Competition Act, 2002

 

⚖️ Competition Act, 2002 (India)

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📜 What is the Competition Act?

The Competition Act, 2002 is an Indian law enacted to promote and sustain competition in markets, prevent anti-competitive practices, and protect consumer interests.

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🎯 Main Objectives

1. Prevent anti-competitive agreements (cartels, price-fixing)

2. Prohibit abuse of dominant position by enterprises

3. Regulate combinations (mergers, acquisitions) that may adversely affect competition

4. Protect consumer interests by ensuring fair competition

5. Promote and sustain competition in markets

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🏛️ Regulatory Authority: Competition Commission of India (CCI)

• Established under the Competition Act to enforce the provisions.

• Investigates anti-competitive conduct.

• Approves mergers and acquisitions beyond a threshold.

• Imposes penalties and orders corrective actions.

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📋 Key Provisions of the Act

Aspect	Section(s)	Description
Anti-competitive Agreements	Sections 3, 3(3)	Prohibits cartels, price-fixing, bid-rigging
Abuse of Dominant Position	Section 4	Prevents monopolistic or unfair practices by dominant firms
Regulation of Combinations	Sections 5 & 6	Regulates mergers & acquisitions beyond threshold limits
Competition Commission of India	Sections 7 to 19	Powers, composition, procedure of CCI
Investigation and Penalties	Sections 26 to 32	CCI's investigation powers and penalties

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🧩 Anti-Competitive Agreements (Section 3)

• Agreements that restrict competition like:

  • Price-fixing

  • Market-sharing

  • Bid-rigging

  • Limiting production/supply

• Such agreements are void and illegal.

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🛑 Abuse of Dominant Position (Section 4)

• Dominant firms cannot:

  • Impose unfair prices

  • Limit production to control prices

  • Deny market access to others

  • Use discriminatory practices

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🔍 Combinations (Mergers & Acquisitions)

• Transactions crossing threshold limits require prior approval from CCI.

• Prevents combinations that may adversely affect competition.

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🏢 Competition Commission of India (CCI) Powers

• Investigate anti-competitive conduct

• Pass orders for cease & desist

• Impose fines (up to 10% of turnover)

• Approve/reject mergers and acquisitions

• Advocate competition awareness

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⚖️ Penalties for Contravention

• Fine up to ₹10 crores or

• Fine up to 3 times the profit made from anti-competitive conduct

• Imprisonment (in some cases)

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📝 Examples of Cases Covered

• Cartels fixing prices in cement, steel, pharma

• Abuse of dominance by telecom companies

• Approval of major mergers like Flipkart-Walmart

• Anti-competitive agreements between competitors