CENTRAL UNIVERSITY OF SOUTH BIHAR

PROJECT TOPIC
Regulation of Monopoly: A Comparative Study of India and
USA
NAME - SANJEET KUMAR SINGH

ENROLLMENT NO. – CUSB1613125044

PROGRAMME – B.A.L.L.B (Hons.)

COURSE NAME – COMPETITION LAW

COURSE CODE – LAW 556

UNDER THE GUIDENCE OF – PROF. S. P. SRIVASTAVA

1
 ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to my professor PROF. S.P.
SRIVASTAVA, who gave me the golden opportunity to do this wonderful project on the
topic parents ‘‘Regulation of Monopoly : A Comparative Study of India and USA”, which
also helped me in doing a lot of research.

Secondly, I would also like to thank my parents ‘’and friends who helped me a lot in
finishing this project within the limited time.

I am making this project not only for marks but to also increase my knowledge.

Thanks again to all who helped me.

- Sanjeet Kumar Singh

2
 INDEX

1. INTRODUCTION...................................................................................P.4
2. REGULATION OF MONOPOLY: USA................................................P.6
US ANTITRUST STATUTES...........................................................P.6
THE INSTITUTIONS.........................................................................P.8
PROCEDURES USED TO IMPLEMENT AND ENFORCE
ANTITRUST LAWS IN US.............................................................P.10
3.THE INDIAN COMPETITION LAW REGIME.......................................P.14
STATUTES.........................................................................................P.14
THE INSTITUTIONS.........................................................................P.14
ENFORCEMENT OF COMPETITION LAW IN INDIA..................P.16
4. COMPARISON AND SUGGESTIONS...................................................P.20
5. CONCLUSION..........................................................................................P.22

3
INTRODUCTION
It was in the year 1890 that the most famous Sherman Act 1890 came in existence. The
effects of this law were that there was a ban on business arrangements that may lead to
restraint in trade1, and followed by that it also prohibited the attempts to acquire monopoly 2.
This act was passed due to the ill practices of railway companies, which were exploiting their
monopoly position which as a result had negative effects on the farmers, shippers and other
traders. And many industries were conjointly having 'trusts' and were adopting measures to
drive out the competitors out of the market. Therefore, Section 1 of the Sherman Act
institutes that, any contract in the form of combinations or any trust or any otherwise, or any
conspiracy, which may lead to restraint in trade ...... is to be declared illegal 3. And followed
by Section 24, it made it as an offence if any attempts are made to acquire monopoly in
market.

The competition law in India came into existence as result of Article 38 and 39 of the
Constitution of India which inter alia, construes that the state might endeavour to advance the
welfare of the public and ensuring effectively, as it might be, a social request in which the
equity, social financial and political, should advise all foundations of national life and State
should, specifically, direct its strategy towards securing:5

 That the possession and the control of material assets of the group are so dispersed as
best to sub serve the benefit of all
 That the operation of the monetary framework does not bring about the grouping of
riches and method for creation to regular disadvantage.

The main aspects of competition law are, first, the 'rule of reason and second, is the 'per se
rule'. These rules originated from the US - the "The Sherman Act 1890, and the famous case

1
Sherman Act,15 U.S.C. Section 1(1890)

2
Sherman Act, 15 U.S.C. Section 2 (1890)

3
Supra note 1.

4
Supra note 2.

5
D.P. Mittal, Competition Law and Practice, 9-10(2nd ed. 2008).

4
of "Northern Pacific Railway Co. v United States and Others" 6. In India the dimensions of
'Rule of Reason' and 'Per se Rule' can be found in the case of Neeraj Malhotra v. Deustche
Post Bank Home Finance ltd. and others7 also known as the payments loan case.

Indian competition law is much younger than U.S. competition law. The basic statute that
governs competition law in the U.S., the Sherman Antitrust Act, was enacted 77 years before
India existed as an independent country. Development of competition law in India also was
delayed by the lack of enthusiasm for a market-based economy that was shared by most of
the population and political leadership of India for several decades after India obtained its
independence. However, India’s competition law jurisprudence is older than many of its
developing country counterparts. The Monopoly and Restrictive Trade Practices Act, 1969
(“MRTP Act”) was the first competition related legislation of India followed by the recent
enactment of the Competition Act, 2002.

This article traces the evolution of competition law in India and takes a comparative snapshot
between the Indian competition law framework and that of United States (“US”).

6
356 U.S. 1(1958).

7
(2011) 106 SCL 62 (CCI).

