World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Mexico 20:

In Paragraph 202, in sub section iii) Competition Policy, it is stated that the Competition Act of 2002 contains provisions on anti competitive agreements, abuse of dominant position and on mergers and acquisitions. The Act prohibits anticompetitive agreements concerning the production, stockpiling, acquisition or control of goods or provision of services. These agreements include cartels, price fixing, production limiting and dividing up of markets or agreements between manufacturers and distributors. However, rules make an exception to this prohibition when agreements emphasize efficiency. There have been no such case during the reporting period. The law also recognizes intellectual property rights, and to facilitate its protection supports reasonable restrictions imposed by their holders. Agreements concerning the production, supply, distribution and control of goods and services for export, although they may have considerable negative effects on competition, are exempt from the ban.

Qn. What are the reasons for not prohibiting anticompetitive agreements concerning the production, supply, distribution and control of goods and services for export? Are there such exclusions in other sectors of the economy?

Reply: In the very preamble of the Competition Act, the Competition Commission of India has been empowered to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interest of consumers and to ensure freedom of trade carried on by other participants in markets, in India. Since the export of goods and services would be affecting markets in foreign countries and not in India, hence the Competition Commission of India cannot take action in those matters as they fall outside India. However, other jurisdictions can take action if they find any violation of their respective acts.

Mexico 21:

In Paragraph 207, sub section iii) Competition Policy, it is pointed out that the Competition Act of 2002 covers all the business activities of the entities linked to the Government. However, special exemptions may be granted for reasons of safety or public interest or obligations under international treaties, agreements or conventions, and when a company meets sovereign functions on behalf of central government or a state government. No antitrust exemptions apply to the Central Public Sector enterprises, including in price preferences or in acquisitions. The absence of such express exemption is a positive element of the Competition Act, as are references to the Commission's role in promoting competition. However, the OECD notes that the Act does not impose any obligation on government agency to refer matters to the Commission (in the promotion of competition), and that the Commission's opinions are not binding.

Qn. Has India considered including provisions in the Competition Act which empowers the Competition Authority so that its advice to other government agencies are made binding?

Reply: Similar provisions are there even in the Acts of other countries/jurisdictions. The government agencies are independent bodies. However, the Government takes decision in totality.