A comparative analysis on anti competition agreement in India, UK

and US.

INTRODUCTION

Law is not just limited to the country in which it evolved and exercised. Law is everywhere, we
need regulations everywhere. Be it travelling across a different country or setting a business
there and following the laws of that country. Earlier, people never gave it a thought to relate laws
of their countries to other countries. When the Roman Empire recognised the existence of
competition law, it was a historic moment. Now, the Competition Law has gained widespread
acceptance across the world. Competition law is nothing more than a legal framework designed
to sustain market competition by regulating anti-competitive activity on the part of corporations,
competition legislation is recognised in various forms in different countries. Anti-Trust
agreements are collaborative agreements between rivals that restrict trade, such as price-fixing,
should be prohibited. Prohibit the formation of monopolies by mergers and Prevent
monopolisation by anticompetitive practises, such as predation or exploitation of a dominating
position, by passing antitrust legislation. A term used to describe the principles of law that
control market activity is antitrust law in the United States, while anti-monopoly law is used to
describe the same concept in China and Russia. In the United Kingdom, antitrust law and
competition law are both used to describe the same thing.

IMPORTANCE OF ANTI-TRUST LAWS

Antitrust laws are designed to encourage and safeguard competition in various "lines of
business" or "relevant markets," if you will. This is all they're meant to be used for. Because of
their size and economic success, they are not meant to penalise them in any way. Antitrust laws
have never been anti-market or anti-business in their original design or application. However,
antitrust rules are designed to promote market economics and healthy competition in every
market, while ensuring that the many market abuses that might occur are addressed.

Competition in every market is the goal of these laws, and the idea is that no one seller can take
advantage of the customers if there are a lot of competing sellers. Instead, each seller will have to
provide a good deal and be responsive and efficient in its dealings with customers, who
otherwise would not be able to buy their products or services.
INDIAN COMPETITION LAW IS A COMPLICATED SUBJECT

India was forced to implement a programme of liberalisation, privatisation, and globalisation

(LPG), which liberalised the country's market economy, putting the country's market secretary in
direct competition with both local and international corporations. In light of this trend, it became
imperative for India to establish an efficient legal framework to promote fairness in commercial
disputes, which finally resulted in the implementation of the India Competition Act, 2002.
Competition law, on the other hand, has a long history that stretches back to the 1960s, when the
Monopolies and Restrictive Trade Practices Act (MRTP) was created in the year 1969. The
Competition Commission of India was established in 2003 as a new quasi-judicial body to
monitor the implementation of the LPG reforms, which was enacted in 2002. The Competition
Commission of India was established as a new quasi-judicial body to monitor the
implementation of the LPG reforms, which was enacted in 2003. Under the Competition Act of
2002, an anti-competitive agreement may be entered into.
It should be clear from the above that competition in the market forces would be governed in
India by the Competition Act of 2002, which bans anti-competitive agreements under Section 3
of the Act. There are two sorts of agreements covered in this section: horizontal agreements,
which are agreements between competitors, and vertical agreements, which are agreements
between parties that have a prospective or real connection of buying and selling to one another.
An Anti-Competitive Agreement will be defined as any agreement entered into by an
association, an enterprise, or a person that has an appreciable adverse effect on competition
(AEC) within India in respect of the acquisition, control of goods, distribution, production,
provision of services, or any other activity, and that is prohibited under the provisions of the
Anti-Competitive Agreements Act. Section 19 further specifies the considerations that must be
considered by the Competition Commission of India in evaluating whether a contract comes into
the category of anti-competitive agreement, which are as follows:
A. If any agreement creates barriers in the market that prevent the entry of new competitors
into that market;
B. If any agreement divides competitors in the market;
C. Any agreement that provides benefits or accruals to consumers;
D. Any agreement that may be for improving the production of goods or provision of
services;
E. Any agreements that promote scientific, technological, and economic advancement;

Cartels are further defined as agreements entered into between competing firms to regulate the
price for the purpose of restricting new entries to the market that are engaged in the production,
distribution, supply of goods or services of a similar nature; control or limit the markets; share
the production or provision of goods or services or the markets by way of allocation of the
market; and share the profits.
Agreements at different levels of the production chain in the markets or at different stages in
respect of distribution, production, sale, supply, trade and other aspects of goods or services,
such as tie-in arrangements, exclusive supply and distribution arrangements, agreements refusing
to deal and resale price maintenance, are also prohibited if they cause or have the potential to
cause AAEC in India.
Anti-competitive agreements are prohibited under Section 27 of the same Act, and the
Competition Commission can impose the following sanctions against violators:
1. An interim order while the investigation is ongoing;
2. An order to the offending parties directing them not to continue such agreements and not
to repeat such agreements;
3. An order to the offending parties directing them to modify any such agreements in the
manner provided in such order; and
4. A substantial financial penalty.