5
REGULATION OF MONOPOLY: USA
US ANTITRUST STATUTES
Various antitrust statutes have been formulated and passed by the US Congress in a bid to
protect consumers and small businesses from anticompetitive business practices. Small
businesses form the majority of enterprises in the United States. They get affected the most
when large companies are allowed to engage in predatory business practices. Over the years,
antitrust laws have continually evolved to keep up with market disruptions and guard against
would-be monopolies. Some of these antitrust laws include:

1. Sherman Antitrust Act

The Sherman Antitrust Act is the oldest legislation to curtail the powers of monopolies and
cartels. The law was proposed in 1890 by Senator John Sherman of Ohio, who was an expert
in trade regulation. The law was aimed at addressing the issue of interstate commerce by
regulating trusts that concentrated power in the hands of a few entities.

The bill was proposed during the “Gilded Age” when the United States experienced rapid
economic growth, which gave rise to monopolies in key industries. For example, companies
such as Standard Oil were blamed for monopolizing the energy industry and pushing out
small competitors.

The Sherman Act comprises three sections. Section One of the act outlaw’s anticompetitive
practices that restrain trade. Some of these practices include agreements to fix prices,
combinations to form conglomerates, agreement to exclude other competitors from certain
segments of the market, etc.

The second section of the Sherman Antitrust Act outlaw’s monopolization or attempts to
monopolize, and it regulates mergers and acquisitions that concentrate too much power in the
hands of a few entities. Companies must get approval from the Federal Trade Commission
and Department of Justice before completing a mergers and acquisition transaction. The last
section of the Sherman Act extends the provisions in the first and second sections to the
District of Columbia and US Territories.8

8
https://corporatefinanceinstitute.com/resources/knowledge/finance/antitrust-acts/ last visited 17th June 2021

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2. Clayton Antitrust Act

The Clayton Antitrust Act was enacted as an improvement of the Sherman Act of 1890.
American lawmaker Henry De Lamar Clayton of Alabama proposed the bill. He sought to
expand the list of outlawed anticompetitive practices to allow a level playing field for all
businesses. The bill was passed in June 1914 and signed into law in October 1914 by
President Woodrow Wilson.

Some of the anticompetitive practices that the Clayton Antitrust Act banned include price
discrimination, exclusive sales contracts, anti-competitive mergers, and local price cutting.
Unlike the Sherman Act, the Clayton Act made activities of trade unions legal. This meant
that practices such as picketing, boycotts, agricultural strikes, and peaceful demonstrations
would not be considered anticompetitive in a court of law. The legislation comprises a total
of 26 sections, with some sections being more popular than others.9

3. The Federal Trade Commission Act

The Federal Trade Commission Act of 1914 created the Federal Trade Commission (FTC)
and gave it concurrent power to enforce the Sherman and Clayton Acts through use of civil
remedies. Only the courts, acting in response to charges brought by the Department of Justice
(DOJ), have the power to impose the criminal penalties authorized by the antitrust acts.
Generally, FTC has the same powers as DOJ but it also has three unique powers—(1) the
power to enforce a statutory prohibition on unfair methods of competition, and unfair or
deceptive acts or practices; (2) the power to obtain a court order temporarily enjoining
conduct that violates the antitrust laws by meeting a standard that is less demanding than the
standard DOJ must meet to obtain such an order; and, (3) the power to conduct hearings to
decide whether a firm has violated the antitrust laws in-house before one of the FTC’s
Administrative Law Judges (ALJ) instead of asking a court to make that decision. The first
unique power has rarely been used. FTC uses the second and third powers with great
frequency but both are controversial. 10

After decades of controversy and uncertainty, a consensus developed among U.S.

enforcement agencies and federal courts about forty years ago that the antitrust laws should
be interpreted and implemented to maximize social welfare through application of principles

9
Ibid
10
Pierce, Richard J., Comparing the Competition Law Regimes of the United States and India (2017). GWU
Law School Public Law Research Paper No. 2017-27; Available at SSRN: http://ssrn.com/abstract=2951944

7
of microeconomics. As a result, they are implemented with the goal of protecting the
performance of competitive markets and not with the goal of protecting competitors. That
distinction has important implications. Thus, for instance, U.S. antitrust law recognizes that
so-called “predatory pricing” should not be discouraged because it is almost always a
symptom of a properly performing competitive market, and that price discrimination often
has beneficial effects on the performance of a market.11

THE INSTITUTIONS

1. The Department of Justice

The Assistant Attorney General for Antitrust is nominated by the President subject to
confirmation by the Senate. She can be removed at will by the President. She reports to the
Attorney General, who also is nominated by the President subject to confirmation by the
Senate. The Antitrust Division of the Department of Justice (DOJ) is staffed by a
combination of lawyers who have a good understanding of the principles of microeconomics
and economists who have a good understanding of antitrust law. Every investigation and
court proceeding are staffed by a combination of economically literate lawyers and legally
literate economists.

