Competition law notes final

=Module 1
q.1.Basic economic and legal principal
Competition law is a branch of law built on the rules established with an aim to
protect competition in the markets for goods and services. These rules which
concern the acts and transactions of undertakings engaged in economic
activities in the markets for goods and services are generally grouped under
three headings. Within this framework, competition rules prohibit agreements,
decisions and concerted practices restricting competition between
undertakings as well as abuse of dominant position by undertakings holding
such positions in their markets, and they also control mergers and acquisitions
over certain thresholds.
The prohibition and control provisions laid out in competition rules
basically aims to prevent cartelization and monopolization in markets for
goods and services. As a matter of fact, such developments in the markets
inevitably harm consumer welfare, an indispensable element of social welfare
which the competition rules aim to protect. On the other hand, some
agreement may limit competition between undertakings on the one hand and
may lead to some social economic efficiencies/benefits on the other. In order
to ensure that such agreements with a net effect of increasing competition can
be made, an exemption regime is regulated in competition law and
agreements between undertakings in the same level (horizontal) and different
levels (vertical) of the market may be left exempt from the prohibition of the
competition rules under an exemption system, provided they are not cartel
agreements which are, by nature, out of the scope of exemption.
The purpose of the Act no 4054 on the Protection of Competition (act no
4054), which provides the basis for the competition legislation in Turkey, is
stated as follows in article 1 of the Act: "The purpose of this Act is to prevent
agreements, decisions and practices preventing, distorting or restricting
competition in markets for goods and services, and the abuse of dominance by
the undertakings dominant in the market, and to ensure the protection of
competition by performing the necessary regulations and supervisions to this
end." Accordingly, the transactions under the scope of the Act aimed at
achieving this goal may be listed under three headings in articles 4, 6 and 7 of
the Act:
Article 4 concerns all agreements, practices and decisions between all kinds of
undertakings operating in or effecting markets for goods and services within
the borders of the Republic of Turkey which can prevent, distort or restrict
competition,
Article 6 concerns abuses of dominant power by undertakings which hold
dominant position in a market,
Article 7 concerns all legal transactions and behavior in the nature of mergers
and acquisitions which aim to create dominant position or strengthen existing
dominant position and which will significantly decrease competition as a result.
The regulations of Articles 4, 6 and 7 which constitute the foundations of the
implementation of the Act and which include prohibitive provisions are aimed
at undertakings. In the implementation of the Act, an undertaking is defined as
"Natural and legal persons who produce, market and sell goods or services in
the market, and units which can decide independently and do constitute an
economic whole," and makes no discrimination among public and private
undertakings within this framework. In other words, the Act no 4054 does not
specify any privileges for public undertakings. Consequently, in case
agreements, practices and decisions restricting competition are carried out by
public undertakings, these undertakings shall also be subject to the provisions
of the Act. The Act no 4054 also does not discriminate between sectors and
covers practices and transactions by undertakings and associations of
undertakings which restrict competition in all markets for goods and services.
Headings and concepts that can be analyzed under the scope of Principles of
Competition Law can be accessed from the menu on the left side.

Q.2 restrain of trade undder indian contract act?

Section 27 of Indian Contract Act, 1872: Agreement in restraint of trade, void
Every agreement by which anyone is restrained from exercising a lawful
profession, trade or business of any kind, is to that extent void.
Exception 1 : Saving of agreement not to carry on business of which good will is
sold - One who sells the goodwill of a business may agree with the buyer to
refrain from carrying on a similar business, within specified local limits, so long
as the buyer, or any person deriving title to the goodwill from him, carries on a
like business therein, provided that such limits appear to the court reasonable,
regard being had to the nature of the business.
Section 27 of the Indian Contract Act, 1872 states that an agreement, which
restrains anyone from carrying on a lawful profession, trade or business, is void
to that extent. The main reason behind this section is that agreements of
restraint are unfair, injustice as they impose an undue restriction on the
personal freedom of a contracting party. However, as an exception, if a party
sells his goodwill to another he can agree with the buyer that he will not carry
on a similar business within the specified local limits.

