In order to appreciate the immense importance and significance the school of competition
law to the national economy, tracing the origins and roots of such law are important to us
such process enables us in comprehending about the identities, relevancy and objectives
apart from the factors that influence decisions.
The original concept is generally dating from the 18th century, and Adam Smith’s Wealth of Nations (1776) merely meant the absence of legal restraint on trade. Modem economic theory, however, which stems from the late 18th century, and led to the first anti-trust legislation, which traced to United states, where Sherman Act was enacted in 1890.
The Sherman Act,1890,Prohibited contracts, Combination or conspiracies in restraint of trade, and also prohibited monopolization to monopolize.
Certain other laws enacted with the progress of time.
- Clayton Act 1914
- Federal trade commission Act 1914
- Robinson Pat-man Act 1936 etc.
The evolution of competition law in India when government appointed the monopolies inquiry committee (MIC) in April 1964, to investigate the extent and effect of concentration of power in the private sector and to suggest necessary legislative or other measures in the light of the findings.
In 1906 another Hazari committee was constituted to review the operation of existing industrial licensing system resulted in disproportionate concentration of wealth in some of businesses house in India. The reports of the committee caused furore in parliament. Following this the government in July 1967 appointed the industrial licensing policy inquiry Committee, which proposed the monopolies, Restrictive Trade practices Bill (MRTP) was enacted in December, 1969.
The MRTP commission a Regulatory authority to deal with the offences failing under the statue was setup in August 1970. Due to liberalisation in India economic in 1991 MRTP Act was failed to get control over the market forces. This led to appointment of high level of committee headed by Mr. SVS Raghvan by the government of India to examine relevant of MRTP Act 1970 and suggest full fledged competition law in India similar to foreign countries.
The central government introduced the competition amendment bill in 2001. The completion bill having passed by the both houses of parliament in December 2002, received the assent of president of India on 13th January,2003 and it came the statue book as the “The Competition Law Act, 2002”
- CURRENT ISSUE
In today’s era of globalization and fast-paced Economy, Neo-Entrepreneurs have capitalized on the fact that the youth of the world requires quality education and a good skill set for survival in this competitive world , and they are willing to invest hefty amounts of money for the same. This is where the corporate world of mergers, cartels and market abuses apply to the mushrooming businesses in the Educational Sector. The Competition Law regulates the activities of those offering services or goods, for the benefit of the consumers. The crucial objectives of the Competition Act, 2002 include protection of the interests of the consumers as well as to promote and sustain competition in the markets. Effective competition is the key to efficiency and productivity in businesses, including those in the Educational sector.
Healthy competition encourages innovation, cost and production efficiency and enhanced consumer satisfaction because of which businesses strive to keep ahead of their competitors in market. However, the stiff competition also creates incentives for unethical traders to ‘cut corners’ to beat their rivals, and this is where the Competition Authorities such as the Competition Commission of India (CCI) must step up the investigation, advocacy and enforcement procedures to encourage free and fair trade to consumers.
- QUESTION OF LAW
Several questions arise in 2002, when the Parliament of India enacted the Competition Act, replacing the archaic Monopoly and Restrictive Trade Practices Act (popularly referred to as
the MRTP Act) of 1969. But studies have shown that cartels are indeed sustainable even under free markets. Abuse of dominance arises when a firm utilizes its monopoly power in one market to extend it to the other markets in other words, it impedes the competitive landscape in the other markets. Similarly, mergers and acquisitions, by their very nature, reduce the competition in the market. All these practices can harm consumer welfare and can arise out of free market condition. Therefore, a competition act is required in order to dissuade firms from undertaking any activity that harms consumer welfare and fair trade significantly in competitive act.
Modes of analysis, presumptions of legality and illegality, and economic
theories of harms and benefits have undergone changes with the rapid changes being
witnessed by national economies across the world to suit them to changing needs and
times. Law has no autonomy as it always exists for serving the needs and mores of the
society and competition law is not an exception to this cardinal and time tested
principle. There is no single universal model of competition law low suitable and fitted to
all the countries across the World. Thus one size fits all is definitely not applicable in
this branch of law. The plain and obvious reason for this could undeniably be that the
content, contours and parameters of competition law in a country would be shaped and
determined by the stage, level and needs of its socio-economic background and
development. Therefore, the competition regimes prevailing in the advanced developed
countries like U.S. and can’t be simply be imitated and replicated in the developing
countries though the best practices and salutary experiences in those regimes can be
adopted with necessary changes suited to the mores and needs of developing countries.
Therefore, developing countries should have sui generis approach in framing their own
competition laws, by drawing right lessons from the competition regimes of the
However, Today almost 90% of the countries across the globe have their own Competition Law.
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