ANTITRUST LAWS IN INDIA

Last Updated on 11th November, 2024
6 minutes, 13 seconds

Description

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Picture Courtesy: https://www.hindustantimes.com/business/cci-says-zomato-swiggy-in-breach-of-antitrust-laws-in-india-report-101731060962204.html

Context

The Competition Commission of India (CCI) reported that Swiggy and Zomato violated antitrust and competition laws by favoring certain restaurants on their platforms.

Details

Zomato reportedly agreed to "exclusivity contracts" with restaurant partners in exchange for lower commissions, which could limit competition.

Swiggy allegedly promised certain restaurants rapid business growth if they listed exclusively on its platform.

The CCI's investigation found that Swiggy, Zomato, and their restaurant partners' exclusivity agreements prevented the market from becoming more competitive.

A violation of the Competition Act may result in serious monetary penalties.

About Antitrust Laws in India

Antitrust Laws

  • The main objective Antitrust Laws are to protect consumers' interests by promoting fair competition and prohibiting anti-competitive market practices.

Monopolies Inquiry Commission (1965)

  • The commission was established to investigate market monopolistic practices and propose measures to prevent monopolies.

Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act)

  • The Act aimed to prevent monopolies, however, it was ambiguous and failed to address issues such as cartelization or predatory pricing. 
  • It also added bureaucratic barriers that slowed market growth and expansion.

liberalization in India’s market

  • Domestic economic challenges, including inflation, as well as global challenges, prompted the implementation of liberalization policies in the 1990s. The MRTP Act was amended to reflect this change, but it was insufficient.

Raghavan Committee (2000)

  • It was established to review and recommend changes to antitrust law.
  • It recommended repealing the MRTP Act and legislating a new legislation to promote market competition.

Competition Act of 2002

  • The act was created to encourage competition, and protect consumer interests.
  • It focuses on promoting competition and preventing anti-competitive practices, rather than just preventing monopolies. 
  • It establishes a framework for defending against anti-competitive actions that are justified and promotes free trade with reasonable restrictions.
  • It regulates three major aspects:
      • Anti-competitive Agreements
      • Abuse of dominant position.
      • Combinations (mergers, acquisitions, and amalgamations).

Competition Commission of India (CCI)

  • It regulates market competition and ensures free and fair trade practices. It prohibits activities that harm competition and investigates cases brought before it under the Competition Act of 2002.
  • It was established in 2009 as a statutory body within the Ministry of Corporate Affairs.
  • The Competition (Amendment) Act of 2007 established two bodies: the CCI and the Competition Appellate Tribunal (CAT). 
      • However, the CAT was succeeded by the National Company Law Appellate Tribunal (NCLAT) in 2017.
  • Non-compliance with the Commission's orders or directions can result in a fine of up to Rs 1 lakh per day, up to a maximum of Rs10 crore.
  • Any person who is dissatisfied with any decision or order of the Commission may file an appeal with the Supreme Court within sixty days.

Membership

  • It consists of one chairperson and a minimum of two members, with the option of increasing to six. 
      • These members are appointed by the Central Government, and the number of members can be reduced to one chairperson and three other members to speed up case hearings.
  • To be appointed as a member of the CCI, a person must have previously served as a High Court judge or be qualified to do so. 
      • He should have 15 years of experience in international trade, business, public affairs, law, commerce, economics, accounting, industry, or administration that is relevant to the CCI's functions.

Powers under the Competition Act 2002

  • Investigate anti-competitive agreements and the misuse of dominant positions.
  • Regulate mergers and acquisitions that may have an adverse impact on competition.
  • Enforce fair competition while protecting consumer interests.

Must Read Articles: 

Competition Commission of India (CCI)

THE COMPETITION (AMENDMENT) BILL, 2022

Source: 

Hindustan Times

Wikipedia

PRACTICE QUESTION

Q.Consider the following statements:

1. The Competition Act 2002 was enacted to replace the Monopolies and Restrictive Trade Practices Act of 1969.

2. An appeal against the decision of the Competition Commission of India to be filed in the High Court.

Which of the above statements is/are correct?

A) 1 only

B) 2 only

C) Both 1 and 2

D) Neither 1 nor 2

Answer: A

Explanation:

Statement 1 is correct:

The Competition Act 2002 was enacted to govern competition law. It replaced the Monopolies and Restrictive Trade Practices Act of 1969. Under this legislation, the Competition Commission of India was established to prevent activities that compromised competition in India.

Statement 2 is incorrect:

A person who is dissatisfied with any decision or order of the Commission may file an appeal with the Supreme Court within sixty days of the date of communication. There shall be no appeal against any commission decision or order made with the parties' consent.

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