The Antitrust Division of DOJ conducts investigations to determine whether firms are
violating antitrust law. If DOJ makes such a determination, it has the power to ask a federal
district court to impose any of the civil or criminal remedies authorized by the antitrust
laws.12

2. The Federal Trade Commission

The Federal Trade Commission (FTC) is one of the primary government enforcement bodies
for antitrust violations in the United States. The Federal Trade Commission Act was enacted
in 1914 and created the FTC, which promotes competition and challenges anticompetitive
business practices in the marketplace.

The FTC, in conjunction with the U.S. Department of Justice Antitrust Division, enforces
federal antitrust laws in the United States. Its responsibilities include:

 Prosecuting companies for federal antitrust law violations

11
Ibid
12
Supra note 10

8
  Evaluating pre-merger notifications to determine the merger’s impact on competition
 Developing policy for continued protection against anticompetitive activity
 Educating consumers and businesses about current laws and regulations

The Supreme Court has said that all violations of the Sherman Act also violate the Federal
Trade Commission Act. This allows the FTC to bring cases under the Sherman Act as well as
the Federal Trade Commission Act. The FTC may investigate single companies or entire
industries for antitrust violations, and may bring federal lawsuits against entities judged to
have violated those laws.13

3. The Courts

Federal courts have the power to provide any of the civil or criminal remedies authorized by
the antitrust laws in response to a complaint filed by DOJ or FTC. They also have the power
to review any action that FTC has taken through use of its internal procedures to determine
whether the FTC action is consistent with the antitrust laws, supported by substantial
evidence and not arbitrary and capricious.

Federal judges are appointed for life and cannot be removed from office except by
impeachment for committing a “high crime or misdemeanour.” They are nominated by the
President subject to confirmation by the Senate. They are experienced lawyers who are
chosen because they are believed to be particularly good lawyers and are believed to have the
temperament and sense of justice critical to the role of a judge. They usually have no formal
training or experience in microeconomics, though they were exposed to some of the vast
literature that discusses the relationship between law and economics during law school.

The only staff support available to federal judges consists of two to four law clerks. Those
clerks typically are recent graduates of well-regarded law schools who performed particularly
well in their studies. Each usually serves as a law clerk for one year. Like federal judges, law
clerks usually have no formal training or experience in microeconomics but they were
exposed to some of the law and economics literature in law school.14

4. Juries

Defendants in civil antitrust cases that are adjudicated in courts are entitled by statute to a
trial by jury. Defendants in criminal cases are entitled to a trial by jury by both the antitrust
13
https://www.classlawgroup.com/antitrust/federal-laws/federal-trade-commission/ last visited 18th June 2021
14
Supra note 10

9
statutes and by the U.S Constitution. A jury consists of six to twelve people who are chosen
at random from the general population. They typically have no knowledge of either law or
economics.15

5. Private Parties

Private parties that have been injured by violations of antitrust laws can file a complaint in a
federal court and can seek any of the civil penalties authorized by the antitrust statutes. The
antitrust remedy that has the greatest deterrent effect on firms that are tempted to violate
antitrust law is the power of a court to award private parties who are victims of violations of
antitrust law three times the damages they have suffered as a result of the violations
committed by the defendants.

In 1977, the U.S. Supreme Court issued two opinions that made it much more difficult for
private parties to bring actions to enforce the antitrust laws by limiting the circumstances in
which firms have standing to bring an antitrust action. Those opinions had the effect of
reducing the number of complaints filed by private parties from a high of almost 14,000 per
year to the present level of about 400 per year. 16

6. State Attorney Generals

State Attorney Generals can sue firms for violating federal antitrust law on behalf of the
citizens of their states. They can ask a court to impose on the defendants any of the civil
penalties authorized by antitrust statutes.17

PROCEDURES USED TO IMPLEMENT AND ENFORCE

ANTITRUST LAWS IN US
The procedures used to implement and enforce antitrust law vary significantly depending on
the context in which implementation and enforcement takes place.

1. Adjudication of Criminal Cases

DOJ is the only institution that is authorized to ask a court to impose criminal penalties
against a firm for violating antitrust law. DOJ brings criminal cases only in the relatively few
cases in which it believes thatone or more firms intentionally violated antitrust law.

