In this present 21st century, the competition sector has gained importance in various countries across the globe due to the changing circumstances and the increase in the significance of the economy of the country. The Competition laws help in the proper functioning of the markets where effective competition is present which is required for the betterment of the economy of the country. Such a legal framework determines the growth of the economy where the various factors concerning the functioning of the market are given importance.
The main objective of the businesses in the market is to provide services to the customers without harming them in any way concerning competition between the sectors. The role of Competition law is clearly seen in the actions of the sectors where the economy of the country is dependent on the same which can change with the changing circumstances. But it can be seen that some countries which focus on the development of competition in the country give importance to the agreements and customers which form an integral part of the whole process where the presence of various factors can be seen.
When the competition law in India is analyzed with the other global economies, it can be seen that even though the objective behind such legal frameworks are similar, the manner in which it is applied varies from one sector to another based on the country and it is important to regulate it based on the same.
Competition Law in India
In India, the competition law framework goes a long way back where it was introduced through the Monopolistic and Restrictive Trade Practice Act, 1969 (MRTP) where the monopolies in the market were given importance. Later with the enactment of the Competition Act, 2002, it can be seen that the laws became more structured incorporating the various aspects of competition in markets. While both laws are analyzed, it can be seen that the 1969 Act failed to ensure effective legal provisions concerning the fair market, and ways to tackle the challenges faced by Indian markets were also not mentioned.
The regulation of business practices in the country was the main objective behind the enactment of the Competition Act, 2002. It focuses on the regulation of anti-competitive agreements, abuse of dominant positions and combinations including mergers and acquisitions. The Act focuses on the anti-competitive agreements and abuse of dominant positions where the issues concerning the same are discussed. While dealing with such issues in competition law, it can be seen that the changing circumstances in the society have an impact on the competition concept which further determines the economy of the country. These inter-connections have to be understood and given importance as it is required for the overall development of the country.
In the Competition Act, 2002 it is said that any agreements which cause or can cause an appreciable adverse effect on competition (AAEC) are considered anti-competitive, as per Section 3 of the Act. Here it can be seen that the agreements are important for the completion of the particular concept where it has to be carried without any violation of the provisions.
Section 3 (1) of the Competition Act prohibits any agreement with respect to production, supply, distribution, storage, and acquisition or control of goods or services which causes or is likely to cause an appreciable adverse effect on competition within India. Even though the Act does not focus on the actual definition of AAEC, it can be seen that the Act puts forward certain factors required to determine the agreements based on the nature of the same as per Section 19 (3) of the Act.
The language in section 19(3) states that the CCI shall have due regard to all or any of the factors mentioned. In Automobiles Dealers Association v. Global Automobiles Limited & Anr, the Competition Commission of India held that it would be sensible to examine activity in the background of all the factors mentioned in Section 19(3) in order to ensure the smooth functioning of the same where the legal provisions are applied without any other issues.
Abuse of dominant position and Anti-competitive agreements
The main challenges of the competition sector are the anti-competitive agreements and abuse of dominant position which is mentioned under the majority of the legal frameworks adopted by the countries where the importance to regulate the same is mentioned. In this present modern era, it can be seen that the changes that are happening in the society are having a great impact on the overall development of the country where the competitive aspects have great relevance.
The abuse of the dominant position which has been happening for a long time has to be prevented to ensure smooth functioning of the sectors where all the sectors have to be provided with the necessary requirements for the proper functioning of the same. The need to regulate the functioning can be seen based on the actions of the sectors and the functioning of the authorities in the same. While dealing with anti-competitive agreements, it has to be seen that the agreements made concerning the competitions and sectors have to be done based on the factors and conditions mentioned under the respective legal provisions so as to ensure the proper functioning of the sectors. The anti-competitive agreement is a serious issue as it focuses on the agreement which is an integral part of the competition aspect which denotes the activities of the same.
Comparison with other Global Economies
The legal provisions concerning competition vary from one country to another depending on the nature of the aspects relating to the market. The concept of competition has great significance as it has an impact on the economy of the country and it is important to analyze the laws concerning the same. In the European Union, the European Commission Treaty of 1962 focuses on the enforcement of trade and business where the market actions are regulated by the proper application of the legal provisions.
The Competition law in the United Kingdom is similar to that of the EU where the provisions of the Competition Act, 1998 are based on Articles 81 and 82 of the EC Treaty. While analyzing the laws of different countries, it can be seen that even though the objective behind the laws is the same, the enforcement of competition law is different from one country to another. As per the EC Treaty, it is said that while dealing with the role of commission it has to be seen that the imposition of penalty and undertakings have to be given importance to get a clear idea about the same.
If the UK Competition Act is analyzed, it can be seen that the power of the enforcement authority is mentioned concerning the business mentioned under the Act. Here the concept of privileged communication is also mentioned where the rights of the undertakings and others are given. The main aspect of the regulatory body is to maintain a balance between the actions of the people especially customers and the functioning of the markets. Competition can have a negative impact on society if it is not regulated in the proper manner.
The enforcement mechanism in India is focused on the functioning of the authorities where their roles are mentioned concerning the anti-competitive agreements and dominant positions. The main issue that comes up in the competition sector is the failure to comply with the agreements made based on the changing circumstances and the problems regarding the abuse of dominant positions in society. Competition between various sectors is required for the proper functioning of the market as it is essential for ensuring services to the customers. The laws concerning competition aspect gains importance due to the same as it is important for the economy of the country.
Conclusion
The role of Competition law in maintaining the economy of the country can be understood from its applications and use based on the changing circumstances. In this competitive world, it is the need of the hour to regulate the activities concerning the same where the agreements and functioning of different organizations and sectors have to be monitored and analyzed to ensure the proper functioning of the same. The competition law is bound to change from one country to another based on the changing environment and nature of the sectors and hence it is important to have separate legal frameworks which focus on the overall functioning of the sectors.
The objectives of the legal provisions or the Acts are the same where the proper functioning of the sectors is given the priority where the services are made available for the customers. The issues or challenges faced by the sectors are also similar as it focuses on certain aspects which require more attention as it forms an integral part of the same. Such similarities have to be analyzed to understand the functioning of the sectors in different countries and to understand the ways in which it can be regulated even when different applications are present.
Editor’s Note
The article discusses one of the very crucial aspects of an economy and its legal framework, i.e. competition law. Firstly, the author has explained the legal framework related to competition in India including the concepts of anti-competitive agreements and abuse of dominant position. The author has further compared the competition law regime in India with some of the other major global economies of the world. Lastly, the author has concluded by saying that such comparison is necessary in order to better understand and solve the issues and challenges faced in the implementation of competition laws.