Competition Act 2002

Utility: Question can be asked on CCI role because of notices to Big-Tech companies and Big E-Retailers.
Evolution of laws regarding unfair trade practices:
  • To regulate advertising, in 1984, Parliament inserted a chapter on unfair trade practices in the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP)
  • Under the MRTP Act, any person or trader (business entity) could approach the MRTP Commission against an unfair trade practice
  • The Consumer Protection Act (CPA) was enacted two years later and it intended to give protection to consumers against unfair trade practices, but the remedy under the CPA has remained dormant
  • So, following changes worldwide, need was felt for a comprehensive law against monopolies and anti-competition business activities
  • On the recommendations of a committee, the Competition Act, 2002 was enacted and it repealed the MRTP Act, 1969.
Need of a new separate law:
  • In case of CPA, only a consumer can approach a consumer forum for a remedy
  • A company is not a consumer and thus cannot approach a consumer forum complaining of unfair trade practices.
  • A business entity must be provided protection against unfair trade practices and a mechanism to claim remedies.
  • As law has evolved, the subject of unfair trade practices has fallen in the gap between the competition law and consumer protection.
  • A separate legislation and a statutory body like the Competition Commission are imperative to foster fair trade practices in the economy
What is CCI? Why was it introduced?
  • India’s antitrust regulator, the CCI, was established in 2003.
  • It is governed by the 2002 Competition Act, which aims to provide a stable competitive environment.
  • The competition law safeguards trade from the whims of unjust commercial activities like price-fixing and ensures that fair competition prevails.
What is the role of CCI in promoting equitable opportunity across the economy?
  • Prevents anti-competitive activities: The Competition Act aims to prevent huge businesses from entering into anti-competitive agreements and abusing their dominating position. It governs mergers and acquisitions that may have an anti-competitive effect. It prohibits price-fixing, market allocation, predatory pricing, and tied selling, as well as other horizontal and vertical constraints.
  • Defends Customer’s interests: It aims to defend customers’ interests in terms of price, quality, and availability of a diverse range of products by limiting the scope for monopoly advantage exploitation.
  • Creates a desirable environment for investment: It provides a desirable investment destination for both global and domestic investors by fostering a competitive and efficient market system. CCI is known to have intervened in situations of cement and steel cartelization.

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