Introduction
Free and fair competition has come to be regarded as one of the pillars of an efficient market economy. Competition brings new ideas and increase manufacturing power and turn to proper distribution of resources. For the consumer, it provides him with wider set of choices, greater product differentiation, lower prices and better satisfaction of consumer demand and preferences.
From the last thirty years, large number of countries have given a more impetus to increase competition through various public policies. Trade and economic liberalisation have also boost competition in the market, by accelerating the offer of goods and services with good quality and less prices. Yet, anti-competitive practices by economic players or induced by improper government policies lesson the profits of liberalisation. This is why countries adopt particular competition regimes to control anti-competitive practices. It doesn’t concern whether the country is developed or developing or passing through a situation in between. Thus, fostering inter-entity rivalry has become an important, albeit intermediate objective of public policy. Now a days, competition law has spread are around the world and about 100 jurisdictions are said to have entered one form of competition law or another.
Power corrupts and absolute power corrupts absolutely. This is often said of political institutions; but it is said to be no less true of economic power.[1] The economic power leads to different manifestation in the area of business activity. One such manifestation is brought by one or more units in an market industry of such a dominant position that they are able to curb the market by controlling prices or output or decreasing competition. Another is the adoption by some producers and distributors, even though they do not have such a dominant position, of practices which restraint competition and thereby keep away the community of the good effects of the competition between producers and distributors to give the best part of it. It is pertinent to say that such practices must create obstruction in the best utilization of the country means of production. Economic power may also adapt itself in obtaining control of large areas of business activity, by a few businessman by different means. In addition to from affecting the economy of the country and being detrimental to the consumers interest, this mostly results in the creation of business empires tending to cast their effect over political democracy and social values.
Those possessing economic power flaunt their superiority in riches in palatial buildings, limousines, and a retinue of servants, and that they think themselves to be a class apart, well above the rest of their fellow countrymen inevitably, the position and glamour of these very rich persons has also seriously undermined social values in the country. Culture and education, scientific pursuits and research are for many young men, at a discount, compared to a carrier that is likely to help to climb the dizzy tops of business success. The big business has the power to corrupt public officials in the attempt to continue and increase their industrial domain.
Although it is true that big business has helped the economic betterment of the country, but it may not make us blind to certain evil effects of such power on the country’s economy. The most serious of these is the risk of emergence of monopoly with its attendant evils high prices for consumers, deterioration in quality and keeping out the small industrialists.
Moreover, our basic objective is that the industrial growth and expansion should not go into the hands of a few persons but should be channelised for the common good and for the nation as a whole.[2]
According to the World Bank ‘Competition’ is “a situation in a market in which firms or sellers independently strive for the buyers’ patronage in order to achieve a particular business objective for example, profits, sales or market share. The term ‘competition’ can be defined in different ways and in many different senses. But in the context of this research, competition can be defined as a process of economic rivalry between the business market players to attract the customer. A entity is said to compete with other entity in the same market if the decisions that the former takes to increase profits depend on either the steps intiates by the other firms or on the price that present in the market. Thus, it is said that a firm’s choices are contolled by ‘competition’ when its actions are influenced by its rivals’ choices or by the present market price. This characterisation of competition applies to all types of identity—be they international or national, domestic or foreign, wholesaler or retailer, or big or small. In their area to be ahead of the other, firms take decisions on how to compete with rivals. In this system, they basically end up competing in the following two ways”:
Fair Competition: This relates to competition whereby entity produce good quality goods, become less costly, adopt the best available technology, and undertake more research and development, and the like. Here, firms strive in terms of new ideas, choice, quality, and service, all of which are thought in principle to bring to more customer satisfaction.
Unfair Competition: This is said to present when a firm resorts to restrictive business practices, which can include predatory pricing, exclusive dealing, tied selling, resale price maintenance, collusion, cartelisation, refusal to deal, abuse of dominant position, etc.
In each case, competition, in the sense of business rivalry, bring to a accumulated market, as the number of firms operating in them is decreased while the size of those still active increases remarkably, resulting in greater business power. Thus the old saying: ‘competition kills competition’. This is true, if one follows the inherent reason within competition; the natural tendency then would thrive competition to result in monopolies.
1.1.2 The ‘Nine Principles’ of Competition Policy
- Foster competitive neutrality between public and private sector enterprises;
- Ensure access to essential facilities;
- Facilitate easy movement of goods and services;
- Separate policy-making, regulation and operation functions;
- Ensure free and fair market process;
- Balance competition and intellectual property rights (IPRs);
- Ensure transparent, predictable and participatory environment;
- Notify and publicly justify deviation from competition principles; and for international obligations.
The object of this project is to study concept of Competition, its embodiment in the countries of India particularly in comparison with United States of America, United Kingdom and European Union, which are the oldest legal regimes on competition. The researchers intend to examine the detailed analyses of competition legal regimes in all the above countries, and try to critically and comparatively analyze the different concepts like agreement of anti-competitive nature, abuse of dominance and regulation of different mergers in these countries. The researcher even attempt to analyze the working of respective national enforcement agencies of competition legislations and finally tries to import certain positive aspects from different experienced competition regimes, which will be suitable to the working of present competition regime in India.
[1] See Monopolies Inquiry Commission, Report (1965), p. 1.
[2] See V.K. Agarwal, Concentration of Economic Power and Monopolies in India (1987). Pp. 24-25.