Competition Act 2002 and CCI: Anti-Competitive Agreements, Dominance Abuse and Merger Control

The Competition Act 2002 is India's primary antitrust law, prohibiting practices that harm competition and consumer welfare. The Competition Commission of India (CCI) enforces the Act. Key provisions cover anti-competitive agreements, abuse of dominance, and mandatory merger approval (combinations).

Section 3 — Anti-Competitive Agreements

Agreements between enterprises that cause or likely to cause Appreciable Adverse Effect on Competition (AAEC) are void and prohibited. Two categories:

Horizontal Agreements (Between Competitors)

Price fixing, bid rigging, market allocation, and output restriction are treated as per se illegal (no need to prove AAEC — presumed).

Vertical Agreements (Between Supply Chain Parties)

Resale Price Maintenance (RPM), exclusive supply/distribution, refusal to deal — Rule of Reason applies (must prove AAEC considering efficiency gains).

Section 4 — Abuse of Dominant Position

A dominant enterprise (significant market power in relevant market) abuses its position by:

• Imposing unfair or discriminatory prices/conditions
• Predatory pricing (below cost to eliminate competition)
• Limiting production, market, or technical development
• Denying market access (refusal to deal, exclusivity)
• Leveraging dominance in one market into another

Combinations — Merger Control (Section 6)

Mergers, acquisitions, and amalgamations above threshold must be pre-notified to CCI:

CCI must clear combinations within 210 working days (typically 30 days for Phase I). For complex mergers, Phase II review (100 days) with remedies possible.

CCI Penalties

• Section 3/4 violations: Up to 10% of average annual turnover for 3 preceding financial years
• Cartels: Up to 3x profit for each cartel year or 10% of turnover (whichever is higher)
• Non-notification of combination: Up to Rs. 1 crore per day of delay

Leniency Programme

CCI's Lesser Penalty Regulations allow cartel members who disclose and cooperate to receive 100% (first), 50% (second), or 25% (subsequent) reduction in penalty. Encourages cartel self-disclosure.