Competition Law: A Brief History

Competition law is a relatively young and developing law in India. The development of Competition Law was first seen in the United States in the year 1890 with the development of the Sherman anti-trust laws which was the first ever attempt for the development of the Competition Law. With the Standard Oil Co. of New Jersey v. United States where the ‘Rule of reason’ doctrine was applied by the United States Supreme Court as an interpretation of the Sherman Act of 1890 showed the beginning of the middle period for Competition Law.

The major boundaries or scope of the anti-trust laws in the United States are given by: -
a.Clayton Act, 1914
b.Hart-Scott-Rodino Act, 1976
c.Rico Act, 1970
d.Merger Guidelines

In India the provisions for the rapid industrial developments and equitable distribution of wealth is given in the constitution in the ‘Directive Principle of State Policy’. The government of India in the year 1960 developed the ‘Mahanalobis Committee’ which was mainly created for promoting ‘Distribution of Income’ and uplifting the ‘Levels of Living’.

The Government implemented a planned economic model which in turn led the growth of big business houses that threatened to take control of the whole economy by monopolizing trade in their respective relevant market. To check this the government created the Monopolies Inquiries Commission in the year 1964.

The planning commission of India developed the Hazari committee under the chairmanship of Dr. R.K. Hazari of review the Industrial Licensing System under Industries Development and Regulation Act, 1951. The Hazari Committee submitted its report in the year 1967. The Hazari Committee report led to the development of the ‘Industrial Licensing Policy Inquiry Committee’ (ILPIC) also called the ‘Dutt Committee’ under the chairmanship of Mr. Subimal Dutt to look into the licensing and financial structure in the country.

The Dutt Committee realized that the licensing and financial structure in the country was unable to check concentration of economic power in the hands of a few powerful businesses so it suggested the ‘Monopolistic Restrictive Trade Practices’ (MRTP) bill. The ‘Monopolies Inquiry Committee’ (MIC) drafted the MRTP bill which became the MRTP act, 1969.

The MRTP act, 1969 was not sufficient for addressing the problems in the economic market. So, the government of India developed the Sachar Committee in the year 1977. Its function was to consider and report the required changes in the MRTP act. The Sachar committee gave its recommendations which led to the amendment of the MRTP act, 1969 in the year 1991.

The MRTP act failed to meet its aims and objectives primarily because of the lack of proper definitions. Due to the failure of the MRTP act the government created a new committee called the Raghavan committee in the year, 1999. Based on the recommendations of the Raghavan Committee the government created a new law called the Competition Law, 2002 and finally the competition commission was formed.

The Competition Commission is successfully meeting its aims and objectives so far, of curbing monopoly and giving everyone equal opportunities to trade in the markets of India.