DEST Practice 13

Competition law and policy in India underwent a fundamental transformation with the enactment of the Competition Act of 2002 and the establishment of the Competition Commission of India as an independent statutory authority, replacing the earlier Monopolies and Restrictive Trade Practices Act of 1969 that had become inadequate for addressing the competitive dynamics of a liberalised, market-oriented economy. The Competition Act prohibits anti-competitive agreements between enterprises or persons, including horizontal agreements such as price fixing, bid rigging, output restriction, and market sharing cartels that are presumed to cause appreciable adverse effect on competition, as well as vertical agreements between enterprises at different levels of the supply chain that have or are likely to have an appreciable adverse effect on competition in the relevant market. The Act also prohibits the abuse of dominant position by enterprises that hold a position of strength in the relevant market, specifically prohibiting unfair or discriminatory pricing or trading conditions, limiting production or technical development to the prejudice of consumers, denial of market access to competitors, and using dominance in one market to protect or extend dominance in another related market. The merger control provisions of the Competition Act require enterprises whose combinations meet specified asset and turnover thresholds to notify the Competition Commission before completing the transaction, enabling the Commission to assess whether the proposed combination would likely cause an appreciable adverse effect on competition in the relevant markets in India and to impose remedies including divestiture of overlapping businesses, licensing of technology, or behavioural restrictions to address identified competition concerns. The Competition Commission has examined a wide range of alleged anti-competitive practices in sectors including cement, steel, telecom, airlines, automobiles, pharmaceuticals, banking, real estate, and e-commerce, imposing penalties on companies found to have violated the Act and recommending structural or behavioural modifications to address competition concerns. In recent years, the Commission has focused considerable attention on the digital economy, grappling with novel competition issues arising from platform businesses, data as a competitive asset, algorithm-driven pricing, and the winner-take-all dynamics of digital markets that tend to produce concentrated market structures with high barriers to entry. The Competition (Amendment) Act of 2023 strengthened the merger control regime by introducing deal value thresholds to capture acquisitions of startups and data-rich companies that may not meet conventional asset and turnover thresholds but could nevertheless have significant competitive implications, and streamlined the merger review process by specifying shorter review timelines for straightforward cases. The Commission has developed a leniency programme under which participants in price-fixing cartels can receive full or partial immunity from penalties by disclosing their participation and cooperating with the Commission's investigation, incentivising cartel members to come forward with information that assists enforcement. The National Company Law Tribunal exercises jurisdiction over mergers and acquisitions under the Companies Act concurrently with the Competition Commission's jurisdiction over competition aspects, requiring the two regulators to coordinate their review processes.