As a first blush in the post-reforms regime, the Government of India felt necessary to provide for effective machinery in the form of Competition Commission of India to regulate acquisition of large businesses so as to ensure no one corporate player assumes dominant role; and to prohibit use of such dominant position to restrict competition which activities would be prejudicial to public interest. In order to regulate such emergent situation, the Government of India brought-in Competition Act in the year 2002 substituting the MRTP Act, 1984.

The dominant features of this Act are to prohibit certain Agreements, abuse of dominant position and Regulation of combinations, such as:

certain agreements between enterprises or association of enterprises or person or association of persons in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services which causes or is likely to cause an appreciable adverse effect on competition within India, which also :

directly or indirectly determines purchase or sale prices,

limits or controls production, supply, markets, technical development, investment or provision of services,

shares the market or source of production or provision of services by way of allocation of area of market, type of goods or services or number of customers in the market,

directly or indirectly resulting in bid rigging or collusive bidding.

Prohibit agreements amongst enterprises or persons for tie-in arrangement; exclusive supply agreement; exclusive distribution agreement; refusal to deal; and resale price maintenance.

Prohibit abuse of dominant position whereby an enterprise directly or indirectly, imposes unfair or discriminatory condition in purchase or sale of goods or services or price in purchase or sale of goods of service; limits or restricts production of goods or provision of services or market therefor or technical or scientific development; or indulges in practice resulting in denial of market access; use of its dominant position in one relevant market to enter into or protect other relevant market.

Prohibit acquisition of one or more enterprises by one or more persons or merger or amalgamation of enterprises resulting in acquisition, control of shares or voting rights or assets to the value of more than Rs 1000 Crores or turnover of more than Rs 3000 Crores in India; OR in India or outside India, in aggregate the assets of the value of more than US$ 500M or turnover of more than US$ 500M to a similar parameters to the maximum of to the tune of Rs 4000 Crores or turn over of more than Rs 12,000 Crores or in India or outside India to US$ 2bn or turnover more than US$ 6bn.

Many provisions of this Act have still not been made effective inasmuch as establishment of the regulator namely Competition Commission of India is yet to be done. The Government intends to transfer the powers and authority of MRTP Commission in the matter of restrictive and unfair trade practices to the already established Consumer Disputes Redressal Fora.

The Government is, however, yet to issue requisite notifications in this regard to make effective the provisions of this Act.