Statutory Exceptions
Sale of Goodwill
The only exception mentioned in Section 27 of the Contract Act is related to
sale of goodwill. One who sells the goodwill of a business may agree with the
buyer to refrain from carrying on a similar business, within specified local
limits, so long as the buyer, or any person deriving title to the goodwill from
him, carries on a like business therein, provided that such limits appear to the
court reasonable, regard being had to the nature of the business. Meaning of
Goodwill:- There should be real goodwill to be sold. The Goodwill which has
been the subject of sale is nothing more than the probability that the old
customer will resort to old place.
Partnership Act
According to Section 11 the Partnership Act,1932 partners during the
continuance of the firm to restrict none of them shall carry on any other
business than that of the firm. Section 36 the Partnership Act,1932 is related to
restrain an outgoing partner from carrying on a similar business within the
specified period and specified local limits, The agreement should specify the
local limits or the period of restraint, and The restriction imposed must be
reasonable Restraint upon employees
Q.3.monopolistic trade practices
Monopolistic Trade Practices
A monopolistic trade practice is one, which has or is likely to have the effect of:
1. maintaining the prices of goods or charges for the services at an
unreasonable level by limiting, reducing or otherwise controlling the
production, supply or distribution of goods or services;
2. unreasonably preventing or lessening competition in the production,
supply or distribution of any goods or services whether or not by
adopting unfair method or fair or deceptive practices;
3. limiting technical development or capital investment to the common
detriment;
4. deteriorating the quality of any goods produced, supplied or distribute;
and
5. increasing unreasonably -
1. the cost of production of any good; or
2. charges for the provision, or maintenance, of any services; or
3. the prices for sale or resale of goods; or
4. the profits derived from the production, supply or distribution of any
goods or services.
A monopolistic trade practice is deemed to be prejudicial to the public interest,
unless it is expressly authorized under any law or the Central Government
permits to carry on any such practice.
Inquiry into Monopolistic Trade Practices
The Commission may inquire into
Any monopolistic trade practice,
5. Upon a reference made to it by the Central Government or
6. Upon an application made to it by the Director General or
7. Upon it own knowledge or information
Q.4 restrrictive trade practices ?
Restrictive trade practices includes activities which lock like flow of capital or
profits in the market
Some firms tend to control the supply of goods in the market either by
restricting production or controlling the delivery.
The MRTP act discourage and prevented the firms from indulging in restricted
trade practices
manipulation of prices, conditions of delivery or flow of supply in the market
which may have the effect of imposing on the consumer unjustified costs or
restrictions are regarded as restrictive trade practices types of restrictive trade
practices
• refusal to deal o tie-up sale
• full line forcing
• exclusive dealing
• price discrimination
• resale price maintenance
• area restriction
• predatory pricing
module2
development oof law from MRTP to competition act 2002
What are the Differences between MRTP Act and Competition Act?
The following are the differences between the MRTP Act and Competition Act:
1. The MRTP Act, as the name suggests, was enacted with a focus on
preventing the formation of monopolies and accumulation of wealth and
power in a small portion of the economy. The Competition Act on the other
hand saw a shift in focus from monopolies to promoting and regulating healthy
competition among the players in the economy.
2. The MRTP Act was characterised as being reformatory in its approach,
whereas the Competition Act is rather punitive in nature.
3. The MRTP Act was focused on taking care of the interests of the
consumers. On the other hand, the Competition Act shifted this focus on the
larger interest of public welfare.
4. The MRTP Act sought to prevent the domination of monopolistic firms
that were deemed dominant due to their great size. Conversely, the
Competition Act determines the dominance enjoyed by a firm not from its size
but rather its structure.
5. While the MRTP Act introduced a total of 14 offences, the Competition
Act on the other hand only recognises 4 offences. Further, although the MRTP
Act listed out these offences, it did not lay down any specific corresponding
penalties, whereas the Competition Act even provides for the specific penalty
for each offence.
6. The MRTP Act was based on the pre-liberalisation and pre-globalisation
era, whereas the Competition Act enacted in 2002 focused on a reformed
economy post liberalisation and globalisation.
7. The MRTP Act deemed any firm enjoying a dominant position as
troublesome, whereas the Competition Act does not find issue with the
dominant position of a firm but seeks to penalise the actual abuse of such
dominant position by a firm.
q. Anti-competitive agreements
are agreements among competitors to prevent, restrict or distort competition.
Section 34 of the Competition Act prohibits agreements, decisions and
practices that are anti-competitive.
A particularly serious type of anti-competitive agreement would be those
made by cartels. Cartel agreements are usually to fix prices, to rig competitive
tendering process, to divide up markets or to limit production. As a result, the
cartelists have little or no incentive to lower prices or provide better quality
goods or services. Based on economic studies, cartels overcharge by 30 per
cent on average. There are four main types of cartel agreements:
• Price Fixing
Price fixing involves competitors agreeing to fix, control or maintain the prices
of goods or services. It can be ‘direct’ fixing of prices, where there is an
agreement to increase or maintain actual prices. Price fixing activities can also
take the form of ‘indirect’ fixing of prices, for example, where competitors
agree to offer the same discounts or credit terms. Price fixing agreements do
not have to be in writing, a verbal understanding at, for instance a trade
association meeting or at a social event, may be sufficient to show that there
was a price fixing agreement. It does not matter how the agreement was
reached or whether it has been carried out. What matters is that the
competitors have agreed to collude.
• Bid Rigging
Bid rigging occurs when competitors agree on who should win a tender. To
support the cartel member that has been designated to ‘win’ the tender bid,
other cartel members may refrain from bidding, withdraw their bid, or submit
bids with higher prices or unacceptable terms. The cartel members may agree
amongst themselves to take turns to be the designated ‘winner’ or to reward
‘supporters’ of the winning bid, for example, by giving sub-contracts to them.
As a result of bid rigging, the party inviting the tender is likely to pay more than
it would if the tender was competitive.
• Market Sharing
In a market sharing agreement competitors divide up markets in various ways,
such as geographical area or size or type of customer (e.g. business/non-
business) and agree to sell only to their allotted segment of the market. As a
result they do not compete for each other’s allotted market. Customers are
affected as they would not be able to shop around for the best deals.

