Indian businesses must arm themselves with comprehensive compliance mechanisms to guard against threats posed by the country’s new competition law
The advent of the Competition Act, 2002, marks a paradigm shift for businesses in India and has required them to rethink many of their prevailing ideas and practices.
The main objective of the law is to maintain competition in Indian industries by preventing or punishing practices that may have an appreciable adverse effect on it. The prohibitions under sections 3 and 4 of the Competition Act, which respectively deal with anti-competitive agreements and the abuse of dominant position, have been in force since 20 May 2009. As the enforcing authority, the Competition Commission of India (CCI) has been actively pursuing inquiries into such cases. The provisions for regulating combinations, contained in sections 5 and 6, are expected to come into force soon, which will bring merger transactions affecting Indian markets under the CCI’s scrutiny as well.
Competition law regulates a wide range of business conduct, ranging from day-to-day activities such as setting prices, selecting trading and business partners, entering into distribution agreements and conducting relations with rival businesses, to longer-term strategies such as those surrounding mergers and acquisitions.
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Vinod Dhall is the head of Dhall Law Chambers in India and former head of the Competition Commission of India. He may be contacted at: vinod.dhall@dhall-lawchambers.com. Sonam Mathur is an associate lawyer at Dhall Law Chambers. She may be contacted at: sonam.mathur@dhall-lawchambers.com.
