Competition Law

FICCI Online
Certificate Course
on Intellectual
Property and
Competition Law
(IPComp)
COMPETITION LAW
MODULE 1
Purpose of the module is to outline the introduction to Competition Law and its various
facets (objects, advantages, implementations and evolution of competition law from Nehruvian
mixed model to promote an inclusive monetary expansion and social justice). Lessons cover
topics like the Prohibition of Anti-competitive Agreements, Abuse of Dominant Position and
Merger, Amalgamations and Acquisitions Control and Remedies under the competition act. It
also includes topics providing information regarding role of preserving the competitive structure
of markets, competition Commission of India and Compulsory Licensing of Patents.
Chapter Title Page No.
1 INTRODUCTION TO COMPETITION LAW AND ITS 3-8

VARIOUS ASPECTS
2 THE PROHIBITION OF ANTI-COMPETITIVE 9-16

AGREEMENTS
3 ABUSE OF POSITION OF DOMINANCE 17-19
4 MERGER, AMALGAMATIONS AND ACQUISITIONS 20-30

CONTROL, REMEDIES UNDER THE COMPETITION ACT
5 OBJECTS OF COMPETITION LAW 31-32
6 MAJOR OBJECTIVES OF COMPETITION POLICY 33-35
7 SUPPLEMENTARY OBJECTIVES OF COMPETITION 36-37

POLICY
8 POSSIBLE CONFLICTS AMONG MULTIPLE OBJECTIVES 38-39
9 THE ROLE OF COMPETITION POLICY AUTHORITIES 40-41
10 THE ADVERSE CONSEQUENCES OF MONOPOLIES 42-45
COMPETITION LAW 1.3 1

11 ECONOMICS AND COMPETITION LAW 46-47
12 GLOBALIZATION AND LIBERALIZATION 48
13 SUSTAINABLE COMPETITION IN MARKET 49-56
14 EVOLUTION OF COMPETITION LAW FROM 57-60

NEHRUVIAN MIXED MODEL TO PROMOTE AN
INCLUSIVE ECONOMIC GROWTH AND SOCIAL JUSTICE
15 THE ROLE OF PRESERVING THE COMPETITION 61-63

STRUCTURE OF MARKETS
16 COMPETITION COMMISSION OF INDIA, COMPULSORY 64-71

LICENSING OF PATENTS, REGULATION OF LAW IN
INDIA AND ITS IMPLEMENTATION

CHAPTER 1:
INTRODUCTION TO COMPETITION LAW
AND ITS VARIOUS ASPECTS
The Competition Law was developed to facilitate fair competition between businesses and to
control the monopolies in the market. Competition Commission of India (CCI) states that
requirement for Competition Law arises as the market suffers from abuse, distortions and anti-
competitive activities (cartel, abuse of dominance).
A group was set up by the Union Ministry of Commerce in October, 1997 to study matters such
as anti-competitive practices and the effect of mergers and amalgamation on competition. The
report thus suggested in January 1999 by the group that the enactment of competition law and
recommended harmonization of competition principles, competition policy and competition law
enforcement efforts are required. The then Finance Minister of India in his budget speech on
27th February, 1999 stated that the Monopolies and Restrictive Trade Practices (MRTP) Act
has become superseded in the light of international economic developments and there is a need
to shift our emphasis from curbing monopolies to promoting competition.
Articles 381 of the Constitution provide 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, strive to minimise the inequalities in income, and endeavour to eliminate
inequalities in status, facilities and opportunities, not only amongst individuals but also amongst
groups of people residing in different areas or engaged in different vocations” and Article 392
state that “the citizens, men and women equally, have the right to an adequate means to
livelihood”; “that the ownership and control of the material resources of the community are so
distributed as best to subserve the common good”; “that the operation of the economic system
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does not result in the concentration of wealth and means of production to the common
detriment”; “that there is equal pay for equal work for both men and women”; “that the health
and strength of workers, men and women, and the tender age of children are not abused and that
citizens are not forced by economic necessity to enter avocations unsuited to their age or
strength” and “that children are given opportunities and facilities to develop in a healthy
manner and in conditions of freedom and dignity and that childhood and youth are protected
against exploitation and against moral and material abandonment.”
Accordingly, Parliament had first enacted the Monopolies and Restrictive Trade Practices
(MRTP) Act and then the Competition Act to promote equitable distribution of wealth and
economic power. The Statement of the Objects and Reasons to the Act states the reason for
enacting the new law in the following words: “In the pursuit of globalization, India has
responded by opening up its economy, removing controls, and restoring to liberalization”. The
objective of the Act can be further understood from its preamble which states as follows – ‘An
act to provide, keeping in view of the economic development of the country, for the
establishment of a Commission to prevent practices having adverse effect on competition, to
promote and sustain competition in markets, to protect the interests of consumers and to confirm
freedom of trade carried on by other participants in markets, in India...’. The Act was drafted,
like most of the competition laws in the world, in general and is not limited to regulation of
commercial acts of private parties.
The Act prohibits or regulates (A) Anticompetitive agreements (u/s 3 of the Act) (B) Abuse of
Dominant Position (u/s 4 of the Act) (C) Combination and Regulation of Combinations (u/s 5 &
6 of the Act). As a quasi-judicial body, the Competition Commission of India (CCI) is bound
by principles of rule of law in giving decisions and the doctrine of precedents. As per the
Competition Act, the Commission is duly empowered to receive documents and testimonial by
way of evidence and therefore is well suited to adjudicate disputes before it on the basis of
material adduced by parties and by application of the principles of evidentiary proof under the
Evidence Act.
This is important since unlike the United States, a suit for anti-competitive practices cannot be
brought in a civil court nor does intent in cartel. Further, the scope of investigation of the

Federal Trade Commission (FTC) and the Department of Justice (DOJ) are slightly different
however, in India all cases relating to anti-competitive practices can only be investigated by the
CCI.
In the cases of ‘contravention by companies’, CCI may under the provision of Section 483 of the
Competition Act proceed against and punish any person who, at the time of the violation, was in
charge of the company, unless that person can show that the violation was committed ‘without
his knowledge’ or that he had exercised ‘all due diligence to prevent the violation’. Section 43A4
provides that in case of a failure to notify a combination, the Commission shall impose a penalty
of 1% of the total assets or turnover of the combination. Section 42A 5 of the Act provides for the
compensation in case of contravention of orders of the CCI. This section provides that a person
may make an application to COMPAT for recovery of compensation from an enterprise for any
loss or damage suffered by him for violating the directions of the CCI under sections 27 6, 287,
328, 339 and 4110 of the Act.
Broad Objectives of the Competition Act
Section 311 – prohibition of anti-competitive agreements.
Section 412 – prohibition of abuse of dominant position.
Sections 513 & 614 – Combinations and Regulation of combinations.
Sections 5 and 6 Combination
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It is the acquisition of one or more companies by one or more people or merger or amalgamation
of enterprises and shall be treated as ‘Combination’ of such enterprises and Persons in the
following cases:
i. acquisition by large enterprises;

ii. acquisition by group;
iii. acquisition of enterprise having similar goods/services;
iv. acquisition enterprise having similar goods/services by a group;
v. merger of enterprises;
vi. merger in group company. Any combination that causes or is possible to cause
Appreciable Adverse Effect on Competition (AAEC) in markets in India is void.
The Competition Act of India (“Act”) was passed in 2002 as a result of India’s hunt of
globalization and liberalization of the economy. The introduction of the Act was an important
step forward in India’s walk towards facing competition within the country and from
international players.
The Act is not proposed to forbid competition in the market. What the Act primarily seeks to
regulate, are the practices that have an adverse effect on competition in the market(s) in India. In
addition, the Act aims to promote sustainable competition in markets, protect consumer interests,
and ensure freedom of trade in the market(s) in India.
Various activities will be prohibited as being anti-competitive. The activities are as follows:
(a) Anti-competitive arrangements;
(b) Abuse of dominant position; and
(c) Mergers and acquisitions that have an appreciable adverse effect on competition in India.
The Act also provides for the formation of the Competition Commission of India (“CCI”),
which works as a market regulator for preventing and regulating anti-competitive practices in the
country, as well as a Competition Appellate Tribunal (“COMPAT”) which is a quasi-judicial
body recognized to hear and dispose of appeals against any direction issued, or decision made by

the CCI.
The Competition Act, 2002 was enacted to provide the establishment of a Commission to
prevent practices having adverse effect on competition and to promote and sustain competition.
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 to prevent and regulate anti-competitive practices in the country. A Competition
Appellate Tribunal was established, which is a quasi-judicial body to hear and dispose of appeals
against any direction issued, or decision made by the CCI.
The Act was then modified by the Competition (Amendment) Act, 2007 and Competition
(Amendment) Act, 2009. The provisions of the Competition Act connecting to anti-competitive
agreements and abuse of dominant position were notified on 20 May 2009.
Introduction of the Act was a significant step towards facing competition. The Competition Act,
2002 is not anticipated to prohibit competition in the market. The legislation prohibits anti-
competitive agreements, abuse of dominant position and regulates mergers, amalgamations and
acquisitions.
One of the main reasons for failure was disagreement over the continued presence of the so-
called ‘Singapore issues’ in the Doha Round of negotiations, one of which is competition
policy. Competition law and policy first appeared on the international agenda at the end of World
War II as part of the negotiations that resulted in the introduction of the General Agreement on
Tariffs and Trade (GATT).
Although no provisions relating to competition law were included in the GATT, the issue
continued to be discussed in a variety of international forums, although with a low-level priority.
In the last era, the subject has moved closer to center of concern. In accordance to a decision
taken at the Singapore Ministerial Conference in 1996, a World Trade Organization (WTO)
committee was set up to look into the issue of the communication between trade and competition
policy.
At the Doha Ministerial Conference in 2001, it was discussed and agreed that the negotiations

regarding multilateral cooperation on competition policy would take place ‘after the Fifth
Session of the Ministerial Conference on the basis of a decision to be taken, by the agreement, at
that Session on modalities of negotiations’.
Competition law and competition policy are not synonymous. Competition law is generally taken
to refer to the laws that regulate private anti-competitive conduct. While competition laws vary
from nation to nation, there are certain core provisions, which underpin nearly all competition
law regimes.
These comprise proscriptions on anti-competitive cartel activities (such as price fixing and
market sharing by competitors); anti-competitive conduct by dominant firms; and mergers that
substantially reduce competition.
In the United States, competition law (other than mergers) is invariably referred to as ‘antitrust
law’. In Australia and elsewhere, it is sometimes referred to as restrictive trade practices law.
The precise shape and content of a nation’s competition law, both substantive and administrative
depends due to significant degree on its competition policy. Competition policy is a much
broader and less defined concept. Most often, it is used to refer to the rules and policies that
determine the conditions of competition within a nation.
In this sense competition, policy includes not only competition law, but also government policies
towards the implementation of the law. A number of states have superficially strong competition
laws that are weakly enforced in practice. Sometimes this is due to unavoidable funding
constraints and sometimes to a lack of proper understanding.

