Almost six years after the enactment of the Competition Act 2002 ("Competition Act"), India's competition regulator - the Competition Commission of India (CCI) has finally become operational. The Competition Act aims at facilitating competition in the Indian market, through prohibition of anti-competitive agreements, cartels and abuse of domination positions.
Legal wrangle over the structure of the CCI had caused much delay in the activation of the Indian competition law regime and kept the CCI in abeyance. While the substantive provisions of the Competition Act relating to (i) prohibition of anti-competitive agreements and (ii) abuse of dominance were finally notified in May, the provisions with respect to regulations of combinations (mergers, amalgamations and acquisitions) are expected to be notified soon.
With the CCI becoming functional, India is now in line with the US, Europe and most recently China in relation to a competition law regime. The Act when entirely implemented is expected to shake up the way companies do business in India. As an independent body responsible for investigating mergers, market shares and conditions, besides regulating firms, CCI would ultimately replace the Monopolies and Restrictive Trade Practices Commission (MRTPC). Though MRTPC will continue to deal with pending cases for two years before being dissolved, it would no longer admit any new cases.
Companies face fines of up to three times their annual profits if they fall foul of new competition laws. The regime has been modelled on the European system and it proposes to make contravention of CCI orders a criminal offence.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.