With the onset of globalization in India, the Indian market has had to deal with many issues – competition being a prominent one. At the time that this wave started, there were local as well as global players in the market, affecting investment and growth of the economy.
AT that time the then prevalent law/act, Monopolistic and Restrictive Trade Practices Act (MRTP Act), 1969, was there to curb monopoly in the market but was not equipped with managing competition and its effects. The government realized it had to shift the focus of the Act from controlling the monopoly in the market to managing competition. It had to promote and attract investment without letting any market power play take place.
With this aim, the government abolished the MRTP Act and introduced Competition Act, 2002 which came into effect on 1 September 2009.
What is the Competition Act?
Keeping in mind the needs of regulated economic growth of the country, the Competition Act deals with issues related to regulation of monopoly and competition in the market. It provides for the formation of a Commission known as Competition Commission of India (CCI). CCI has the power to hold, acquire, and dispose of assets whether movable or immovable and to sue or be sued.
Its aim is to:
- Stop methods or systems that are unfavourable for competition
- Maintain and improve competition in the market
- Make certain that various businesses can enjoy freedom of trade
- Safeguard the interest of the public/customers at large
- Ban exploitation of market power
- Regulation of actions such as mergers, acquisition, or amalgamations
Composition of Competition Commission of India
- The Commission will consist of Chairperson and two to six members appointed by the Central Government.
- Every member of the commission will be required to have knowledge and professional experience of at least 15 years in economics, law, commerce, international trade, management, finance, public affairs, accountancy, industry, or matters of competition and familiarity with competition law and policies.
- The Central Government, if required, can appoint a Director General to assist CCI in their work and Joint, Deputy, Additional, or Assistant Director General or consultants to work under the guidance of Director General.
Duty and Powers of General Director under Competition Act
The different powers and obligations of the General Director are to help the functioning of the CCI smoothly.
- The duty of the Director General is to assist the CCI in the investigation of any infringement of the rules and regulations of the Competition Act.
- The General has the same powers as of CCI which includes:
- summoning and making compulsory the attendance of any individual and then investigating him under oath
- insisting on production of various documents
- accepting the evidence/proof on the affidavit
- announcing commissions for the assessment of various documents and witnesses
Penalty for not complying as per the Competition Act
If a person,
- breaches the orders of the Commission or fails to pay the penalty enforced as per this Act, he shall be liable to imprisonment in civil prison for a term that may extend to 1 year and a fine not more than rupees ten lakhs
- fails to fulfil the directions of Commission and Director General; he shall be liable to pay one lakh rupees for each day till the failure continues
- makes a false statement or omits material information, he shall be liable to pay rupees fifty lakhs to one crore
- causes an offense while handing over the information, he shall be liable to pay not more than ten lakhs