Competition Law in India - Nishith Desai Associates

1 Competition Law in IndiaJurisprudential Trendsand the way 2013 Nishith Desai Associates 2013 MUMBAI SILICON VALLEY BANGALORE SINGAPORE MUMBAI BKC NEW DELHI Nishith Desai AssociatesISBN [-] Competition LAW IN India A REPORT ON JURISPRUDENTIAL TRENDS AND WAY FORWARD INTRODUCTIONA pril 2013 Shalaka Patil, Payel Chatterjee, Shashank Gautam, M S Ananth, Aditi Jha, Simone Reis, Pratibha JainFor Private Circulation OnlyNishith Desai Associates is the copyright holder of this report.

2 No reader should act on the basis of any statement contained herein without seeking professional advice. The firm expressly disclaims all and any liability to any person who has read this document, or any extract thereof, with respect to anything or consequences of anything done, or omitted to be done, by any such person in reliance upon the content of this report. Competition Law in IndiaPriviliged and Confidential Nishith Desai Associates 2013 ContentsGLOSSARY 01 INTRODUCTION 031.

3 TREND ANALYSIS 042. EVOLUTION OF Competition LAW IN India 103. THE MRTP ACT: PREDECESSOR OF THE Competition ACT, 2002 124. INDIAN Competition LAW FRAMEWORK 175. ANTI-COMPETITIVE AGREEMENTS 196. ABUSE OF DOMINANCE 227. JURISPRUDENTIAL TRENDS - SECTION 3 258. JURISPRUDENTIAL TRENDS - SECTION 4 429. INTERNATIONAL TRENDS IN Competition LAW 63 CONCLUSION 70 ANNEXURE ACOMPETITION ACT, 2002 CASES 72 Competition Law in IndiaPriviliged and Confidential1 Nishith Desai Associates 2013 GlossaryAbbreviations and terms used in this Paper.

4 Abbreviation AAEC Act or Competition Act CD CCI COMPAT DG Directors DoJ Evidence Act FRAND F&O FTC HMT IDRA INR or Rs. IP IPR MCA Full FormAppreciable Adverse Effect on CompetitionThe Competition Act, 2002 Currency DerivativeCompetition commission of IndiaCompetition Appellate TribunalDirector General of InvestigationDirectors of the CompanyDepartment of JusticeIndian Evidence Act, 1872 Fair, Reasonable And Non-DiscriminatoryFutures and OptionsFederal Trade CommissionHypothetical Monopolist TestIndustrial (Department and Regulation)

5 Act of 1951 Indian National RupeeIntellectual PropertyIntellectual Property RightMinistry of Corporate AffairsProvided upon request only Nishith Desai Associates 20132 Abbreviation MCX MIC MLATs MRTP Act MRTPC MTP NSE OECD OP OTC RBI RTP SEBI SEP SOE SSNIP SSO Supreme Court TFEU UTP Full Form MCX Stock Exchange Inquiry CommissionMutual Legal Assistance TreatiesMonopoly and Restrictive Trade Practices Act, 1969 Monopoly and restrictive Trade Practices CommissionMonopolistic Trade PracticesNational Stock Exchange of India LtdOrganization of Economic Cooperation and developmentOpposite PartyOver the CounterReserve Bank of IndiaRestrictive Trade PracticesSecurity Exchange Board of India Standard Essential Patents State Owned EnterpriseSmall but Significant and Non-transitory Increase in PriceStandard Setting OrganizationsThe Honourable Supreme Court of IndiaTreaty on the Functioning of the European UnionUnfair Trade

6 PracticesCompetition Law in IndiaPriviliged and Confidential3 Nishith Desai Associates 2013 IntroductionThe Indian Competition law regime is a nascent regime. It is barely four years since our new Competition law- the Competition Act has become operational. Prior to the operationalization of the Competition Act in May 2009, MRTP Act was the operational law that regulated certain aspects of Competition . This Report discusses the legislative history of the Competition Act and analyzes salient jurispruden-tial trends in Competition law enforcement over the period of last four years.

7 This Report is divided into nine parts. Part I of this report deals with the trend analysis of cases brought before the Competition commission of India CCI. Part II of this Report deals with the evolutionary history of Competition law in India . Part III focuses on MRTP Act, Part IV of this report focuses on the Competition law framework envisaged under the Competition Act. Part V and Part VI of this report discuss anticompetitive agree-ments and abuse of dominance, respectively. Part VII and Part VIII of this report discuss trends in the enforcement of the Competition Act.

8 Part IX of this report summarizes some of the international trends in Competition law jurisprudence This Report also includes an annexure that provides details, up to February, 2013, of all the orders passed by the CCI with respect to the information received by the CCI about alleged violation of Section 3 and 4 of the Competition Act and combination notifications filed under Section 6 (2) of the Competition upon request only Nishith Desai Associates 201341. Trend analysisFrom the data available on the website of the CCI, the annual reports of the CCI and the CCI s quarterly magazine-Fair Play, we note that the CCI has received a total of 271 cases under section 19 (1)1 of the Competition Act till February, 2013.

9 A brief analysis of the cases brought during the last three financial years of the CCI s functioning is provided We have also presented information pertaining to all the cases that have been brought before the CCI under Sections 3, 4 and 5 of the Competition Act as Annexure A to this Before The CCI During The FY 2009-103 TotalNil8282240706 NilRefer-ences received from Local Au-thoritiesNilNilNilNilNilNilNilRefer-e nces received from State received from Central moto cogni-zanceNilNilNilNilNilNilNilCases Received from MRTPC On trans-fer50500702 NilInfor-mation Received u/s 19 (1)

10 NilNilNil3232170506 NilDescriptionNumber of matters pending at the beginning of the yearNumber of matters received during the yearTotal number of mattersNumber of matters in which prima facie violations noticedNumber of matters in which no prima facie violation noticedInvestigation reports received on prima facie matters or-dered for investigationInquiries Conducted1. The commission may inquire into any alleged contravention of the provisions contained in subsection (1) of section 3 or sub-section (1) of section 4 either on its own motion or on (a) receipt of any information, in such manner and] accompanied by such fee as may be determined by regulations, from any person, con-sumer or their association or trade association.