CHAPTER 2:
THE PROHIBITION OF ANTI-
COMPETITIVE AGREEMENTS
Anti-competitive agreements are those agreements that limit competition. Section 315 of the
Competition Act, 2002 prohibits any agreement with respect to production, supply, distribution,
storage and acquisition or control of goods or services, which causes or is likely to cause a
significant adverse effect on competition in India. The term 'Agreement' is defined in Section
2(b) of the Competition Act, 2002 that includes any arrangement or understanding or concerted
action, whether or not it is formal, in writing or intended to be enforceable by legal proceedings.
The agreements does not necessarily have to be a formal one and in writing or defensible in a
court of law.
Section 3(2) of the Competition Act, 2002 proclaims that any anti-competitive agreement within
the meaning of Section 3(1) of the Competition Act, 2002 shall be considered invalid. The whole
agreement is taken as invalid if it contains anti-competitive clauses having noticeable adverse
effect on the competition. The term 'appreciable adverse effect on competition' used in Section
3, is not defined in the Act. However, the Act specifies a number of factors that the Competition
Commission of India should take into account while determining whether an agreement has a
considerable adverse effect on competition or not.
Agreement between competitors is termed as Horizontal agreements. The most malicious form
of an anti-competitive agreement is cartelization. When competitors agree to fix prices, share
consumer, or do both, the agreement termed as cartel. In addition to horizontal agreements, there
can be anti-competitive agreements between manufacturers and providers or between producers
and distributors. These are mentioned to as Vertical agreements. Vertical agreements too can
undermine competition in the market.
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According to Section 3(3)16 of the Act, the kind of agreements which would be considered to
have an 'appreciable adverse effect on competition' would be those agreements which:
i. Directly or indirectly determine sale or purchase prices;

ii. Limits or control production, supply, markets, technical developments, investments or
provision of services;
iii. Share the market or source of production by distribution of geographical area of market,
nature of goods or number of customers or any other alike way; and
iv. Directly or indirectly, result in bid rigging or collusive bidding.
The agreements residing in Section 3(3) of the Act shall be arbitrated by 'shall be presumed
rule' and responsibility to prove otherwise lies on the defendant.
Section 3(4) provides that any agreement amongst enterprises or persons at different stages or
levels of the production chain in different markets, in respect of production, supply, distribution,
storage, sale or price of, or trade in goods or provision of services, including:
i) Tie-in agreement;
ii) Exclusive supply agreement;
iii) Exclusive distribution agreement;
iv) Refusal to deal; and
v) Resale price maintenance.
All these shall be alleged as an anti-competitive agreement, if such agreements causes or is likely
to cause an appreciable adverse effect on competition in India.
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The agreements falling in Section 3(4) of the Act shall be judged by 'rule of reason' and the
onus lies on the prosecutor to prove its appreciable effect on competition in India.
Section 3(5)18 of the Act gives due recognition to the intellectual property rights, which provides
that the prohibition against anti-competitive agreements shall not restrict the right of any person
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to restrain any infringement of, or to impose reasonable conditions as may be necessary for
protecting, any rights under the Copyright Act, 1957, the Patents Act, 1970, the Trade Marks
Act, 1999, the Geographical Indications of Goods (Registration and Protection) Act, 1999,
the Designs Act, 2000 and the Semi-conductor Integrated Circuits Layout-Design Act, 2000.
Additionally, the Competition Act, 2002 does not limit any person's right to export goods from
India under an agreement, which requires him to exclusively supply, distribute or control goods
or provisions of services for satisfying export contracts.
Thus, any agreement for the determination of preventive infringement of such Intellectual
Property Rights or for imposing reasonable conditions for protecting such rights shall not be
subject to the prohibition against anti-competitive agreements.
Anti-competitive agreements (Chapter I / Article 101)
Both United Kingdom and European Union competition law forbid agreements, arrangements
and concerted business practices, which significantly prevent, limit or falsify competition and
which may affect trade within the UK or the EU respectively.
Consequences of breach
Abuse of Chapter I or Article 10119 can have serious consequences on a company:
 firms involved in activities that breach these provisions can face fines of up to 10% of group
global turnover;
 provisions in agreements which break Chapter I or Article 101 are invalid and unenforceable
(which may lead to the whole agreement being unenforceable);
 firms in breach of Chapter I or Article 101 also leave themselves visible to actions for damages
from customers and competitors who can show that they have been harmed by the anti-
competitive behavior; and
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 Breaking Chapter I, law can result in persons being disqualified from being a company director
and lead to criminal sanctions.
Types of agreement caught as an Anti-Competitive Agreement
The judgment of an arrangement being anti-competitive or not, is done based on its objective, or
its effect on competition, rather than its phrasing or practice. This means that verbal and casual
'gentlemen's agreements' are similarly capable of being found to be an anti-competitive as
formal, written agreements.
Examples of the types of procedures, which are generally forbidden under Chapter I and Article
101 include:
 agreements which directly or indirectly fix acquisition or marketing prices, or any other trading
conditions (for example, discounts or rebates, etc.);
 agreements which limit or control manufacture, markets, technical development or investment

(for example, setting quotas or levels of output);
 agreements which share markets or sources of supply; and
 agreements which apply unlike conditions to alike transactions, placing other trading parties at a
disadvantage.
Cartels
Cartel behavior among the competitors is the most severe form of anti-competitive behavior
under Chapter I/Article 101, consist of the uppermost penalties. A 'hardcore' cartel is one, which
involves price-fixing, market sharing, bid rigging or limiting the supply or manufacture of goods
or services. Individuals impeached for a cartel may be accountable to imprisonment for up to five
years and/or the imposition of unlimited fines.

Exemptions
Considering the fact that an agreement is restrictive of competition does not mean that it is
instinctively prohibited. It may be considered as that an agreement, which appears to fall within
the prohibitions under Chapter I or Article 101 is omitted or exempted from the competition
rules.
For example, an agreement which would else be caught by Article 101 may be presumed to be
harmless where the parties have adequately low market shares, that there can be no real effect on
competition or trade between Member States. The same belief is considered by analogy, to
agreements otherwise caught by Chapter I. However, agreements, which are deemed restrictive
by object, will usually be found to infringe the competition rules.
Other agreements may, however, be excused under a 'block exemption' i.e. a group exemption,
which automatically exempts agreements falling within its terms. Different block exemptions
may apply subjecting to the nature of the agreement or the market sector concerned.
Each sets out certain criteria (for example, relating to the market share of the parties and the
types of restriction confined within the agreement) which must be met in order for an agreement
to be block exempted.
Even if an agreement does not fit squarely within a block exemption, it is still not automatically
unlawful or unenforceable. An agreement may be individually exempted because its beneficial
effects outweigh the restrictions of competition.
Anti-Competitive Agreements Section 3 of the Competition Act states that any agreement, which
causes or is likely to cause an Appreciable Adverse Effect (AAE) on competition in India is
deemed anti-competitive. Section 3 (1) of the Competition Act prohibits any agreement with
respect to “production, supply, distribution, storage and acquisition or control of goods or
services which causes or is likely to cause an appreciable adverse effect on competition within
India”. Although the Competition Act does not define Appreciable Adverse Effect (AAE) on
competition and nor is there any thumb rule to determine when an agreement causes or is likely
to cause Appreciable Adverse Effect (AAE) on competition, Section 19 (3) of the Act specifies

certain factors for determining Appreciable Adverse Effect (AAE) on competition. The intent of
the legislature reflected vide the mandatory language of Section 19 (1)20 of the Act is that the
Competition Commission of India (CCI) is required to carry a balanced assessment of anti-
competitive effect as well pro-competitive justification of the agreement. As stated above AAE is
not defined but Section 19 (3) provides the factors that the CCI must have due regard to which
determining whether an agreement has an Appreciable Adverse Effect (AAE) on competition
under Section 3, such factors are:
i. creation of barriers to new entrants in the market;

ii. driving existing competitors out of the market;
iii. foreclosure of competition by hindering entry into the market;
iv. accrual of benefits to consumers;
v. improvements in production or distribution of goods or provision of services; and
vi. promotion of technical, scientific and economic development by means of production or
distribution of goods or provision of services.
The language in Section 19(3)21 mentions that Competition Commission of India (CCI) shall
have ‘due regard to all or any’ of the above-mentioned factors. In the resolutions that have been
analyzed below, it has been noted that Competition Commission of India (CCI) has examined the
allegations and material on record as against the elements of Section 19(3) as set out above.
However, in Automobiles Dealers Association v. Global Automobiles Limited & Anr, the
Competition Commission of India (CCI) held that it would be sensible to examine an action in
the background of all the factors cited in Section 19(3). The Competition Act does not classify
agreements into horizontal or vertical however the language of Section 3 (3) and Sections 3 (4)
makes it amply clear that the former is intended at horizontal agreement and later at vertical
agreements. Horizontal agreements connecting to events referred to under Section 3 (3) of the
Competition Act are supposed to have an Appreciable Adverse Effect (AAE) on competition
within India.
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Section 3(3) of the Competition Act provides that agreements or a ‘practice carried’ on by
enterprises or persons (including cartels) engaged in trade of identical or similar products are
presumed to have Appreciable Adverse Effect (AAE) on competition in India if they:
• Directly or indirectly fix purchase or sale prices;
• Limit or control production, supply, markets, technical development, investments or provision

of services;
• Result in sharing markets or sources of production or provision of services; and
• Indulge in bid-rigging or collusive bidding.
The first three types of conducts may include all firms in a market, a majority of them,
coordinating their business, whether vis-à-vis price, geographic market, or output, to effectively
act like a monopoly and share the monopoly profits accrued from their collusion. The fourth type
of cartelized behavior may involve competitors collaborating in a way to restrict competition in
response to a tender invitation and might be a combination of all the other practices. The only
exception to this per-se rule is in the nature of joint venture arrangements, which increase
efficiency in terms of production, supply, distribution, storage, acquisition or control of goods or
services.
Thus, there has to be a direct nexus between cost/ quality efficiencies the agreement and benefits
to the consumers must at least compensate consumers for any actual or likely negative impact
caused by the agreement. Section 3(4) of the Competition Act offers that any agreement amongst
enterprises or persons at different stages or levels of the manufacturing chain in different
markets, in respect of manufacture, supply, distribution, storage, sale or price of, or trade in
goods or provision of services etc.
These agreements are not anti-competitive but if they cause or are expected to cause an
Appreciable Adverse Effect (AAE) on competition in India will these agreements be in violation
of Section 3(1) of the Competition Act. The rule of reason must be applied in this determination.
The Competition Act unambiguously states that the outlines of anti-competitive restraints will

not apply with respect to those horizontal and vertical agreements, which impose reasonable
conditions to protect or confine infringement of, the rights granted under intellectual property
laws.

CHAPTER 3:
ABUSE OF DOMINANT POSITIONS
Section 422 of the Competition Act, 2002 specifically forbids any enterprise or group from
abusing its dominant position. The term 'Dominant Position' includes a position of strength,
enjoyed by an enterprise or group, in relevant market, in India, which enables it to:
a) Operate self-sufficiently of competition forces prevalent in the relevant market; or
b) Affect its competitors or customers or the relevant market in its favor.
The term 'Dominance' is also referred to as market power, which is defined as the capability of
the firm to raise prices or decrease output or does independently of its both rivals and consumers.
As per Section 2(r) of the Competition Act, 2002 'relevant market' means the market, which may
be concluded by the Competition Commission of India with reference to the appropriate 'product
market' or 'relevant geographical market' or with reference to both.
The Act entails that applicable product market is to be determined by considering; physical
characteristics or end-use of goods; the price of goods and services, consumer favourites,
exclusion of in-house production, the presence of specialized producers and the cataloging of
industrial products. Further, the related geographical market is determined by considering
regulatory barriers, local specification requirements, national procurement policies, suitable
distribution facilities, transport costs, language, consumer preferences and need for secure or
regular supplies or rapid after sales services.
In short, there shall be an abuse of dominant position if an enterprise indulges into the below
mentioned activities:
a) Directly or indirectly imposing discriminatory conditions in the purchase or sale of goods

or service, or setting prices in the purchase or sale (including predatory pricing) of goods
or services;
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b) Limiting or confining the production of goods or delivery of services; or limiting
technical or scientific development concerning to goods or services to the prejudice of
customers;
i. Indulging in practice resulting in the denial of market access;
ii. Making deduction of contracts subject to approval by other parties of
supplementary compulsions, which has no connection with the subject of such
contract; and
iii. Utilization of the leading position in one relevant market to enter into, or protect,
another related market.
Section 19(4)23 of the Act authorizes the Competition Commission of India (CCI) to determine
whether any enterprise or group appreciates a dominant position or not, in the relevant market
and to decide whether or not there has been an abuse of dominant position. Further mere
presence of dominance is not to be scowled upon unless the dominance is abused.
The Competition Act sets out following factors which the CCI will take into account to establish
the dominant position of an enterprise:
i. market share of the enterprise;

ii. size and resources of the enterprise;
iii. size and importance of the competitors;
iv. economic power of the enterprise including marketable advantages over competitors;
v. vertical integration of the enterprises or sale or service network of such enterprises;
vi. reliance of consumers on the enterprise;
vii. monopoly or dominant position whether assimilated as a result of any statute or by
virtue of being a Government company or a public sector undertaking or otherwise;
viii. entry barriers including barriers such as regulatory barriers, financial risk, high capital
cost of entry, marketing entry barriers, technical entry barriers, economies of scale,
high cost of substitute goods or service for consumers;
ix. countervailing buying power;
x. market structure and size of market;
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xi. social compulsions and social costs;
xii. relative advantage, by way of the involvement to the financial development, by the
enterprise enjoying a dominant position having or likely to have an substantial
contrary effect on competition; and
xiii. any other factor which the Commission may consider relevant for the inquiry Once
the dominance of an enterprise in the relevant market is determined the CCI has to
establish the abuse of its dominance by an enterprise.
The Competition Act sets out a list of activities that shall be deemed abuse of dominant
position i.e.:
i. anti-competitive practices of imposing unfair or discriminatory trading conditions or

prices or predatory prices;
ii. limiting the supply of goods or services, or a market or technical or scientific
development, denying market access;
iii. imposing supplementary obligations having no connection with the subject of the
contract; or
iv. using dominance in one market to enter into or protect another relevant market.
The list of abuses provided in the Competition Act is meant to be exhaustive and not merely
illustrative. This broadly follows the categories of abuse identified under 102 of Treaty on
the Functioning of the European Union (TEFU). The Competition Act also exempts
certain unfair or discriminatory conditions in purchase or sale or predatory pricing of goods
or service from being considered an abuse when such trading conditions are adopted to meet
competition.

