Test: The Competition Act, 2002 - UGC NET MCQ

- The Assertion is true; anti-competitive agreements can indeed reduce market competition in India as outlined in the Competition Act.

- The Reason is false; anti-competitive agreements can be informal and still be deemed anti-competitive, regardless of whether they are documented.

- Thus, while both statements are true, the Reason does not correctly explain the Assertion.

- Assertion Analysis: The assertion is true; the CCI was indeed established to regulate competition and address anti-competitive behaviors in India.

- Reason Analysis: The reason is also true; the Raghavan Committee played a critical role in proposing the CCI as a solution to the legal challenges faced in implementing competition laws.

- Explanation: Since both statements are true and the reason accurately explains why the CCI was founded, the correct answer is Option A.

Statement 1 is correct because the CCI's primary role is indeed to enforce the Competition Act, 2002, which is designed to promote fair competition and safeguard consumer rights against anti-competitive practices.

Statement 2 is also correct as the regulations specify that individuals can file complaints under Section 19(1)(a) without prerequisites, thereby ensuring inclusivity. Hence, both statements accurately reflect the functions and procedures of the CCI in relation to the Competition Act, 2002.

The CCI is established as an independent statutory body with the primary role of enforcing competition-related regulations. This includes preventing anti-competitive practices such as abuse of dominant position, price fixing, and collusive bidding. By fostering a fair competition environment, the CCI ensures that markets operate efficiently, benefiting consumers and businesses alike. An interesting fact is that the CCI also engages in competition advocacy, aiming to educate businesses about the benefits of healthy competition.

The primary objective of the Competition Act, 2002 is to safeguard consumer interests and ensure healthy market competition. This legislation aims to create an environment where businesses compete fairly, which leads to better product quality, innovation, and a wider range of choices for consumers. An interesting fact is that this Act replaced the earlier MRTP Act, which was more focused on controlling monopolies rather than promoting competition.

Statement 1 is incorrect because Section 61 of the Competition Act explicitly restricts civil courts from adjudicating matters that fall within the purview of the CCI. This means that civil courts do not have jurisdiction over these issues, as the CCI is the designated authority for handling competition-related matters.

Statement 2 is correct since the primary responsibility of the CCI, as outlined in the Competition Act, 2002, is indeed to enforce the provisions of the act, particularly focusing on preventing anti-competitive agreements and addressing abuses of dominant positions.

Therefore, the correct response is that only statement 2 is true.

• The Assertion is true because the CCI indeed plays a critical role in ensuring consumer welfare by overseeing market activities.
• The Reason is also true as the CCI is designated as the central authority for handling competition law violations.
• However, the Reason does not serve as a correct explanation for the Assertion, as the role of the CCI in consumer welfare encompasses broader functions beyond just managing complaints.

The main objective of the Competition Act, 2002 is to prevent actions that could harm competition within the market. This includes addressing issues such as monopolistic practices and the concentration of wealth. By ensuring fair competition, the act seeks to protect consumer rights and promote a healthy economic environment. An interesting fact about this act is that it established the Competition Commission of India (CCI), which plays a crucial role in enforcing competition laws and reviewing mergers and acquisitions to maintain market integrity.

- The Assertion is true; the Competition Act indeed provides exemptions for combinations involving governmental financial institutions.

- The Reason is false; not all combinations undergo strict scrutiny; only those above certain thresholds are subject to detailed evaluation.

- Therefore, while the Assertion is correct, the Reason does not accurately reflect the provisions of the Competition Act.

The Competition Act, 2002 prohibits agreements that are deemed anti-competitive. This includes collusion among businesses to fix prices, limit production, or divide markets, all of which can undermine fair competition. By outlawing such practices, the act aims to promote a competitive marketplace, benefiting consumers through better prices and choices. A noteworthy aspect of the act is its role in regulating mergers and acquisitions, which ensures that these business activities do not lead to a significant reduction in competition in the market.