• Production Control
Production control involves an agreement between competitors to limit the
quantity of goods or services available in the market. By controlling the supply
or production of goods or services, the cartel is able to, indirectly, increase
prices to maximise their profits.
What are vertical agreements?
Vertical agreements are agreements made between two or more parties which
are operating at different levels of the production, supply and distribution
chain for the purposes of that agreement. For example, between a
manufacturer and a supplier or between a supplier and a retailer.
The parties only need to be operating at different levels of the chain for the
purposes of the specific agreement, that is, the parties could ordinarily be
competitors. But provided that they are acting at different levels in respect of
the arrangement in question (for example, a manufacturer agreeing to supply
the goods made by another manufacturer), it will be deemed a vertical
agreement.
For the purposes of vertical agreements, the main applicable EU block
exemption is the vertical agreement block exemption, which exempts many
vertical arrangements from the Chapter I and the Article 101 prohibitions

horizontal agreements?
Horizontal agreements are agreements made between two or more parties
which are operating at the same level of the production, supply and
distribution chain, for example, between two suppliers or two retailers.
Examples include, joint selling agreements, joint buying agreements,
specialisation agreements and R&D agreements made between competing
enterprises.
There are several EU block exemptions which may apply to horizontal
agreements
What Is Predatory Pricing?
Predatory pricing is the illegal act of setting prices low to attempt to eliminate
the competition.
Predatory pricing violates antitrust laws, as it makes markets more vulnerable
to a monopoly. However, allegations of this practice can be difficult to
prosecute because defendants may argue successfully that lowering prices is
part of normal competition, rather than a deliberate attempt to undermine the
marketplace. What’s more, predatory pricing doesn’t always succeed in its goal
because of the difficulties in recouping lost revenue and successfully
eliminating competitors.
KEY TAKEAWAYS
In a predatory pricing scheme, prices are set low to attempt to drive out
competitors and create a monopoly.
Consumers may benefit from lower prices in the short term, but they suffer if
the scheme succeeds in eliminating competition, as this would trigger a rise in
prices and a decline in choice.
Prosecutions for predatory pricing have been complicated by the short-term
consumer benefits and the difficulty of proving the intent to create a market
monopoly.

