[Guest Post] Competition Act, 2002: An Overview of Competition Law in India by Prakhar Bhardwaj | Law Notes


Competition is a process of economic rivalry between market players to attract customers. The competition also refers to a situation in a business environment where businesses independently strive for the patronage of customers in order to achieve their business objective. Free and fair competition is one of the pillars of an efficient business environment.

Competition act: an overview

The Competition Act was enacted in the year 2002 and it came into force on 13th January 2003. The objectives of the act have been set forth in its preamble which states that the act would provide for the establishment of a Commission (i.e. Competition Commission of India) to prevent anti-competitive practices, to promote and sustain competition in the market, to protect the consumers and to ensure freedom of trade carried on by the other participants of the market. The Act regulates three Anti-competitive practices namely Anti-competitive agreements, Abuse of Dominant Position and Mergers & Acquisitions (Combinations). The main criteria used for the regulation of anti-competitive practices are that such practices should not cause an appreciable adverse effect on competition within India.
Section 3 of the Act explains as to what agreements are anti-competitive in nature and it classifies such agreements into two categories namely Horizontal agreements and vertical agreements. It states that all the anticompetitive agreements which can cause an appreciable adverse effect on competition in India shall be void subject to certain exceptions as provided under section 3(5). Section 4 deals with issues of abuse of dominant position, it gives a list of acts which may amount to an abuse of dominant position. Further section 5 and 6 explains aspects of combinations and also prescribe certain norms to regulate combinations.

The Competition Act, 2002

It was enacted to provide for the establishment of a Commission to prevent practices having an adverse effect on competition, and to promote and sustain competition in the business environment and to protect the interest of consumers and also to ensure freedom of trade carried on by other participants in markets in India and for matters connected therewith or incidental thereto. The Competition Act, 2002 came into existence in January, 2003 and the Competition Commission of India was established on 14 October 2003. CCI consists of a Chairperson and 6 Members appointed by the Central Government. CCI functions as a market regulator for preventing and regulating anti–competitive practices in the country. A Competition Appellate Tribunal was also established, which is a quasi-judicial body established to hear and dispose of appeals against any direction issued, or decision made by the CCI.

Elements of Competition Law

There are three major elements of a competition law
i) Anti-competitive agreements
ii) Abuse of dominance
iii) Merger, amalgamations and acquisitions control


The enactment of Competition Act, 2002 is a step taken by the Government to stand at par with the changed and changing economic scenarios and is in line with the changed economic
thinking of liberalisation, privatisation and globalisation. It indicates the willingness of the country to move forward from control economy to free-market economy but with adequate checks and control measures. The Act has not only focused on the regulatory part but has also adopted the concept of ‘Competition Advocacy’ to promote competition, create awareness etc. as a social duty of the commission.

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