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Types of Offenses and Penalties Under The Competition Act, 2002

The Competition Act, 2002 provides strict regulations to prevent anti-competitive practices and ensure fair competition. Violations of this Act result in penalties and legal consequences imposed by the Competition Commission of India (CCI).

Types of Offenses Under The Competition Act, 2002

1. Contravention of CCI Orders or Directions

  • Failure to comply with any order or direction issued by the CCI.
  • Example: A company continues anti-competitive practices despite a CCI order.

Penalty: Fine of up to ₹1 lakh per day of non-compliance, up to a maximum of ₹10 crores.

2. Failure to Notify CCI About Combinations

  • Companies entering into mergers, acquisitions, or amalgamations must inform the CCI if the deal exceeds financial thresholds.
  • Example: Two large telecom companies merging without CCI approval.

Penalty: Fine of up to 1% of the total turnover or assets of the combined entity.

3. Providing False Information or Omitting Material Facts

  • Submitting false statements or failing to provide essential information to the CCI.
  • Example: A company misrepresenting its financial details in a merger approval request.

Penalty: Fine ranging from ₹50 lakh to ₹1 crore, depending on the severity of the misinformation.

4. Engaging in Anti-Competitive Agreements

  • Agreements between businesses that reduce competition, such as cartels, price-fixing, and bid-rigging.
  • Example: Cement companies agreeing to fix prices instead of competing fairly.

Penalty: Fine of up to 10% of the average turnover of each participating company.

5. Abuse of Dominant Position

  • A company with significant market power misuses its position to eliminate competition or exploit consumers.
  • Example: A software company forcing users to buy additional services to access its core product.

Penalty: Heavy fines and modifications to business practices ordered by CCI.

6. Furnishing False Documents or Tampering With Evidence

  • Providing false evidence or destroying documents during an investigation.
  • Example: A company deletes emails related to price-fixing before a CCI audit.

Penalty: Fine of up to ₹1 crore for individuals or companies involved.

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