Competition is now universally acknowledged as the best means of ensuring that consumers, even more so the aam admi or common man have access to the broadest range of services at the most competitive prices. Producers will have maximum incentive to innovate, reduce their costs and meet consumer demand.
Competition thus promotes allocative and productive efficiency. But all this requires healthy market conditions and governments across the globe are increasingly trying to remove market imperfections through appropriate regulations to promote competition.
Competition Act, 2002 follows the philosophy of modern competition laws and aims at foresting competition and at protecting Indian markets against anti-competitive practices by enterprises.
Competition laws all over the world are primarily concerned with the acquisition and/or exercise of market powers and its abuse. The term market power is variously known as dominant position, monopoly power and substantial market power.
Competition Act, 2002 prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations wherever, such agreements abuse or combinations cause or is likely to cause, appreciable adverse effect on competition in markets in India.
With increasing litigation of the Indian economy and markets with the international economy the Government acquired a wider perspective on regulation of markets from merely curbing monopolies to promoting competition. Subsequently, the Competition Act, 2002 was enacted on January 13, 2003.