Tag: #act

EFFECTIVENESS OF REGULATIONS GOVERNING ANTI-COMPETITIVE AGREEMENTS

Posted on

The article is written by ADV. ZUBA PARVEZ BUBERE

Introduction:


The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 was primarily enacted to control the formation of monopolies, prevent economic assemblage of power in the hands of few, and prohibit monopolistic and restrictive trade practices. Over time, the provisions of the Act were seen to have turned obsolete in the era of cut-throat competition between the players in the marketplace. In other terms, the MRTP Act fell short in safeguarding the general consumer interest and ensuring fair competition in the market. Thereafter, the Competition Act, 2002 replaced the MRTP Act, 1969 intending to encourage healthy competition amongst the players besides prohibiting anti-competitive agreements, abuse of dominant position, and regulation of acquisitions, mergers, and amalgamations. The CCI, under the Act, sought to regulate two kinds of agreements viz. anti-competitive agreements between the competitors (also known as “horizontal agreements”) and anti-competitive agreements amongst persons placed at different levels of the production/ supply chain ((also known as “vertical agreements”).


Since its inception, the governing Act along with the functioning of the CCI has been challenged at timely intervals. The major issues as regards the effectiveness of competition laws relate to its ability to tackle the abuse of dominant position by the major players in the market, formation, and operation of cartels, and the potential of penalizing laws to punish the offenders. The absence of effective anti-competitive agreements paves the way for the dominant entities to rule the market thereby forcing other competitors to function just like puppets. These dominant firms interrupt competition and seek to enrich themselves at the cost of general consumer welfare.


Analysis Of Study:


As regards the first issue, several reports indicate that various sectors in the Indian economy have witnessed a reduction in the number of dominant players while the proportion of market share as held by them has increased considerably. For instance, as per the statistics sourced from the Annual Reports of the CCI, in the year 2010, 39.13% of the firms in the Indian market were marked as being in the dominant position while the market cap in the respective industry remained 80.48. The corresponding figure in 2018 was 38.8% while in the year 2020 fell to 16.48%. On the other hand, the market cap in the respective industry remained 84.25 in 2018 and 89.33 in 2020.

Since the CCI came into existence in March 2019, 1008 cases have been marked as “antitrust matters”. While 20% of those matters related to the real estate sector, around 10% were linked to the automobile industry. In 2017-2018, 68 cases were registered as anti-competitive agreements and abuse of dominant position by the major participants in the market. Expressly, the consolidation of powers in the hands of the few can result in serious repercussions to be faced by the entire industry.


This is a grave concern as far as the Internet is concerned since quantification of these risks is a challenging task in itself and some of them are either listed on stock exchanges of countries abroad or are unlisted private entities. An instance that is worth mentioning is the Jio-Facebook merger which can have humongous effects on the Indian economy. Concerning the alliance of Jio with other entities such as Intel and Google, some of the experts are of the view that Jio could emerge as a giant international player rolling several companies into its sphere. While Facebook and Google account for 68% of the digital ad revenue in the Indian scenario, Flipkart and Amazon contributed to around 90% of the business in the E-commerce industry in October 2019. Though such mergers bring in short-term benefits for the consumers, nothing can be commented on as far as the long-term repercussions are concerned.


As regards cartels, they operate to aggrandize themselves by embracing unhealthy competitive plans and policies. Cartels usually enter into four kinds of agreements viz. price-fixing agreements, market-sharing agreements, bid-rigging agreements, and agreements to control the production/ supply in the market. Those competitors who do not form a part of the cartel feel isolated and find it challenging to survive and grow in the market.

Export cartels form an exception i.e. as long as it does not create any anti-competitive effect in the domestic markets and those seeking IP Protection in the form of patent pooling, tie-in agreements, etc. Foreign Direct Investment may acquire domestic firms and entities in the market-leading to a concentration of powers in the hands of a small group transforming them into dominant players in the respective sector. A single instance of such acquisition may not result in any notable impact on the competition. Perhaps, when there are numerous occurrences of a similar nature, it can potentially damage fair and free trade especially if the exporter is a major player in the market. On the other hand, instances of patent cross-licensing schemes have resulted in the formation of cartels. Therefore, the activities of those competitors availing or attempting to avail the benefits of these exceptions are required to be carefully monitored.


