with 22
purchasers of these vitamins, agreements which contained an obligation
upon them, or the grant of fidelity rebates offering them an incentive, to
buy all or most of their requirements of vitamins exclusively, or in
preference from Roche. Obiter dicta-Very large shares in the market in
themselves, save in exceptional circumstances, evidence of the existence
of a DP.
Exclusive purchase contracts & the fidelity rebates offered to the
purchasers amounted to abuse of this dominant position because they
distorted competition between producers in so far as they deprived the
customers of Roche of the opportunity of choosing their suppliers.
The effect of the contract was to apply dissimilar conditions to equivalent
transactions, viz, Roche would be charging 2 diff prices for the same
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quantity of the same product, depending upon whether the buyer was
prepared to forego purchasing from Roches competitors.
Court Explained-An undertaking which has a very large market share & holds
it for some time, by means of the volume of production & the scale of the
supply which it stands for-without those having much smaller market shares
being able to meet rapidly the demand from those who would like to break away
from the undertaking which has the largest market share-is by virtue of that
share in a position of strength which makes it an unavoidable trading partner &
which, already because of this secures for it, at the very least during relatively
long periods, that freedom of action which is the special feature of a DP.
Further the Court listed the relevant factors in determining the existence of a
DP-
Relationship between the market shares of the undertaking & its
competitors;
Technological lead of an undertaking over its competitors;
Existence of a highly developed sales network;
Absence of potential competition.
COMPAGNIE MARITIME BELGE TRANSPORTS SA & OTHERS v.
COMMISSION OF THE EUROPEAN COMMUNITIES The members
of Associated Central West Africa Lines (CEWAL) & 2 other shipping
conferences brought this action contesting before the Court the decision
of the Commission & the Court of 1
st
Instance. The Commission had
decided that all the shipping conferences had violated Article 81(1) of
the EEC (European Economic Community) Treaty, by entering into non-
competition agreements with 1 another, imposing on themselves a
restraint to the effect that each member would refrain from operating as
an independent shipping company (outsider) in the area of activity of the
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others. HELD This was abuse of their collective dominant position by
the members of CEWAL-with the intention of eliminating the principal
independent competitor-by
o Participating in the implementation of the co-operation ag with
Ogefrem;
o Modifying its freight rates by departing from the tariff in force in order
to offer rates.
It was argued that in order to show that DP was shared by more than 1
undertaking a close economic link bet them had to be established.
Court Ruled-
DP may be held by 2 or more economic entities legally independent of
each other, provided that from an economic point of view they present
themselves or act together on a particular market as a collective entity.
It should be ascertained whether the undertakings constitute a collective
entity vis-a-vis their competitors / trading partners & consumers for a
particular market & if that collective entity actually holds a DP &
whether its conduct constitutes abuse.
Court held that the co-operation agreement with Ogefrem amounted to abuse of
DP.
EUROPEMBALLAGE CORPN & CONTINENTAL CAN COMPANY INC v.
COMMISSION OF THE EUROPEAN COMMUNITIES Continental was
already enjoying a DP through the control of 1 company, in a substantial part
of the common market for certain types of containers. HELD-Abuse of DP
by the acquisition by Continental, through its subsidiary, Europemballage,
by approximately 80% of the shares & convertible debentures of Thomassen
& Drijver-Verbliva-this practically eliminated in a substantial part of the
common market. Though the subsidiary had a separate Legal personality, its
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conduct could be attributed to the parent company, particularly when in
essentials it follows the directives of the parent company.
TETRA PAK INTERNATIONAL SA v. COMMISSION OF THE EUROPEAN
COMMUNITIES the Tetra Pak group specialized in equipment for the
packaging of liquid or semi-liquid food products in cartons (covering both
aseptic & non-aseptic packaging sectors).Tetra Pak held 90-95% of the
market in the aseptic sector & 50-55% in the non-aseptic sector. The
complainant Elopak, held 27%. The complaint by Elopak Italia before EC
was that Tetra Pak imposed unfair conditions on the supply of machines for
filling cartons & that the sale of cartons & equipment, in certain cases were
at predatory prices. HELD Contracts for the sale/lease of Tetra Pak
equipment for manufacturing cartons contained several clauses found to be
anti-competitive. Main such clauses were:-
o Buyers of Tetra Pak equipment were prohibited from changing the
configuration of the equipment bought.
o They were also not allowed to add any part or accessory to that
equipment.
o Tetra Pak reserved to itself the exclusive rights to inspect the
equipment, maintain & repair it & to supply spare parts.
o The IPR in relation to any improvement made to the product by the
buyer was to be assigned to Tetra Pak.
o The purchaser from Tetra Pak was to ensure that his buyer assumed
his obligations to Tetra Pak. Breach of this condition entailed a
penalty.