As a result, this Section renders Exclusive Dealing null and invalid. These Agreements may have
an anti-competitive component, but they may also have the potential to provide efficiency.
Consumers may, however, be included in anti-competitive agreements, which raises the
legitimate issue of whether they should be. This question was first addressed by the CCI in the
case of Yashoda Hospital and Research Center Ltd v. India Bulls Financial Services Ltd. (IFSL),
in which it was determined that in order for Section 3 to be applicable, two or more enterprises
must be involved, as well as an agreement between them. In a related caseix, the Gujarat High
Court ruled that consumers had no role to play in the anti-competitive arrangement in which they
were involved. In this way, these court rulings explicitly declared that consumers cannot be
parties to anti-competitive agreements under any circumstances.

THE INCEPTION MRTP ACT

For more than 40 years now, people have been thinking about and formulating the Monopoly and
Restrictive Trade Practices Act of 1969 (MRTP). It was a direct result of the government's
command-and-control approach to policy formulation. It was established to avoid the
concentration of economic power, to regulate monopolies, and to ban monopolistic, restrictive
trade practises, and unfair trade practises, among other things.

The transition from the MRTP Act of 1969 to the Competition Act of 2002 was significant.
The economic reforms of the 1990s brought about a significant transformation in the corporate
climate in India. The Monopoly and Restrictive Trade Practices Act (MRTP) of 1969 (also
known as the Sherman Act) was revised from time to time in order to stay up with
improvements. Despite these modifications, it was thought that the MRTP framework was
insufficient to meet the needs of a rapidly changing economic environment.

WHAT ARE OUR OPTIONS IN ANTI COMPETETIVE AGREEMENT

If, after an investigation, the commission determines that the agreement in question is within the
scope of Section 3, it may issue one of the following orders, depending on the circumstances:

The court may order a person, company, or organisation that is a party to the agreement to
terminate or resume participation in the agreement. The court may also let the penalty procedures
to continue as in the case of Vodafone.
Person, company, or group may be subjected to whatever sanctions the government considers
appropriate. Such fines should not be more than ten percent of the average turnover for the prior
three fiscal years, whichever is greater.
In the case of cartels, the above-mentioned penalties shall apply to each producer, seller,
distributor, trader, or service provider who is a member of that cartel, and the amount of the
penalty may be up to three times the amount of the cartel's profit for each year the agreement is
in effect, or ten percent, whichever is higher, for each year the agreement is in effect. Instructions
to the commission for modification of the agreement up to a certain degree and in the manner
stated in the order of the commission. Payment of the costs and the giving of instructions to the
firm in order for it to comply with the orders. It has the authority to issue whatever command or
directive it sees suitable.

ANTI-TRUST LAWS IN THE UNITED STATES

The three most important Federal antitrust statutes are as follows:

1. The Sherman Antitrust Act was passed in 1890.

2. The Clayton Act is a piece of legislation that was passed in the United States in 1872.
3. The Federal Trade Commission Act is a piece of legislation that was passed in 1977.

The Sherman Antitrust Act was passed in 1890. Under this Act, contracts, combinations, and
conspiracies that unduly obstruct interstate and international commerce are prohibited. This
involves agreements among rivals to control pricing, rig bids, and distribute clients, all of which
are considered criminal offences and are punished by imprisonment. Moreover, under the
Sherman Act, it is unlawful to monopolise any portion of interstate trade. When one company
dominates the market for a product or service, it is said to have achieved that market dominance
not because its product or service is better to others, but rather because it has suppressed
competition via anticompetitive behaviour. When a firm's robust competition and lower prices
drive sales away from its less efficient rivals, the Act is not breached; in such situation,
competition is functioning correctly and no violation occurs.

The Clayton Act is a piece of legislation that was passed in the United States in 1872.
There are no criminal sanctions for violating this Act, which is a civil legislation that forbids
mergers or acquisitions that have the potential to reduce competition. Under the provisions of
this Act, the government challenges mergers that are likely to result in higher costs for
consumers. All parties contemplating a merger or acquisition of a size greater than a particular
threshold must inform both the Antitrust Division and the Federal Trade Commission of their
intentions. In addition, the Act forbids additional corporate activities that, in some situations,
may be detrimental to competition.

