The Competition Act 2003
With the advent of globalization, the Indian economy was opened up removing controls and a policy of liberalization is being followed in every aspects of Indian economy. As a result the Indian market was forced to competition from inside and outside. It was felt that the Monopolies and Restrictive Trade Practices Act 1969, was outdated to match with the international economic developments and the necessity was felt to enact a new Law to promote competition and to curb monopolies.
The Act provides for the establishment of a Competition Commission to prevent practices, having adverse effect on competition to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto. As per the Act no enterprise shall abuse its dominant position in the economy and also it prohibits combinations by enterprises which are likely to cause an adverse effect on competitions with in the relevant market in India.
The Competition Commission shall consist of a chairperson and not less than two and not more than ten members to be appointed by the Central Government. The Commission can enquire into contraventions of the provisions of the Act, on the basis of complaints received by it or on a reference made to it by the central or state government or a statutory authority.
The Jurisdiction, powers and authority of the Commission may be exercised by Benches which shall be constituted by the Chairperson .The Bench shall consists of not less than two members.
On receipt of a complaint or a reference from the Central Government, or a Statutory authority or on its own knowledge or information, the Commission is of the opinion that there exists a prima facia case, shall direct the Director General to cause an investigation to be made into the matter.
The Commission can levy penalty for contravention of its orders, failure to comply with its directions, making of false statements or omission to furnish material information, etc. Further the Commission can levy upon an enterprise a penalty of not more than 10% of its average turnover for the last three financial years. It can also order division of dominant enterprises. It will also have power to order demerger in the case of mergers and amalgamations that adversely affect competition.
The act provides for a fund called the Competition fund. The grants given by the Central Government, fees received under the Act and costs realized by the Commission and application fees charged will be credited into this Fund.