Also, given the almost complete domination of the aseptic markets by Tetra
Pak, thanks to this position in this market, it could concentrate its efforts on the
non-aseptic market by acting independently of the other economic operators,
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and placed it in a situation comparable to that of holding a DP on the markets in
question, as a whole.
COMBINATIONS:
Take-over, amalgamation, mergers etc are some of the means of increasing
market dominance.
Competition Act intends to exercise control over such mergers &
amalgamations, with a view to ensure that such amalgamations & mergers are
not anti-competitive.
COMBINATION-MEANING:
The acquisition of 1 or more enterprises by 1 or more persons OR
mergers/amalgamation of enterprises shall be treated as combinations..in the
following instances:-
a) Acquisition of large enterprises: An acquisition where the parties (acquirer
& enterprise) whose control/shares/voting rights/assets have been/being
acquired-jointly have
i. In India-assets of value of more than Rs.1K crores / turnover more than
Rs.3K crores OR
ii. In & outside India, in aggregate, assets of the value of more than $500
milion-including at least Rs,.500 crores in India / turn-over more than
$1,500 million-including at least Rs.1,500 crores in India
Assets/turn-over exceeding specified limits: If after acquisition, the joint
assets/turn-over increases the aforesaid limits, it will be a combination.
If the acquirer already had the assets/turnover-any further acquisition will be
combination.

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Type of Combination Assets/turnover in India Assets/turnover in or outside
India
Any Acquisition-where-
acquirer+enterprise jointly
have - [S.5(a)(i)]
Joint assests-over-Rs.1K
Crores/turnover over Rs.3K
Crores
Joint assets-over $500
Million-including at least
Rs.500 Crores in India OR
turnover more than $1,500
Million-including at least
Rs.1,500 Crores in India.
Acquisition by group of
enterprise [S.5(a)(ii)]
Assets over Rs.4K Crores /
turnover over Rs.12K Crores
Joint assets-over $2 Billion-
including at least 500 Crores
in India / turnover more than
$6 Billion-including at least
Rs.1,500 crores in India.
Acquisition by a person of an
enterprise-when such person
is having direct/indirect
control over another
enterprise engaged in
production / distribution /
trading of similar / identical /
substitutable goods/service)
[S.5(b)(i)]
Joint assets over Rs.1K
Crores/turnover over Rs.3K
Crores.
Joint assets over $500
Million / turnover $1,500
Million.
Acquisition by a group with
similar / identical /
substitutable goods / services
[S.5(b)(ii)]
Group assets over Rs.4K
Crores / turnover over
Rs.12K Crores
Group assets over $2 Billion
/turnover over $6 Billion.
Merger / amalgamation of 2
enterprises (goods / services
may be similar / dissimilar)
[S.5(c)(i)]
Combined assets over Rs.1K
Crores / turnover over Rs.3K
Crores.
Combined Assets over $500
Million / turnover over
$1,500 Million
Merger / amalgamation in a
group (goods / services
maybe similar/dissimilar)
Combined assets over Rs.4K
Crores / turnover over
Rs.12K Crores.
Combined assets over $2
Billion / turnover over $6
Billion.
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CALCULATION of VALUE OF ASSETS [S.5(c) Explanation]:
The value of assets shall be determined by taking the book value of the assets as
shown, in the audited boks of a/c of the enterprise, in the financial year
immediately preceding the financial year in which the date of proposed merger
falls, as reducd by any depreciation, & the value of assets shall include the
brand value, value of Good-will or value of rights, patent, permitted use,
collective mark, registered proprietor, registered trade mark, registered user,
homonymous geographical indication, geographical indications, design or
layout-design or similar oher commercial rights, if any referred to in S.3 (5).