CHAPTER 4:
MERGER,
AMALGAMATION
AND ACQUISITION
CONTROL, REMEDIES UNDER
COMPETITION LAW
Mergers and acquisitions (or combinations) refer to a situation where the ownership of two or
more enterprises is joined together. A merger is said to occur when two or more companies
combine to form a new company. In this, two or more companies may merge with an existing
company or they may merge to form a new company. The assets and liabilities of the transferor
company become the assets and liabilities of the transferee company. The purpose of a merger is
usually to create a bigger entity, which accelerates growth and leads to economies of scale.
TYPES OF MERGERS
Mergers are broadly classified into three categories:
i. Horizontal mergers, which takes place amid competitors, a horizontal merger produce
or supply similar or identical products. These mergers are observed as presenting a
greater danger to competition than any other type of mergers. They have effect on market
concentration and use of market power as they lead to (a) reduction in number of market
players and (b) increase in market share of the merged entity. Such upsurges in market
power may result in increased prices, restricted output, diminished innovation, etc. which
is damaging to the competitive process. The possible anti-competitive effects of
horizontal mergers are thus alike to what may occur in case of cartels or horizontal anti-

competitive agreements. The impact of horizontal mergers on competition would be more
opposing where there are fewer firms functioning in the relevant market or where the
market shares of the merged entity are high so that the resulting entity would be the
dominant firm in the market. The impact of horizontal mergers on competition can be
classified into one-sided/unilateral effects and coordinated effects.
a. Unilateral Effects: A merger may lead to a monopoly (in an extreme case) or
otherwise create an enterprise with considerable increase in market power. The
enterprise can then over charge or increase its profit margin or able to reduce
output, quality or variety. In this way, the enterprise can unilaterally abuse its
dominant position.
b. Coordinated Effects: A horizontal merger may decrease the number of competing
enterprises and make it easier for the outstanding enterprises to co-ordinate their
behaviour in terms of price, quantity or quality i.e. a cartel-type arrangement. The
coordination can be implicitly or expressly raise the prices as a result, the
competitive prices may not be touched and firms may earn monopoly or oligopoly
profits. Many other factors also affect the ability to synchronize. For example, it is
easier for competitors to reach and monitor agreements if the products are
comparatively homogenous and the pricing by individual competitors is relatively
transparent.
ii. Vertical mergers, a vertical merger takes place among enterprises at different levels in
the chain of manufacturers and distributors. The contrary impact of vertical mergers on
competition is comparatively less. They may also bring benefits for the merging
enterprises and for consumers, which is less likely and less considerable in the case of
horizontal mergers. However, in certain conditions, vertical mergers can attract action by
competition authorities. For example, if a dominant enterprise obtains source of raw
materials, this enterprise could negate access to raw materials to competitors or potential
competitor. Vertical mergers can result in following anti-competitive effects:
(1) Fear of Fore Closure: Vertical integration can sometimes lead to foreclosure for the

contending firms. Foreclosure can take two forms: Input foreclosure and Customer
foreclosure. Input foreclosure is debated above i.e. when dominant enterprise obtains
source of raw material and negates others. Customer foreclosure occurs when the supplier
assimilates with a customer base in the market, thereby depriving other player’s access to
customers.
(2) Entry Blocking: Monopolies can have the ability to prevent the entry of firms into
the market. Sometime it is claimed that even competitors can come together or prevent a
potential entrant. This is sometimes referred to as collective foreclosure. If through
integration, firms are able to internalize different levels of production then artificial
barriers to entry could be created. This implies that because of the size of the incumbent,
potential entrants capital requirements will be high.
(3) Differential Pricing: If a firm has a monopoly over the supply of a particular input
and it integrates downstream into processing of the input into finished products, an
anticompetitive effect may arise if the firm charges a high price for the input supplies and
a low price for the finished products. This differential price jeopardizes the economic
viability of all the other firms in the downstream finished product market. This practice
mainly prevails in the steel industry, where integrated steel manufacturers follow
differential pricing in hot-rolled coils to harm the interest of cold-rolled steel
manufacturers, the downstream players.
Vertical merger is forbidden if it causes or is likely to cause an appreciable adverse effect

within the relevant market in India. It will have such effect, if it results in foreclosure of market,
entry blocking or price squeeze. It will not have that effect if the administrative direction rather
than a market transaction forms the basis of cooperation. In that case, there is no fear of
foreclosure, including collective foreclosure (entry blocking) and reduction in output prices
(price squeeze) which further creates a favorable environment for collusive behavior. It may be
administratively desirable as business expediency or to create efficiency, if a firm chooses, based
on relative costs, to sell its finished or unfinished product to other firms who in turn sell it to the
market with or without further processing, rather to perform the activity by itself. However,
anticompetitive effects are likely when at the vertical levels.

iii. Conglomerate mergers, which take place between enterprises engaged in unrelated business
activities. The theories for restraining vertical and horizontal merges are well formulated.
However, there is no clear mechanism for similar restraints on conglomerate mergers, as these
mergers are not considered potentially anti-competitive as the structure of the competition in the
relevant market does not ostensibly change but on the other hand, it gives the additional financial
strength to the parties concerned.
A considerable increase in the financial strength of the combined enterprise could provide for a
wider scope of action and leverage vis-à-vis competitors or potential competitors of both the
acquired and the acquiring enterprise and specially if one or both are in a dominant position of
the market power, enabling it to resorting to predatory pricing, raising entry barriers and
eliminating potential competition.
An example of conglomerate acquisition could be found in Federal Trade Commission (FTC) v.

Proctor and Gamble. Merger was found to be anti-competitive because the powerful acquiring
firm, Proctor and Gamble (P&G), could substantially reduce the competitive structure of the
industry by dissuading the smaller firms from competing aggressively and raising barriers to new
contenders who would be reluctant to face the huge P&G with its large advertising budget. As
these mergers are not considered potentially anti-competitive, but still there are some objections
to these forms of mergers which are due to the under mentioned competitive effects such as:
i. The Theory of Deep Pockets: Some competition authorities are wary of mergers
that may produce a conglomerate with great financial and market power and with
deep pockets. It is believed that firms operating in many markets can devastate
their rivals through their potentially infinite capital resources.
ii. Reciprocal Dealing: These mergers can lead to increase in opportunity for
reciprocal dealing, which arises in a structure where firms meet as seller to buyer
in some markets and as buyer to seller in other, which is disadvantage to the
rivals.
iii. Mutual Forbearance: Conglomerate mergers may enhance the likelihood of
mutual forbearance, where each enterprise may independently decide to compete
less vigorously with the other in that section of the market where its position is

relatively weak, thereby leading to a situation of peaceful co-existence rather than
vigorous competition, i.e. the development of a ‘live and let live policy’ that is
comfortable for firms but harms consumers.
Mergers are imperiled to review because of their possible adverse effect on competition in the
applicable market. Such adverse effect could be the result of a unilateral conduct or of
synchronized conduct between two or more enterprises facilitated by the merger. Control of
either type of conduct is prospective and aimed at preventing such conduct post-merger.
Remedies for Merger Control
Successful merger implementation is defined by obtaining effective remedies, like obstructing a

transaction of settling under terms that avoid or resolve a disputed litigation while protecting
consumer welfare. The provisions on merger control/regulations in most competition laws
essentially seek to prevent mergers that would negatively affect competition. This is done in two
ways i.e. by appraising the mergers to determine their effects on competition and undertaking
remedial methods to ensure that, the anti-competitive impact can be prevented. Where such
remedial actions are not effective enough, the mergers are prohibited from taking effect.
Competition Act in Reference to Mergers and Acquisitions
Throughout the last century, there has been a proliferation of competition laws in countries
across the globe that demonstrates the necessity of having competition law, including provisions
of merger control. The mergers need to be regulated by formulating suitable anti-trust legislation
to protect the interest of the consumers and the whole economy. Mergers and acquisitions are
subject to competition law because they may result in the modification of the existent market
structure by giving rise to single firm dominance or coordinated practices. Over the past several
years, the mergers and acquisitions market in India has been very active. The percentage of
domestic as well as cross-border transaction has risen significantly.
The practice of mergers and acquisitions has attained considerable significance in the
contemporary corporate scenario with the prevalence of family run business houses in India,

corporate restructuring is also widely used for re-organizing the business entities, succession
planning and seeking tax advantages within the group. Thus, there was considerable pressure
from the industry representatives, various interest groups and trade association to bring out a
merger control regime to curb anti-competitive effects of combinations whereas the then existing
Monopolies and Restrictive Trade Practices Act (MRTP) was found to be inadequate in
pursuit of changes brought about by liberalization. The MRTP Act, in comparison with
competition laws of many countries, was found inadequate for fostering competition in the
market and trade and for reducing, if not eliminating, anti-competitive practices in the country’s
domestic and international trade. Therefore, in the light of expanding global transactions and
enhanced interaction of firms across territorial bounds, the Indian competition regime underwent
a paradigm shift, from a reformist premise to one encouraging and promoting competition in the
market.
Thus, after a long and troubled gestation, India’s competition law and Competition Commission
of India came into existence. The Competition Act, 2002 came into existence in January 2003
and the Competition Commission of India was established in October 2003.The objective of the
Act can be known from its Preamble, which is mentioned below:
“An act to provide, keeping in view of the economic development of the country for the
establishment of a Commission to prevent practices having adverse effect on competition,
to promote and sustain competition in markets, to protect the interest of consumers and
to ensure freedom of trade carried on by other participants in markets, in India and for
matters connected therewith or incidental thereto.”
Analysis of Provisions of Competition Act Relevant to Mergers and Acquisitions
Merger control provisions under competition law seek to prevent creation of mergers that will
negatively influence competition and unlike others, focus areas of competition law involves an
ex-ante analysis of the probable effects of the proposed merger. In India, the first competition
statute was the MRTP Act, which was enacted pursuant to the recommendations of inter alia,
the Monopolies Inquiry Committee appointed in 1964. This legislation contained provisions on

Monopolistic and Restrictive Trade Practices (which included anti-competitive agreements)
and on the concentration of economic power. Chapter III of the MRTP Act which was related to
the ‘concentration of economic power’, included provisions on mergers which required that prior
approval should be obtained from the Central Government or any scheme of merger or
amalgamation involving undertakings, the assets of which exceeded certain threshold limits or
where the merged entity exceeded certain threshold limit. The object of this provision was to see
among other things that “amalgamation is not used as a device to create new monopolies or to
bring about restrictive trade practices.” These provisions were, however, deleted vide an
amendment to the Act in 1991, brought about in the wake of structural reforms introduced by the
government through the new industrial policy.
Competition Act prohibits anti-competitive agreements and abuse of dominance, as they are per
se harmful, whereas combinations (mergers, acquisitions etc.) are regulated by orders of CCI.
The reason is combinations ensure economic growth, more economic opportunities for business
to compete with their overseas counterparts and consumer welfare ultimately. On the other hand,
anti-competitive combinations harm markets and subvert the interest of consumers. In amicable
and consensual mergers, the parties have unanimity of interests and any Competition Authority
would not have much to do but to allow such proposals. On examination of annual reports of
several competition authorities, it is seen that in almost all jurisdictions across the globe 90
percent cases of merger notification are allowed and in the remaining 10 percent cases, they are
either modified or rejected. That is why Competition Act, 2002, only regulates mergers as
Mergers and acquisitions (M&A) have become a necessity for an economy to compete and
withstand global competition.
The specific provisions of Competition Act, 2002 that deal with or regulate combinations are
Section 524, 625, 2026, 2927, 3028 and 3129. Section 5 and 6 are the operative provisions dealing
with combinations. Besides mergers and amalgamations, the provisions pertaining to regulation
of ‘combination’ for the purposes of Competition Act, covers acquisitions. ‘Acquisition’ for the
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purpose of combination is not only the acquisition of shares or voting rights or control of
management, but also acquisition of or control of assets of the target company. The Competition
Act sets a threshold below which a merger, acquisition or acquiring of control is not regarded as
a combination and is therefore outside the merger regime of the Act. The threshold is high and is
defined in terms of assets or turnover.
Combination
Section 530 of the Competition Act explains the circumstances under which acquisition, merger
or amalgamation of enterprises would be taken as ‘combination’ of enterprises. They are
enumerated here under:
i. The acquisition of one enterprise by another involves acquiring shares, voting

rights or assets of another enterprise to enable it to exercise control. If as a result,
the value of assets or the turnover of the combining enterprises or groups exceeds
the specified thresholds the combination is deemed to have potential of affecting
the competition adversely;
ii. Obtaining control by a person over an enterprise when such person has already
direct or subsidiary control over another enterprise involved in production,
distribution or trading of a similar or identical or substituted goods or provision of
similar or identical or substituted service, if the value of properties or turnover of
both the said enterprises is more than the amount revealed in section 5(b). Thus,
the combination of two enterprises as a result of one have now been attained,
under the same control is a combination having potential of affecting competition;
iii. Merger or an amalgamation of enterprise is a combination in case the enterprise
remaining after merger or the enterprise created as a result of merger has more
than the assets or turnover above the prescribed thresholds.
Regulation of Combinations
30