15
Supra note 10
16
Ibid
17
Ibid

10
The international vitamin price-fixing conspiracy DOJ uncovered in 1999 illustrates the
relatively rare circumstance in which DOJ seeks criminal penalties.10 All of the major
manufacturers of vitamins met regularly and secretly in various locations in many countries
to agree to fix prices at levels that had the effect of increasing the firms’ revenues by billions
of dollars each year. With the active cooperation of antitrust authorities in several other
countries, DOJ obtained evidence that was so powerful that each of the firms and individuals
in the firms that participated in the conspiracy agreed to accept serious criminal and civil
penalties without a court trial. In the rare situation in which DOJ seeks criminal penalties, and
the firms and individuals who are accused of criminal violations attempt to defend their
conduct in court, the defendants are entitled to a jury trial in which they enjoy all of the many
procedural safeguards to which all criminal defendants are entitled in the U.S.

2. Adjudication of Civil Cases

DOJ, FTC, a state Attorney General, or a private party with antitrust standing can seek civil
remedies against firms that they allege to have violated antitrust law by filing a complaint in a
federal court. The court then conducts a trial to determine whether the defendants violated
antitrust law and, if so, what remedies the government or private party is entitled to obtain. A
trial of that type typically takes many years and is extremely expensive. The liberal discovery
rules that apply to federal court trials typically create a situation in which the trial cannot
even begin for years after the complaint is filed. The trial itself then typically takes at least
months to complete because many of the disputed issues are complicated, and the parties
invariably present extensive expert testimony that is subject to lengthy cross-examination.

The decision of the federal district judge is then appealed to a circuit court, adding another 12
to 24 months to the decision-making process. If the defendants assert their right to a jury trial,
the trial is even longer and more expensive. In a non-jury trial, the judge can adopt time-
saving procedures like having the parties file all of their direct testimony in writing in
advance of the trial. The oral hearing then consists only of cross-examination. Those
procedures are not available in a jury trial. The jury must have the opportunity to listen to
each witness give her direct testimony in oral form.

11
3. Mergers and Acquisitions

We can divide these into horizontal, vertical and potential competition mergers.

Horizontal Mergers: When firms with dominant market shares prepare to enter a merger, the
FTC must decide whether the new entity will be able to exert monopolistic and anti-
competitive pressures on the remaining firms. For example, the company that makes Malibu
Rum and had an 8% market share of total rum sales, proposed buying the company that
makes Captain Morgan’s rums, which had a 33% of total sales to form a new company
holding 41% market share.

Meanwhile, the incumbent dominant firm held over 54% of sales. This would mean the
premium rum market would be composed of two competitors together responsible for over
95% of sales in total. The FTC challenged the merger on the grounds that the two remaining
companies could collude to raise prices and forced Malibu to divest its rum business.

Unilateral Effects. The FTC will often challenge mergers between rival firms that offer close
substitutes, on the grounds that the merger will eliminate beneficial competition and
innovation. In 2004, the FTC did just that, by challenging a merger between General Electric
and a rival firm, as the rival firm manufactured competitive non-destructive testing
equipment. In order to go forward with the merger, GE agreed to divest its non-destructive
testing equipment business.

Vertical Mergers. Mergers between buyers and sellers can improve cost savings and business
synergies, which can translate to competitive prices for consumers. But when the vertical
merger can have a negative effect on competition due to a competitor’s inability to access
supplies, the FTC may require certain provisions prior to the completion of the merger. For
example, Valero Energy had to divest certain businesses and form an informational firewall
when it acquired an ethanol terminator operator.

Potential Competition Mergers. Over the years, the FTC has challenged rampant pre-emptive
merger activity in the pharmaceutical industry between dominant firms and would-be or new
market entrants to facilitate competition and entry into the industry.18

18
https://www.investopedia.com/ask/answers/09/antitrust-law.asp last visited on 17th June 2021

12
4. Procedures to Announce Interpretations of Antitrust Law

The substantive standards in the Sherman and Clayton antitrust statutes are broad and vague.
The statutes prohibit contracts that unreasonably restrain trade, conduct that is considered to
be an inappropriate means of obtaining, retaining or attempting to obtain monopoly power,
and tying, requirements contracts, price discrimination, mergers and acquisitions when the
effects of any of those forms of conduct may be to substantially lessen competition or tend to
create a monopoly. Thus, it is particularly important that government officials, judges, and
firms have good ways of determining how those vague standards are interpreted by DOJ,
FTC, and the courts.