EFFECT OF INFLATION ON VALUE OF ASSETS/TURNOVER [S.20 (3)]:
The Central Govt. shall, on the expiry of every 2 years-in consultation with the
CCI-by notification-enhance/reduce-on the basis of the wholesale price
index/fluctuations in exchange rate of rupees/foreign currencies-the value of
assets or the value of turnover, for the purposes of that section.
REGULATION OVER COMBINATIONS [S.6 (1)]:
No person/enterprise shall enter into a combination which causes or is likely to
cause an appreciable adverse effect on competition within the relevant market in
India & such a combination shall be void. (S.6 came into effect on May,2009).
PROVISON DOESNT APPLY TO PFI/FII [S.6 (4)]:
The provisions of S.6 do not apply to share subscription or fianancing facility or
any acquisition, by a public financial institution, FII, bank or venture capital
fund, pursuant to any covenant of a loan agreement or investment agreement.
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Public Financial Institution: means such an institution specified under s.4A of
the Companies Act, 1956 (Includes a State Financial, Industrial or Investment
Corpn - S.2(o).
As per s.4A of the Companies Act-all bodies (eg. ICICI, IFCI, IDBI, LIC, UTI)
are Public Financial Institutions. Also includes Securitisation Company &
Asset Reconstruction Company registered with RBI under Securitisation Act,
2002.
MANDATORY NOTICE TO COMMISSION:
Any person/enterprise-who/which proposes to enter into a combination-shall
give notice to the Commission-in the (prescribed) form & fee-disclosing details
of the proposed combination-within 30 days of
o Approval of the proposal relating to merger/amalgamation (as per
s.5(c) by Board of Directors of the enterprise concerned with such
merger/amalgamation OR
o Execution of any agreement/document for acquisition (as per s.5(a) or
acquiring of control referred to in s.5(b).
COOLING PERIOD OF 210 DAYS: after the notice. Combination cant
become effective during the cooling period.
PENALTY FOR NOT GIVING NOTICE u/s.6 (2) [S.43A]:
If any person/enterprise fails to give notice to the Commission u/s.6 (2) of the
Competition Act-the Commission shall impose on such person/enterprise-a
penalty which may extend to 1% of the total turnover or the assets, whichever in
higher, of the combination.
Show cause Notice [Regulation 48 of Competition Commission of India
(General) Regulations, 2009]: If penalty is proposed to be imposed by
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Commission on a person-showcause notice duly signed by Secretary shall be
given-asking for submitting explanation in writing within 15 days. Penalty shall
be imposed only after giving opportunity of personal hearing to the person.
PROCEDURE AT COMMISSION AFTER RECEIVING NOTICE:
On receipt of notice [u/s.6(2)]-examine the notice & form prima facie opinion
[as provided in s.29(1)]-proceed as per provisions of s.29-31.
S.29(1): CCI has to form a prima facie opinion-whether a combination is likely
to cause/has caused-an appreciable adverse effect on competition within the
relevant market in India. If yes-issue a notice to the parties, to show cause.
Combination not effective for 210 days from date of notice, or till CCI issues
order u/s.31:
The combination shal not come into effect until 210 days or order of
Commission u/s.31is recd, whichever is earlier.
U/s.31, Commission can either-
Approve the combination or
Order that the combination shall not be effective or
Propose modifications in the combination.

FACTORS TO BE CONSIDERED [by CCI] IN DETERMINING ADVERSE
EFFECT OF COMBINATION: [S.20 (4)]
a) Actual/potential level of competition thru imports in the market.
b) Extent of barriers to entry to the market.
c) Level of combination in the market.
d) Degree of countervailing power in the market.
e) Likelihood that the combination would result in the parties to the
combination being able to significantly & sustainably increase prices/profit
margins.
f) Extent of effective competition likely to sustain in a market.
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g) Extent to which substitutes are available or likely to be available in the
market.
h) Market share, in the relevant market, of the persons/enterprises in a
combination, individually/combination.
i) Likelihood that the combination would result in the removal of a vigorous &
effective competitor/s in the market.
j) Nature & extent of verticals integration in the market.
k) Possibility of a failing business.
l) Nature & extent of innovation.
m) Relative advantage, by way of the contribution to the economic
development, by any combination having or likely to have appreciable
adverse effect on competition.
n) Whether the benefits of the combination outweigh the adverse impact of the
combination, if any.
