In 2002, the Parliament of India enacted the Competition Act, replacing the archaic Monopoly and Restrictive Trade Practices Act (popularly referred to as the MRTP Act) of 1969. The primary goal of the Act, as stated in the preamble, is 'keeping in view of the economic development of the country … to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect interests of consumers and to ensure freedom of trade'.

Economic theory clearly shows that the total proit in an industry characterized by monopoly is greater than the combined proit of all irms in the industry in case the industry is competitive in nature. At the same time, due to higher prices, consumer welfare suffers under monopoly when compared to a more competitive setup. To me, this is the fundamental theoretical premise behind the competition law.

The Act intends to curb any activity that could harm consumer welfare or freedom of any individual (or individuals) to freely and fairly compete in the market. Therefore, the three broad areas for the Competition Act to look at are: (a) cartelizing behaviour of the irms, (b) abuse of dominant position, and (c) mergers and acquisition.

As Fox Eleanor M. puts it "Even within a particular national system, the goals of competition law may evolve and transmogrify, often depending upon the state of industrialisation of the economy, the strength of the political democracy, the power of the judiciary and the bureaucrats, and the exposure of the domestic firms to global competition."

Competition policy seeks to prevent companies from reducing the efficiency of market mechanisms. It is aimed at keeping firms from forming cartels or monopolies and from abusing a dominant market position and at ensuring that mergers and acquisitions and subjected to proper scrutiny. These practices often limit competition and take away incentives to excel, innovate, reduce prices and improve customer service. Anti-competitive practices may also act as trade barriers that distort trade and investment flows.

History
Competition laws have a long history. Some authors claim that the first laws against anti-competitive practices date as far back as the Middle Ages, when cartels, the so-called guilds, were formed in most European cities. The first prohibition of contracts that restrain trade can be traced to English common law of the early fifteenth century.

The first modern body of competition law can be traced back to the enactment of the Sherman Act of 1890 and the Clayton Act of 1914 in the United States. In the second half of the nineteenth century, the United States and Canada experienced a turbulent process of economic change. Railroads and steamships expanded the scope of many markets, and managerial innovations led to larger corporations and trusts.

At the same time, agricultural prices fell as a consequence of monetary stringency associated with the gold standard. Farmers and small business owners discovered that they had to pay high prices for the inputs charged by the trusts while receiving lower prices for their own outputs. They subsequently lobbied for legislation to limit the trusts' power. Their movement was successful and led to the adoption of competition laws in Canada (1889) and the United States (1890).

India adopted its first competition law way back in 1969 in the form of Monopolies and Restrictive Trade Practices Act (MRTP). The Monopolies and Restrictive Trade Practices Bill was introduced in the Parliament in the year 1967 and the same was referred to the Joint Select Committee. The MRTP Act, 1969 came into force, with effect from, 1 June, 1970.

However, with the changing nature of business, market, economy on the whole within and outside India, there was felt a necessity to replace the obsolete law by the new competition law and hence the MRTP Act was replaced with the Competition Act of 2002.

The enactment of MRTP Act, 1969 was based on the socio – economic philosophy enshrined in the Directive Principles of State Policy contained in the Constitution of India. The MRTP Act, 1969 underwent amendments in 1974, 1980, 1982, 1984, 1986, 1988 and 1991. The amendments introduced in the year 1982 and 1984 were based on the recommendations of the Sachar Committee, which was constituted by the Govt. of India under the Chairmanship of Justice Rajinder Sachar in the year 1977.

The Sachar Committee pointed out that advertisements and sales promotions having become well established modes of modern business techniques, representations through such advertisements to the consumer should not become deceptive. The Committee also noted that fictitious bargain was another common form of deception and many devices were used to lure buyers into believing that they were getting something for nothing or at a nominal value for their money. The Committee recommended that an obligation is to be cast on the seller to speak the truth when he advertises and also to avoid half truth, the purpose being preventing false or misleading advertisements.

However, as the times changed, the need was felt for a new competition law. With the introduction of a new economic policy and opening up of the Indian market to the world, there was a need to shift focus from curbing monopolies to promoting competition in the Indian market. As pointed out by the then Finance Minister in his budget speech in February 1999–

"The MRTP Act has become obsolete in certain areas in the light of international economic developments relating to competition laws. We need to shift our focus from curbing monopolies to promoting competition. The Government has decided to appoint a committee to examine this range of issues and propose a modern competition law suitable for our conditions."

In October 1999, the Government of India constituted a High Level Committee under the Chairmanship of Mr. SVS Raghavan ['Raghavan Committee'] to advise a modern competition law for the country in line with international developments and to suggest legislative framework, which may entail a new law or suitable amendments in the MRTP Act, 1969. The Raghavan Committee presented its report to the Government in May 2000.'

11. MRTP ACT, 1969:
For nearly 200 years, the British East India Company ruled India. They used India's resources for their personal gain, destroying the indigenous industries that existed in India at that time. handicrafts, for example. There was no competitive regime in India before to independence. There were only government policies and resolutions aimed at a just and equal distribution of resources.

The World Wars, on the other hand, resulted in the beginning of the Indian economy's industrialisation. India was the principal source of guns and ammunition for the British army, although not actively engaging in the conflicts.