As regards the third issue, post a thorough investigation of the registered cases under its banner, the CCI imposed penalties of approximately Rs. 357 crores on the defaulting offenders. Since most of those cases were challenged in appeals before the higher authorities, only as much as approximately 1.4 crores could be realized. To put it another way, most of the time, the offenders attempt to get away with their ill-conduct by taking advantage of the long-drawn litigation process, leaving behind possibly no scope for the CCI to initiate strong measures against them. This, in a manner, could be said to be a failure of the penalizing powers of the Commission.


There is a need to direct efforts towards educating the larger population about competition laws. It is only when a majority of the population is educated, will they turn intolerant towards the unfair business policies and place their opinions and demands forcefully.

Conclusion:


Though the CCI has succeeded in attaining its objectives up to a definite level, it has still failed in addressing certain loopholes and ambiguities. The biggest loophole in the performance of the CCI can undoubtedly be stated as the inability of the said Commission to enforce strong measures against anti-competitive agreements and taxing the defaulting offenders. The CCI derives its authority from the Competition Act, 2002. However, the Act doesn’t confer ample power on the concerned authority to out master the unfair tricks and means adopted by some. For instance, the Act states that the CCI has the liberty to grant some leeway by way of contributing to economic development. This ground can be used by the major players as an opportunity to justify their anti-competitive practices in the name of development.


Some of the most challenging scenarios that the CCI may have to deal with in the future are related to industries such as the telecom, internet, etc. The key distinguishing feature that compliments the two markets is the “network effects”. These sectors may comprise contestants who can establish themselves as being in the dominant position and dictate terms of trade and business in pursuance to the network effects, thereby abusing the said positions and disturbing the smooth flow of activities. The CCI must actively look into the terms of mergers and negotiations contracts. To address issues falling in the said sectors and ensure healthy competition in the respective industries, persons of specialist knowledge and practical experience in the said fields besides possessing the ability to comprehend modern industrial economics will have to be employed.


Anti-competitive practices impose negative consequences on consumers due to their higher prices and restricted supply. Staunch alliances injure consumer interest both in developed as well as developing countries. With the creative minds working towards malicious motives, the CCI needs to pull up its socks and be ready to come to the rescue of innocent consumers.

Latest Posts

Archives

Factories Act,1948

Posted on

The present article is written by Mudit Jain pursuing B.B.A. LL.B. (H) from Indore Institute of Law.

INTRODUCTION –

A factory is a structure or location where items are manufactured using machinery and manual labor. The constituent parliament enacted the factories act, 1948 on August 28, 1948, the governor-general of India gave his assent on September 23, 1948, and it went into effect on April 1, 1949. It protects the health, safety, and wellbeing of factory employees, as well as providing protection to exploited workers in order to improve their working circumstances in industries or factories. It will also oversee the properties’ owners, and severe observations will be conducted about factories and other laborers’ working conditions. The Act is divided into 120 sections, 11 chapters, and three parts.

HISTORY –

1.The Factories Act,1881-In 1881, the first Indian Factory Act was passed (15th of 1881). This Act was primarily concerned with prohibiting the employment of children under the age of seven, as well as their double work on the same day. This Act was made applicable to factories with more than 100 employees as well as enterprises with mechanical power.

2.The Factories Act,1891-Because of a flaw and a loophole in the 1881 Act, employers were always in problems. In 1884, the panel reviewed the employers’ inquiries. The Indian Factories Act of 1891 was then passed.

3.The Factories Act,1911-The safety standards in the 1891 Act were insufficient, and multiple fires occurred on the premises, resulting in more than 50 deaths between 1901 and 1905. As a result, the Factories Act 1911 was passed to protect factory employees.

4.The Factories Act,1922-Following World War I, the International Labour Organization was established in 1919, with an emphasis on working hours, minimum age, and night labor for women and children. The laborers went on strike in 1921 in protest of the convention’s ratification. As a result, the Factories Act of 1911 was revised in 1922 to add regulations for working hours, minimum age, and night employment for women and children.