ENQUIRY INTO COMBINATION BY CCI & ORDER:
CCI can enquire-
Suo motto
On receipt of notice.
Enquiry Into Combination By Commission-On Its Own:
Upon its own knowledge OR
Info relating to acquisition referred to it u/s.5(a) OR
Acquiring of control referred to in s.5(b) OR
Merger/amalgamation referred to in s.5(c)
S.20(1) Proviso: Commission shall not initiate any inquiry under this sub-
section after the expiry of 1 yr from the date on which such combination has
taken effect.
Enquiry On Combination-On Receiving Notice:
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S.20(2): On receipt of notice u/s.6(2)-Inquire as to whether a combination
referred to in that notice/reference has caused or is likely to cause an
appreciable adverse effect on competition in India. [Note: 1yr period
mentioned in S.20(1) is inapplicable to S.20(2)]
[CONFLICT of Statutory provisions:
S.20(2): Inquiry mandatory.
S.6(3) read with S.29(1): Commission can drop proceedings-if on prima facie
opinion-it concludes that competition in India will not be adversely affected.]
PROCEDURE FOR INVESTIGATION OF COMBINATIONS:
S.29(1): Show-cause for investigation: If Commission prima facie opines that
a combination is likely/causes ...India-it shall issue notice to the parties to
show-cause-as to why investigation in of such combination should not be
conducted-to respond within 30 days of receipt of notice.
S.29(1A): After receipt of response from parties:
Commission may call for a report from Director General (DG)-to be submitted
within 60 days (Commission-may extend time for a further 60 days).
S.6(2): Inquiry into disclosures:
If any person/enterprise-gives notice under this section-Commission shall
examine such notice-form prima facie opinion [as per s.29(1)] & proceed [as
per s.30].
S.29(2): Publish information for public knowledge:
If Commission-prima facie opines that the combination is or
likely..appreciable adverse effect...India-shall (within 7 working days from
date of receipt of the response of the parties to the combination OR report of
DG u/s.29(1A) whichever is later-direct the parties to-publish details of the
combination (within 10 working days of such direction, in such manner as it
thinks appropriate)-Reason-for bringing the combination to the
knowledge/info of the public & persons affected or likely to be affected by
such combination.
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S.29(3): Invite Objections:
The Commission may invite any person/member of the pubic (affected or
likely to be affected by the combinations)-within 15 working days from date
on which the details of the combination were published.
S.29(4): Call for Additional Details:
The Commission may-within 15 working days from the expiry of the period
specified in S.29(3)-call for such additional/other info as it deems fit-from the
parties to the combination.
S.29(5): The additional info shall be furnished by the parties-within 15 days
from the expiry of the period specified in s.29(4).
S.29(6): Proceed to deal with the case: After receipt of all info & within 45
working days from expiry of the period specified in s.29(5)-Commission shall
proceed to deal with the case as per s.31.
Order of Commission after Enquiry:
Commission may pass any of the following Orders:
S.31(1): Approve the combination.
S.31(2): Direct that the combination shall not take effect.
S.31(3): If Commission opines that the combination has/is likely to have
appreciable adverse effect on competition-BUT-that such adverse effect can be
eliminated by modification-it may propose appropriate modification to the
combination.
S.31(4): The parties (who accept the modification) shall carry it out within the
time specified by the Commission.
S.31(5): If the parties to the combination, who have accepted the modification
proposed- do not carry them out within time specified by the Commission-
shall be deemed to have an appreciable adverse effect..& Commission shall
deal with such combination as per the provisions of the Act.
S.31(6): If the parties to the combination do not accept the modifications
proposed by the Commission-they may submit an amendment to the
Dr. KUMUDHA RATHNA
modifications proposed by the Commission-to the Commission-within 30
working days of modification proposed by the Commission.
S.31(7): If the Commission agrees with the amendment proposed by the
parties-it shall-by Order-approve the combination.
S.31(8): If the Commission doesnt accept the amendments proposed by the
parties-it shall I allow a further 30 working days-within which time they shall
accept the modifications proposed by the Commission.