q. Abuse of dominant position- Concept

In simple terms 'dominant position' means something in a superior position as
compared to others based on some factors.
- Dominant position is not per se that unless the position is used to exploit
other players in the market.
Abuse of dominant position takes place when an undertaking or of business
uses its dominant position in an exclusionary or an expository manner.
The competition act gives a comprehensive list if practices which comprise of
abuse of dominant position and also mentions the circumstances under which
these practices are disallowed
Under Section 4 of competition act dominant position implies empowerment
of an Enterprises to work autonomously using its power to Grab market share
and to influence customers or contenders or in the market in support of such
practices.
- Dominance can be measured through the following factors
1. Market share
2. size and Assets of undertaking
3. size and significance of contenders of competitors
4. the financial intensity of the undertaking
5. a vertical combination or integration
6. Reliance on customers on the entity enjoying dominance
7. degree of existing barriers in the market
8. market structure and size of the market
9. the source of dominance position regardless of whether it was acquire
because of resolution or a statute
10. social expenses and commitments made by the big business getting a
benefit out of prevailing situation through financial improvements
Abuse of dominant position includes:
• Imposing unfair condition or price
• Predatory pricing
• Limiting production/market or technical development
• Certain barrier to entry
• Applying dissimilar conditions to similar transactions
• Denying market access
• Using dominant position in one market to gain advantages in another market
q. Combination’
Under the meaning of the Competition Act, 2002 a combination refers to the
direct or indirect acquisition of the shares, voting rights or assets or the control
over management or control over assets of one or more enterprises by one or
more persons, or, a merger or amalgamation between enterprises, when the
combining enterprises jointly exceed certain thresholds set under Section 5 of
the Act. Thus a merger or amalgamation or an acquisition would be
categorized as a combination only in case where such merger/amalgamation
or acquisition exceeds the financial thresholds contained in Section 5 of the
Competition Act, 2002 and such combinations would be subject to regulations
provided in Section 6 of the Act. The financial thresholds contained in Section 5
are in terms of the joint value of assets or the turnover of the combining
enterprises.
The Government of India regulates combinations to ensure that there exists
healthy competition in the market. Any combination that causes an adverse
appreciable effect in the relevant market are deemed to be void under the
Competition Act, 2002. If such mergers/amalgamations or acquisitions are not
kept under check, the large scale enterprises would often take over the small
case enterprises and prevent competition in the market. Further if such
practices are left unchecked, it shall result in the concentration of wealth in
specific sectors of the economy which shall hamper the economic vision of the
country in line with the economic policies of the Government of India.
Module 3
1. structure and function of CCI
The CCI acts as the competition regulator in India. The
Commission was established in 2003, although it became fully
functional only by 2009. It aims at establishing a competitive
environment in the Indian economy through proactive engagement
with all the stakeholders, the government, and international
jurisdiction.

 The objectives of the Commission are:

a. To prevent practices that harm the competition.
b. To promote and sustain competition in markets.
c. To protect the interests of consumers.
d. To ensure freedom of trade.

 Formation
- The members of the CCI are appointed by the Central
Government.
- The Competition Commission of India is currently functional with
a Chairperson and two members.
- The chairperson and the members are usually full-time members.
- The eligibility for the Commission: 
a) The Chairperson and every other Member shall be a person
of ability, integrity, and who, has been, or is qualified to be
a judge of a High Court, or, has special knowledge of, and
professional experience of not less than fifteen years in
international trade, economics, business, commerce, law,
finance, accountancy, management, industry, public affairs,
administration or in any other matter which, in the opinion
 of the Central Government, may be useful to the
Commission.

 Functions

1. Ensuring that the benefit and welfare of the customers are

maintained in the Indian Market.
2. An accelerated and inclusive economic growth through
ensuring fair and healthy competition in the economic
activities of the nation.
3. Ensuring the efficient utilization of the nation’s resources
through the execution of competition policies.
4. The Commission also undertakes competition advocacy.
5. It is also the antitrust ombudsman for small organizations.
6. The CCI will also scrutinize any foreign company that enters
the Indian market through a merger or acquisition to ensure
that it abides by India’s competition laws – the Competition
Act, 2002.
7. CCI also ensures interaction and cooperation with the other
regulating authorities in the economy. This will ensure that the
sectoral regulatory laws are agreeable with the competition
laws.
8. It also acts as a business facilitator, by ensuring that a few
firms do not establish dominance in the market and that there
is a peaceful co-existence between the small and the large
enterprises.

