Impact of Competition Law on Business Enterprises

Abstract

Modern Competition Law has replaced the erstwhile Monopolistic and Restrictive Trade Practices Act 1969 and ushered in a new era of sophisticated interpretation and application of the law based on economic evidence and legal reasoning. The competition act is largely inspired by the EU regime. This is reflected not only in the text of the legislation but also from the language, logic and approach adopted by the competition authorities, while administering the law. As the competition law enters into 15th years of its implementation in India, it is imperative to take stock of its impact on Indian economy in general and companies in particular. All these years, competition authority had evolved sophisticated approach to cover more and more the instances of anti-competitive behaviour committed by the enterprises. Supreme Court has also contributed to the effective and legalistic application of the provisions by providing clarity on various aspects such as who is or isn’t an enterprise, demarcation of powers of competition authority on the one hand and sectoral regulators on the other, turnover to be taken as relevant turnover on the basis of which penalty is calculated etc. The present article seeks to analyze the leading judgments handed down by the competition authorities and the Supreme Court and the survey findings, to understand (i) the level of awareness about the requirements of competition law among enterprises; (ii) to what extent companies have changed their behaviour and approach to the business, in compliance with the competition law; (iii) how and to what extent economic evidence have been relied upon by the Competition authorities, so as to balance the requirement of law and business. Keywords: competition law, regulators, economic evidence, abuse of dominance, anti-competitive behaviour