S.31(9): If the parties do not accept the modifications proposed by the
Commission (within period specified in sub.s.6/8) the combination shall be
deemed to have an appreciable adverse effect on competition & be dealt with
according to the provisions of this Act.
S.31(10): Further Orders by Commission:
Where the Commission
has declared that the combination shall not take effect [S.31(2)] OR
Combination deemed to be having appreciable adverse effect on
competition [S.31(9)]
Without prejudice to any penalty which may be imposed or any other
prosecution-Commission may Order as follows-
a) The acquisition referred to S.5(a) OR
b) The acquiring of control referred to in S.5(b) OR
c) The merger/amalgamation referred to in S.5(c)
Shall not be given effect to.
Also, the Commission may, if it thinks appropriate-frame a scheme to
implement its Order-under this section.
S.31(11): Deemed Approval: If Commission doesnt-within 210 days from
date of notice to Competition Commission-deemed to have been approved by
the Commission.
Expln: Exclusion in computing 210 days: The 30 days specified in sub.s.6 &
further 30 days specified in sub.s.8 shall be excluded.
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S.31(12): If any extension of time is sought by the parties to the combination-
the period shall be computed after deducting the extended period.
S.31 (13): Where the Commission has ordered a combination to be void-any
acquisition/merger/amalgamation-shall be dealt with by authorities under any
other Law for the time being in force as if such acq/merger/amalgamation-had
not taken place.
S.31 (14): The provisions of Chapter shall not affect-proceedings initiated or
which may be initiated under any other Law for the time being in force.
S.32: Acts taking place outside India but having an effect on competition in
India:
The Commission shall, not withstanding that-
a) An ag referred to in S.3 has been entered into outside India OR
b) Any party to such ag is outside India OR
c) Any enterprise abusing the dominant position is outside India OR
d) A combination has taken place outside India OR
e) Any party to combination is outside India OR
f) Any other matter/practice/action arising out of such ag or dominant position
or combination is outside India
Have power to inquire into such ag or abuse of dominant position or
combination-if such ag/dominant position/combination-has or is likely to have-
an appreciable adverse effect on competition in the relevant market in India.
S.33: empowers the Commission to issue interim Orders restraining any party
from carrying on such act until the conclusion of such inquiry or until further
Orders [even sans giving notice to such party, where it deems it necessary].
S.35: Appearance before Commission:
A person/enterprise/DG may
Appear in person OR
Authorise 1 or more
o Chartered accountants
Dr. KUMUDHA RATHNA
o Company secretaries
o Cost accountants
o Legal practitioners
o Any of his/its Officers
to present his/its case before the Commission.
S.36: Power of Commission to regulate its own procedure:
1) In discharging its functions-Commission shall be guided by-principles of
natural Justice-subject to
a. Provisions of this Act
b. Rules framed by Central Govt.
Commission shall have power to regulate its own procedure.
2) Commission-for the purpose of discharging its functions-has vested in itself
the same powers as that of a Civil Court under C.P.C.-namely-
a. Summoning/enforcing attendance of any person
b. Examine him on oath
c. Require discovery & production of documents
d. Receive evidence on affidavit
e. Issue commissions for examination of witnesses/docs
f. Requisition any pubic record/doc or copy thereof from any office
(subject to ss.123 & 124 of Indian Evidence Act, 1872).
3) Call upon such experts, from any discipline as it deems necessary-to assist
the Commission in the conduct of any inquiry by it.
4) The Commission may direct any person-to produce/furnish-before-
DG/Secretary/any Officer authorised by it-
a. Such books/documents in custody/control of such person
b. Trade or any info (in relation to the trade carried on by such person) as
may be in his possession.
S.38: Rectification of Orders: The Commission may-suo moto or on notice
given by any party to an Order-rectify any mistake apparent from the record.
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Expln: The Commission shall not-in rectifying any mistake-amend a substantive
part of its Order.
S.39: Execution of Orders of Commission imposing penalty:
1) If a person on whom monetary penalty has been imposed by the
Commission-fails to pay it-the Commission may proceed against the person
to recover the penalty in such manner as may be specified by the regulations.
