Competition Law in Practice
From MRTP to the Competition Act
How India moved from a law aimed at limiting big business to a modern competition law focused on protecting competition and consumers.
India’s approach to competition law has changed dramatically along with its economy.
The MRTP era
The Monopolies and Restrictive Trade Practices Act, 1969, known as the MRTP Act, reflected concerns about the concentration of economic power in a few business houses. It:
- Required large companies to get government approval to expand, merge or set up new units.
- Focused on the size of firms rather than their behaviour.
- Fitted into the licence raj, where the state tightly controlled industry.
After the 1991 reforms, industrial licensing was mostly removed, and the MRTP approach looked outdated. Being big was no longer seen as a problem in itself; what mattered was whether firms harmed competition.
A new law
A committee headed by S.V.S. Raghavan recommended a modern competition law in 2000. The result was the Competition Act, 2002. It created the Competition Commission of India, or CCI. Legal challenges and amendments delayed its full operation; its main provisions on anti-competitive conduct came into force in 2009 and merger control in 2011. The MRTP Act was repealed.
What the Competition Act covers
- Anti-competitive agreements, such as cartels and some agreements between suppliers and distributors.
- Abuse of dominant position: dominance itself is legal, but abusing it is not.
- Combinations: mergers and acquisitions above certain size thresholds must be reviewed.
- Competition advocacy: promoting competition in government policy.
Appeals
Appeals against CCI orders go to the National Company Law Appellate Tribunal, or NCLAT, and then to the Supreme Court.
The 2023 amendment
The Competition (Amendment) Act, 2023 brought major changes, including a settlements and commitments mechanism, a deal value threshold for merger review and penalties based on global turnover.
Under the MRTP Act, a large company needed permission simply to expand. Under the Competition Act, the same company can grow freely as long as it does not collude with rivals or abuse a dominant position. The focus shifted from size to behaviour.
Modern competition law allows firms to grow large by serving customers well. It targets harmful behaviour, such as cartels and abuse of dominance.
- The MRTP Act of 1969 focused on limiting the size of big business.
- The Competition Act, 2002 focuses on protecting competition and consumers.
- The CCI enforces rules on agreements, dominance and mergers.
- The 2023 amendment added settlements, commitments and a deal value threshold.
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