Competition Law – Need & Provisions (Indian Context)

Competition law ensures that markets remain fair and competitive for businesses and consumers.

1. Need / Objectives of Competition Law

1. Prevent Anti‑Competitive Agreements

   • Stop cartels and collusive practices that fix prices or limit supply.

2. Prohibit Abuse of Dominant Position

   • Ensure big firms do not unfairly exploit consumers or exclude rivals.

3. Regulate Combinations (Mergers & Acquisitions)

   • Examine large M&A deals to avoid creation of harmful monopolies.

4. Promote Consumer Welfare and Economic Efficiency

   • Encourage innovation, quality improvement and reasonable prices.

2. Competition Act, 2002 – Key Provisions (Exam‑Oriented)

Only main points (no section numbers needed):

1. Prohibition of Anti‑Competitive Agreements

   • Agreements which cause or are likely to cause appreciable adverse effect on competition (AAEC) are void.
   • Examples: price‑fixing, bid‑rigging, output restriction.

2. Prohibition of Abuse of Dominant Position

   • A firm having dominant market position cannot misuse it by unfair prices, limiting production, or denying market access.

3. Regulation of Combinations

   • Large mergers, amalgamations and acquisitions above specified thresholds must be notified to CCI for approval.

4. Establishment of Competition Commission of India (CCI)

   • Independent body to enforce the Act, conduct inquiries and impose penalties.

5. Penalties and Remedies

   • CCI can order cease and desist, impose monetary penalties, and in extreme cases modify or break up anti‑competitive agreements.

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3. Importance for Business and Consumers

• Ensures level playing field; small and efficient firms can compete.
• Protects consumers from cartels and excessive pricing.
• Gives clarity for businesses planning large mergers or joint ventures.

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4. Quick Revision Points

• Need: prevent anti‑competitive practices, protect consumers, promote efficiency.
• Key provisions: ban anti‑competitive agreements, prevent abuse of dominance, regulate combinations, establish CCI, impose penalties.
• In answers, always relate competition law to fair markets and consumer welfare.

5. Quiz Time 🎯

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