 Challenges
The CCI faces multiple challenges while implementing the
Competition Laws. The challenges can be both internal and external.

1. The constant and continuous change in the way businesses

are undertaken and the evolving antitrust issue is proving
to be a significant challenge for the CCI. 
2. The emerging business models are based on a digital
economy and e-commerce. This proves to be a problem for
the CCI as the current competition laws talk only of assets
and turnovers.
 3. The number of benches of the CCI has to be increased to
pronounce judgments more speedily on the competition
cases.
4. The inclusion of parameters in the competition and
antitrust laws such as data accessibility, network effects,
etc. is important to ensure that the Competition laws are
relevant in a digital economy.

2. Regulatory role

- CCI became functional in 2009, seven years after the Competition

Act was passed in 2002 with the aim of promoting healthy
competition. The body, which is often called the anti-trust
watchdog, is required to protect the Indian markets against
activities among players which may have appreciable adverse
effects on competition.
- The CCI is also empowered to act against any entity that abuses
its dominant market position to its undue advantage.
- Ensure that the markets work for the benefits of the consumers,
so the welfare of the consumers is the main priority.
- Economic activities are promoting fair competition in the market
for growth and prosperity.
- Implement the competition practices and policies of the
Competition Act. The aim is the best possible utilization of
resources by embracing these policies.
- Another role of the CCI is to ensure interaction and cooperation
with the other regulating authorities in the economy. This will
ensure that the sectoral regulatory laws are in agreeable with the
competition laws.
- One important role of the CCI is to carry out advocacy about
competition and competition laws. It aims to educate ministries,
state governments, regulators, and other authorities about the
modern concepts of competition. And it does so by conducting
workshops, seminars, publishing papers, etc.
Module 4

Competition appellate tribunal.

- It was established by central government to hear and dispose off
appeals against the orders and directions passed by the CCI
- The competition appellate tribunal adjudicates on claims for
competitions which may have a reason from the findings of CCI.
- The provisions of the tribunal allow for final appeal to the
supreme court to aggrieved parties are not satisfied with the
adjudication of tribunal.

1. Composition
- The tribunal shall consist of chairperson and not more than two
other members to be appointed by central government.
- Chairperson shall be a person who is or has been a judge of
supreme court or the chief justice of high court.
- The member shall be a person of ability, integrity and standing
having special knowledge and professional experience of not less
than 25 years in competition matters including competition law
and policy, international trade, economics, business, commerce,
law, finance etc.
- Tenure for member and chairperson will be five years or till the
age of 65 for member and till 68 for the chairperson.
2. Functions
- To eliminate practices having adverse effects on competition,
promote and sustain competition, protect the interests of
consumers and ensure freedom of trade in the markets of India.
 - The Competition Commission of India takes the following
measures to achieve its objectives:

 Consumer welfare to make the markets work for the

benefit and welfare of consumers.
 Ensure fair and healthy competition in economic
activities in the country for faster and inclusive growth
and development of the economy.
 Implement competition policies with an aim to
effectuate the most efficient utilization of economic
resources.
 Develop and nurture effective relations and
interactions with sectoral regulators to ensure smooth
alignment of sectoral regulatory laws in tandem with
the competition law.
 Effectively carry out competition advocacy and
spread the information on benefits of competition
among all stakeholders to establish and nurture
competition culture in Indian economy.

 Power –
- Every appeal shall be filed within a period of 60 days from the
date on which a copy of the direction or decision or order
made by the Competition Commission of India is received and
it shall be in the prescribed form and be accompanied by the
prescribed fees.
- The Appellate Tribunal may entertain an appeal after the
expiry of the period of 60 days if it is satisfied that there was
sufficient cause for not filing it within that period. This rule is
similar to the power of other Tribunals in India.
- The COMPAT is bound by procedure laid down by Civil
Procedure Code, 1908.
- It is empowered to summon and enforce attendance of any
person and examine him on oath, require discovery and
production of documents, receiving evidence on affidavit, issue
commission for examining of witnesses, dismiss a
representation on default under the Competition Act, 2002.
 - Although the powers are similar to Civil Court of original
jurisdiction, the technical details are not expected in the
Tribunal and strict adherence to Indian Evidence Act is also not
required.