While the definition of combination is contained in section 5, the regulation thereof is provided
in Section 6. Section 6 of the Competition Act deals with regulation of combinations. It contains
a prohibition against a combination, which causes or is likely to cause an appreciable adverse
impact on competition and provisions requiring pre-notification of combinations. The core
component of any merger control regime is the assessment of proposed merger to determine their
possible effects on competition. Every system of merger control sets out a substantive test to
determine whether or not a merger ought to be blocked and must decide upon a standard of proof
required before a competition authority can block a merger. A substantive test usually involves
the examination of various factors such as pre and post-merger market shares, market
concentration, barriers to entry, extent of effective competition etc. among others to assess
whether the proposed transaction will negatively affect competition. Each of the jurisdictions
employs various quantitative and qualitative criteria to examine the effects of merger. Section
6(1) states that no person or 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 and such a
combination shall be void.
A combination leads to adverse effect only if it creates a dominant enterprise, which is likely to
abuse its dominance. Market dominance need not necessarily lead to abuse. However, when the
companies are too big, they can indulge in abuse and exploit the consumers through market
manipulation. But on the other hand, big companies have its own advantages in form of
economies of scale, accelerated growth and larger expenditure on research (such as in
pharmaceuticals).
The basic assumptions, which were the foundations of a closely regulated or controlled
economy, have altered in the present day society. Today enterprises have to withstand global
competition. Therefore, a balance has to be struck between the advantages and disadvantages.
The likely abuse of bigness has to prevent in incipiency. Every type of merger whether
horizontal, vertical or conglomerate should be prohibited when it abuses its position to drive
competing business from the market.
A combination, whether horizontal, vertical or conglomerate is to be tested by the standard of

section 6(1), that is, whether it “causes or is likely to cause appreciable adverse effect on

competition within the relevant market in India” which requires a prediction of the
combination’s impact on present or future competition. Section 6(1), therefore, requires not only
an appraisal of the immediate impact of the combination on competition but also a prediction of
its effect on competitive conditions in future, to prevent the destruction of competition.
Intra-group Mergers and Amalgamations
Mergers and amalgamations between a holding company and its subsidiary wholly owned by
enterprises within the same group and between subsidiaries wholly owned by enterprises
belonging to the same group would not require notification to the CCI. Thus, it is seen that there
is a distinction made between acquisitions and mergers for intra-group re-organizations, given
that for an intra-group exemption by way of a merger, the enterprises involved should be wholly
owned within the same group. Thus, in case of merger or amalgamation, the exemption is partial.
Moreover, this partial exemption has been provided by the amendment regulations. Earlier the
notification requirement was dispensed only in respect of intra-group acquisitions of control or
voting rights or shares or assets.
Combinations whether in the form of mergers, amalgamations or acquisitions are very important
for a developing countries. They provide numerous advantages to an economy like India in the
form of diversification of business, increased synergy, accelerated growth, tax benefits,
improved profitability etc. They enable foreign collaboration through cross-border mergers and
enable companies to withstand global competition. On the other hand, they may lead to
monopoly or create barriers to entry and similar anti- competitive practices. Therefore, they need
regulation. The need to swiftly permit such mergers, which are beneficial to the economy and
prohibit anticompetitive ones has led to the formulation of merger control regime all over the
world.
In India, mergers were regulated under the MRTP Act, 1969. But the Act had become obsolete
in the light of international economic developments and was replaced by the Competition Act,
2002. The provisions relating to combinations came into force recently on 1 June 2011. The CCI
also notified the implementing combination regulations effective from the same date. The Act
and the Regulations together constitute the merger control regime. The gradual succession from

the MRTP Act to Competition Act is one of the most important milestones as far as economic
reforms in the field of competition law in the country are concerned. By shifting the focus from
the stage of merely ‘curbing monopolies’ in the domestic market to ‘promoting competition’ the
competition regime in India has attained recognition for its progressive ways. It provides for pre-
merger notification, review and remedies in the form of modifications which if applied
effectively can play a crucial role in regulating mergers. The merger control provisions are
designed in such a way to prevent mergers that are likely to have an appreciable adverse impact
on competition.
Overall, the efficiency of the CCI is commendable as it has been approving competition in a time
bound manner given the nascence and ambiguities that are prevalent in the regime. Therefore,
such lacunas and ambiguities in the regime should be removed at the earliest to make it more
effective. If the various problems and concerns raised by the current provisions on merger
regulation in the Competition Act are addressed, the act can be an effective instrument in
achieving its aim and preventing anti-competitive practices in the market. Moreover, none of the
merger control decisions that have been arrived so far have resulted in any substantive legal
issues, which have made the role of the Commission much easier. The true test of the
Commission will only arise when complex and substantial legal issues are brought before it. But
commission should be commended to correctly analyze most of the decisions and to arrive at
clearances ahead of the time limit set by Combination Regulations.
Thus, the CCIs responsiveness to the industry concerns and its eagerness to develop a unique
body of jurisprudence comparable to that of more advanced jurisdictions is encouraging and puts
to rest any fears of merger control acting a roadblock to M&A activity in India. Overall, the
Indian competition law is looking forward and intends to create an economy, which will enable
all to enjoy the fruits of developments through vigorous competition.

CHAPTER 5:
OBJECTS OF COMPETITION LAW
Competition in market-based economies broadly refers to a state in which firms or sellers

independently struggle for buyers' patronage in order to achieve a particular business objective,
for example, profits, sales, or market share. Competition in this framework is often associated
with rivalry. Competitive rivalry may take place in terms of price, quantity, service or
combinations of these and other factors that customers may value.
TENSIONS IN COMPETITION LAW AND POLICY
Competition drive organizations to become effectual and to offer a greater choice of products
and services at lower prices. In a competitive market economy, price (and profit) signals tend to
be free of misrepresentations and create incentives for firms to redistribute resources from lower-
to higher valued uses. Decentralized judgment made by firms promotes efficient allocation of
society's scarce resources, increases consumer welfare and gives rise to dynamic efficiency in the
form of innovation, technological change and progress in the economy as a whole.
However, firms also have incentives to acquire market power, that is, to obtain discretionary
control over prices and other related factors determining business transactions. Such market
power may be gained by limiting competition by erecting barriers to commerce, entering into
collusive arrangements to restrict prices and output and engaging in other anticompetitive
business practices. These examples of deficient competition are generally viewed as market
failures that result in inefficient allocation of resources and adversely affect industry
performance and economic welfare.
Such market failures enable sellers to deliberately reduce output to extract higher prices at the
expense of consumers and society in general. Furthermore, questions arise as to what constitutes
equitable distribution of the gains from trade between sellers or between producers and
consumers.

Broadly, the two ends of the spectrum can be described in terms of economic and non-economic
approaches to competition policy. At one end it is a view that the sole purpose of competition
policy is to maximize economic efficiency. Under this view, there is no room for sociopolitical
criteria such as fairness and equity in the administration of competition policy. Such criteria are
viewed as ill-defined and loaded with objective value judgments, and therefore not able to be
applied in a consistent manner. The other view is that competition policy is based on multiple
values that are neither easily quantifiable nor reduced to a single economic objective. These
values reflect a society's wishes, culture, history, institutions, and perception of itself, which
cannot and should not be ignored in competition law enforcement.
Within the spectrum, a range of views has been expressed on the comparative weights to be
attached to different aspects. There is a characteristic tension between the need for a clear set of
legal rules to substitute certainty in the application of competition policy and the need to
consider specific facts. While competition policy targets at fixing market failure arising from
flawed competition, precise legal rules cannot be edged across all types of actual or potential
anti-competitive situations. For example, an outright prohibition or a per se approach may well
be adopted against price fixing agreements, while a rule of reason approach that assesses facts on
a case-by-case basis is likely to be more suitable in certain types of business practices such as
exclusive dealing contracts.
Another source of tension is the priority involved to competition policy relative to the rank order
allocated to other government policies. In most industrial countries competition legislation is a
general law that applies to all economic activities and sectors unless explicit exemptions are
approved. Given the widespread interface, competition policy has with other government
policies; there are areas in which the respective purposes may be harmonizing such as in the case
of ingenuities directed at deregulation and privatization of state-owned corporations. However,
in other areas such as trade, investment and regional development policies battles may often
arise. The extent of steadiness, or its lack, in different government policy measures can support
or thwart the objectives of competition policy.

CHAPTER 6:
MAJOR OBJECTIVES OF COMPETITION
POLICY
Canada and the United States enacted competition legislation toward the end of the 1889and
1890, respectively. While many purposes have been attributed to competition policy during the
past hundred years, certain foremost subjects stand out. The most common of the objectives
quoted is the maintenance of the competitive processor of free competition, the protection or up
gradation of operative competition. These are seen as identical with striking down or averting
arbitrary restraints on competition. Associated objectives are freedom of trade, freedom choice
and access to markets. In some countries, such as Germany, the freedom of individual act is
viewed as the economic correspondent of a democratic constitutional structure.
Initially, the crucial objective of maintenance and elevation of effective competition was to
counter private boundaries on competition hence, competition laws in most countries continue to
forbid price-fixing agreements and abuse of dominant market position. However, during the past
two decades or so, the role of competition policy has extended significantly to include
diminishing the adverse effects of government interference in the marketplace. For instance, in
Italy, competition law applies to both public and private firms, whereas firms providing public
services or operational monopolistic position are exempted from competition law only within the
parameters of the mission attributed to them. The provisions in Canada's Competition Act are
also similar.
Improving access and opening markets by reducing barriers to entry through deregulation,
privatization, tariff reduction, or removal of quotas and licenses, and marketing board schemes
are specifically highlighted as important objectives in the administration of competition policy in
several industrial countries.
These actions do not necessarily imply that competition authorities have a direct mandate over

commercial, regulatory and privatization policies in these jurisdictions. However, through inter-
and intra-governmental participation in the development of public policies and by making
submissions and interventions in regulatory proceedings, competition authorities can wield
influence favoring market-determined solutions.
In some countries, competition authorities can analyze whether regulatory measures from the
public sector will negatively affect competition and strive to have any measures that
unreasonably limit competition amended or abolished. In Sweden, the Competition Ombudsman
may propose changes to existing regulations that would enhance the competitive environment.
Other countries, however, do not believe that government encouragement of state monopolies, or
"national champions," at the cost of reduced competition in domestic markets would enhance
their competitiveness, performance or welfare. They have found that such national champions
and public utilities, shielded from the full effects of competition, respond insufficiently to their
markets and that improvements in productivity are slow, there has been widespread recognition
that there is more to competition than simply applying competition legislation, since
liberalization, deregulation, and privatization have also acted as stimuli to markets.
Other commonly expressed objectives of competition policy are prevention of abuse of economic
power and thus protection of consumers and of producers who want the freedom to act in a
competitive manner and achievement of economic efficiency, defined broadly to encourage
allocative and dynamic efficiency through lowered production costs and technological change
and innovation.
During the past two decades, the focus has been on attaining economic efficiency, to maximize
consumer welfare. For example, the Antitrust Enforcement Guidelines for Inter-national
Operations of the U.S. Department of Justice (1988) state that the purpose of antitrust laws is to
establish broad principles of competition that are designed to preserve an unrestrained interaction
of competitive forces that will yield the best allocation of resources, the lowest prices and the
highest quality products and services for consumers.
A major theme of competition legislation in the United States was once the explicit preference
for pluralism in terms of the diffusion of economic power throughout the economy. Lawmakers

viewed a concentration of economic power as a threat to dispersed decision-making, the
foundation of democratic society. The argument was that large firms, with their aggregation of
resources, resemble private governments not subject to external constraints or public account-
ability. This concern has also led to a tendency to protect small businesses, which is frequently in
conflict with the objectives of maximizing economic efficiency and consumer welfare.
In various countries, these objectives are juxtaposed without any particular ranking of priorities.
Different views persist as to which objectives should receive greater emphasis, although
increased emphasis on the efficiency objective is apparent in a number of jurisdictions.
In the United States, for example, the Supreme Court since the mid-1970s has consistently
decided antitrust cases with the economic efficiency objective in mind. This has also been the
thrust of the enforcement policies adopted by U.S. competition agencies during the past 25 years
or so. France's administration of competition emphasizes innovation and the dynamic efficiency
of firms. In Canada, the pre-amble of the Competition Act states that its purpose is to maintain
and encourage competition in order to promote efficiency.