Except in the context of mergers and acquisitions, the only reliable source of interpretations
of antitrust law are contained in judicial opinions. In many cases, there are no recent opinions
that address patterns of fact similar to the pattern of facts that an enforcement agency, a court,
or a lawyer who is advising her clients with respect to the legality of some proposed form of
conduct can use as the basis for an opinion about the legality of the conduct at issue. In that
common situation, the court, agency or private attorney must make an educated guess with
respect to the legality of the conduct based on judicial opinions that address patterns of fact
that often differ in material ways from the pattern of facts that is before the agency, court, or
private attorney. In many situations, the court opinions that are relevant to the question at
issue are decades old and reflect methods of reasoning that courts have since abandoned.19

19
Supra note 10

13
THE INDIAN COMPETITION LAW REGIME
For 40 years, India had its own version of competition law, which was enacted through a
legislation called the Monopolies and Restrictive Trade Practices Act 1969 (MRTP Act). This
legislation, based on principles of a “command and control” economy, was designed to put in
place a regulatory regime in the country which did not allow concentration of economic
power in a few hands that was prejudicial to public interest and therefore prohibited any
monopolistic and restrictive trade practices. Post-economic liberalization in 1991, it became
imperative to put in place a competition law regime that was more responsive to the
economic realities of the nation and consistent with international practices. Consequently, in
2002, the Indian Parliament approved a comprehensive competition legislation — the
Competition Act 2002 (Competition Act), to regulate business practices in India so as to
prevent practices having an appreciable adverse effect on competition (AAEC) in India. The
Competition Act primarily seeks to regulate three types of conduct: anti-competitive
agreements, abuse of a dominant position and combinations (i.e., mergers, acquisitions and
amalgamations). The Competition Act, which was amended by the Competition
(Amendment) Act 2007, later came into force on 20 May 2009, when the Government of
India notified the provisions related to anti-competitive agreements and abuse of dominant
position of the Competition Act. It took three more years for the merger control provisions of
the Competition Act to be brought into force in June 2011.20

The Institutions
Five institutions play major roles in implementing Indian competition law.

1. The Competition Commission

The Competition Commission of India (CCI) consists of a Chair and 2 to 6 other members.
They are appointed by the Central Government based on the recommendations of a
committee consisting of the Chief Justice of India, the Secretary of the Ministry of Corporate
Affairs, the Secretary of the Ministry of Law and Justice and two reputed experts. The Chair
and the members serve a term of five years and they can be removed by the central
Government only for cause.

20
https://www.globalcompliancenews.com/antitrust-and-competition/antitrust-and-competition-in-india/ last
visited 17th June

14
The CCI has the power to determine that any practice violates the CA. It has the power to ban
any such practice and to ban it on an interim basis during the period in which it is
investigating the practice. It can impose civil penalties and criminal penalties of up to three
years in prison for violations of the CA. It has the same powers as a civil court and it has
exclusive jurisdiction over disputes that arise under the CA. It also has the power to
determine its own procedures.

2. The Director General

The Director General (DG) is the investigative arm of the CCI. The DG is appointed by the
Central Government. The DG has a duty to investigate any alleged violation of the CA or the
rules of the CCI when requested to do so by the CCI. At the end of his investigation, the DG
must issue a report that is not binding on the CCI. The DG has many of the powers of a civil
court, including the power to require the production of documents and the power to seize
documents. The DG has the power to issue orders, the violation of which can be punished by
the CCI.

3. The Competition Appellate Tribunal

The Competition Appellate Tribunal (COMPAT) has exclusive jurisdiction to hear appeals
from decisions of the CCI. It consists of a chair and two members who are appointed by the
Central Government from a list prepared by a selection committee. Members can be removed
only for cause by the Central Government in consultation with the Chief Justice of India.
COMPAT has the powers of a civil court and can issue its own rules of procedure.

4. The Supreme Court

The Supreme Court of India has exclusive jurisdiction to hear appeals from decisions of
COMPAT.
5. Private Parties Private
parties can provide information that can form the basis for an inquiry by the CCI and can

apply for compensation from the COMSAT based on the findings of the CCI or the orders of

COMSAT. Notably, however, private parties can not actually initiate proceedings to

determine whether a firm has violated the Competition Act.21

21
Supra note 10

15
ENFORCEMENT OF COMPETITION LAW IN INDIA
Anti-competitive agreements
The Competition Act seeks to regulate two kinds of agreements: (a) anti-competitive
agreements between/amongst competitors (horizontal agreements) and (b) anti-competitive
agreements between enterprises or persons at different stages or levels of the production
chain (vertical agreements). Under the Competition Act, certain kinds of horizontal
agreements (described in the next subsection) are presumed to cause an AAEC in India. The
presumption does not mean that all alleged horizontal agreements are necessarily anti-
competitive; it remains open to the parties entering into such an agreement to provide
evidence that their agreement does not result in an AAEC and rebut the presumption. On the
other hand, such presumption does not apply to vertical agreements. Vertical agreements are
usually permitted unless it is established that they cause, or are likely to cause, an AAEC
within India. The Competition Act provides an exhaustive list of horizontal agreements that
are presumed to cause an AAEC in India, as well as an inclusive list of vertical agreements
that may be prohibited depending upon their effect on conditions of competition within
India.22