As a result, large commercial conglomerates such as Tata, Birla, and others were formed. This was first seen as a good sign for India's rising economy. Following independence, India implemented a centralised planning framework-five-year plans that outlined how the country's resources would be employed over the next five years. The fundamental goal of the first five-year plans was to achieve Industrial and Economic Development.

The Industrial Policy Resolution of 1956 categorised all of the country's industries into three categories: Schedule A, Schedule B, and Schedule C businesses. The pattern of industrial development was largely determined by the government. Most of the laws and regulations enacted at the period were based on the Command-and-Control Principle.

The government interjected heavily into the activities of private enterprises and businesses. The goal was to enhance the county's public sector, which could only contribute to economic progress. Many refer to this period as the "License Raj," in which private industries were needed to obtain permission licences from the government in order to operate, and high tariffs and quotas were imposed on goods imports.

The government used to assist the Big Business Houses since they were important contributors to the economy's growth. Obtaining licences and approvals became a piece of cake for them. It quickly resulted in the concentration of economic power in the hands of a select few.

These monopolistic industrialists began engaging in anti-competitive behavior that harmed the overall public interest. It also went against the fundamental ideas that guided the creation of the Indian Constitution, the country's bible. The Monopolies and Restrictive Trade Practices Act, 1969 [MRTP, Act] was enacted as a result of this scenario. The MRTP Act was enacted to ensure that the economic system does not result in the concentration of economic power in the hands of a few individuals.

Raghavan Committee
Raghavan Committee inter alia recommended repealing of the MRTP Act and enacting a modern competition law to meet the challenges, if any, of trade liberalization. Article 19(1) (g) of the Constitution of India guarantees all citizens of India a right to practice any profession or to carry on any occupation, trade or business subject to the condition that the state shall in public interest impose reasonable restrictions to such freedom by enacting suitable legislations.

Article 301 of the Constitution of India, read with Articles 302 and 304(b), empower the Parliament to enact suitable laws to reasonably restrict freedom of trade throughout the territory of India.

Thus, it emerges from the foregoing that the Parliament is empowered to impose reasonable restrictions upon enterprises from enjoying unfettered freedom of trade and commerce. Coupled with the recommendations of the Raghavan Committee and the Constitutional mandate, the Parliament enacted the Competition Act, 2002 in December 2002 which obtained the Presidential assent on 13 January 2003. The Competition Act is, thus, a legislation that imposes reasonable restrictions upon citizens and enterprises to the freedom of trade and commerce while operating in India.

In view of the foregoing principles, it would be prudent to briely examine the necessity of passing of the Competition Act in 2002. While enacting the Competition Bill, the Government of India inter alia observed the following: India has, in the pursuit of globalisation, responded to opening up its economy, removing controls and resorting to liberalisation. As a natural consequence of this the Indian market has to be geared to face competition from within the country and outside.

The Monopolies and Restrictive Trade Practices Act, 1969 has become obsolete in certain respects in the light of international economic developments relating more particularly to competition laws and there is a need to shift the focus from curbing monopolies to promoting competition.

Competition (Amendment) Bill, 2022
Recently, on 5th August 2022, the Competition (Amendment) Bill, 2022 was introduced in the Lok sabha which seeks to overhaul the extant competition regime in India. The bill was made from the cumalation of the recommendations of the Competition Law Review Committee (CLRC) in 2019 and the consultation carried out by the Ministry of Corporate Affairs (MCA) from the Draft Competition (Amendment) Bill, 2020 in Debruary 2020.

The Competition (Amendment) Bill, 2022, proposes significant changes to India's competition law regime. These amendments aim to strengthen the Competition Commission of India's (CCI) powers, expedite merger reviews, and address emerging challenges in the competitive landscape.

Key Provisions of the Bill:

• Deal Value Threshold: The Bill introduces a global deal value threshold of INR 20 billion (approx. USD 251 million / EUR 247 million) for mergers with substantial business operations in India. This means that mergers below this threshold will generally not require CCI approval, unless they meet certain specific criteria.
   
• Shorter Merger Review: The Bill seeks to reduce the timeline for merger reviews from the existing outer limit of 210 days to 150 days. Additionally, it introduces a "deemed approval" mechanism, whereby mergers are automatically approved if the CCI does not form an opinion within 20 days.
   
• Settlement and Commitment: The Bill introduces a mechanism for "settlement" and "commitment," allowing parties under investigation to offer commitments or settle matters with the CCI. This can help to expedite investigations and reduce the burden on the CCI.
   
• Hub and Spoke Cartels: The Bill specifically defines "hub and spoke" cartels and provides for the inclusion of third parties who facilitate such cartels. This aims to address the complex nature of modern cartels.
   
• DG's Power to Depose Legal Advisors: The Bill empowers the Director General (DG) to examine on oath the legal advisors of any of the officers/employees/agents of the party being investigated. However, this provision has faced criticism from the Standing Committee on Finance (SCF), which has raised concerns about attorney-client privilege.

Concerns Raised by the SCF
The Standing Committee on Finance has raised several concerns about the Bill. These include:

• Attorney-Client Privilege: The SCF has expressed concerns about the potential infringement of attorney-client privilege by allowing the DG to examine legal advisors.
• Third Party Participation: The SCF has recommended that third parties should have a discretionary role in settlement and commitment proposals rather than mandatory participation.
• Timeline for Merger Reviews: The SCF has observed that the proposed reduction in timelines for merger reviews may be burdensome on the CCI.