CHAPTER 7:
SUPPLEMENTARY OBJECTIVES OF
COMPETITION POLICY
In response to socio-political concerns, various purposes of competition policy other than
economic efficacy and improved consumer wellbeing have been acknowledged. These include
protecting small businesses, preserving the free enterprise system and maintaining fairness and
honesty. Some objectives, such as moderating or curbing inflation, recur over time, because
price equilibrium methods are less likely to succeed when monopolistic tendencies exist in an
economy.
In addition, economists have contended that competition policy must identify the effects that
business practices such as mergers may have on employment, collapse of communities and
regional development through plant terminations, reorganization of material sourcing and
production, distribution and financing decisions. The issue of absconder ownership and the lack
of local presence or commitment by "head office management" have also been raised. The only
areas of consensus superficial across different jurisdictions are that:
i. The objective of competition policy is to protect competition by arresting down or

avoiding private (and where possible, public) business limitations that adversely obstruct
with the competitive process; and
ii. The competitive process should be protected not to maintain and promote competition for
competition's sake but to achieve other objectives as well.
Thereafter, consensus breaks down within and across countries. Although competition is
acknowledged as the process that nurtures effective use or efficient distribution of society's
resources, the sovereignty of this objective has not been uniformly accepted. Moreover, there is
disagreement over what constitutes private limit to competition. The relative significance and
balance between efficiency and the various other economic-social-political intentions that

competition policy can advance remain to be recognized.

CHAPTER 8:
POSSIBLE CONFLICTS AMONG
MULTIPLE OBJECTIVES
The various objectives of competition policy are not inevitably the product of a well-defined,
steady set of principles. While the essential core of competition legislation has intacted the
maintenance or defense of competition through the hindrance of private restraints on trade and
abuses of economic power-the changing emphasis on various objectives and the pressure to
increase the number of goals have been remarkable. Although these shifts support the
proposition that competition policy can adapt to changing economic, social and political
conditions, these shifts also imply that competition policy maybe the subject of political
compromise.
Efforts to take into account multiple objectives in the administration of competition policy may
give rise to conflicts and inconsistent results. For instance, protecting small businesses and
maintaining employment could conflict with attaining economic efficiency. With the small
business objective, competitors rather than competition may be protected. In addition, such
disquiets as community breakdown, fairness, equity and pluralism cannot be quantified easily or
even defined acceptably. Attempts to incorporate them could result in inconsistent application
and interpretation of competition policy. Clear standards would be unlikely to emerge, thereby
leading to uncertainty and distortions in the marketplace and the undermining of the competitive
process.
However, it has been argued that the intent of competition policy incorporates more than owed
efficiency. Competition policy as expressed in the laws sanctioned by representative
governments aims to serve the broad public interest and thus includes sociopolitical goals.
The pursuit of economic efficiency may in some situations give rise to increased consumer and
producer surplus as a result of higher levels of output at the same or lower prices. These

circumstances may also produce higher profits for businesses. In such instances, the proponents
of economic efficiency would not differ in their viewpoints. However, a conflict may arise if
producer surplus increases at the expense of consumer surplus, even if the total surplus
(economic welfare) of society as a whole rises. Usually, competition policy would dispense
greater importance to consumer surplus.
Notwithstanding disagreements among economists, it is widely acknowledged that the

application of economic analysis imparts a greater degree of precision and predictability in the
enforcement of competition policy. Economic tools can be used effectively to analyze
noneconomic concerns, such as the fairness or equity implications of enforcement decisions, or
to systematically assess the effects of different business practices and market structures.
Competition policy incorporates both legal and economic principles and both disciplines play
mutually supporting roles.
Public interest is an indefinable and amorphous concept. In many cases, public interest can be
widely distributed and what might be considered clearly in the public interest by one party may
be seen as less important by another. The complication of the public interest approach to
competition policy may thus produce significant tension between different stakeholders.
Implementation of competition policy itself risks becoming captive to the political process if it
attempts to serve different interest groups, which may not be conducive to maintaining or
promoting operative competition. In other words, though the public interest tactic to competition
policy permits the consideration and balancing of different economic, social, and political
objectives, the independence with which this policy can be administered can easily become
constrained.

CHAPTER 9:
THE ROLE OF COMPETITION POLICY
AUTHORITIES
The administration of competition policy is more approachable than proactive. Competition

authorities, for the most part, respond to market growths such as mergers or price-fixing
agreements to protect the competitive process. Public insight of competition agencies tends to be
that they are law implementation bodies. Even within government, the input of competition
authorities in the formulation of economic or sectoral policies has historically been limited. In a
few jurisdictions competition agencies are authorized to intervene in regulatory and trade-related
matters, to achieve the major purposes of competition policy, competition authorities need to
con-sider augmenting and altering their role in the economy. Through analysis of market,
circumstances that unfavorably affect economic performance and adoption of solutions that
violate free market principles the least, the role of competition as an instrument of overall
government policy would be reinforced.
Competition policy generally has been viewed as a way of achieving or preserving a number of
other objectives such as, pluralism, decentralization of economic decision-making, prevention of
misuses of economic power, pro-motion of small business, fairness and impartiality and other
sociopolitical values. These associated objectives tend to vary across jurisdictions and over
time, reflecting the changing nature and adaptability of competition policy as it seeks to address
current concerns of society while remaining steadfast to the basic objectives.
The inclusion of multiple objectives, however, increases the risk of battles and random
application of competition policy. The interests of different stakeholders may oblige the
independence of competition policy authorities, lead to political interference and compromise
and erode one of the major benefits of the competitive process, namely, economic efficiency. In
most cases the struggles between economic efficiency and other policy, objectives either are

insignificant or can be well adjusted. Nevertheless, the rank and weights attached to the multiple
objectives of competition policy remain largely unclear and need to be defined. It is necessary to
ensure both business conviction and public accountability.

CHAPTER 10:
THE ADVERSE CONSEQUENCES OF
MONOPOLIES
Penalties
The CCI has commands in relation to anti-competitive agreements and abuse of dominant
positions. If the CCI finds that there is a biased competition practice, which caused or is likely to
cause a substantial adverse effect on the competition in India, it may permit all or any of the
following order as mentioned below:
- A cease and desist order, which directs the parties involved in such agreement or abuse of a
dominant position to cease acting upon such agreement and not to re-enter such agreement or to
halt such abuse of a dominant position, as the case may be;
- An order, which imposes a monetary penalty, as deemed, fit but that does not exceed 10% of
the average turnover for the last three previous financial years, on each party to the agreement or
abuse. Provided that in case of a cartel, the CCI may enforce on each producer, seller, distributor,
trader or service provider included in that cartel a penalty of up to three times its profit for each
year of the endurance of such agreement or 10% its turnover for each that it continues such
agreement, whichever is higher;
- An order directs that the agreement must stand reformed to the extent and in the manner that
may be specified in the order;
- An order that directs compliance with its orders and guidelines, including payment of costs;
- An order that directs the division of an enterprise that is abusing its dominant position to
ensure that it can no longer abuse its dominance; and

- Any order or direction which is considered to be fit by CCI.
Further, any person may apply to the Competition Appellate Tribunal (COMPAT) for the
retrieval of reimbursement from any enterprise for any loss or damage shown to have been
grieved by such person because of the enterprise, i.e.
- Irreverent directions issued by the CCI;
- Contravening, with no reasonable ground, any decision or order of the CCI issued under
sections 27, 28, 31, 32 and 33 or any condition or constraint subject to which any approval,
sanctions, directions or exemption in relation to any matter has been accorded, given, made or
granted under the Competition Act; or
- Delaying in carrying out such orders or directions.
The word ‘monopoly’ was probably first used in England by Thomas More in Utopia
(1516). It carried a specific meaning:
A Monopoly was an Institution or allowance by the King, by His Grant, Commission, or

otherwise, to any person or persons, bodies politic or corporate, of or for the sole buying, selling,
making, working or using of anything, whereby any person or persons, bodies politic or
corporate are sought to be restrained of any freedom, or liberty that they had before or hindered
in their lawful trade. (The US Supreme Court in Standard Oil Co. of New Jersey v US (1911) 221
US 1, citing Sir Edward Coke, Institutes)
Such monopolies were progressively granted from the mid-1300s. In Elizabethan England
(1558–1603) the system of Industrial Monopoly Licenses was heavily mistreated as a mechanism
for raising funds for the monarch without the inconvenience of consulting Parliament. Although
Parliament protested, the Queen was able to persuade it to drop a Bill that would have curbed the
practice. It was therefore left to the courts in 1602 to rule that a grant of a monopoly for the
making of playing cards to one Darcy was illegal and void (Darcy v Allin (1602) 11 Co Rep 84b
also known as the Case of the Monopolies). Even at this time the arguments against monopoly
practices were becoming well-rehearsed and the court found that there were unavoidable and

unwelcome consequences of all monopolies: such as increase in price, a reduction in quality and
reduction in the incentive to work. The position in the early 1600s was such that Ben Jonson, in
The Devil is an Ass (1616), was able to mock for his audiences the practice of allowing
monopolies and those who negotiated them: the character of Merecraft, ‘The Great Projector’,
endorsed and sold progressive monopoly schemes, including an inventive scheme to monopolize
the market in toothpicks.
Further, the conflict between Crown and Parliament was resolved in 1623 with the passing of the
Statute of Monopolies, which declared that ‘All Monopolies . . . are altogether contrary to the
Laws of this Realm, and so are and shall be utterly void and of none effect and in no wise to be
put into use or execution’. In making an exception for patents for a period not exceeding 21 years
save where these operated to raise prices or to damage trade, the statute also formed the basis for
the modern law of patents. Monopolies could still be granted to trading corporations and guilds,
a practice much used by Charles I. In the ‘Great Case against Monopolies’, East India Company
v Sandys (1685) 10 St Tr 371, it was held that a distinction could be drawn between monopolies
operating within the realm, and those established in order to compete outside the realm.
In 1772, following a House of Commons committee report, most of the old laws were repealed,
and by 1844 all earlier Acts were repealed, it then being considered that the prohibitions had
effects contrary to that intended and were partly responsible for hindering trade and raising
prices. From that time until now, monopolies have not been prevented in the United Kingdom
and the modern law of competition deals with issues of the abuse of monopoly power, not with
its presence per se. The United Kingdom, with a belief in the assistances of economic laissez-
faire, did not return to competition law until after the Second World War, when in 1948
legislation was introduced that established a domestic structure for the examination and control
of anti-competitive competitive conduct. The domestic regime now is found primarily in two
statutes, the Competition Act 1998 (‘CA 98’) and the Enterprise Act 2002 (‘EA 02’)
If the monopolist could force each consumer to pay their maximum price the total income to the
monopolist rises and the consumer remaining vanishes, which signifies a transfer of income from
the consumers to the monopolist. This issue is often dealt with in competition law under the
heading of ‘price discrimination’. It is not directly a matter that intrudes upon the efficiency of

the condition, but it is nevertheless of valid interest to a regulator concerned with the distribution
of income. In 1954, in an article, which has rumored seminal importance but has led to a
somewhat difficult and convoluted debate, Arnold Harberger attempted to enumerate the total
loss to American society from the monopolistic industries in the United States (Harberger, A. C.,
‘Monopoly and Resource Allocation’, (1954) 44 American Economic Review 77). Harberger
estimated the difference between the total consumer demand gratified under competitive
conditions, and the reduced demand satisfied under monopoly conditions (the ‘welfare triangle’,
or ‘Harberger triangle’).
The strategic activity undertaken to reinforce, a monopoly position (‘rent seeking’) may also
represent a cost of monopolies. This might include excessive advertising that has no benefit in
terms of increased sales, and aggressive competition that does not increase either consumer or
producer welfare. The Competition Law of the EC and UK intense British Airways/Virgin
Atlantic competition of the mid- to late 1990s is cited as an example of such conduct.