2) If the Commission opines that recovery of penalty is to be as per provisions
of the Income-Tax Act, 1961-it may make a reference to this effect to the
concerned IT authority-for recovery.
3) Where a reference has been made by the Commission-under sub-section.2-
the person on whom the penalty has been imposed shall be deemed to be an
assessee in default under IT Act.
DUTIES OF THE DIRECTOR GENERAL:
S.41: DG shall when directed by the Commission-assist the Commission in-
investigating into any contravention of the provisions of this Act or any
rules/regulations made there under.
S.42: Contravention of the Orders of the Commission:
The Commission may cause an inquiry to be made into compliance of its
Orders/directions.
If any person (sans sufficient cause) fails to comply with the Orders...he
shall be punishable with-fine (max-Rs.1 lakh for each day of non-
compliance subject to a max of Rs.10 crores)-as determined by the
Commission.
If any person doesnt comply with Orders/directions or fails to pay the above
said fine-Imprisonment for a max of 3 yrs &/or fine (max-Rs.25 crores)-as
Chief Metropolitan Magistrate, Delhi, deems fit.
But, Chief Metro Magistrate, Delhi-shall take cognizance of any offence
under this section-ONLY on a complaint filed by the Commission.
Dr. KUMUDHA RATHNA
S.42A: (inserted by 2007 amendment Act): Compensation in case of
contravention of Orders of Commission:
Any person-may make an application to the Appellate Tribunal for an Order for
the recovery of-compensation for any loss/damage-suffered as a result of-
An enterprise violating directions issued by the Commission; or
Contravening (sans reasons) any decision/Order of Commission or
Contravening (sans reasons) any conditions/restrictions subject to which any
approval/sanction/direction/exemption in relation to any matter has been
granted under this Act or
Delay in carrying out such Orders/Directions of the Commission.
S.43: Penalty for failure to comply with directions of Commission and Director
General:
If any person fails to comply (sans reasonable cause)-with a Direction given by

The Commission u/s.36 (2 & 4) or
The DG while exercising powers referred to in s.41 (2)
Such person shall be punishable with fine (max-Rs.1 lakh per day of continuing
default with a total max of Rs.1 crore)-as determined by the Commission.
S.43A: Power to impose penalty for non-furnishing of info on combinations:
If any person/enterprise-fails to give notice to the Commission [u/s.6 (2)]-
Commission shall impose penalty-may extend to 1% of the total turnover or the
assets (whichever is higher) of such combination.
S.44: Penalty for making false statement/omission to furnish material
information:
If any party to a combination-
Makes a statement which is false-of a material particular-knowingly OR
Omits to state any material particular-knowing it to be material
Dr. KUMUDHA RATHNA
Such person shall be liable to a penalty-Rs.50 lakhs (minimum) & max of Rs.1
crore (as determined by the Commission.
S.45: Penalty for offences in relation to furnishing of info:
[Without prejudice to S.44] If any person-furnishes or reqd to furnish any
info/particulars/docs-
Makes any statement/furnishes any doc-which he knows or has reason to
believe to be false (relating to any material particular) OR
Omits to state any material fact-knowing it to be material OR
Wilfully alters/suppresses/destroys-any doc-which is reqd to be furnished
Punishable with fine (max) of Rs.1 crore-by the Commission.
S.46: Power of Commission to impose lesser punishment:
If the Commission is satisfied that-any Producer/seller/distributor etc-included
in a cartel (which is alleged to have violated S.3)-has made a full & true
disclosure-in respect of the alleged violations-may impose of such person-a
lesser penalty-as it deems fit.
S.47: Crediting sums realised by way of penalties-to-Consolidated Fund of
India:
All sums realised by way of penalties under this Act shall be credited to this
fund.
S.49: Competition Advocacy:
The Central Govt/St. Govt. may-in formulating a policy on competition (or any
other matter)-make a reference to the Commission-for its opinion-on possible
effect of such policy on competition-AND-on receipt of such reference-the
Commission shall-within 60 days of making the reference-give its opinion-to
the Central/St. Govt.
The opinion of the Commission-shall not be binding upon the Govt.
The Commission shall take suitable measures for the promotion of competition
advocacy-creating awareness & imparting training about competition issues.

Dr. KUMUDHA RATHNA