There are four main types of cartels: price fixing; limit production or supply; Market distribution and; Manipulation of collusive bids/auctions. The term `supply-rigging` has been defined in the Explanatory Note to Article 3(3)(d) of the Competition Act 2002, i.e. any agreement between market participants and undertakings involved in a similar production or trade in goods or the provision of services which directly or indirectly restricts competition for tenders. Paragraph 3(3)(d) of the Competition Act, 2002 prohibits such an agreement that results in bids or collusive bids. The Competition Commission of India has adopted a presumptive rule approach, which means that once the essential elements constituting the manipulation of the offer have been identified, this is sufficient as it is no longer necessary to know the effects of such conduct. In such a situation, the burden of proof lies with the opposing parties in order to contradict the allegations made against them and to demonstrate that their conduct did not result in appreciable harm to competition in India. CCI considered that these agreements allow OEMs to become monopolistic players in the market for their car model, create barriers to entry, exclude competition from independent service providers and charge operating prices from consumers, in addition to the potential long-term structural anti-competitive effects on the automotive market in India. These agreements were considered vertical agreements, including exclusive supply agreements, exclusive distribution agreements and refusals of transactions under Article 3(4) and considered as AAEC in India. Under subsection 3(3) of the Act, any horizontal agreement of any of the following types is considered to have a CEAA and is therefore anti-competitive and void: Equation 2: An agreement in which the parties engage in similar trade in goods or services and whose agreement has a particular effect suggests that the agreement has appreciable adverse effects on competition in India. Each of the three elements of this equation is developed below. A market sharing agreement is an agreement between undertakings in which they decide, in accordance with Article 3(3) of the Competition Act 2002, on the production, supply or provision of services on the basis of the geographical area of the market. Geographical area is not the only factor; In some cases, they also take into account other factors, such as the type of goods or services or the number of customers in the market. Such agreements are considered to have appreciable negative effects on competition.
The term “market sharing” refers to the division of the market, so that there is no competition between competitors in the market and there is an absolute monopoly on profits in their sharing of the market. This marketing is usually done by assigning the geographical area to each market player or according to the allocation of customers. Horizontal agreements are essentially agreements between competitors. These competitors are at the same stage of the production chain and exist in the same market. Equation 1: Agreements that cause or may have an appreciable effect on competition (AAEC) in India are void. The nature of these agreements is explained in more detail below. Conclusion The purpose of the Act is to prevent practices by parties that are anti-competitive or harmful to the market. It can be ensured if there is commercial freedom and protects the interests of all parties. This objective can only be pursued if the agreements are eliminated and all the principles of law are respected. It is important that the parties, when doing business in India, bear in mind the maintenance of anti-competitive elements in the agreements between them. Companies should be proactive and diligent in identifying existing anti-competitive elements of their current agreements.
A training programme is needed to better understand the impact of anti-competitive agreements and how to avoid them. Bibliography Books: · Competition Law in India – Abir Ro and Jayant Kumar Websites: · www.ssrana.in/Intellectual%20Property/Competition%20Law/Anti-Competitive-Agreements-in-India.aspx · www.mondaq.com/india/x/250048/Trade+Regulation+Practices/AntiCompetitive+Agreements+Tests+And+Tribulation files: · The Monopolies and Cartels Act, 1969 · Competition Act 2002 Endnotes [1] www.cci.gov.in/sites/default/files/cci_pdf/competitionact2012 [2] www.cci.gov.in/sites/default/files/cci_pdf/competitionact2012 [3] No. . .