CHAPTER 11:
ECONOMICS AND COMPETITION LAW
There are fewer disputes surrounding the basic tools of economics as compared to the policy
inferences of different market structures. Markets represent the accumulation of individual
elements and there will be circumstances in competition law where these individual elements
become important in determining the presence of anti-competitive behavior and in determining
other economic issues, such as the ability of a monopolist to raise prices, or the existence of
other products that constrain the monopolist’s power i.e. Demand, supply and price. In a free
market economy the price of any product is set by the relationship between the demand for the
product and the supply of the product.
The more inelastic demand is, therefore, the more a monopolist will be able to raise prices and
still increase their income. It may be alleged that petrol has an inflexible demand. If the demand
for petrol was in fact flexible the government would not be able to raise significant revenue by
taxation on petrol, for any increase in tax would be more than matched by a drop in sales. An
elastic demand curve denotes that consumers are very approachable to changes in price: if price
rises by 10 per cent demand falls by more than 10 per cent and in such a condition a monopolist
hovering prices will find that income will fall. Any product that has many substitutes is likely to
have an elastic demand.
The demand for a product is affected by the prices of other products, which is termed ‘cross-
elasticity of demand’ or ‘substitutability’. An examination of substitutability is almost essential
in determining the boundaries of any given product market. If demand for one product is highly
subtle to the price of another (e.g., clementine’s and mandarins) it is probably unwise to treat the
market for clementine as being a distinct one distinct from the market for mandarins. Producers
and retailers of clementine will continuously monitor that what is happening in the market for
mandarins. This is just one area in which the language of business may differ from the language
of competition law. The sales or marketing director of any business may have a very clear

interpretation of the market that is being battered by that business, but, if subject to a competition
investigation, a very different description of the market (often but not always a wider one) may
be adopted.
Costs convinced competition law issues cannot appropriately be resolute without an investigation
of the costs faced by the company concerned. This is true of assertions of predation, where the
charge is that the business is making losses or acting primarily with the intent of driving a
competitor out of the market or of preventing entry into the market and of allegations of
‘profiteering’ where the company is accused of making too much profit. Costs of production can
be separated out in various ways. The primary partitions made by economists are between fixed
and variable costs; marginal, average, and total costs; and short-run and long run costs.
In the short run, fixed costs are those that stay persistent whatsoever the level of production
(e.g., the rent on the factories and perhaps research and development); flexible costs alter
conferring to the level of production (e.g., the cost of steel, plastics, and labor). Peripheral costs
are those of the additional unit of production (the cost of making one extra car). Generally
marginal costs fall as production rises through the operation of ‘economies of scale’. Economies
of scale are the profits that arise from producing more of any item. It is, for example, cheaper to
produce the tenth motor car in a mass production plant than it is to produce the first and the
10,000th will be substantially cheaper still. Where there are economies of scale, the average cost,
which is the total cost divided by the quantity produced, will fall as output rises.

CHAPTER 12:
GLOBALIZATION AND LIBERALIZATION
The purpose of Fair Trade Law (competition law) is to uphold domestic trading order, protect
consumer’s interest and ensure impartial competition and development of economic stabilization
and prosperity. Ever since its formation, the Federal Trade Commission (FTC) has been
dedicated to the implementation of the Fair Trade Law and maintenance of trading order to
ensure a liberal and fair competition mechanism. The FTC has also been actively contributing in
international communications regarding competition laws and policies to better concept a sound
competition law system and generates a liberal and fair competition environment and culture.
However, with the constant change of international competition, the competition environment
has become more diverse and complex. In addition, economic renovations, globalization and
liberalization have caused the domestic socio-economic structure to have a dramatic change.
The competition authorities of our country and other countries in the world have been challenged
to enact appropriate competition policies and control the development of the competition law
system. In order to efficiently prevent all kinds of anti-competition behaviors worldwide and to
protect our liberal competition environment and closely combine competition law system with
current economic development.
International Integration of Competition Law Systems
The formation of a competition law system is critical to the overall economic expansion of a
country. Whether a country is developed, developing or even underdeveloped, it should be fully
devoted to establishing competition policies that are suitable for its nation and international
competition environment and should enact a set of proper competition regulations to promote the
development and fortune of the overall economy of this country. However, the flourishing
commercial competitions are brought by globalization and liberalization, in order to coordinate
with the competent authorities of competition policy/law of each country in the world and uphold
the international competition order.

CHAPTER 13:
SUSTAINABLE COMPETITION IN
MARKET
It is widely acknowledged that a nation’s development cannot be attained solely by gross

domestic product growth, but instead can be achieved by an inclusive and integrated agenda of
environmental, social and economic policies and instruments. By recognizing the linkages,
complementarities and frictions between these three policy areas, growth may be achieved in the
long term that is both inclusive and impartial and environmentally responsible.
Sustainable development is a joined agenda for economic, environmental and social solutions. Its
strength lies in the intertwining of its dimensions. This integration provides the basis for
economic models that assist people and the environment; for environmental solutions that
contribute to progress; for social approaches that add to economic dynamism and allow for the
preservation and supportable use of the environmental common; and for reinforcing human
rights, equality and sustainability. Responding to all goals as a cohesive and integrated whole
will be critical to ensuring the transformations needed at scale.
By correcting market failures, effective competition strategies lead firms to become more
efficient, increase the innovation and widen the consumer choice and product quality. Further,
these conditions may also lead to firms producing healthier, safer and environmentally
responsible and more ethical and equitable products, in order to satisfy the demands of more
discerning and conscientious consumers.
Proponents of competition policy would argue that, as well as fostering economic growth, this is
indicative of its role in supporting equitable outcomes, alleviating poverty and indirectly
promoting sustainable and inclusive development. Further, the alignment of business practices,
especially those of big business, can play a central role in determining the development path of a

nation.
Sustainable competition law must address social and environmental concerns and cannot focus
solely on economic issues. Further, in order to use competition law to promote sustainable and
inclusive development, there is need for the identification of appropriate environment and
development objectives, their links to international competition rules and the appropriate
mechanisms in relation to the specific context of the affected country.
How competition policy can contribute to sustainable and inclusive growth and
development
Sustainable and inclusive development is the core concept underlying the sustainable
development agenda and includes the idea of economic transformation. Appropriate industrial
and trade policies are certainly necessary but not sufficient on their own to achieve sustainable
and inclusive growth and development. Competition policy should accompaniment these policies
if Governments have to achieve such growth. Competition enhances competence, promotes
innovation and leads to wider product choice and better quality, thereby improving consumer
welfare. It also disciplines the conduct of firms. Lack of competitive rivalry may result in leading
firms seeking to maintain or obtain monopoly rents, which go against the idea of sustainable and
comprehensive growth and let firms make unfair profits at the expenditure of consumers and
potential competitors. High and anticompetitive profit markups have been found to prevent
growth, productivity and employment creation.
Development of a sound competition policy
Achieving sustainable and inclusive growth and development needs a good policy mix that needs
to take into consideration the specific economic, social and environmental circumstances of a
country. In order to contribute to sustainable development, which encompasses economic, social
and environmental dimensions of development processes, such a policy mix would include trade,
economic, social and environmental policies. If planned suitably and implemented effectively,
competition policy is additional tool that accompaniments these policies in achieving sustainable
and inclusive growth.
It is important to recognize how competition policy may best subsidize to sustainable and

inclusive development. For this purpose, the procedure of developing a competition policy
should be participatory and involve all stakeholders, including applicable government ministries
and other institutions, consumer and business agents, academia and civil society. This will enable
policy design that addresses the concerns elevated by stakeholders to the extent possible.
Prioritization
One of the ways in which competition policy can subsidize to sustainable and inclusive
development is to set priority sectors that are vital for an economy and for poor individuals. This
would allow the competition agency to emphasis its resources were dealing with possible
anticompetitive practices in these priority sectors. For instance, if the policy describes agriculture
as a priority sector, this may contribute to the exclusion of anticompetitive practices in that
sector, thereby guaranteeing fair prices for consumers and producers, which would then improve
their living standards.
Further, highlighting the agricultural sector in competition policy and consequently in

competition law enforcement would encourage sustainable development. Considering that the
bulk of the poor in developing and least developed countries live in rural areas and earn their
living from agriculture, this may ultimately contribute to poverty lessening by enhancing small
farmers’ productivity and income growth. Effective competition policies might result in
improved access by small farmers to agricultural inputs such as fertilizers, seeds and
agrochemicals. Likewise, competitive downstream markets could help domestic value addition
for agricultural commodities.
Complementarity
Competition policy is a vital policy and accompaniments other support policies in achieving
sustainable and comprehensive growth and development. On the environmental dimension of
sustainable development, no one would deny the need for research and development, eco-
innovation and eco-friendly technologies. Competition policy may be planned so as to promote
such businesses while environmental policy may provide encouragements to eco-friendly
production processes, green sectors and products. However, such policies or incentives should
neither be used as disguised protectionism nor to unreasonably distort competition in the market.

One objective of competition policy is to certify efficient and well-functioning markets, which
are critical in promoting innovation and new technologies. Therefore, it is renowned by some
countries that efficient environmental policy involves strong competition policy employment,
which does not allow firms to abuse their market power or eliminate competition in order to
stimulate more innovation, does not favor anti-competitive mergers for the sake of innovation,
and at the same time does not depress horizontal or vertical cooperation between firms to engage
in joint research and development and eco-innovation activities.
Fair competition
Besides guaranteeing free competition, competition policy may also look into ways to reinforce
fair competition. Competition laws aim to remedy anticompetitive practices but not essentially
unfair business practices. This is so particularly with respect to predetermined relationships
between Small and Medium-Sized Enterprises (SMEs) and large businesses.
The former may be susceptible vis-à-vis the latter given the superior negotiating power of large
businesses. In a progressively globalized world economy, developing countries and countries
with economies in transition face many challenges. Production in many sectors is carried out
through global value chains ruled by large multinational companies, their subsidiaries and
subcontractors. Global value chains have been facing increased concentration through both
horizontal and vertical mergers of large transnational corporations, or through takeovers by
transnational corporations of smaller domestic companies.
In these extremely concentrated and vertically integrated global manufacturing sectors, local
SMEs face the encounter of dealing with very large enterprises with strong negotiating power.
Local SMEs do not have sufficient bargaining power and are therefore in a deprived position to
negotiate fair prices or contract terms and conditions for their products or services in vertical
relationships with large firms.
Competition law and unfair competition law constitute two pillars of competition policy. Both
are apprehensive with the protection of competition and may therefore be reflected as part of
basic competition legislation. Even though competition and unfair competition laws highlight
different features, that is, free and fair competition, respectively, their common feature is to

encourage competition. Competition can only function correctly if it is free from
misrepresentation resulting not only from market failures but also from unfair business practices.
Competition laws, is different from abuse of market power as it cannot address abuse of
bargaining power. Misuse of bargaining power refers to a situation in which a party takes benefit
of its superior bargaining position vis-à-vis another party and involves in unjust demeanor
compared to normal business practices, through acts including but not limited to:
i. setting or changing transaction terms in a way disadvantageous to the other party;

ii. imposing a shortcoming on the other party regarding terms or the execution of
transaction;
iii. unfair and excessively long payment terms for supplied goods or services;
iv. unfair and unjustified provisions concerning the return of goods; and
v. unfair judgment
In competition law, the abuse of dominant position needs a firm to have significant market power
in the applicable market. This is a necessary but not sufficient condition to prove abuse.
Different from abuse of dominance, abuse of negotiating power does not require a party to have
a dominant place in the market, but it does require that it Design of competition law.
Competition law may be designed and applied in such a way as to endorse inclusive and
sustainable growth and development. There are many interesting examples from various
countries that address precise economic, social and historical issues through the suitable design
and effective implementation of competition law.
Exemptions
Many competition laws include exceptions to prohibited anticompetitive practices. These

exemptions may be of a sectorial or non-sectorial nature. Non-sectorial exemptions under
competition law are granted to business agreements or practices, which would have the effect of
ensuring economic progress, including the creation or retention of jobs and would allow
consumers a fair share of the resulting benefit, without giving businesses concerned the
possibility of eliminating competition in a substantial part of the products market. The European
Union provides for such an exemption from the prohibitions listed in Article 101(1) of the