The Federal Trade Commission Act is a piece of legislation that governs the Federal Trade
Commission. Despite the fact that this Act forbids unfair tactics of competition in interstate
commerce, there are no criminal consequences associated with it. It also established the Federal
Trade Commission, which is responsible for investigating and prosecuting breaches of the Act.

Offenses that are related

A number of other statutes are used by the Antitrust Division to combat illegal activities arising
from conduct that occurs in the context of antitrust violations or that otherwise negatively affect
the competitive process, as well as offences that compromise the integrity of an antitrust or
related investigation, such as statutes that prohibit making false statements to federal agencies or
obstructing justice, conspiracies to defraud the United States, and mail- and wire-transfer fraud.
Each of these offences is punishable by a separate punishment and jail term, which may be added
to the penalties and imprisonment terms already imposed for antitrust breaches.

IN RELATION TO INDIA, THE UNITED STATES

In contrast to the Indian enforcement framework, which is composed of a single piece of law and
a single agency, the US enforcement framework is formed of a number of agencies and pieces of
legislation. In the United States, two government agencies, the Antitrust Division of the United
States Department of Justice (DOJ) and the Federal Trade Commission, are primarily responsible
for enforcing antitrust laws (FTC). It is important to note that the former is a part of the
executive branch of government, whilst the latter is an independent administrative agency,
similar to the CCI. The Sherman Act, which was passed in 1890, is the oldest federal antitrust
legislation in existence. It is concerned largely with anti-competitive agreements and monopolies
exerted by businesses. Among other things, the Clayton Act of 1914 prohibits certain corporate
activities such as exclusive supply, mergers, pricing discrimination and tying, among others. The
Department of Justice and the Federal Trade Commission each enforce the Sherman Act and the
Clayton Act separately. Unless, of course, the breach involves a criminal prosecution, the
Department of Justice has sole jurisdiction over the matter.

THE COMMON LAW TRADITIONS IN THE UK ARE CHANGING

When we look at the laws of the United Kingdom, we see that the country has particular
legislation defining restrictions against anti-competitive agreements. According to the United
Kingdom Competition Act 1998, any agreement between two or more firms, as well as any
connected actions, that have a negative impact on commerce in the United Kingdom or limit
competition are forbidden. The clauses of the United Kingdom Act are strikingly similar to those
of the Indian Competition Act. Accords that are inherently price-fixing agreements or
agreements that govern the manufacture, distribution, or exchange of products are prohibited
under the Act.
Section 1 of the Sherman Act, passed in 1890. If a corporation is discovered to be involved in
any such contract or combination of contracts, the Sherman Antitrust Act penalises it with a fine
of up to $ 10,000,000 if the conduct is deemed to be unlawful.
Section 2 of the Sherman Act of 1890. Section 45 of the Federal Trade Commission Act of 1914.
Section 2 of the United Kingdom Competition Act of 1998. Section 2(1)(a) of the United
Kingdom Competition Act of 1998.
The primary purpose of reviewing all of these laws is to draw attention to the fact that in nations
such as the United States and the United Kingdom, there is no distinction between horizontal and
vertical anti-competitive agreements, as is the case under the Competition Act 2002. One of the
primary concerns under Indian law is whether to classify the agreement as horizontal or vertical
in order to bring it inside the ambit of the statute that forbids such anti-competitive agreements in
the first place.A closer examination of the laws of the United States and the United Kingdom
reveals that these laws support the illegality of anti-competitive agreements or any other such
practises that adversely affect the benefits of consumers or harm market competition, but they do
not limit the scope of the law by requiring that an agreement be either a horizontal or vertical
anti-competitive agreement, as some have suggested. As a result, agreements that do not fit
under any of these categories but are still anti-competitive are not barred from entering into
force. In this context, the CCI must carefully examine Indian law and make any necessary
adjustments in order to broaden the extent of its authority.

CONCLUSION

The main aim of anti- competition laws and agreements is to create a safe competitive
environment. To build trust among people. Supposedly their is a company in a city working and
providing services since ten years, and a new company founds it difficult for itself to work
against that company’s monopoly it can either propose a merger, divide the areas, etc. Anti-
competition agreements ensure anything like that won’t happen and whoever breaks them risks
its business. Although studies show that government’s undue interference results in unsatisfied
consumers. But, limited monitoring is necessary, this is a law that evolved as people find its
need. Which shows that it is needful.