Abuse of dominant position

The Competition Act prohibits an enterprise, which enjoys a “dominant position” in a

relevant market from abusing its position of dominance. Under the Competition Act,
“dominant position” is defined as a position of strength, enjoyed by an enterprise, in the
relevant market in India which (a) enables it to operate independently of competitive forces
prevailing in the relevant market or (b) to affect its competitors or consumers or the relevant
market in its favour. The Competition Act does not specify any single criterion for
determining whether an enterprise or group enjoys a dominant position in a relevant market;
instead, it provides a list of several factors, which may be considered by the CCI when
determining such dominance. These factors include market share, size and resources of an
enterprise, size and importance of competitors, market structure and size of market, and
countervailing buying power. The Competition Act provides an exhaustive list of practices,
which, when carried out by a dominant enterprise or group, would constitute an abuse of
dominance and any behaviour by a dominant firm which falls within the scope of such
conduct is likely to be prohibited. These include:

22
Supra note 20

16
  Imposing unfair or discriminatory conditions on sale or purchase of goods/services,
including predatory pricing;
 limiting or restricting:
 production of goods or provision of services of a market; or
 technical or scientific development relating to goods or services to the prejudice of
consumers;
 indulging in practice or practices resulting in denial of market access, in any manner;
 making the conclusion of contracts subject to acceptance by other parties of
supplementary obligations, which, by their nature according to commercial usage,
have no connection with the subject of such contracts; and
 using one’s dominant position in one relevant market to enter into or protect another.

The prohibition on imposing “unfair” or “discriminatory” pricing, however, does not apply to
dominant enterprises when such conduct is employed to meet competition. Interestingly, the
terms “unfair” or “discriminatory” have not been defined under the Competition Act. The
CCI has so far issued decisions in abuse of dominance cases pertaining to sectors such as the
stock exchange, real estate, specialty glass, sports regulation, etc. One of the interesting
trends in the CCI’s enforcement pertains to the determination of the “relevant market” in
investigations into potential abuse of dominance. So far, the CCI seems inclined to define the
relevant market in the narrowest possible way. For instance, in the DLF decision, when
assessing alleged abuse by DLF (a real estate company), the CCI adopted a fairly narrow
definition of the relevant market. The primary question was whether “high-end” residential
apartments in a small geographical region (Gurgaon) would constitute a relevant market. In
its analysis, the CCI distinguished between the markets for high-end and low-end apartments
and found that these form two separate product markets, as consumer preferences for each
were different. Similarly, in the recent auto-parts decision, the CCI considered each brand of
cars to qualify as a separate relevant market for the supply of spare parts and after-sales
services. The language used in section 4 (1) of the Competition Act seems to suggest that
abuse of a dominant position is subject to a per se prohibition. In other words, the CCI is not
required to carry out a market effect analysis for abuse of dominance cases. Nevertheless,
from a review of the decisions of the CCI, it appears that the CCI is inclined to analyze
market effects as well while dealing with abuse of dominance cases.23

23
Supra note 20

17
Combination regulation (Section 5 and 6)
Combination of companies means when 2 companies come together because of a merger,
acquisition or amalgamation. Now, the CCI isn’t very fond of combinations that come into
existence to restrict competition. So, CCI has made it mandatory for combinations to notify
them before the union, for their approval. Not all combinations have to do this, and only
those whose assets and turnover exceed the monetary threshold specified in the act have to do
it. CCI will investigate the combination and then may or may not approve it.24

Penalties and liabilities

The Competition Act, unlike its predecessor, the MRTP Act, prescribes heavy penalties for
the violation of its provisions. In the case of anti-competitive agreements and abuse of
dominance, the CCI may impose fines of up to 10 percent of the average turnover for the last
three preceding financial years upon each of such persons or enterprises that are parties to
such agreements or abuse. In the case of cartels, the CCI may impose the higher of the
amount equal to three times the total profits for each year of the continuance of such
agreement or 10 percent of turnover for each year of the continuance of the agreement. The
CCI may also require parties to an anti-competitive agreement or enterprises abusing their
dominant position to “cease and desist” from continuing with such agreements or practices.
The CCI may also sanction modification of agreements, which are found to be anti-
competitive. In the case of abuse of dominance, the CCI has the power to order the division
of the dominant enterprise. During the last few years, the CCI has sent out a strong message
to the industry that it will not hesitate to use its considerable fining powers available under
the Competition Act, if the gravity and the nature of infringement so demands. The CCI has
imposed penalties up to the highest permissible level of 10 percent of the average annual
turnover of the past three years, including a cartel case involving seven regional film bodies
for forming a cartel. As indicated earlier, in another cartel case involving 11 cement
companies, the CCI fined companies 50 percent of the profit made during the cartel period.
One issue that remains unclear is how the CCI is likely to determine the quantum of fine that
may be imposed on parties for contravening the provisions of the Competition Act. While
most jurisdictions across the world, such as the European Union, consider the degree of
involvement of a party, as well as the mitigating factors at the time, to determine the quantum
of fine, the CCI has been silent in its orders till date in this regard. However, news reports
have indicated that the CCI may soon come out with regulations/guidelines on the method of
24
https://www.indialawoffices.com/legal-articles/enforcement-of-competition-law-in-india last visited 17th June