5.The Factories Act,1934-In 1929, a Royal Commission was established to study the current Act and provide recommendations for the long-term improvement of labor living circumstances. As a result, the Firms Act of 1934 was adopted, and it went into effect in 1935, including factory inspection and observation, which applies to factories employing 20 or more people with power.

6.The Factories Act,1948-The Factories Act of 1934 was revised in 1935, 1936, 1937, 1940, 1941, 1944, 1945, 1946, 1947, and 1948, with a significant change in 1948. During the interim congress government, a five-year plan was developed to unify labor conditions and reform the 1934 Act, similar to the 1937 United Kingdom Factories Act. According to the International Labour Organization, in the areas of health, safety, welfare, working hours, hygiene, medical examination, and the submission of the factory and industry plans. As a result, on April 1, 1949, the Factories Act 1948 went into effect.

OBJECTIVES-

  • To keep humans from working long hours with physical hardship or hard labor.
  • To offer employees a healthy and sanitary working environment.
  • To protect workers from dangerous tasks and to avoid accidents.
  • To guarantee that yearly leave is paid for.
  • To safeguard women and children while they are at work.

IMPORTANCE OF THE FACTORIES ACT,1948 –

Factories in India are the most significant component of economic growth; it is also the state’s responsibility to provide every resident of India with health and safety conditions, which are especially crucial for factory workers. The factories act sought to protect employees’ interests, precautions, and preventions in hazardous employment, health, and safety in the workplace, to prohibit their exploitation, to impose responsibilities on employers and managers to protect every employee, and to protect women and children.

SCOPE AND APPLICABILITY OF THIS ACT-

The Act applies to the entire country of India, including Jammu & Kashmir. The Act applies to any premises having ten or more workers in the production process and powers, as well as any premises with twenty or more workers in the manufacturing process but no authority. The Act authorizes the state government to declare any of the factories or premises covered by the Act to comply with the Act’s provisions for safety, health, and welfare. However, it does not contain a mine or a mobile unit of the Union Armed Forces, restaurants, or hotels.

SALIENT FEATURES –

  • Workers’ working hours shall not exceed 48 hours per week, and there must be a weekly holiday.
  • Every factory must have preventative and safeguards in place to protect the workers’ health, as stipulated by the Act. Restrooms, proper lighting, ventilators, and temperature must all be supplied. The workplace should be maintained clean and sanitary at all times.
  • To maintain worker safety, factories should be securely gated, and youngsters should not be permitted to work in dangerous or enclosed places. Furthermore, the state government must oversee each plant to verify that safety precautions are taken and implemented in accordance with the requirements.
  • Restrooms, lunchrooms, first-aid equipment, shelters, and crèches must be provided for the workers’ safety. Washing facilities must be supplied and well maintained for the benefit of workers.
  • If a person breaches a provision of the factories act, it is considered an offense and punishable by imprisonment for three months or a fine of up to one lakh rupees, or both. If any of the employees misuse any of the facilities provided for their health, safety, and welfare, he or she will be fined up to 500 rupees.

MAJOR AUTHORITY UNDER THE FACTORIES ACT,1948-

The management and the occupier shall be held accountable under the factories act for the execution of the provisions outlined in the act. Section 2(n) defines “occupier” as the person who has ultimate authority over the factory’s affairs. Following the Supreme Court’s decision in the case J.K. Industries Limited v. The Chief Inspector Of Factories, 1996, “Manager” refers to the person who is responsible for the operation of the factory for the occupier and must be selected by the occupier.

MAJOR PROVISIONS UNDER THIS ACT-

  • Occupier Responsibilities
  • Inspectors’ powers and responsibilities
  • Worker Health and Safety Provisions
  • Provisions Concerning Worker Safety
  • Provisions Concerning Worker Welfare
  • Adult employees’ working hours
  • Earned annual leave
  • Provisions concerning worker strength
  • Employment provisions for women
  • Provisions concerning child labor
  • Operations that are dangerous
  • Diseases, accidents, and risky events must be reported.
  • Special provisions for hazardous processes
  • Accidents and potentially hazardous events
  • Workers’ rights and obligations
  • Penalties and procedures are in place.

