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The Competition Act, 2002, aims to defend the economy from enemies of competition. It prohibits anti-competitive agreements and abuse of dominant position. It empowers the Competition Commission of India (CCI) to impose penalties upon each person party to such an agreement or abuse. The CCI has the authority to impose a penalty of up to 10 per cent of the average turnover for the three preceding financial years. The Act defines “turnover” to include the value of goods or services sold. The CCI used to levy a penalty based on the “total” turnover of the offending person but within the ceiling of 10 per cent.
In Re: Excel Crop Care Limited, the CCI imposed a penalty at 9 per cent of the total turnover. Since the statute was not clear whether the turnover was related to the product or the person, the apex court, in an appeal in this matter in 2017, adopted “relevant” turnover for imposing a penalty. It clarified that “rele
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