28/02/2019

Whether a particular entity is an “enterprise”?

We see the following
1. Person or not
2. Government department or not
3. Sovereign duty or not
4. Economic Activity or not
In India – Enterprise. In Europe – undertaking
Let us discuss “enterprise” with regard to 3 and 4
Whether PWD can be questioned for their tender related activities for violation
of Competition Law? Are they amenable to jurisdiction of Competition law? -
CCI – Dissent -Case No. 70/2014
What are sovereign functions?
Primary – maintenance of law & order and Administration of justice
Secondary – Something that has evolved over a course of time. Any function by
the State that does not fall under Primary, are considered to be secondary
functions. Example: Welfare functions.
The tests to identify if a function is Sovereign, are
1) Primary Function
2) Inexcusable Function
3) That function cannot be delegated
You would’ve studied about sovereign functions in tort law – Sovereign
immunity
Article 300 Constitution – Damages when Sovereign does an act. If primary
need not pay damages.
PNO Steam and Navigation ship Company case – line of difference between
sovereign and non-sovereign functions are disappearing. This is because what
was once considered a secondary function has been elevated to the level of
secondary and vice versa.
In a welfare state, the dividing line is imaginary, although it is still there. There
is overlapping. State can do some private functions and vice versa. So now how
to understand sovereign function? Unless the statutes demarcate something as
a sovereign function, everything else is a non-sovereign function.
Section 2(h)- Atomic energy, currency, defense and space – sovereign
functions. The problem of interpreting this provision is, it becomes inclusive
and not exhaustive. Hence, any function which may seem like a sovereign
function may also be included under this.
PWD CASE – Shri Rajat Verma v. PWD
PWD calls for a tender for construction of overhead bridge over a railway track
to ensure welfare of the public. There are some anti-competitive clauses in the
tender. Can this be challenged under Competition Act? The Govt is using a
private player to carry out a welfare function.
Govt.
1) It is for a public activity and we are not going to charge public for this.
Hence, it is a sovereign public function.
2) It is not a commercial/ economic activity. Hence does not fall within
definition of “enterprise” under section 2(h).
Majority: Held what the Govt. contended and hence did not go into the question
of dominance.
Questions:
Can all welfare functions be considered as sovereign functions?
Functional approach: It is a sovereign function which can be delegated i.e.
done by public and private. Look into who is doing the activity/ who can do it?
If it is an exclusive activity which can be done by government alone, then they
can be exempted from the ambit of Competition law. But if both private and
public can do, then they can be challenged.
But most states are Welfare states presently. So can it be said that this results
in ousting of jurisdiction of Competition Commission over this?
Eg: Para 17 & 18 – Dissent - Bangalore water supply case – just because it is
sovereign function, doesn’t mean they don’t fall under the ambit of ID Act
because private players can also do the same.
P.W.D. Employees Union v. State of Gujarat – Welfare activities or economic
adventure – do not qualify as sovereign
N. Nagendra Rao v. State of A.P. - Administration of law, order and justice,
internal and external security/protection and some fiscal functions – Sovereign
functions
Agricultural Produce Market Committee v. Ashok Harikunt and Anrs etc. –
Sovereign functions are primary inalienable functions which only State could
exercise.
State of UP v. Deep Chandra – Construction and repairs of road undertaken by
PWD – not sovereign.
Hofner – Undertaking encompasses every entity engaged in economic activity
regardless of legal status and the way it is financed. Employment recruitment
agency – Competition law regime.
Policy making and law-making is still a sovereign activity. But to implement a
law/ policy there may be use of private players and it can also be considered as
non-sovereign function.
Read the other cases as well
Can it be considered as a non-economic activity just because there is not profit
motive?
What is the difference between economic and commercial activity? – Check in
competition law around the world – what are the concerned about in the above
two?
06/03/2019

