Authored By: Shivani Devi (LL.M), Rayat Bahra University, Punjab, Research Writer at Law Audience,
Edited By: Mr. Varun Kumar, Advocate, Himachal, Punjab & Haryana and Founder at Law Audience
Abstract:
Competition is important for the smooth functioning of markets as it encourages efficiency, innovation, and protects consumer interests. To maintain fair competition, governments frame competition policy and enforce it through competition law. In India, the Competition Act, 2002 was enacted to promote competition and replace the earlier MRTP Act, 1969. This paper explains the relationship between competition policy and competition law, with special reference to the Indian competition framework. It also discusses how the objectives of competition policy are implemented through the Competition Act, 2002.
Keywords: Competition Policy, Competition Law, Competition Act 2002, CCI, India
1. Introduction:
After the economic reforms of 1991, Indian markets became more open and competitive. With increasing private participation, it became necessary to prevent unfair trade practices and misuse of market power. The earlier MRTP Act, 1969 was not suitable for modern economic conditions. Therefore, the Competition Act, 2002 was enacted to promote competition and protect consumer interests. To understand this law, it is important to examine how competition policy and competition law are related.
2. Competition Policy in India:
Competition policy refers to the government’s overall approach to promote competition and prevent practices that harm the market. It includes economic reforms, deregulation, and market-friendly policies.
Key Objectives of Indian Competition Policy
- Promoting healthy market competition
- Preventing concentration of economic power
- Protecting consumer interests
- Ensuring freedom of trade
The Raghavan Committee Report, 2000 recommended adopting a modern competition policy focused on efficiency and consumer welfare, which led to the enactment of the Competition Act, 2002.
3. Competition Law: Competition Act, 2002:
Competition law is the legal mechanism that enforces competition policy. In India, the Competition Act, 2002 regulates anti-competitive conduct through three main areas:
- Section 3 – Anti-competitive agreements
- Section 4 – Abuse of dominant position
- Sections 5 & 6 – Regulation of combinations (mergers and acquisitions)
The Competition Commission of India (CCI) is the statutory authority responsible for enforcing the Act.
4. Relationship between Competition Policy and Competition Law:
4.1 Competition Policy as the Foundation, Law as the Tool:
Competition policy provides the objectives, while competition law provides the rules and enforcement mechanism. The Competition Act, 2002 reflects competition policy goals in its preamble.
Case Law:
Brahm Dutt vs. Union of India (2005):
The Supreme Court recognized that the Competition Act is based on economic principles of competition policy and aims to maintain market competition rather than control monopolies.
4.2 Implementation of Policy through Legal Provisions:
Competition policy goals are implemented through specific legal provisions of the Act.
Case Law (Anti-competitive agreements):
CCI vs. Coordination Committee of Artists and Technicians of WBFCT (2017).
The Supreme Court held that collective boycotts and price-fixing agreements are anti-competitive and violate Section 3 of the Act. This case shows how competition law enforcers competition policy against cartels.
4.3 Preventing Abuse of Dominant Position:
Competition policy aims to prevent misuse of market power. Competition law provides remedies under Section 4.
Case Law:
MCX Stock Exchange Ltd. vs. National Stock Exchange of India Ltd. (2011):
CCI held that NSE abused its dominant position by charging zero transaction fees to eliminate competition. This case highlights how competition law protects market fairness in line with competition policy.
4.4 Role of CCI in Bridging Policy and Law:
The CCI not only enforces the law but also promotes competition advocacy under Section 49.
Case Law:
CCI vs. Steel Authority of India Ltd. (SAIL) (2010):
The Supreme Court emphasized the role of the CCI in maintaining competition and clarified procedural aspects of enforcement. The case shows how legal interpretation supports competition policy objectives.
4.5 Regulation of Mergers and Acquisitions:
Competition policy seeks to prevent excessive market concentration, which is enforced through merger control provisions.
Case Law:
Thomas Cook (India) Ltd. vs. CCI (2016):
The Supreme Court upheld the penalty imposed by CCI for failure to notify a combination, highlighting the importance of merger regulation in protecting competition.
5. Importance of the Relationship in India:
In India, competition policy and competition law work together to ensure:
- Fair competition
- Consumer protection
- Prevention of misuse of market power
- Balanced economic growth
Without strong laws, competition policy cannot be effectively implemented, and without proper policy, laws may lose their direction.
6. Conclusion:
Competition policy and competition law are closely connected and support each other. Competition policy provides the vision, while competition law gives that vision legal backing. In India, the Competition Act, 2002 successfully reflects competition policy goals and helps in maintaining competitive markets. A strong coordination between policy and law is necessary for the growth of a fair and efficient economy.
References:
- Report of the High-Level Committee on Competition Policy and Law (Raghavan Committee Report), 2000.
- Competition Act, 2002.
- Competition Commission of India v. Steel Authority of India Ltd., (2010) 10 SCC 744.
- Avtar Singh, Competition Law, Eastern Book Company.
- Richard Whish, Competition Law, Oxford University Press.
