Module 2: Unit 3

Evolution of Competition Law in

India and other Select Jurisdictions

Course on Competition Law and Policy CUTS:CIRC-NLU Delhi

Dr. Vijay Kumar Singh*

* Disclaimer: Deputy Director (Law), Competition Commission of India. The views expressed in this article are the personal views of the author and do not represent in

any way either the official views of the Commission or the Honble Members. The author may be contacted at vrsingh.vk@gmail.com Author is a former Faculty of

Law at HNLU, Raipur and COLS, UPES, Dehradun

Background of Competition Law in India

Articles 38 and 39 of the Constitution of

India.

to secure a social order for the promotion and welfare of the people. This provision recognized the

need to eliminate and minimize the inequalities in

income, which applied not only to the individuals but

also to the groups in different areas

the States shall strive to secure that the operation of the economic system does not result in the

concentration of wealth and means of production to

the common detriment.

Committees

1951, the Hazari Committee study industrial licensing procedure under the Industries (Development and Regulation) Act, 1951

Subimal Dutt Committee

October 1960, the Mahalanobis Committee - Distribution of Income and Levels of Living

1964 Monopolies Inquiry Commission (MIC) Justice K.C. Das Gupta

Draft MRTP Bill The Monopolies and Restrictive Trade

Practices Act, 1969 (MRTP Act)

MRTP Act

(a) prevention of concentration of economic power to the common detriment;

(b) control of monopolies;

(c) prohibition of Monopolistic Trade Practices (MTP);

(d) prohibition of Restrictive Trade Practices (RTP); and

(e) prohibition of Unfair Trade Practices (UTP)

Amendments were in 1974, 1980, 1982, 1983, 1984, 1985, 1986, 1988, and 1991

The Change The Monopolies and Restrictive Trade Practices Act has become

obsolete in certain areas in the light of international economic developments relating to competition laws. We need to shift our focus from curbing monopolies to promoting competition. Government has decided to appoint a Committee to examine this range of issues and propose a modern Competition Law suitable for our conditions.

Yashvant Sinha, Finance Minister, Budget Speech (1999-2000) (February 27, 1999).

Other factors obligations cast on India by the World Trade Organization

(WTO) Agreements

Expert Group constituted by Ministry of Commerce (1999) High Level Committee on Competition Policy and Law (1999) Working Group on Competition Policy (2007) Committee on National Competition Policy and related matters

(2011)

MRTP ACT, 1969

COMPETITION ACT, 2002

1 Based on the pre-reforms scenario Based on the post-reforms scenario

2 Based on size as a factor Based on structure as a factor

3 Competition offences implicit or not defined Competition offences explicit and defined

4 Complex in arrangement and language Simple in arrangement and language and

easily comprehensible

5 14 per se offences negating the principles of

natural justice

4 per se offences and all the rest subjected to

rule of reason.

6 Frowns upon dominance Frowns upon abuse of dominance

7 Registration of agreements compulsory No requirement of registration of agreements

8 No combinations regulation Combinations regulated beyond a high

threshold limit.

9 Competition Commission appointed by the

Government

Competition Commission selected by a

Collegium (search committee)

10 Very little administrative and financial

autonomy for the Competition Commission

Relatively more autonomy for the

Competition Commission

11 No competition advocacy role for the

Competition Commission

Competition Commission has competition

advocacy role

12 No penalties for offences Penalties for offences

13 Reactive and rigid Proactive and flexible

14 Unfair trade practices covered Unfair trade practices omitted (consumer fora

will deal with them)

www.cuts-international.org/doc01.doc

upcoming of law The Competition Act 2002 received the assent of President on the 13th

January, 2003

first provisions of the Act were notified on 31st March, 2003

provision establishing the Commission, competition advocacy, and finance, accounts and audits, and miscellaneous provisions were notified on 19th June, 2003

20th May, 2009, the working provisions, i.e. provisions relating to anti-competitive practice and abuse of dominance were brought into force

LitigationBrahm Dutt v. Union of India MANU/SC/0054/2005: (2005) 2 SCC 431

Thiru. R. Gandhi President, Madras Bar Association v. Union of India (UOI), rep. by its Secretary, Department of Company Affairs, [2004] 1 20 CompCas 510 (Mad)

Amendment of 2007..

provisions relating to combinations were notified on 4th March 2011 to be effective from June 1, 2011 The Competition Act, 2002, 5, 6, 20, 29, 30 and 31.

Notification of Section 43A and Section 44 of the Competition Act, 2002 w.e.f. 01.06.2011

United States

(1889-Canada)..

Sherman Act.. 1890 As a reaction to formation of trusts

Standard Oil Trust

Higher Tariff..

Improvements in Transportation and communication(evolution of large single market)

Increased competition price wars

Responded by cartels price agreements - Railroads and oil companies

Sherman Act Enforcement.

Section 1 and 2 Enforcement initially not very strict until

Trans-Missouri Freight Association (1897)...

Dr. Miles v. Park & Sons (1911) per se violations

Standard Oil and American Tobacco Terminal Railroad (1912).. Impact of Chicago School

Change to rule of reason.. Sylvania..(1977) Leegins case (2007).. Text Messaging (2011)

Mergers?? and other developments..

Clayton Act 1914 Price Discrimination.. Interlocking directorates Private antitrust remedies

Robinson-Patman Act, 1936 (price discrimination)

Celler-Kefauver Act, 1950 (extending cross-ownership prohibition among competitors to asset transactions)

Hard-Scott-Rodino Act, 1976 (DOJ & FTC power to review all mergers beyond a threshold)..

Federal Trade Commission Act, 1914.. FTC and DOJ as enforcement agencies Role of American Bar Association..

European Union Competition law

early developments Germany1923 Cartel Law

1957 Federal Cartel Office (Bundeskartellamt)

Protection of economic freedom

United Kingdom.. Profiteering Act

1919.

Monopolies and Restrictive Practices (Inquiry and Control) Act 1998

OFT Competition Commission

Competition Law in European

Communities European Union Law for the Community 1951 Treaty of Paris European Coal and Steel Community

(ECSC)

European Atomic Energy Community (Euratom), 1957 Six members founding members of European Economic

Community (EEC)

EU law The Treaties

Treaty of Rome, 1957 Treaty of Amsterdam, 1999 Lisbon Treaty, 2009 Paris Rome Amsterdam Lisbon Article 65 85 81 101 Article 66(7) 86 82 102 Economic efficiency and European market integration

EU law The Institutions

The European Commission..

Council.. Parliament

Commissioners..

DG Competition

Judicial System

General Court (known as Court of First Instance initially)

European Court of Justice (ECJ)

Thank You.