The original competition jurisprudence – MRTP Act – we will enquire only

private players and government players will be exempted. But the new Act does
not differentiate between them.
Are these terms included in Section 2(h) of Competition Act? No. But there are
different school of thoughts. One says 2(h) includes “Commercial activities”
only and the other says it includes “economic activities” only.
“Commercial” – Profit-making. Commercial falls within this. It is a broader
term.
“Economic” – Eg. Govt. constructed bridge. But doesn’t ask for toll fees. –
Maybe economic but not commercial. – This is what the majority is the above
case held. They said 2(h) is “Commercial”.
But what we actually check today is if it is an “Economic Activity” – Para 9 –
Dissent. There is an “economic activity” only when there is a market and there
is a buyer and a seller – Supplementary Order in case No. 19/2011. In the case
of PWD – Government becomes the procurer and the tenderers become the
service supplier.
It is economic but not commercial as – time save for passengers, reduction in
pollution due to waiting etc. – improve economy.
What is important is: Public Works Department, by floating tenders, is
interfacing with a wide market for road and bridge construction services in the
state of Haryana, and its interface with the providers of construction services
has the potential of affecting and distorting the market.
How to Interpret the Act
Section 61 – Ousting of Jurisdiction of Civil Courts in cases that fall under this
Act. Further, no injunction can be passed against action taken under this Act.
Section 60 – The provisions of this Act shall have an overriding effect in respect
to inconsistent provisions of any other law – Principle of Harmonious
construction should be used first. If still no settlement is reached (irrecoverable
conflict), then Competition law prevails over other laws.
Section 62 – The provisions shall be in addition to and not in derogation of the
provisions of any other law – It is merely an addendum and supplementary
legislation to already existing laws.
If you read this in descending order, from 62-60, it will make more sense.
Power to Exempt
Section 54 – CG may by notification exempt from application of this Act for
such period as may be specified:
(a) If necessary for interest of security of State/ Public interest
(b) Treaty/ agreement/ Convention obligation
(c) Any enterprise which performs a sovereign function on behalf of CG/ SG.
Proviso to (c)– But CG can exempt only if it is relatable to sovereign functions –
in case where an enterprise is carrying out both sovereign and non-sovereign
functions.
07/03/2019

European Competition Law – Functional approach > Institutional/

Organizational approach.
Functional approach- an enquiry into the functions carried out by the entity.
Institutional – Way it has been formed/ constituted and who is financing it?
To determine what an economic activity is, they use functional approach.
Who is carrying out the function? Private – easy. If government is doing it, we
must see if private persons can also carry out this function. If yes, then falls
under the ambit of Competition law.
There was a judgment in 1991 – Before this and after this there was a change
in the Competition law regime in the Europe.
Case 1: Hofner case: Public employment agencies – Graduate – will be matched
with a government department which fits.
In EU – it was not for every kind of employment. It was restricted to Higher
executive employment only. This agency was sued under Competition law.
Is this possible? It is a body of the Government. Not a private player. Next
question is, can this job be done by a private player?
Case 2: Tamil Nadu – Cinema booking – due to discrepancies, the State takes it
up as welfare measure. Not private player. The test as to whether it can be
done by a private player should be seen. It is a regulatory function?
Case 3: You are a private person and you want to start a private law college.
You find that some conditions to start this in UGC/ BCI are slightly
discriminatory. Is this an entry barrier? Can this be challenged under
Competition law? Or will it be excused as a regulatory authority?
08/03/2019

The Following tests change from case to case

You will see whether private/ Government. If Government, whether sovereign/
non-sovereign. If non-sovereign – whether economic/ not? What if it is a
regulatory function? – Eg. Hofner case – functional approach. Activity of acting
as intermediary to find employees – can be done by private player also.
Although it is regulatory, it is still economic activity which can be carried out
by a private player. Hence it falls under ambit of EU Competition law. The way
in which the organization is financed is immaterial and so is the way in which
it is formed.
The test above is – Private can also do + Economic.
Commercial latitude – Example – PWD department – used a private player to
implement the policy by calling out for tender. This brings in the Commercial
latitude.
Imperium - Coming from word Imperial = Dominium – Places where
Government has absolute authority and the authority cannot be delegated. Eg.
Land Acquisition, Tax collection etc. This comes when it is related to concept of
Policy making. Policy making – purely sovereign in nature. When it is
implementation only it moves to private parties also – PWD also.
Indian Glycol (IG) v. India Sugar (IS) mills association 2018 from para 34-37 -
important
IG is involved in ethanol manufacturing for which it needs a byproduct from
various sugar mills. IS is a trade association. IG is suing IS for acting in a
dominant manner by distinguishing public enterprises from private enterprises
when it comes to delivery of that byproduct. For private enterprises, unfair
conditions are imposed.
IS – trade union – formed to achieve a common objective of giving a common
platform for distribution of produces of various sugar manufacturers.
They say there is no commercial/ economic activity and hence we are not an
enterprise.
Because of the conditions, the benefit is gotten from the individual members
and these individuals may get some economic benefit from the acts of the
Union. The person who is actually benefitting is to be seen.
The following two judgments are discussed in the IG case.
CCI v. Co-ordination committee – only dealt with Section 3
Shivam enterprises v. Kiratpur Sahib truck operators’ society
In this particular case, the court found that IG is not involved in any economic
activity. What is does is a strict TU activity. This case further falls under
Section 4. Hence Co-ordination committee is not applicable. The concept of
imperium and dominium is also discussed although not in those exact terms.
Definition of “Consumer” under Consumer protection law and Competition law
– read
Has “Customer” been defined in any of the statutes? Is it one and the same?
09/03/2019 – Customer v. Consumer
13/03/2019

