The proposed Law will not apply to Government Departments and enterprises performing sovereign functions and policy making aspects of Governmental activities (decision making by Ministries/Departments/Offices of Central Government or State Governments)/ local bodies-like reservation for SSI, preference in procurement from SSI units/PSUs and such similar policies.

    The proposed Law will also provide for exemption of certain classes of enterprises and international agreements from the applicability of the Act by way of specific notifications.

    The Law would curb those practices, which would have an appreciable adverse effect on Competition. The proposed Law identifies three such ways in which such practices could occur as under:

    Anti-competitive Agreements: (Horizontal Agreements, Vertical Agreements) can be inquired into by CCI which could impose a penalty or an amount upto 10 per cent of its average turnover in the last three years for the offence.

    Abuse of Dominant Position (The criteria for deciding the dominant position are broader than one included in MRTP Act). Enjoying a dominant position will not be a crime but its abuse will be a crime.

    Elimination/reduction of competitors in market achieved through acquisitions, amalgamations or mergers (The proposed Law is not against every acquisition, merger or amalgamation, but it refers only to those acquisitions, mergers and amalgamation, which are of a certain prescribed size-size in terms of (a) assets or (b) turnover, Acquisition, merger or amalgamation would become ‘Combination’ when:

    The proposed Law provides for an adjudicating relief machinery by way of establishing the Competition Commission of India (CCI) which would be a Quasi-Judicial Body. CCI will have a Chairperson and not less than two and not more than ten other Members, as may be specified by the Central Govenrment.

    The CCI will have the following powers:

    To issue "Cease and Desist" Orders

    To grant such interim relief as would be necessary in each case

    To award compensation

    To impose fines on the guilty

    To order division of dominant undertaking

    Power to order de-merger

    Power to order costs for frivolous complaints

    In addition to the adjudication function, the CCI will have the roles of advocacy, investigation, prosecution and merger control.

    The Statutory Regulatory Authorities can make reference to CCI for advice.

    The proposed Law provides for the post of Director Genral (and a host of his deputies in various places) to assist the Competition Commission in its inquiries. Unlike in MRTP Act, the Director General will not have powers to initiate investigations suo motu.

    In view of the policy shift from curbing monopolies to promoting competition, there is a need to repeal the Monopolies and Restrictive Trade Practices Act. Hence, the proposed Competition Law to be brought in, aims at doing away with the rigidly structured MRTP Act. The Competition Law proposed is flexible and behaviour – oriented. Other reasons are as follows:

    MRTP Act is based on the pre-reforms scenario whereas the new Law will be based on the post-reforms scenario.

    MRTP Act is based on the size as a factor whereas the new Law will be based on the structure as a factor.

    MRTP Act has 14 per se offences negating the principles of natural justice where the new Law has 4 per se offences, all the rest subjected to rule of reason.

    MRTP Act provides for Registration of agreements as compulsory whereas in the new Law there is no requirement of registration of agreement.

    Under the new Law, dominance per se is not bad but only the abuse of dominance is considered bad whereas under the MRTP Law, dominance itself is bad.

    Combination Regulation mentioned in the Bill, ensures that Competition is not reduced . Combinations are not regulated by MRTP Act.

    MRTP Act has powers only to pass "Cease and Desist" orders and did not have any other powers to prevent or punish, whereas the Competition Law contains punitive provisions.

    MRTP Act does not vest MRTP Commission to inquire into cartels of foreign origin in a direct manner. The proposed Competition Law seeks to regulate them.

    The concept of ‘Group’ under the MRTP Act had wider import and was unworkable whereas the concept has been simplified in the proposed Law.

    The proposed Law provides for a Competition fund which shall be utilised for promotion of competition advocacy, creating awareness about competition issues and training in accordance with the rules that may be prescribed.

    Pending cases pertaining to Unfair Trade Practices other than those relating to tie in sales, purchases or cases falling under clause (x) of sub-section (1) of Section 36A , the Monopolies and Restrictive Trade Practices Act, 1969 under the repealed Act shall stand transferred to the National Commission constituted under the Consumer Protection Act, 1986.