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quantifying fines in light of the gravity of the infringement. With regard to combinations, if
the CCI is of the opinion that the combination will cause or is likely to cause an AAEC
within India, the CCI may either pass an order prohibiting the proposed combination or may
permit the combination subject to modifications in the scheme of merger, acquisition or
amalgamation. Failure to notify a combination to the Commission can result in a fine of up to
1 percent of the combined value of the turnover or the assets of the enterprises involved,
whichever is higher. The CCI has exercised such powers in a number of instances. For
belated notification, the CCI has imposed penalties up to INR100 million in a transaction
involving Titan International and Titan Europe. Further, in cases where parties have
consummated (whole or part of) a transaction, prior to receiving approval from the CCI (gun-
jumping), the CCI has, further to its powers under the Competition Act, imposed penalties in
two cases amounting to INR10 million and INR30 million, respectively (significantly less
than the maximum amount it is empowered to impose). Till date the CCI has not exercised its
power to impose the highest allowable penalty under the Competition Act. Further, non-
compliance with orders passed by the CCI or directions of the DG may also attract a penalty
of INR100,000 for each day of non-compliance subject to a maximum of INR10 million.
Failure to pay the fine could result in imprisonment for up to a period of three years, or a fine
of up to INR250 million. The CCI had for the first time imposed a fine of INR10 million on
Kingfisher Airlines Limited (Kingfisher) for not furnishing information it sought during the
ongoing investigation into Kingfisher’s proposed strategic agreement with Jet Airways.
Though the fine was later reduced to INR7.25 million by the COMPAT, this particular CCI
order sent out a strong message to the industry that the CCI may use its power to impose fines
for non-compliance with CCI/DG’s direction.25

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Supra note 20

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COMPARISON & SUGGESTIONS
This is an ideal time for India to look at the rich history of the U.S. competition law regime
for lessons on how to construct a competition law regime in India that will serve the nation
well. The U.S. has made many serious mistakes in its 126 years of efforts to craft a good
competition law regime. The U.S. has corrected many of its past mistakes, but the U.S.
competition regime is still far from ideal, as section II of this article explains. The Transcript
of the 2015 Symposium on Indian Competition Law describes well-informed debates with
respect to all of the most important problems that confront the other major competition law
regimes of the world. The debates drew heavily on the academic literature and the
experiences of the U.S. institutions that implement competition law. Many of the issues
addressed at the symposium are challenging, but the sophisticated nature of the debates
suggests that India has as good a chance as the U.S. of addressing the issues effectively. India
can learn from the trial-and-error method the U.S. has used to try to create a good
competition law regime.

By studying the history of U.S. competition law, Indian scholars and government officials
can avoid the mistakes the U.S. has made and can create a competition law regime that
functions better than the U.S. competition law regime. There is a saying among law reform
advocates in the U.S.: “take the best and leave the rest.” India should take that approach in its
efforts to use the U.S. competition law regime as part of its basis to finish the task of creating
a competition law regime for India.

The basic elements of the Indian competition law regime are excellent. The statutes are
drafted in ways that recognize the need for the institutions to decide when a particular type of
conduct is likely to produce bad effects on the performance of a market and when that same
type of conduct is unlikely to produce bad effects and has instead the potential to produce
socially desirable results. The institutions also seem well suited to the task.

The basic elements of the Indian competition law regime are better than their U.S.
counterparts in several important ways. First, unlike the FTC and DOJ, the CCI has the power
to issue substantive rules to implement the CA. Second, unlike the U.S., India has avoided the
risk that private parties will create bad legal precedents by litigating cases before courts of
general jurisdiction whose judges lack the expertise required to consider critically the often-
implausible theories the private parties urge the courts to adopt. India has accomplished that

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both by conferring exclusive jurisdiction on institutions with appropriate expertise and by
declining to allow private parties to initiate competition law proceedings. Third, the Indian
Competition Commission has the power to determine its own rules of procedure. Used
wisely, that power allows the Commission to adopt procedures that are adequate to the task
but do not produce the interminable delays that plague the decision-making processes of the
FTC and U.S. courts.