Treaty on the Functioning of the European Union. It provides that prohibitions do not apply
to any agreement between firms “which contributes to improving the production or distribution
of goods or to promoting technical or economic progress, while allowing consumers a fair share
of the resulting benefit, and which does not:
i. Impose on the undertakings concerned restrictions which are not indispensable to the
attainment of these objectives; and
ii. Afford such undertakings to eliminating competition in respect of a substantial part of the
products in question”.
This exemption may apply to contracts in research and development that might result in
innovation supporting environmental protection or agreements to promote the production and
distribution of green products.
It may be argued that the way in which exemptions set out in competition law are interpreted and
applied may also result in the prevention of agreements that would otherwise contribute to
achieving sustainable development through better use of natural resources or environmental
protection. This is because the balancing of possible consumer welfare loss resulting from such
agreements on one hand and sustainable development gains to be achieved on the other might
not be a straightforward exercise.
Consequently, authorizations and exemptions under competition law may be formulated and
implemented in such a way as to provide for evaluating business agreements or practices with
respect to their impact on sustainable development, including environmental protection,
promoting ecological innovations or the production and distribution of green products, etc. This
might require the substantial integration of social and environmental dimensions of sustainable
development into competition law and a sustainable development perspective into the way the
law is enforced.
Exemptions of the agricultural sector
Agriculture is a sector that is often subject to special management by competition laws and other
sectorial laws due to its multi-dimensional nature. Agriculture involves economic events that
have both social and environmental dimensions. It delivers livelihood for an important segment

of the population in both the developed and developing countries. In addition, the weaker
bargaining power of smallholder farmer’s vis-à-vis providers of inputs such as fertilizers and
agrochemicals, as well as consumers of their produce, requires distinctive attention in
competition policy. To eradicate such an imbalance, farmers unify themselves in cooperatives,
which may ease collecting, processing and marketing of their products, negotiate prices with
buyers on their behalf; enable them to purchase inputs at lower prices; and provide them with
access to credit and other financial facilities.
In the European Union, competition rules apply to the entire food supply chain, from agricultural
production to grocery retail. Competition rules for agricultural products are laid down in
Regulation 1308/2013, which is known as the Common Market Organization Regulation and
provides for some exemptions. These exemptions permit for cooperation agreements among
farmers, which aim at increasing competence and strengthening the bargaining power of farmers
vis-à-vis buyers on the condition that they do not eliminate competition, do not damage the
objectives of the Common Agricultural Policy or do not engage in price fixing. Exclusions also
cover vertical agreements between farmers on one hand and processors and wholesalers on the
other, subject to certain conditions. Following the 2013 Common Agricultural Policy reform,
new competition rules for the agricultural sector were introduced. These rules allow producers of
olive oil, beef, veal, and arable crops to jointly sell/commercialize their products through
producer organizations subject to certain conditions, comprising increased efficiency in
production and certain thresholds for the volumes marketed by these organizations.
The United States of America has a similar exclusion for the agricultural sector. The Clayton
Antitrust Act of 1916 authorizes farmers to set up cooperatives “for the purpose of mutual
help”. The Capper-Volstead Act clarifies the related help to be prolonged to farmers through
cooperatives and the legitimate objectives of such cooperatives, as “collectively processing,
preparing for market, handling and marketing” the agricultural products of its members for their
shared benefit.
However, farmer’s cooperatives are not resistant from the application of competition law where
these organizations involve in anticompetitive activities to the impairment of consumers. Some
countries, such as France and Sweden, have obvious provisions in their competition laws

exempting agricultural companies or relations from the prohibition under their competition laws,
whereas many developing countries do not have such explicit exemption provisions in their
competition laws for any specific sector.

CHAPTER 14:
EVOLUTION OF COMPETITION LAW
FROM NEHRUVIAN MIXED MODEL TO
PROMOTE AN INCLUSIVE ECONOMIC
GROWTH AND SOCIAL JUSTICE
India selected a planned economic structure also referred to as the Nehruvian Socialism Model
after independence. The Nehruvian Model was a mixed economy model – a model that was
neither a market economy like the United States of America nor a socialist economy one like the
Union of Soviet Socialist Republics (USSR). Under the mixed model, both the private and
public sector co-existed. The mixed economy model approach was to ensure that the
Government played a significant role in capital formation of the country in order to promote an
inclusive economic growth and social justice. To promote economic growth, the Government
reserved itself for strategic industries such as mining, electricity and heavy industries, serving
public interest. The functions of the private sectors were made subject to Industrial
(Department and Regulation) Act of 1951(IDRA). The Industrial (Department and
Regulation) Act (IDRA) empowered the Government to regulate almost every aspect of the
functioning of private sector i.e. size of plant and production size, price of goods produced and
their distribution, foreign trade and exchange control, labor issues etc. Despite all the above-
mentioned impressive goals of the Nehruvian model, the result was unsatisfactory.
Although the objective of the industrial licensing system was to direct resources in socially
desired directions, it however resulted in giving flexible power to government authorities to
control investment decisions of private industries, which results in trade barriers on competition
and reduction in efficiency, and consequently, the growth of the economy. This obliged the

Government to initiate reformation of Indian economy; the reform wave began in mid-1980s.
The reforms beginning in 1991 were not a one off event and ever since 1991 many more rounds
of reforms have been rolled out year after year to usher India into a market based economy.
These reforms require to have a varying extent influencing every aspect of economic policy
including reforms of economic legislation. The Nehruvian model was a mixed economy model,
but it was tilting more towards socialistic pattern of economic growth with the objective being
‘economic growth with social justice’. Despite more than a decade of independence, it was
apparent to every one including Mr. Nehru that that the professed model was not yielding desired
results. Economy was growing at the rate of less than 3% per annum and income growth was
around 1.75%.
The growth rate, often critically referred to as the Hindu rate of growth was not enough to result
in the much-desired drop down. The Government, appointed a Committee in October, 1960 to
look into the reasons of inequality in the distribution of income and levels of living
(Mahalanobis Committee). The Committee noted that big business houses were emerging
because of the “planned economy” model practiced by the Government and recommended
consideration at industrial structure. Subsequently on an account of such recommendations made
by the Mahalanobis Committee, the Government constituted the Monopolies Inquiry
Commission (MIC) in 1964 to enquire into the extent of and effect of concentration of power in
the private sector and the prevalence of monopolistic practices in India. The MIC found a high
level of concentration of economic power in over 85 percent of industrial items in India. The
MIC also found that the then licensing policy in the country had enabled big business houses to
secure a disproportionately bigger share of licenses resulting in foreclosure of capacity.
The Monopolies and Restrictive Trade Practices (MRTP) Act was passed to enable the
Government to control concentration of economic power in Indian industry. The MRTP Act was
notified in the year 1970 and in August 1970, the MRTP Commission was set up.
The preamble stated that the MRTP Act is an “Act to provide that the operation of the economic
system does not result in the concentration of the economic power to the common detriment, for
the control of monopolies, for the prohibition of monopolistic and restrictive trade practices and

for matters connected therewith or incidental thereto.”
The MRTP Act was a predecessor to the Competition Act and pursued to legislate over issues
relating to restrictive and monopolistic trade practices. There are areas of resemblances between
the MRTP Act and the Competition Act. The thrust of the Competition Act is to promote
competition, the objective of the Monopolies, Restrictive Trade Practices (MRTP) Act was to
prevent economic concentration, and restrictive trade practices.
Chapter IV of the MRTP Act dealt with Monopolistic Trade Practice (MTP) is defined under
section 2 (1) of the Act. It provides controlled production, supply or distribution of goods and
thereby maintaining price of goods or charge of services at unreasonable level, unreasonably
preventing or lessening competition, limiting technical development or capital investment or
allowing quality of goods or services to deteriorate, unreasonably increasing prices of goods or
services, cost of production or charges for any services and Adopting unfair or deceptive
methods to reduce or prevent competition.
Another category of practices that dealt under the Monopolies and Restrictive Trade Practices
(MRTP) Act were those characterized as Unfair Trade Practices. Unfair Trade Practices was
focused on issues of consumer protection such as misleading advertisements, sales promotion,
product safety standard etc. Pursuant to a notification of the Ministry of Corporate Affairs, all
pending cases relating to UTP were transferred to the National Commission constituted under
the Consumer Protection Act, 1986.
Further, Restrictive Trade Practices is also in the Monopolies and Restrictive Trade Practices
(MRTP) Act under Chapter V31 of the Act. The act defines Restrictive Trade Practice as “The
traders, in order to maximize their profits and to gain power in the market, often indulge in
activities that tend to block the flow of capital into production. Such traders also bring in
conditions of delivery to affect the flow of supplies leading to unjustified costs.
A significant fragment of the Monopolies and Restrictive Trade Practices (MRTP) Act was
focused around monopolistic behavior and economic concentration. Due to changing economic
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situation and initiation of economic reforms in the country post 1991, the need was felt for a
change in approach towards fostering competition.
The Raghavan Committee was formed to acclaim a suitable legislative framework related to
competition law for the country. It was stated that although the Monopolies and Restrictive
Trade Practices (MRTP) Act had provisions regulating anti-competitive practices, in comparison
with competition laws of many countries it was inadequate for promoting competition in the
market trade and for reducing, if not eliminating, anticompetitive practices from the country’s
domestic and international trade. The Raghavan Committee considered enacting a new
competition law instead of amending Monopolies and Restrictive Trade Practices (MRTP).
This led to the enactment of the Competition Act, it was challenged in the Supreme Court, based
on validity even before it became operational. A writ petition was filed in the Supreme Court
challenged the constitutional validity of the appointment of a retired bureaucrat as the head of the
Commission.

CHAPTER 15:
THE ROLE OF PRESERVING THE
COMPETITION STRUCTURE OF
MARKETS
Economic resources are characteristically defined as land, labor and capital. The use of these
resources results in the goods and services that are bought and sold. A fourth economic resource
is entrepreneurship, which is the ability of an individual to turn the production of economic
resources into a successful business. The role of competition in a market economy allows
multiple individuals or businesses to use possessions competently and produce the cheapest
products at the best quality. Constant competition further refines a company’s use of resources
and forces it to improve products and operations or suffer the consequences.
Growth in a market economy hinges on the use of capital. Competition allows new businesses to
start and increase the total production output. When this occurs, natural economic growth is the
result. Individuals have better jobs and potentially higher incomes, the demand for goods and
services increases and companies start or increase supply in order to meet the demand. The
cyclical nature of a market economy allows for bigger investment and, in turn, more growth and
output.
The long-term sustainability of market economies is dependent on the amount of freedom in a

market economy. Private property laws are among the most important in these systems. When
individuals can keep the resources or capital they earn, the market tends to succeed for
sustainable time-period.

Flowchart showing GDP growth
Competition is essential for a functioning market system as it creates the incentives for firms to
increase the following:
a) Productive efficiency, i.e., to produce more with less;

b) Allocate efficiency, i.e., to deploy resources where the value placed on a good by the
consumer is greater than the cost of making it to invest in innovation;
c) In addition, competition disbands private power, which protects smaller firms from being
deprived of their freedom to compete by more powerful firms; and
d) The democratic process, competition ensures that contracts are not only economically
efficient but also generate distributive outcomes that can plausibly be presumed to be fair.
The fairness-generating properties of contracts are essential to the moral legality of the economic
and the political system. A fair competition in the market may not always be the most profitable
strategy for an individual player. The potential mismatch between the societal and individual
goals for maximizing profits, creates incentives for firms to avoid market competition and to
engage in anticompetitive strategies instead. At this point, the antitrust laws step in to protect the
legislative decision for competition as the rule of trade from being undermined by private market
participants.
Traditionally, there are four types of markets base on degree of market power viz.
a) Perfect competition (min. Market power)

b) Monopolistic competition
c) Oligopoly
d) Monopoly (max. Market power)
Here, “Market power” also known as “pricing power” is defined as the ability of an individual
firm to vary its price while remaining profitable or as the firm’s ability to charge the price above
its Market Competition.
Perfect market competition comprises following features:
i. Large number of competing firms;

ii. Firms are small relative to the entire market;
iii. Products different firms make are identical; and
iv. Information on prices is readily available.
When the market is not competitive or not perfectly competitive, it signifies Monopolistic
Competition. Monopolistic competition is a combination of both monopoly and perfect
competition. It is a form of competition that exemplifies a number of industries that are familiar
to consumers in their day-to-day lives such as restaurants, salons, clothing and consumer
electronics. The presence of monopolistic competition explains the endurance of small firms in
modern economies. The small firms in the real world operate in markets that can be
monopolistically competitive and as an economic model of competition; monopolistic
competition is more realistic than perfect competition.

