The Competition Act, 2002 was enacted by the Parliament of India and governs Indian Competition law. It replaced the archaic The Monopolies and Restrictive Trade Practices Act, 1969. Under this legislation, the Competition Commission of India was established to prevent the activities that have an adverse effect on competition in India.
It is a tool to implement and enforce competition policy and to prevent and punish anti-competitive business practices by firms and unnecessary Government interference in the market. Competition laws is equally applicable on written as well as oral agreement, arrangements between the enterprises or persons.
Short title, Extent and Commencement of Competition Act
- This Act may be called the Competition Act, 2002.
- It extends to the whole of India except the State of Jammu and Kashmir.
- It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint: Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
The Competition Act, 2002 was amended by the Competition (Amendment) Act, 2007 and again by the Competition (Amendment) Act, 2009. This is an act to establish a commission, protect the interest of the consumers and ensure freedom of trade in markets in India:
- To prohibit the agreements or practices that restricts free trading and also the competition between two business entities,
- To ban the abusive situation of the market monopoly,
- To provide the opportunity to the entrepreneur for the competition in the market,
- To have the international support and enforcement network across the world,
- To prevent from anti-competition practices and to promote a fair and healthy competition in the market.
Objectives of Competition Act
- To promote healthy competition in the market.
- To prevent those practices which are having adverse effect on competition.
- Protect the interests of concerns in a suitable manner.
- Ensure freedom of trade in Indian markets.
- To prevent abuses of dominant position in the market actively.
- Regulating the operation and activities of combinations (acquisitions, mergers and amalgamation).
- Creating awareness and imparting training about the competition Act.
Non-Applicability of Competition Act
Competition Act is not applicable in the following cases:
- Public Financial Institutions.
- Foreign Institutional Investors.
- Venture capital Funds.
- Agreements related to intellectual property rights (IPRs) such as trademarks, patents, copyrights etc.
- Central Government has the authority to exempt any class of enterprises from the provisions of Act in the common interest of national security or public interest.