The Indian Supreme Court has issued two opinions that establish basic ground rules
applicable to the Competition Commission. In Rangi International Ltd. v. Nova Scotia Bank
and Others (2013) 7 Supreme Court Cases 160, the Court held that the Commission must
state reasons to support its actions. That requirement is critical to the success of any agency-
administered legal regime. Courts, the Prime Minister, Parliament, and the public must have a
means of understanding why the Commission acted as it did in each case.

In Competition Commission of India v. Steel Authority of India Limited and Another (2010)
10 Supreme Court Cases 744, the Court held that all proceedings before the Commission
must be completed “most expeditiously” and in a period of time even shorter than the
demanding decisional deadlines stated in the applicable statute. The Commission may find
this mandate difficult, or impossible, to implement, and the Supreme Court may experience
great difficulty enforcing the mandate. That has been the U.S. experience.

U.S. courts lack the power to require U.S. agencies to act expeditiously. U.S. courts have the
power, and the duty, to enforce statutory deadlines on agency actions, but they have not been
able to accomplish that task effectively. The U.S Congress imposes hundreds of unrealistic
statutory deadlines on agency actions, requires agencies to use procedures that are extremely
time-consuming, and then refuses to provide agencies with the resources required to
accomplish more than a modest fraction of the many demanding tasks they are required to
perform. The disappointing results are described in chapter 12 of my Treatise on
Administrative Law and in an article by Yale Law Professor Nicholas Parrillo that will be
published in the next issue of Harvard Law Review.

India can complete the process of creating an excellent competition law regime by taking just
a few important steps. First, and most important, India needs to pay a lot of attention to
appropriate staffing of the institutions. The U.S. improved its competition law regime
dramatically when it added large numbers of talented economists to the FTC Bureau of

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Competition and the DOJ Antitrust Division and gave economists a major voice in the
process of shaping and applying competition law.

Second, India can avoid the crippling delays in the U.S. competition law regime by adopting
rules of procedure that recognize that paper hearings are at least as good as oral evidentiary
hearings for purposes of resolving the typical disputes that arise in proceedings before
competition law tribunals.

Third, India can make good use of the CCI’s power to issue rules by issuing rules that
describe in detail the way the CCI makes decisions about whether a particular type of conduct
violates the CA. The FTC/DOJ merger guidelines are a good illustration of the kinds of rules
and guidelines that can be extremely valuable in allowing all members of the public to
understand what the CCI is doing and to predict the manner in which CCI will evaluate a
particular form of conduct in a variety of factual situations.

Fourth, India should consider amending the CA to allow COMPAT to award treble damages
to private parties who have been injured by violations of the CA as determined by the CCI.
The treble damage remedy in U.S. competition law provides a powerful deterrent to firms
that are tempted to violate the competition laws.

CONCLUSION
After a clear perusal of all the laws in various jurisdictions we can conclude that the
competition laws of India and the Antitrust Laws of the US have some common features. In
entirety the basic principles governing the competition laws are almost similar and have been
included in all the legislatures. However, all the laws have some different provision to
implement these particulars principles. After analysing all the laws one can conclude that
these laws implement the basic principles namely, anti-competitive agreements, abuse of
dominant position and combinations in different ways.

While the basic principles of competition law remain the same the objectives or the results
cannot be the same for all jurisdictions. In essence, a progressive realisation of competition
policy goals would be the answer to an effective competition law regime in developing
countries. While the implementation of competition law even at the early stages of economic
development is not bad per se its blind implementation following the path of the developed
countries can kill its very objectives. Thus, competition law is a complex creation of
lawmakers which the Indian Government and the Competition Commission should take time
to understand in light of the special needs and requirements of the Indian economy and
implement it accordingly.

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BIBLIOGRAPHY
1. D.P. Mittal, Competition Law and Practice, (2nd ed. 2008)
2. Pierce, Richard J., Comparing the Competition Law Regimes of the United States and
India (2017). GWU Law School Public Law Research Paper; Available at SSRN:
http://ssrn.com/abstract=2951944
3. https://corporatefinanceinstitute.com/resources/knowledge/finance/antitrust-acts/
4. https://www.classlawgroup.com/antitrust/federal-laws/federal-trade-commission/
5. https://www.investopedia.com/ask/answers/09/antitrust-law.asp
6.https://www.globalcompliancenews.com/antitrust-and-competition/antitrust-and
competition-in-india/
7. https://www.indialawoffices.com/legal-articles/enforcement-of-competition-law-in-india

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