Competition Commission of India (CCI) is empowered to investigate those practices that may harm competition in India and this power is provided by Section 19 of the Competition Act ,2002. The unethical practices this CCI investigates are anti-competitive agreements and abuse of dominant positions. This section has been updated by the Competition (Amendment) Act, 2023, to address contemporary economic challenges and ensure a fair marketplace. The CCI can start an inquiry on its own or upon receiving information from individuals, consumer groups, or government references, provided the filing is within three years from the cause of action.
Delays may be excused if it is justifiable, ensuring flexibility in addressing competition related practices. When evaluating agreements, the CCI considers factors like barriers to new entrants, impact on existing competitors and benefits or harm to consumers, with recent changes refining these criteria to include broader harm assessments. The section details how the CCI determines the relevant market, considering geographic and product factors, with 2023 amendments adding considerations like switching costs and service characteristics, enhancing the precision of market analysis.
Elevate your career with our Advanced Certification Program in Mergers & Acquisitions designed to transform your professional journey in just six months. This high- engagement course emphasizes real-world applications and features master classes from NLUand industry partners led by expert faculty.
Detailed Analysis of Section 19 of the Competition Act, 2002
Section 19 of the Competition Act, 2002 governs how the Competition Commission of India (CCI) conducts inquiries into anti-competitive practices and dominant market positions.
The section came into effect as of April 9, 2025 and is amended by the Competition (Amendment) Act, 2023 which reflected updates aimed at strengthening competition regulation and addressing modern economic dynamics.
Following is a comprehensive breakdown regarding the essentials of Section 19, incorporating all amendments and contextual details.
Background and Legislative Context
The Competition Act, 2002 was enacted to replace the Monopolies and Restrictive Trade Practices Act, 1969 and its objective is to prevent practices which put adverse effects on the competition in India and promote a fair market environment.
It established the CCI to oversee these objectives. The Act has undergone amendments, notably in 2007, 2009 and most recently in 2023, with the letter introducing significant changes to align with global competition trends and digital economy needs.
The Competition (Amendment) Act, 2023, published on April 11, 2023, and partially enforced by notifications in 2023 and 2024, has refined several provisions, including Section 19 in order to enhance the CCI's investigative powers and market analysis capabilities. These changes were informed by stakeholder consultations and reports.
Also, Get to Know About Kotak Mahindra Bank's Acquisition of Sonata Finance Case Study
Detailed Provisions of Section 19
Inquiry into certain agreements and dominant position of enterprise depicts the authority of Competition Commission of India and describe the methods for inquiries or investigations. Given below is a detailed examination, organized as per the subsections of Section 19:
Inquiry Initiation
The CCI may start an inquiry into anti-competitive agreements (under Section 3) or abuse of dominant position (under Section 4) in the following ways:
Suo Moto: On its own initiative.
Information Received: Upon receiving information, along with a prescribed fee, from any person, consumer, consumer association, or trade association.
Government Reference: Based on a reference from the Central Government, State Government, or a statutory authority.
A significant amendment in 2023 introduced a time limit: the CCI shall not entertain information or references unless filed within three years from the date of the cause of action. However, it may entertain delayed filings if satisfied there was sufficient cause, recording reasons for condoning the delay.
Scope of Powers
Section 19(2) states that the CCI has the powers and duties listed in subsection (3) to (7) of the same Section, even if an investigation i snot yet started. It acts as a link making sure that all of the authorities' investigative and analytical tasks are done.
Factors for Anti-Competitive Agreements
1. When determining whether an agreement has an appreciable adverse effect on competition under Section 19(3), the CCI considers the following factors:
Creation of barriers to new entrants in the market.
Driving existing competitors out of the market.
Foreclosure of competition.
Benefits or harm to consumers (previously "accrual of benefits," amended to "benefits or harm" in 2023).
Improvements in production or distribution of goods or provision of services.
Promotion of technical, scientific, and economic development.
2. The 2023 amendment removed "by hindering entry into the market" from Clause (c), focusing on broader competitive effects, and substituted "accrual of benefits" with "benefits or harm" in Clause (d), reflecting a balanced approach to consumer impact.
Factors for Dominant Position
The CCI looks at the following things to decide if a business has a dominant position under Section 19(4), which are:
Market share of the enterprise.
Size and resources of the enterprise.
Size and importance of competitors.
Economic power, including commercial advantages over competitors.
Vertical integration or sale or service network.
Dependence of consumers on the enterprise.
Monopoly or dominant position due to statute, being a government company, public sector undertaking, or otherwise.
Entry barriers, including regulatory, financial risk, high capital cost, marketing, technical, economies of scale, high cost of substitutes, etc.
Countervailing buying power.
Market structure and size of the market.
Social obligations and social costs.
Relative advantage by way of contribution to economic development.
Any other relevant factor.
This subsection remains unchanged by the 2023 amendments, maintaining its comprehensive approach to assessing dominance.
Determination of Relevant Market
The Competition Commission of India has to figure out the relevant market by looking at both the geographical market and the relevant product market.
The Relevant Geographic Market under Section 19(6) are:
Regulatory trade barriers.
Local specification requirements.
National procurement policies.
Adequate distribution facilities.
Transport costs.
Language.
Preferences of consumers.
The 2023 amendment added these clauses:
Clause (i): Characteristics of goods or nature of services.
Clause (j): Costs associated with switching supply or demand to other areas.
The Relevant Product Market under Section 19(7) are:
Physical characteristics or end-use of goods (amended to include "or the nature of services" in Clause (a)).
Price of goods or service.
Consumer preferences.
Excluded in-house production.
Classification of industrial products.
The 2023 amendment added:
Clause (g): Costs associated with switching demand or supply to other goods or services.
Clause (h): Categories of customers.
These changes broaden the scope to include service characteristics and consumer segmentation, reflecting digital and service-based economies.
Implications and Unexpected Details
The amendments to Section 19, especially the addition of switching costs and service characteristics, are more extensive than expected. This shows how India has adjusted to digital markets and global competition standards. These amendments make sure that the CCI can deal with new problems, like how tech companies dominate the market and how people switch brands which weren't as important in the original 2002 Act.
Summary
The amended version of Section 19 gives the CCI a strong framework to control and look into the competition, with better tools for studying the market and quickly. In order to ensure fair competition and keep up with the changes in the economy, it strikes a balance between strict rules and freedom. In India's competitive business world, it's important for players to understand these rules so they can follow them and make smart plans.
Related Posts:
Section 19 Of Competition Act: FAQs
Q1. What does Section 19 of Competition Act, 2002 state?
Section 19 talks about inquiry into certain agreements and dominant position in the competition sphere of the Indian market.
Q2. What changes did the 2023 Amendment in the Act bring?
The 2023 Amendment in the Competition Act, 2002 added clause (i) which talks about the characteristics of goods or nature of services and Clause (j) which talks about costs associated with switching supply or demand to other areas.
Q3. What powers are given to CCI under Section 19?
Section 19 empowers Competition Commission of India to investigate and inquire if all sorts of unethical or adverse competitions are going on in the market.
Q4. What comes under the relevant product market?
Price of goods or service, consumer preferences ,excluded in-house production, classification of industrial products, etc.
