The Prohibition of Agreements in Competition Act, also known as the Competition Act, is a legislation that aims to promote fair competition in India. The act prohibits any agreement, whether written or oral, between enterprises that results in an adverse impact on competition in the market.
The Competition Act is part of India`s efforts to create a competitive market economy that supports innovation, consumer choice, and economic growth. The act applies to all sectors and industries, including services and manufacturing, and aims to promote fair competition and protect consumers from unfair practices.
The act defines agreements as any form of contract, arrangement, understanding, or concerted practice, whether formal or informal, that has an adverse impact on competition in the market. Some examples of prohibited agreements are price fixing, market allocation, bid rigging, and refusal to deal.
The Competition Act also provides for penalties and fines for those who engage in anti-competitive practices. These can range from a fine of up to 10% of the enterprise`s turnover to imprisonment for up to three years for individuals involved in the violation.
The act also includes provisions for the establishment of the Competition Commission of India (CCI), which is responsible for enforcing the act and investigating anti-competitive practices. The CCI has the authority to investigate any suspected violation of the act and can issue orders to stop such practices.
Overall, the Prohibition of Agreements in Competition Act is a crucial legislation in ensuring fair competition in the Indian market. By promoting fair competition, the act supports innovation, consumer choice, and economic growth, and protects consumers from unfair practices. Any enterprise operating in India should ensure compliance with the act to avoid penalties and fines.