The Competition Act, 2002: salient features, key definitions and amendments

1. Commencement

The Act (12 of 2003) received assent on 13 January 2003. It came into force in stages. The Commission was established in October 2003, but its working was held up by a writ petition (below). The provisions on anti-competitive agreements and abuse of dominance (sections 3 and 4) came into force on 20 May 2009, the MRTP Act was repealed with effect from 1 September 2009, and the combination provisions (sections 5, 6, 20, 29 to 31) came into force on 1 June 2011.

2. Salient features, chapter by chapter

• Chapter I — Preliminary. Short title, extent (whole of India), and definitions (section 2).
• Chapter II — Prohibitions. Anti-competitive agreements (section 3), abuse of dominant position (section 4), combinations (sections 5, 6 and 6A).
• Chapter III — Competition Commission of India. Establishment, composition, selection, tenure, removal, Director General (sections 7 to 17).
• Chapter IV — Duties, powers and functions. Duties (section 18); inquiry into agreements and dominance (sections 19, 26, 27, 28); combinations (sections 20, 29 to 31); references to and from statutory authorities (sections 21, 21A); meetings (section 22); extra-territorial jurisdiction (section 32); interim orders (section 33); procedure, rectification and recovery (sections 35 to 39).
• Chapter V — Director General. Investigation powers (section 41).
• Chapter VI — Penalties. Sections 42 to 48C, including lesser penalty (section 46) and settlements and commitments (sections 48A to 48C).
• Chapter VII — Competition advocacy. Section 49.
• Chapter VIII — Finance. Grants, Competition Fund, audit, reports (sections 50 to 53). Chapter VIIIA — Appellate Tribunal (sections 53A to 53U).
• Chapter IX — Miscellaneous. Exemptions (section 54), government directions (section 55), supersession (section 56), overriding effect (section 60), bar on civil courts (section 61), Act in addition to other laws (section 62), rules and regulations (sections 63, 64), repeal of MRTP (section 66).

3. The key definitions

• Agreement (section 2(b)) — includes any arrangement, understanding or action in concert, whether or not formal or in writing, and whether or not intended to be enforceable by legal proceedings. A cartel need not leave a contract behind; circumstantial evidence is enough.
• Cartel (section 2(c)) — an association of producers, sellers, distributors, traders or service providers who, by agreement among themselves, limit, control or attempt to control production, distribution, sale or price of, or trade in, goods or services.
• Enterprise (section 2(h)) — a person or a department of Government, including units, divisions and subsidiaries, engaged in any economic activity relating to goods or services, or investment, or dealing in securities, but not any activity relatable to the sovereign functions of Government, including atomic energy, currency, defence and space. The words “economic activity” and “including units, divisions, subsidiaries” came in 2023.
• Person (section 2(l)) — includes individuals, HUFs, companies, firms, associations of persons in or outside India, statutory corporations and government companies, foreign bodies corporate, co-operative societies, local authorities and every artificial juridical person.
• Relevant market (section 2(r)), relevant geographic market (section 2(s)) and relevant product market (section 2(t)) — discussed in the note on abuse of dominance. The 2023 amendment added supply-side substitutability to section 2(t).
• Party (section 2(ka), inserted 2023) — includes a consumer, enterprise, person, informant, consumer or trade association, the Central or a State Government, a statutory authority, and anyone against whom an inquiry is instituted or who is impleaded.

4. Brahm Dutt and the 2007 amendment

As enacted, the Act allowed a bureaucrat to be Chairperson of a body that exercised adjudicatory functions. In Brahm Dutt v. Union of India, decided on 20 January 2005, (2005) 2 SCC 431, a writ petition challenged this as contrary to the separation of powers. The Union told the Court it intended to amend the Act to create a separate appellate body, and the Court disposed of the petition on that basis, observing that an expert regulatory body and a separate appellate body might be needed.

The Competition (Amendment) Act, 2007 made these changes:

• Commission reduced to a Chairperson and between two and six Members, all whole-time (section 8), chosen from a panel recommended by a Selection Committee headed by the Chief Justice of India or his nominee (section 9).
• Commission made primarily a regulator and adjudicator: the Bench system (sections 23 to 25) and the power to award compensation (section 34) were omitted.
• Competition Appellate Tribunal (COMPAT) created by Chapter VIIIA to hear appeals from the CCI and claims for compensation; appeals from COMPAT to the Supreme Court (section 53T). The old direct appeal to the Supreme Court (section 40) was omitted.
• Merger notification made mandatory (“shall” for “may”) with a 210-day suspensory period (section 6(2), (2A)), and a penalty for failure to notify (section 43A).
• Cartel penalty raised to three times profit or 10 per cent of turnover for each year of the cartel (section 27(b) proviso); fines for non-compliance with orders (section 42).
• “Complaint” replaced by “information” (section 19(1)(a)), and the CCI’s inquiry procedure rewritten (section 26).
• Section 66 amended for the phased dissolution of the MRTP Commission.

5. The Finance Act, 2017

The Finance Act, 2017 abolished the Competition Appellate Tribunal and made the National Company Law Appellate Tribunal (NCLAT) the Appellate Tribunal under the Act from 26 May 2017 (section 53A as substituted). Pending appeals were transferred to the NCLAT.

6. The Competition (Amendment) Act, 2023

Act 9 of 2023 received assent on 11 April 2023. Section 1(2) let the Government bring provisions into force on different dates, and it did so in stages from May 2023. The main changes, with the dates on which they came into force as far as can be confirmed:

• Global turnover penalties — Explanation 2 to section 27(b): “turnover” means global turnover from all products and services; penalties on officers re-cast in section 48. In force from 6 March 2024, with the CCI’s penalty guidelines issued under the new section 64B.
• Settlements and commitments — sections 48A to 48C, for vertical agreements (section 3(4)) and abuse of dominance (section 4), not cartels. In force from 6 March 2024.
• Leniency plus — section 46(4): an applicant who discloses a second, unrelated cartel can get a further reduction in the first. In force from 20 February 2024.
• Deal value threshold — section 5(d): a transaction worth more than Rs. 2,000 crore is a combination if the target has substantial business operations in India; the review period was cut from 210 to 150 days (section 6(2A)); a statement of objections procedure (section 29A). In force from 10 September 2024, with the Combination Regulations, 2024.
• Other changes — a three-year limitation for information (section 19(1) provisos); hub-and-spoke cartels (second proviso to section 3(3)); vertical agreements widened (section 3(4)); supplementary DG investigation (section 26(3A), (3B)); show-cause notice before final orders (section 26(9)); 25 per cent pre-deposit for appeals (section 53B(2)); casting vote of the Chairperson removed (section 22(3)); DG appointed by the Commission with Central Government approval (section 16(1)); compounding of offences (section 59A); and consultation before regulations (section 64A).

How this is examined

June 2025: “What are the salient features of Indian Competition Act, 2002?” (section 2 above, with the definitions). January 2026: “Enumerate the changes made by the Amendment to Competition Act, 2007” (section 4). Begin the 2007 answer with Brahm Dutt, because the case explains why the amendment was made, and end it with one paragraph on 2017 and 2023 so the examiner sees you know that COMPAT no longer exists.