Competition Act: Remedies for Sections 3 & 4 Violations
The Competition Act, 2002, prohibits specific business practices that can harm competition. Key provisions include:
- Section 3: Prohibits agreements that cause or are likely to cause an appreciable adverse effect on competition in India (anti-competitive agreements).
- Section 4: Prohibits the abuse of a dominant position by an enterprise or association of enterprises.
Understanding Section 27 Remedies
The primary remedies and penalties for violations of Section 3 and Section 4 are laid down under Section 27 of the Competition Act, 2002.
After an inquiry finds a contravention of Section 3 or Section 4, the Competition Commission of India (CCI) can pass orders under Section 27. These orders may include:
- Directing the contravening party to cease the anti-competitive agreement or abuse of dominant position.
- Ordering modifications to the agreement.
- Prohibiting the party from entering into future agreements or engaging in such conduct.
- Imposing penalties. For violations of Sections 3 and 4, the penalty can extend up to $10\%$ of the average turnover from such agreement/conduct for each year of its continuance.
Rationale for Other Options
The other sections mentioned serve different purposes within the Act:
- Section 26: Governs the procedure for the CCI's inquiry into alleged violations, including investigation stages, rather than the final remedy.
- Section 42A: Deals with penalties specifically for failing to comply with orders or directions issued by the CCI under other sections of the Act.
- Section 43A: Imposes penalties for contravening regulations related to combinations (mergers and acquisitions), which is distinct from Sections 3 and 4 violations.
Therefore, Section 27 is the designated section for remedies concerning violations of Sections 3 and 4.
Important Questions from Business Competition
Which of the following is a guideline to deal with colleagues?
The shut down refers to complete cessation or closing down of the business. It involves which of the following?
i) No buying or selling
ii) No manufacturing
iii) Shifting of business from one place to another place
iv) Assets to be sold or disposed off
v) Returning capital to owners
- In case of anti-competitive activities by a firm, the Competition Commission of India can impose a penalty which shall be not more than
- Arrange the following steps in the investigation process of combinations by the Competition Commission of India in the correct order.
A. Call for a report from the Director General
B. Invite any person, affected parties to file written objections
C. Direct the parties of combination to publish details of the combination
D. Call for additional information from the parties of the combination
E. Issue a notice for show-cause to the parties of the combination
Choose the correct answer from the option given below: - Choose the correct section of the Competition Act, 2002 Which provides that 'No enterprise shall abuse its dominant position' :
