The Competition Act, 2002 is a specific Act of the Indian Parliament that governs commercial competition in India, aiming to prevent practices that have an appreciable adverse effect on competition (AAEC). It was passed in January 2003 and was a direct result of India's economic liberalization in 1991, which rendered the previous law, the Monopolies and Restrictive Trade Practices Act (MRTP Act), 1969, outdated. The MRTP Act, rooted in a socialist-era command economy, focused on curbing monopolies and the concentration of economic power, while the Competition Act shifted the focus to promoting and sustaining competition in markets.
The Act works by prohibiting three main types of anti-competitive conduct, which are enforced by the Competition Commission of India (CCI), established in October 2003. First, Section 3 prohibits anti-competitive agreements, such as cartels, price-fixing, and bid-rigging. Second, Section 4 prohibits the abuse of a dominant position by an enterprise. Third, Sections 5 and 6 regulate "Combinations," which are mergers, acquisitions, and amalgamations of a certain size, to ensure they do not cause an AAEC. The substantive provisions of Sections 3 and 4 came into effect on May 20, 2009, and the merger control provisions of Sections 5 and 6 on June 1, 2011.
The Act is connected to the Competition Commission of India (CCI), the quasi-judicial body responsible for its implementation, and the National Company Law Appellate Tribunal (NCLAT), which replaced the Competition Appellate Tribunal (COMPAT) in 2017 as the appellate authority. The Act has been amended multiple times, most recently by the Competition (Amendment) Act, 2023, which received the President's assent on April 11, 2023. Key changes introduced by the 2023 Amendment include the introduction of a Deal Value Threshold for combinations, requiring prior CCI approval for transactions valued over INR 2,000 crore where the target has substantial business operations in India. The Amendment also shortened the maximum period for the CCI's review of combinations from 210 days to 150 days and introduced provisions for "settlement" and "commitment" to reduce litigation.