pri Background of the Competition Act Background of the Competition Act

In Easter days the leading companies plays a dominant position to carry out the business it leads to blocking of many competitors inside the Indian Market. In Order to monitor the restrictive trade practices in India Law has been passes as MRTP Act ( Monopoly Restrictive Trade Practise) to avoid the Monopoly trade practice in India.

Competition law introduced to balance the best trade practices Between Corporates within India. One of the important elements of law was establishment of the Competition Commission of India. The Competition Law framework to control the Dominance Position, Holistic Take Over, Merger& Acquisitions.

Competition Law Introduces to Control the following:

> Maximization of Consumer and protect their interest.

> Regulatory Nature

> Concentration in Market

> Target the Monopolies or Dominant Players

> Ensure freedom of trade carried on by other participants.

The Competition Act was amended in 2007 in view of economic developments and liberalization which required the Indian economy to allow domestic as well as international competition in the market and the said amendment provides that Competition Commission of India is function as a regulator for preventing and regulating anti-competitive practices in the Country in accordance with the Act.

The Act was amended again in 2009, in accordance with the said amendment, the Competition Commission of India and the Competition Appelate Tribunal have been established. The provisions of the Competition Act relating to anti-competitive agreements and abuse of dominant position were notified on May 20, 2009.

Combination Regulations, 2011 introduced and explained “Combinations”, which is emphasize on following aspects:

  • Regular acquisition
  • Acquisition of Person
  • Regular Merger& Acquisition

The above three aspects plays a Vital role in Combination of entities.

> Regular Acquisition: When a Company Shares, Voting Right, Assets were acquired were known fall into Combination.

> Acquisition Of Person: When a Person acquires Control over the Enterprises which engage in Competition.

    • If a person able to control the affairs of the company.
    • Defacto Control

> Regular Merger & Acquisition: When a Regular Merger& Acquisition quantitative threshold need to consider to ensure the Combination is Regular. The threshold Limit applies to International Combination outside Jurisdiction.

Threshold Limit Under Sec 6 as per the Latest Notification 2016.

In India
Assets (INR) Turnover (INR)
Individual 20,000 million 60,000 million
Group 80,000 million 240,000 million
In India and Outside India
Assets Turnover
Total (USD) Min. aggregate in India (INR) Total (USD) Min. aggregate in India (INR)
Individual 1,000 million 10,000 million 3,000 million 30,000 million
Group 4,000 million 10,000 million 12,000 million 30,000 million

Upon reaching the threshold the Combination has to seek approval /Notify from Competition Commissions Board by submitting the form within 30 days. The date of final board meeting to finalize the decision of Combination proposal notify the Commission.

The Competition commission in receipt of the notification or form the board will assess the details with various parameters. The commission or director general will response the application within 210 days and assess the unfair trade practices if any, and validate the Combinations.

There few exceptions for the transaction no need to seek Competition commission approval.

Role of Company Secretary :

The Competition Act plays a vital role in Horizontal, Vertical, Coglomarte Mergers and Acquisitions. In the recent amendment of the Competition Act, 2019, describes Combination and impacts within India and Outside India.

Company Secretary having a certificate of practice can appear before Competition Commission of India and ensuring all compliances under the Act. Company Secretary also plays an important role as an advisor to the Company to comply with the provisions of the Competition Act. Company Secretary is the best suited professional to be appointed as “Compliance Officer” under the Competition Compliance Program. Company Secretary plays vital and significant role when the company proposes for Merger and Amalgamation, Acquisition and Takeover.  The role of the Company Secretary is also very important in a foreign Company operates business in India.

Role of Company Secretary being in pivotal position to prevent any participation of Competition Commission of India to facilitate ease of doing business that will facilitate deciding in favour of investing in India as compared investments in other developing countries.

If the Company regular in compliances than regulatory watch of Government by monitoring routines of organization and results in absence of litigations by or against the Target Company.


Any business operated in India, they must have the knowledge of the various laws and related rules and regulations and also the implementation of the same. Competition in the global market is a huge challenge in current situation and needs to be dealt with very carefully. Here, it is very important to all businesses to realize that although competition brings prosperity, thriving and striving, shall be a continuous process.

The Competition Act 2002 is a very comprehensive law and the intent of the legislation is “To promote fair competition, catch up with the global economy, safeguard the interest of the consumers and ensure a stable market for India.”


Disclaimer: The content of this write up is intended to provide a general guide to the subject matter.

This Article has been written by Suresh Kumar. He is Corporate Lawyer and Company Secretary in Chennai and has 17+ years of experience in the area of Finance, Compliance, AML, Company Secretary & Legal and Arbitration. He can reachable @9884034993,email

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July 2021