 Procedure
- Every appeal shall be filed within a period of 60 days from the
date on which a copy of the direction or decision or order
made by the Competition Commission of India is received and
it shall be in the prescribed form and be accompanied by the
prescribed fees.
- The Appellate Tribunal may entertain an appeal after the
expiry of the period of 60 days if it is satisfied that there was
sufficient cause for not filing it within that period.
- The Appellate Tribunal shall not be bound by the procedure
laid down in the Code of Civil Procedure, 1908 (5 of 1908), but
shall be guided by the principles of natural justice and, subject
to the other provisions of this Act and of any rules made by the
Central Government.
- The Appellate Tribunal shall have, for the purposes of
discharging its functions under the Act, the same powers as are
vested in a civil court under the Code of Civil Procedure, 1908
(5 of 1908).

 Award-
- Every order made by the Appellate Tribunal shall be enforced
by it in the same manner as if it were a decree made by a court
in a suit pending therein.
- If any person contravenes, without any reasonable ground,
any order of the Appellate Tribunal, he shall be liable for a
penalty of not exceeding rupees one crore or imprisonment for
a term up to three years or with both as the Chief Metropolitan
Magistrate, Delhi may deem fit.
  Power to punish for contempt .-
The Appellate Tribunal shall have, and exercise, the same
jurisdiction, powers and authority in respect of contempt of itself as a High
Court has and may exercise and, for this purpose, the provisions of the
Contempt of Courts Act, 1971 (70 of 1971) shall have effect subject to
modifications that,-
(a) the reference therein to a High Court shall be construed as including
a reference to the Appellate Tribunal;
(b) the references to the Advocate-General in section 15 of the said Act
shall be construed as a reference to such Law Officer as the Central
Government may, by notification, specify in this behalf

 Execution of orders of Appellate Tribunal

- Every order made by the Appellate Tribunal shall be enforced
by it in the same manner as if it were a decree made by a court
in a suit pending therein, and it shall be lawful for the
Appellate Tribunal to send, in case of its inability to execute
such order, to the court within the local limits of whose
jurisdiction,-
a) in the case of an order against a company, the registered
office of the company is situated; or
b) in the case of an order against any other person, place
where the person concerned voluntarily resides or
carries on business or personally works for gain, is
situated.
- Notwithstanding anything contained in sub-section (1), the
Appellate Tribunal may transmit any order made by it to a civil
court having local jurisdiction and such civil court shall execute
the order as if it were a decree made by that court.
Q.3.monopolistic trade practices
A monopolistic trade practice is one, which has or is likely to have the effect of:
1. maintaining the prices of goods or charges for the services at an
unreasonable level by limiting, reducing or otherwise controlling the
production, supply or distribution of goods or services;
2. unreasonably preventing or lessening competition in the production,
supply or distribution of any goods or services whether or not by
adopting unfair method or fair or deceptive practices;
3. limiting technical development or capital investment to the common
detriment;
4. deteriorating the quality of any goods produced, supplied or distribute;
and
5. increasing unreasonably -
a. the cost of production of any good; or
b. charges for the provision, or maintenance, of any services; or
c. the prices for sale or resale of goods; or
d. the profits derived from the production, supply or distribution
of any goods or services.
A monopolistic trade practice is deemed to be prejudicial to the public interest,
unless it is expressly authorized under any law or the Central Government
permits to carry on any such practice.
Inquiry into Monopolistic Trade Practices the Commission may inquire into any
monopolistic trade practice,
- Upon a reference made to it by the Central Government or
- Upon an application made to it by the Director General or
 - Upon it own knowledge or information

