Important Definitions under the

competition Act

Important Definitions under the competition Act, 2002

The Act provides for several key definitions which are necessary to be understood in order to understand the functioning of the Act. These are:

Cartel: The Act defines ‘Cartel’ as an association of producers, sellers,distributors, traders or service providers who by agreement amongst themselves, limit, control or attempt to control the production, distribution,sale or price of or trade in goods or provision of services.

Cartel has been put in the category of those anti-competitive agreements through which the manufacturers, sellers, producers of homogenous commodities agree to control the production, supply prices etc of goods so as to get desired profits and control over the market.

Enterprise: As per Section 2(h) of the Act, ‘enterprise’ means and includes a person or a department of Government, who or which is or has been engaged in following activities :

(i) Production, storage, supply, distribution, acquisition or control of articles or goods;

(ii) Provisions of services of any kind;

(iii)Investing or acquiring of business, holding or dealing in shares or other securities of any other body corporate either directly or through a subsidiary.

However, a department of Government carrying activity relating to sovereign functions of the government which includes activities relating to atomic energy, currency, defence and space shall not be termed as an ‘enterprise’ for the purpose of the Act.

Person: Section 2(l) of the Act provides an inclusive definition of ‘person’. Itstates that a ‘person’ includes following:

(i) An individual, Hindu undivided-family,company or a firm;

(ii) An association of persons whether incorporated or not in India or outside India;

(iii)Any corporation established by Central or State government or a Government Company as defined under Companies Act.

(iv)Anybody corporate incorporated by or under the laws of a country outside India.

(v) Any Cooperative Society, local authority or an artificial juridical person.

Relevant Market: The definition of the term ‘relevant market’ is dependent ontwo terms namely ‘relevant geographic market’ and ‘relevant product market’ as section 2(r) of the Act lays down that for determination of relevant market. Commission has to refer either ‘relevant geographic market’ or ‘relevant product market’ or both.

(i) Relevant geographic market implies a market in an area where homogeneous conditions prevails for various aspects of trade and commerce. Such conditions are distinct from markets in neighbouring areas. section 2 (s)

(ii) Relevant Product Market refers to a market where the products and services are of such a nature that those can be interchanged or substituted by other products and services available in that market. section 2 (t)