Article 102 requires a dominant position in a substantial part of the Union, but Chapter II does not require that a dominant position be exercised in a substantial part of the United Kingdom, which means that, at least in theory, a dominant position could be considered to exist in a relatively small geographical area of the United Kingdom. The history of competition law dates back to the Roman Empire. The business practices of market traders, guilds and governments have always been tested and sometimes punished with severe penalties. Since the 20th century, competition law has become global. [7] The two most important and influential competition regulatory systems are U.S. antitrust law and European Union competition law. National and regional competition authorities around the world have formed international support and enforcement networks. Article 19(1) of the Act provides that the ICC may investigate any alleged breach of Article 3(1) of the Act, alone or after receiving information from a person, consumer or his trade association or association, after payment of fees and in the prescribed manner. The IHK may also take action if the central government or a state government or legal authority refers to it. CCI will only conduct the investigation if there is prima facie evidence and will then request the Director-General to investigate the case. In cases where, following an application, the CCI determines that the agreement is anti-competitive and that it includes AAEC, it may issue some or all of the following orders, with the exception of any interim injunction it may issue under section 33 of the Act: upon receipt of the investigation report, the CCI will forward it to the parties concerned and to the legal authority, who solicit their objections.
After reviewing the objections received, CCI may, if necessary, adopt the DG`s report or request the DG to continue the investigations or conduct its own investigations. The ICC will consult with all parties involved and determine whether this is an anti-competitive agreement or an abuse of dominance, or both, and issue appropriate orders. Anti-competitive agreements are agreements between competitors aimed at preventing, restricting or distorting competition. Section 34 of the Competition Act prohibits anti-competitive agreements, decisions and practices. According to Mill, there has been a shift in economic theory that has emphasized a more precise and theoretical model of competition. A simple neoclassical model of free markets states that the production and distribution of goods and services in competitive free markets maximizes social well-being. This model assumes that new companies can freely enter markets and compete with existing companies, or to use legal language, there are no barriers to entry. By this term, economists mean something very specific that competitive free markets offer allocative, productive and dynamic efficiency. Allocative efficiency, also known as Pareto efficiency, according to Italian economist Vilfredo Pareto, means that in the long run, the resources of an economy go to those who are willing and able to pay for it. Because rational producers will continue to produce and sell and buyers will continue to buy until the last possible marginal unit of production – or rational producers will reduce their production to the margin at which buyers buy the same quantity as that produced – there is no waste, the greater number of desires of the greatest number of people will be satisfied and the profit will be perfected, because resources can no longer be redistributed to make someone better.
without aggravating anyone else; The company has achieved allocative efficiency. Productive efficiency simply means that society does as much as possible. Free markets are meant to reward those who work hard, and therefore those who push society`s resources to the limit of their possible production. [61] Dynamic efficiency refers to the idea that companies that are constantly competing must research, create and innovate in order to maintain their share of consumers. This goes back to the idea of the Austro-American political scientist Joseph Schumpeter that an “eternal storm of creative destruction” repeatedly sweeps away capitalist economies and excludes entrepreneurship at the mercy of the market. [62] This led Schumpeter to argue that monopolies did not need to be broken (as with Standard Oil) because the next storm of economic innovation would do the same. The Sherman Act of 1890 was intended to prohibit the restriction of competition by large corporations that worked with rivals to fix production, prices, and market shares, first through pools and later through trusts. Trusts first appeared in U.S. railroads, where the capital needs of railroad construction excluded competitive services in sparsely populated areas at the time. This trust has enabled the railways to discriminate against the tariffs and services imposed on consumers and businesses and to destroy potential competitors. Different trusts could be dominant in different industries. The Standard Oil Company Trust controlled several markets in the 1880s, including the heating oil, lead, and whiskey market.
[31] Many citizens became sufficiently aware and publicly concerned about how trusts were negatively affecting them that the law became a priority for both major parties. One of the main concerns of this law is that competitive markets themselves should provide the primary regulation of prices, products, interest and profits. Instead, the law prohibited anti-competitive practices and codified the common law restrictive business doctrine. [32] Professor Rudolph Peritz argued that competition law in the United States has evolved around two sometimes contradictory concepts of competition: first, that of individual liberty, free from state interference, and second, a fair competitive environment free from excessive economic power. Since the passage of the Sherman Act, the application of competition law has been based on various economic theories adopted by the government. [33] A practical way to promote workers` understanding of competition law is for an enterprise to actively develop and implement a competition law compliance policy and program specifically tailored to that enterprise, as well as to train staff and implement other risk management and mitigation procedures. Not only does this minimise the risk of not being compliant at all, but if a company is under investigation for anti-competitive behaviour, evidence of competition policy can be taken into account by the CMA or the European Commission and lead to a reduction in the fine. Competition law is increasingly linked to intellectual property such as copyright, trademarks, patents, industrial design rights and, in some jurisdictions, trade secrets. [105] It is considered that the promotion of innovation through the enforcement of intellectual property rights can promote and limit competitiveness.
The question depends on whether it is legal to acquire a monopoly by accumulating intellectual property rights. In this case, the judgment must decide between preference for intellectual property rights or competitiveness: during the investigation, the ICC may issue an interim injunction preventing a party from pursuing anti-competitive agreements or abuse of dominant position. In the event of an anti-competitive agreement or abuse of a dominant position, CCIs may impose a penalty of up to 10% of the average turnover of companies that have engaged in such practices in the last 3 previous financial years. In the case of a cartel, the CCI may impose on each member of the cartel a penalty equal to three times higher than its profit for each year of the continuation of such an agreement or up to 10 % of its turnover for each year of the continuation of that agreement, whichever is greater. A group of economists and lawyers, largely associated with the University of Chicago, advocates an approach to competition law guided by the thesis that certain actions originally considered anti-competitive could in fact promote competition. [66] The U.S. Supreme Court has used the Chicago School approach in several recent cases. [67] A view of the Chicago School`s antitrust approach can be found in the books Antitrust Law[68] and Economic Analysis of Law by Judge Richard Posner of the U.S. Circuit Court of Appeals. [69] When companies have significant market shares, consumers run the risk of paying higher prices and receiving products of lower quality than competitive markets.
However, the existence of a very high market share does not always mean that consumers pay excessive prices, as the risk of new entrants can slow down the price increases of a company with a high market share. Competition law does not make mere monopoly illegal, but abuses the power that a monopoly can confer, for example through exclusionary practices. The law aims to prevent the practices of parties who have AAEC in India. This can guarantee free trade and would protect the interests of all parties, including consumers. However, such an objective would only be achieved if the managing parties followed the principles set out in the legislation. It is important that the parties, when doing business in India, bear in mind the maintenance of anti-competitive elements in the agreements between them. Undertakings should be proactive and diligent in identifying existing anti-competitive elements in their current agreements […].