This article has been written by Ms Kamakshi, a 4th yearstudent of REVA university

A market is said to be competitive if consumers make a fair choice to use any company’s products without imbalance in product costs. In such a market, a particular product is manufactured by various companies and businessmen, but no firm dominates the market and establishes a monopoly. On the other hand, a market in which one firm dominates all others and does not offer a fair chance for growth can also affect a country’s economy. Consumers are forced to use only one company’s products. Such a market is called a monopoly market. Suppose you went to the market to buy an appliance, and found only fixed-price, specific “XYZ” company products. It is a product that you cannot help but buy because you cannot compare the price with other home appliance manufacturers.

The equilibrium established between sellers and buyers or consumers in competitive markets does not exist in monopoly markets, resulting in cost fluctuations. Therefore, it was necessary to regulate the market and prevent companies from monopolizing the market. Antitrust laws were enacted for this purpose. 

Development of antitrust laws in India 

Pre-liberalisation era

This era is characterized by many problems faced by the country as it seeks to become self-sufficient. This is the stage when India became an independent country and struggled to establish governance and other systems to regulate the actions of its institutions. The government at the time decided to set up a planning commission to examine the growth and stability of each sector in the country. The commission, in its first five-year plan, focused on the reintegration of refugees who had faced difficulties as a result of the division. No attention was paid to the stability of the economy and the Indian market until the Second Five Year Plan. The Second Five Year Plan is also known as the Mahalanobis Plan. This Mahalanobis model was adopted to speed up the pace of industrialization. The plan was aimed at building more and more industries to expand markets and improve manufacturing processes for the country’s development towards a socialist society.

With the establishment of industries and companies in the market, the government felt the need to regulate monopolistic practices and established the Monopoly Investigation Commission in 1965 to report on the monopoly situation of certain companies in the market and Proposed measures for points. On the European Commission’s proposal, Parliament enacted the Monopol and Restrictive Trade Practices Act 1969 (MRTP Act). The purpose of this law was to prevent monopolies and to distribute resources evenly across all industries.

But the law was vague and vague, and by and large failed to serve its purpose and prevent practices such as cartelization, predatory pricing, and other similar strategies. It took a lot of paperwork, licenses, and permits to get started. There were certain sectors that were monopolized by the government, unable to develop private industry. This limited the growth and expansion of the market. The Commission’s other plans failed due to natural disasters such as drought and famine, as well as inflation caused by various revolutions in other countries of the world. The European Commission intended to introduce market liberalization in its Sixth Five-Year Plan and adopted its policies and other tax reforms. Congress also changed the law. 

Post-liberalisation era

This era is characterized by many problems faced by the country as it seeks to become self-sufficient. This is the stage when India became an independent country and struggled to establish governance and other systems to regulate the actions of its institutions. The government at the time decided to set up a planning commission to examine the growth and stability of each sector in the country. The commission, in its first five-year plan, focused on the reintegration of refugees who had faced difficulties as a result of the division. No attention was paid to the stability of the economy and the Indian market until the Second Five Year Plan. The Second Five Year Plan is also known as the Mahalanobis Plan. This Mahalanobis model was adopted to speed up the pace of industrialization. The plan was aimed at building more and more industries to expand markets and improve manufacturing processes for the country’s development towards a socialist society.

With the establishment of industries and companies in the market, the government felt the need to regulate monopolistic practices and established the Monopoly Investigation Commission in 1965 to report on the monopoly situation of certain companies in the market and Proposed measures for points. On the European Commission’s proposal, Parliament enacted the Monopol and Restrictive Trade Practices Act 1969 (MRTP Act). The purpose of this law was to prevent monopolies and to distribute resources evenly across all industries.

But the law was vague and vague, and by and large failed to serve its purpose and prevent practices such as cartelization, predatory pricing, and other similar strategies. It took a lot of paperwork, licenses, and permits to get started. There were certain sectors that were monopolized by the government, unable to develop private industry. This limited the growth and expansion of the market. The Commission’s other plans failed due to natural disasters such as drought and famine, as well as inflation caused by various revolutions in other countries of the world. The European Commission intended to introduce market liberalization in its Sixth Five-Year Plan and adopted its policies and other tax reforms. Congress also changed the law. 

The Competition Act 2002 (Amendment) aims to promote competition and protect the Indian market from anti-competitive corporate practices in accordance with contemporary competition law philosophies. The law prohibits anti-competitive agreements, abuse of a dominant position by corporations and regulates mergers (mergers, mergers and acquisitions) to ensure competition in India is not affected. The law prohibits agreements that have or may have a substantial adverse effect on competition in the Indian market. Such contracts are void. Agreement can be horizontal. H.Between companies, individuals, organizations, etc. are involved in the same or similar trade in goods or provision of services, or they may be vertical; H. Between companies or individuals at different stages or levels of the production chain in different markets. Cartel formation is one of the horizontal agreements that is likely to have a significant negative impact on competition, according to Section 3 of the Law. 

Anti-Competitive Agreements (Section 3)

Agreement includes any agreement, understanding or concerted action between the parties. It may or may not be in writing. Anti-competitive agreements under competition law are broadly divided into anti-competitive horizontal agreements and anti-competitive vertical agreements. 

Anti-Competitive Horizontal Agreements-Section 3(3)

Horizontal agreements are agreements in which companies engage in the same or similar trade in goods or services. If companies agree to distort competition in the market, such agreements are deemed to have a substantial impact on competition and are therefore void. The following four categories of his contracts between competitors are considered AAEC.

• Price agreement.
• Agreements to limit production and/or supply.
• Market-sharing agreements.
• Bid-rigging or bid-rigging. 

Vertical Agreements-Section 3(4)

Vertical agreements are agreements entered into by companies at various stages or levels such as production, distribution, delivery, and warehousing. These vertical limits include:

• Involvement Order.
• Exclusive Supply/Sales Agreement.
• Refusal of Business. and
• Maintain resale prices.

Imposing reasonable conditions necessary to protect intellectual property rights (IPRs) listed in section 3(5) should generally not be treated as a violation of law.

However, they are subject to scrutiny by the Commission to determine whether such terms are appropriate and necessary to protect intellectual property rights. 

Abuse of Dominant Position (Section 4)

Advantage refers to a position of strength that allows a firm to operate independently of market competitiveness or to exert favorable influence over competitors or consumers. A controlling position in the company itself is not prohibited. However, if a dominant position in the relevant market causes the company to abuse that dominant position, this is prohibited. Abuse of a dominant position impedes fair competition among firms, exploits consumers and makes it more difficult for other market participants to compete with dominant firms. Abuse of a controlling position includes:

• Imposing unreasonable terms or prices, including predatory prices.
• restrictions on production/market or technical or scientific development;
• Denial of market access and
• condition the conclusion of the contract without mentioning the contract; and
• Use a dominant position in one relevant market to gain an advantage in another relevant market. 

Conclusion: Antitrust laws are laws that regulate markets and their activities. Such laws are intended to reduce unfair trade practices and prevent monopolies. The concept of antitrust law was first introduced to the United States in 1890 with the passage of the Sherman Act. In India, the MRTP Act addressed such issues, but with increasing industrialization and urbanization, the parliament felt the need for an entirely new law that could address the increase in unfair trade practices and control enterprises. I was. In 2002 the Competition Law was passed. It was further amended in 2007 and NCLAT was established to expedite cases.