Legal Aspects Of Corporate Business COMPETITION ACT 2002

Legal Aspects Of Corporate Business

COMPETITION ACT, 2002 NAME: KHARA KETAN CLASS: M. COM(SEM-2) ROLL. NO: 24

Competition • Is “a situation in a market in which firms or sellers independently strive for the buyers’ patronage in order to achieve a particular business objective for example, profit, sales, or market share “

Definition • Acquisition: Acquisition means, directly or indirectly, acquiring or agreeing to acquire shares, voting rights or assets of any enterprise or control over management or assets of any enterprise. • Cartel: cartel includes an association of any producers, sellers, distributors, traders, or service providers who, by agreement among themselves, limit control or attempt to the control production, distribution, sale or price of goods or provision of services.

• Dominant position: it means position of strength, enjoyed by an enterprise, in the relevant market which enables it to operate independently of competitive forces prevailing in the market or affect its competitors consumers in its favour. • Rule of reasons: it is the analysis of any activity under the challenge on the basic of business justification, competitive and on consumer. It is the logic behind the conclusion for any order.

Objectives of Competition Act, 2002 1) Ensure fair competition in india. By prohibiting trade practice that have an adverse effect on competition 2) Promote and sustain competition 3) Protect the interests of consumers 4) Ensure freedom of trade for other participants in incidental and connected markets

Features Of Competition Act, 2002 Prohibition of anti-competitive agreements Prohibition of abuse of dominant position Regulation of combinations Establishment of the competition commission of india • Penalties for contravention and non-compliance • Competition advocacy and • Constitution of the competition fund. • •

Components of The Competition Act, 2002 • • Anti-competition agreements Abuse of dominance Combinations regulation Competition advocacy

1. Anti-Competition agreement. Firms enter into agreements, which may have the potential of restricting competition. A scan of the competition laws in the world will be show that they made a distinction between horizental and vertical agreements between firms.

Anti-competition Agreements Horizontal Agreements These are between and among competitors who are at the same stage of production, supply, distribution, etc. Examples: cartels, bid rigging, sharing of market, etc.

Anti-competition Agreements vertical Agreements • vertical Agreements are between parties at different stages of production, supply, distribution, etc. Examples: exclusive supply / distribution agreements, refusal to deal

2. Abuse Of Dominance. Dominant position has been appropriately defined in the Act. In terms of the position of strength enjoyed by an enterprise. In the releavant market, in india, which enables it to operate independently of competitive forces prevailing in the relevant market or affects its competitions or consumers or the relevant market in its favour.

3. The competition Act on Combinations Regulation • Combinations, in terms of the meaning given to then in the Act, include mergers, amalgamations, acquitions. • in order to establish whether the higher concentration in the market resulting from the merger will increase the possibility of collusive or unilaterally harmful behavior, it must first be established as to what the relevant market.

4. Competition Advocacy The competition commission of india, in terms of advocacy provisions in the Act, is enabled to participate in the formulation of the country’s economic policies and to participate in the reviewing of laws related to competition at the instance of the central government.

Competition Commission of india • Competition Commission of india is a body corporate and independent entity possessing a common seal with the power to enter into contracts and to sue in its name. it is to consist of a chairperson, who is to be assisted by a minimum of two, and a maximum of six, other members. • The chairperson and the members shall be person of ability, integrity and standing and shall be having special knowledge of and each professional experience of not less then fifteen year in international trade,

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