MAJOR AMENDMENTS UNDER THIS-

The Factories Amendment Act,1954

The Indian government accepted the International Labour Organization Convention and outlawed the employment of women and young people in industries at night. As a result, sections 66,70, and 71 were changed. Also prohibited are women and young people from cleaning, lubricating, and operating machines. Revision of the chapter on leave with pay to fix 240 days attendance and raise the maximum on carried forward leave. Allowing 6 hours of labor in a row with no breaks if the shift is 6 hours long.

The Factories Amendment Act,1976

Following the 1948 and 1954 amendments, industrial expansion continued, and there is a need for safety officers in all factories and industries to deal with worker health and safety issues. As a result, the 1976 Factory Amendment Act was passed. Changes were made to the definitions of the production process, worker, factory, occupier, and so on when the word “contract labor” was incorporated into the definition of worker The location must be approved and granted prior authorization. The investigation into fatal accidents was scheduled for one month under Section 82.

Section 92 of the Act increased the maximum limit from Rs. 500 to Rs. 2000, and section 94 increased the enhanced penalty from Rs. 1000 to Rs. 5000. Section 94 also included a provision for a minimum fine in the event of a fatal accident or significant bodily harm (Rs. 1000 for death and Rs. 500 for serious physical harm; in the case of an aggravated sentence, these values were quadrupled). Section 36A was amended to include the use of portable electric lights, Section 40A for building maintenance, Section 40B for Safety Officers, Sections 62(1-A) and 73(1-A) for more particulars in muster roll, Section 88A for notice of dangerous occurrences, and Section 91A for safety and health surveys.

The Factories Amendment Act,1987

The Bhopal gas catastrophe raised worldwide safety awareness and prompted the Indian government to implement stricter standards to guarantee the health and safety of workers. As a result, the state and federal governments enacted new environmental protection laws (i.e. Environmental (Protection) Act, 1986). In addition, the government made essential revisions to the existing factories (amendment) act of 1986, adding a new chapter IV A on hazardous procedures and harsh fines and imprisonments for violations.

The Factories Amendment Act,2014

On August 7, 2014, the Factories (Amendment) Bill, 2014 was introduced in Lok Sabha. It intends to alter the Factories Act of 1948. The Act’s goal is to guarantee proper safety measures while also promoting the health and wellbeing of factory workers. According to the Statement of Objects and Reasons, the amendments proposed in the Bill are based on changes in manufacturing practices and technologies, ratification of ILO conventions, judicial decisions, recommendations of various Committees, and decisions made at Factories Chief Inspectors Conferences. 

The Factories Amendment Act,2016

On August 10, 2016, the Minister for Labour and Employment, Mr. Bandaru Dattatreya, proposed the Factories (Amendment) Bill, 2016. The Factories Act of 1948 is amended by the Bill. The Act governs manufacturing workers’ safety, health, and well-being. The Bill modifies provisions concerning overtime hours of labor. The Act allows the state government to make regulations on a variety of issues, and the bill gives the national government the same authority. The Act empowers the state government to enact laws governing overtime hours of labor. However, the total number of hours of overtime for a quarter cannot exceed 50. This restriction is increased to 100 hours under the Bill. The federal government may also impose rules in this regard, among other modifications.

CONCLUSION-

The Factories Act is crucial in the industrial sector since it provides a wide range of advantages to the factory and industry workers. It improved their working conditions, health, safety, and wellbeing. Workers are regarded as the backbone of our Indian economy, and the government made critical changes to improve their living circumstances. Furthermore, the Act made employees aware of different measures designed to protect their interests and compelled employers who act in bad faith to be aware of their legal obligations.

REFERENCES-

  • https://prsindia.org/billtrack/the-factories-amendment-bill-2014
  • https://legislative.gov.in/sites/default/files/A1948-63_0.pdf
  • http://labourbureau.gov.in/LS_FACT_2004_Chap_1.pdf
  • https://www.legalbites.in/factories-act-1948#:~:text=Salient%20 features%20of%20the%20 Act,-Working%20 hours%20of&text=There%20must%20be%20 restrooms%2C%20 adequate,in%20 hazardous%20and%20confined%20areas.
  • https://www.srcc.edu/sites/default/files/B.Com%20(H)_Sem6_BCH%206.4%20(d)_Industrial%20Relations%20and%20Labour%20Laws_W2_CG_UNIT%205_0.pdf

Latest Posts

Archives