q. Anti-competitive agreements
are agreements among competitors to prevent, restrict or distort competition.
Section 34 of the Competition Act prohibits agreements, decisions and
practices that are anti-competitive.
A particularly serious type of anti-competitive agreement would be those
made by cartels. Cartel agreements are usually to fix prices, to rig competitive
tendering process, to divide up markets or to limit production. As a result, the
cartelists have little or no incentive to lower prices or provide better quality
goods or services. Based on economic studies, cartels overcharge by 30 per
cent on average. There are four main types of cartel agreements:
• Price Fixing
Price fixing involves competitors agreeing to fix, control or maintain the prices
of goods or services. It can be ‘direct’ fixing of prices, where there is an
agreement to increase or maintain actual prices. Price fixing activities can also
take the form of ‘indirect’ fixing of prices, for example, where competitors
agree to offer the same discounts or credit terms. Price fixing agreements do
not have to be in writing, a verbal understanding at, for instance a trade
association meeting or at a social event, may be sufficient to show that there
was a price fixing agreement. It does not matter how the agreement was
reached or whether it has been carried out. What matters is that the
competitors have agreed to collude.
• Bid Rigging
Bid rigging occurs when competitors agree on who should win a tender. To
support the cartel member that has been designated to ‘win’ the tender bid,
other cartel members may refrain from bidding, withdraw their bid, or submit
bids with higher prices or unacceptable terms. The cartel members may agree
amongst themselves to take turns to be the designated ‘winner’ or to reward
‘supporters’ of the winning bid, for example, by giving sub-contracts to them.
As a result of bid rigging, the party inviting the tender is likely to pay more than
it would if the tender was competitive.
• Market Sharing
In a market sharing agreement competitors divide up markets in various ways,
such as geographical area or size or type of customer (e.g. business/non-
business) and agree to sell only to their allotted segment of the market. As a
result they do not compete for each other’s allotted market. Customers are
affected as they would not be able to shop around for the best deals.

• Production Control
Production control involves an agreement between competitors to limit the
quantity of goods or services available in the market. By controlling the supply
or production of goods or services, the cartel is able to, indirectly, increase
prices to maximise their profits.
What are vertical agreements?
Vertical agreements are agreements made between two or more parties which
are operating at different levels of the production, supply and distribution
chain for the purposes of that agreement. For example, between a
manufacturer and a supplier or between a supplier and a retailer.
The parties only need to be operating at different levels of the chain for the
purposes of the specific agreement, that is, the parties could ordinarily be
competitors. But provided that they are acting at different levels in respect of
the arrangement in question (for example, a manufacturer agreeing to supply
the goods made by another manufacturer), it will be deemed a vertical
agreement.
For the purposes of vertical agreements, the main applicable EU block
exemption is the vertical agreement block exemption, which exempts many
vertical arrangements from the Chapter I and the Article 101 prohibitions

horizontal agreements?
Horizontal agreements are agreements made between two or more parties
which are operating at the same level of the production, supply and
distribution chain, for example, between two suppliers or two retailers.
Examples include, joint selling agreements, joint buying agreements,
specialisation agreements and R&D agreements made between competing
enterprises.
There are several EU block exemptions which may apply to horizontal
agreements

q. Combination’
Under the meaning of the Competition Act, 2002 a combination refers to the
direct or indirect acquisition of the shares, voting rights or assets or the control
over management or control over assets of one or more enterprises by one or
more persons, or, a merger or amalgamation between enterprises, when the
combining enterprises jointly exceed certain thresholds set under Section 5 of
the Act. Thus a merger or amalgamation or an acquisition would be
categorized as a combination only in case where such merger/amalgamation
or acquisition exceeds the financial thresholds contained in Section 5 of the
Competition Act, 2002 and such combinations would be subject to regulations
provided in Section 6 of the Act. The financial thresholds contained in Section 5
are in terms of the joint value of assets or the turnover of the combining
enterprises.
The Government of India regulates combinations to ensure that there exists
healthy competition in the market. Any combination that causes an adverse
appreciable effect in the relevant market are deemed to be void under the
Competition Act, 2002. If such mergers/amalgamations or acquisitions are not
kept under check, the large scale enterprises would often take over the small
case enterprises and prevent competition in the market. Further if such
practices are left unchecked, it shall result in the concentration of wealth in
specific sectors of the economy which shall hamper the economic vision of the
country in line with the economic policies of the Government of India.