CHAPTER 16:
COMPETITION COMMISSION OF INDIA,
COMPULSORY LICENSING OF PATENTS,
REGULATION OF LAW IN INDIA AND ITS
IMPLEMENTATION
COMPETITION COMMISSION OF INDIA
The Competition Commission of India (the Commission) is established under the Competition
Act, 2002 (the Act) with the objective to prevent adverse effects on competition,
 to promote and sustain competition in markets;

 to protect the interests of consumers and to ensure freedom of trade
carried on by other participants in markets, in India; and
 for matters connected therewith or incidental thereto.
It is mandated, to give opinion on a reference from Central Government or a State Government

on possible effect on competition of a proposed policy and take suitable measures for the
promotion of competition advocacy, creating awareness and imparting training about
competition issues. It follows its objectives through two mechanisms, namely, advocacy and
sanctions targeted at an enterprises. While these two measures are complementary, advocacy
ensures freedom of trade and achieves ‘fair competition for greater good’.
The Competition Commission of India (CCI) is a 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 ten other members.

Acts taking place outside India
The Competition Commission of India (CCI) has the power to investigate into unfair
agreements or abuse of dominant position or combinations taking place outside India but having
adverse effect on competition in India, provided that any of the below mentioned conditions
exists:
 An agreement executed outside India;
 Any contracting party exists outside India;
 Any enterprise abusing dominant position outside India;
 A combination established outside India;
 A party to a combination located abroad; and
 Any matter or practice or action rising out of agreement or dominant position or

combination outside India.
To deal with cross border issues, the Competition Commission of India (CCI) is empowered
to enter into any Memorandum of Understanding (MoU) with any foreign agency of any
foreign country with the earlier approval of Central Government.
Benches
For the execution of duties, the Competition Act anticipates the exercise of the jurisdiction,
powers and authority of the Competition Commission of India (CCI) by number of Benches. If
necessary, a Bench would be constituted by the chairperson of at least two members; it being
mandated that at least one member of each Bench would be a "Judicial Member". The Bench
over which the chairperson presides is to be known as the Principal Bench and the other Benches
known as Additional Benches. However, the Act further empowers the chairperson to constitute

one or more Benches known as Mergers Benches exclusively to deal with combination and the
regulation of combinations.
Extension of the executive powers
The Competition Act anticipates the extension of the executive powers of the Competition
Commission of India (CCI) by the appointment of Director General and other persons for the
purpose of assisting it in conducting enquiries into violations of the provisions of the Act as well
as conducting cases before the Commission.
The Competition Commission of India (CCI) is empowered to conduct enquiries into

following:
1. "Certain agreements and dominant position of enterprise"; and
2. "Combinations"
The Competition Commission of India (CCI), either on its own motion, on receipt of a complaint
or on a reference made to it by the Centre or State Government may enquire into any alleged
contravention regarding the nature of the agreement, which is suspected to be inherently anti-
competitive, or the abuse of dominant position. Any person, consumer, consumer association or
trade association can make a complaint.
An enquiry into a combination, existing or proposed, may be initiated upon the knowledge or
information in the possession of the Competition Commission of India (CCI) or upon notice of
the person or entity proposing to enter into a combination or upon a reference made by a
statutory authority. Limitation of time for initiation of enquiry is one year from the date on which
the combination has taken effect when CCI conducts such enquiry.
Jurisdiction
An enquiry or complaint could be initiated or filed before the Bench of the Competition
Commission of India (CCI) within the local limits of its jurisdiction the respondent\s actually or

voluntarily resides, carries on business or works for personal gain, or where the cause of action
wholly or in part arises.
The Competition Commission of India (CCI) has been vested with the powers of a civil
court including those provided under sections 240 and 240A of the Companies Act, 1956 on
an "Inspector of Investigation" while trying a suit, including the power to summon and
examine any person on oath, requiring the discovery and production of documents and receiving
evidence on affidavits. The Competition Commission of India (CCI) is also vested with certain
powers of affirmative action to act in an expedited manner. Civil courts or any other equivalent
authority will not have any jurisdiction to entertain any suit or proceeding or provide injunction
with regard to any matter which would ordinarily fall within the ambit of the Competition
Commission of India (CCI).
Functions and roles of CCI
The functions performed by the CCI include:
i. Market regulator for all sectors with focus on anti-competitive behavior of companies
that can distort competition;
ii. Exclude abuse of dominant position;
iii. Regulate the combinations (acquisition, acquiring of control and Merger and acquisition)
that may cause adverse effect on competition within India; and
iv. Create awareness and arrange training on competition issues through advocacy.
In case of combination, Competition Commission of India (CCI) may pass

following orders:
 Approval of the combination if no appreciable adverse effect on competition is found;
 Disapproval of the combination in case of adverse effect;
 It may propose suitable modification as accepted by the parties;

 During enquiry grant interim relief by way of temporary injunctions; and
 Award compensation.
PENALTIES
In case of failure to comply with the directions of the Competition Commission of India (CCI)
and Director General or false representation of facts by parties, penalties ranging from Rs 1lac to
Rs 1 crore may be imposed as the case may be.
EXECUTION OF THE ORDER
It is the responsibility the Competition Commission of India (CCI) to execute the order.
However, in the event of its inability to execute it, the Competition Commission of India (CCI)
may send such order for execution to the High Court or the principal civil court, as the case may
be.
POST-DECISIONAL OPTIONS
The aggrieved person may apply to the Competition Commission of India (CCI) for review of
the order within thirty days from the date of the order when the below mentioned conditions are
fulfilled:
 An appeal is allowed by this Act; and
 No appeal has been preferred
Provision has been made for an appeal against any order or decision of the Competition
Commission of India (CCI) by any aggrieved person. An application for this purpose has to be
made to the Supreme Court within 60 days from the date of communication of the decision or
order.

COMPETITION ADVOCACY
Perhaps one of the most crucial components of the Act is competition advocacy. It helps in the
evolution of competition law through review of policy, promotion of competition advocacy,
creating awareness and imparting training about competition issues. For this purpose,
Government can refer to the Competition Commission of India (CCI) for its opinion thereon
but is not bound by it. The power of the Centre to issue directions to the Competition
Commission of India (CCI) is inherent and such directions would bind it.
COMPULSORY LICENSING (CL) OF PATENTS
Compulsory License (CL) is an important part of the Patent system. The Indian Patent Act
1970, amended in 1999, in 2002 and then in 2005, where the third amended i.e. Indian Patent
Act 2005 explored the phenomenon of compulsory licensing and the grant of compulsory license
that are contained in the section 8432 to 9233 of the Indian Patents Act 1970. The compulsory
license can be granted in India at any time after the expiration of three years from the date of the
sealing of a patent, any person interested can make an application to the Controller for grant of
compulsory license on patent on any of the below mentioned grounds as per section 84(1):
i. If reasonable requirements of the public have not been satisfied;

ii. If the patent invention is not available to the public at an affordable price; and
iii. If the patent invention is not worked in the territory of India.
Other situations in which Compulsory License (CL) can be granted are:
i. For exports in certain exceptional circumstances (Section 92 A) i.e. during national

emergency, extreme urgency of public non-commercial use by notification of the Central
Government in the official gazette [Section 92 A]; and
ii. To countries with insufficient or no manufacturing capacity in the pharmaceutical sector
to address public health problem [Section 92 A (1)].
32
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33

The 1st Compulsory License (CL) granted in India was almost a decade after Doha Declaration.
It was granted to Natco for Bayer’s drug Nexaver, after being convinced that all the factors
enumerated under section 84 of the Indian patent act were satisfied i.e. reasonable requirements
of the public not being met, patentee failed to work the invention within the India and drug was
not available at affordable prices.
Section 84 for Compulsory License (CL)
At any time after the expiration of three years from the date of the grant of a patent, any person
interested may make an application to the Controller for grant of compulsory license on patent
on any of the following grounds, namely:—
(a) That the reasonable requirements of the public with respect to the patented invention have
not been satisfied, or
(b) that the patented invention is not available to the public at a reasonably affordable price, or
(c) that the patented invention is not worked in the territory of India.
As per Section 84, any person who is interested or already the holder of the license under the
patent can make a request to the Controller for grant of compulsory license on expiry of the three
years, when the above conditions are fulfilled.
Types of patent licenses
There are two types of patent licenses as mentioned below:
i. Exclusive license: A patent owner handovers all indications of ownership to the licensee
only retaining the title to the patent. From the point of view of the patent owner, he
surrenders all rights under the patent (including the right to sue for infringement and the
right to license) to the licensee.
The licensee obtains the right to sub-license the patent and sue for patent infringement. However,
the exclusivity can be limited by a field of use i.e. the licensee gets a promise from the patent

owner that the patent will not be licensed to anyone else in a specified field of use.
ii. Non-exclusive license: By granting a non-exclusive license, the patent owner principally
promises not to sue the licensee for patent infringement. It is assumed that acquiring a
non-exclusive license, the licensee acquires the freedom to operate in the space protected
by the licensed patent, but this may or may not be the case. It depends on whether or not
the licensee’s products infringe other patents.
Termination of Compulsory License (CL)
Section 94 of the Act deals with termination of compulsory license, It provides that on an
application made by the patentee or any other person deriving title or interest in the patent, a
compulsory license granted under section 84 may be terminated by the Controller, if and when
the circumstances that gave rise to the grant thereof no longer exist and such circumstances are
unlikely to recur. Provision attached to the section enables the holder of the compulsory license a
right to object to such termination.
The application of the termination of compulsory license can be done through FORM 21
according to the Patents Act, 1970 and Patents Rules, 2003.
Disclaimer: the study material mentioned in the module is for academics purpose to
provide information and understanding, it should not be interpreted as a legal advice or opinion.

Competition Law

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Chapter Title Page No.

1 INTRODUCTION TO COMPETITION LAW AND ITS 3-8

2 THE PROHIBITION OF ANTI-COMPETITIVE 9-16

3 ABUSE OF POSITION OF DOMINANCE 17-19

4 MERGER, AMALGAMATIONS AND ACQUISITIONS 20-30

5 OBJECTS OF COMPETITION LAW 31-32

6 MAJOR OBJECTIVES OF COMPETITION POLICY 33-35

7 SUPPLEMENTARY OBJECTIVES OF COMPETITION 36-37

8 POSSIBLE CONFLICTS AMONG MULTIPLE OBJECTIVES 38-39

9 THE ROLE OF COMPETITION POLICY AUTHORITIES 40-41

10 THE ADVERSE CONSEQUENCES OF MONOPOLIES 42-45

COMPETITION LAW 1.3 1

12 GLOBALIZATION AND LIBERALIZATION 48

13 SUSTAINABLE COMPETITION IN MARKET 49-56

14 EVOLUTION OF COMPETITION LAW FROM 57-60

15 THE ROLE OF PRESERVING THE COMPETITION 61-63

16 COMPETITION COMMISSION OF INDIA, COMPULSORY 64-71

COMPETITION LAW 1.3 2

COMPETITION LAW 1.3 3

COMPETITION LAW 1.3 4

Broad Objectives of the Competition Act

Section 311 – prohibition of anti-competitive agreements.

Section 412 – prohibition of abuse of dominant position.

Sections 513 & 614 – Combinations and Regulation of combinations.

Sections 5 and 6 Combination

COMPETITION LAW 1.3 5

i. acquisition by large enterprises;

(a) Anti-competitive arrangements;

(b) Abuse of dominant position; and

COMPETITION LAW 1.3 6

COMPETITION LAW 1.3 7

COMPETITION LAW 1.3 8

COMPETITION LAW 1.3 9

i. Directly or indirectly determine sale or purchase prices;

iv. Directly or indirectly, result in bid rigging or collusive bidding.

COMPETITION LAW 1.3 10

Anti-competitive agreements (Chapter I / Article 101)

Abuse of Chapter I or Article 10119 can have serious consequences on a company:

COMPETITION LAW 1.3 11

Types of agreement caught as an Anti-Competitive Agreement

 agreements which limit or control manufacture, markets, technical development or investment

 agreements which share markets or sources of supply; and

COMPETITION LAW 1.3 12

COMPETITION LAW 1.3 13

i. creation of barriers to new entrants in the market;

COMPETITION LAW 1.3 14

• Directly or indirectly fix purchase or sale prices;

• Limit or control production, supply, markets, technical development, investments or provision

• Result in sharing markets or sources of production or provision of services; and

• Indulge in bid-rigging or collusive bidding.

COMPETITION LAW 1.3 15

COMPETITION LAW 1.3 16

a) Operate self-sufficiently of competition forces prevalent in the relevant market; or

b) Affect its competitors or customers or the relevant market in its favor.

a) Directly or indirectly imposing discriminatory conditions in the purchase or sale of goods

COMPETITION LAW 1.3 17

i. market share of the enterprise;

COMPETITION LAW 1.3 18

i. anti-competitive practices of imposing unfair or discriminatory trading conditions or

COMPETITION LAW 1.3 19

Mergers are broadly classified into three categories:

COMPETITION LAW 1.3 20

COMPETITION LAW 1.3 21