Consumer Protection Act – most discussions about the definition clause –

Section 2.
This Act has 31 sections. 4-31- Procedure orientated
Entire structure and juice of the Act – 1-3.
Preamble
An Act to provide for
 better protection of the interests of consumers and
 for that purpose, to make provision for the establishment of consumer
councils and other authorities for the settlement of consumers' disputes
and
 for matters connected therewith.
This is a Social welfare legislation unlike MRTP which is an economic
legislation. Hence interpretation of this should be beneficial interpretation –
one which confers the benefit/ advances the benefit.
Aims & Objectives:
1. It is a benevolent, progressive and social welfare legislation
2. To provide inexpensive, speedy and summary redressal of consumer
disputes.
3. The Act makes the dictum, caveat emptor (buyers beware), a thing of the
past.
4. When we approach the market as a consumer, we expect value for
money, i.e., right quality, right quantity, right prices, information about
the mode of use etc. But there may be instances
Case laws:
India Photographic Co. Ltd. v. H.D. Shourie, AIR 1999 SC 2453
Act is a result of widespread consumer protection movement. It should be
interpreted in a rational manner rather than a technical manner.
Charan Singh v. Healing Touch Hospital, AIR 2000 SC 3138
S. 3 – Act not in derogation of any other law. The provisions of this Act shall be
in addition to and not in derogation of the provisions of any other law for the
time being in force. – Section 60-63 of Competition Law.
Benevolent legislation + alternative system of consumer justice by summary
trial + exercise quasi-judicial powers of consumer redressal.
Essential elements of Section 3
 It is an additional remedy
 In addition to any other remedy enforceable by way of a civil suit
 Presence of alternative remedy will not be taken as a bar of jurisdiction
under CPA.
CPA- Specific forums for specific purposes. Does not offence any statute or any
other law.
PM Bakshi – Remedies available to a Consumer
4 remedies are open to consumer whose life/ property is damaged by a person
rendering professional services.
1. Contract Law – Civil Court – Liquidated damages for breach of Contract.
2. Law of Torts – Civil Court – Unliquidated damages.
3. Disciplinary Remedy – Disciplinary Tribunals or Institutions – Examples:
Doctors, Lawyers, Nurses etc.
4. Criminal Law – Criminal Court – Examples: Doctor – Prosecution for
Negligence – S. 304A, 336, 337 and 338.
All these aren’t dependent on CPA. CPA is only in addition to the normal
remedy.
Case laws – Commercial Officer v. Bihar State Warehousing Corporation,
1994 (1) CPR 357.
Presence of alternative remedy under Arbitration Act is does not debar
redressal under CPA.
General Manager, Telecom BSNL v. Krishnan, AIR 2003 Ker 152 – Find SC
judgment for this.
Section 7B of Telegraph Act does not oust the jurisdiction of Consumer court
under CPA. CPA is a special law.
Udaipur Cement Works v. Punjab Water supply Sewage board
Presence of Arbitration clause in agreement between Manufacturer and
Consumer does not oust the CPA.
Secretary, Thirumugran Co-op Agricultural Credit Society v. Lalitha, AIR
2004 SC 448
Section 190 & 156 TN Co-op Societies Act does not oust jurisdiction of
Consumer Courts.
Srimathy v. Union of India, AIR 1996 Mad 427.
Claim by Client against advocates under Advocates Act will not prevail over
CPA.
Definition of Consumer – Section 2(1)(d)
Act for the first time introduced the concept of ‘consumer’ and conferred
express additional rights on him. Act doesn’t seek to protect every consumer
within literal meaning of the term. The protection is meant for the person who
fits in the definition of “Consumer” given by the Act.
Section 2(1)(d) – Any person
Person – 2(1)(m)
Who buys good for Consideration paid/ promised – part/ full/ deferred
payment.
(i) Next, they make a distinction between customer and a consumer. If second
person is going to use it with the permission (some approval) of the first person
who bought it, second may also be a consumer. But doesn’t include that
person who obtains goods for resale/ any commercial purpose.
(ii) hires or avails of any services for a consideration - paid/ promised – part/
full/ deferred payment. It also includes beneficiary who is using it with the
approval of first service receiver. But does not include a person who avails of
such services for any commercial purposes.
Who is not a consumer -Resale/ Commercial purpose, Services rendered free of
charge or under the contract of personal service.
What is “Commercial Purpose”?
British Financial Services Market Act, 2000 – Defines Customer.
14/03/2019

Section 59(11) - “Customer”, in relation to an authorized person, means a

person who is using, or who is or may be contemplating using, any of the
services provided by the authorized person.
Definition is 3-fold under this British Act
(a) persons who use, have used or are or may be contemplating using, any
of the services provided by a member of a profession in the course of
carrying on exempt regulated activities;
(b) persons who have rights or interests which are derived from, or otherwise
attributable to, the use of any such services by other persons; or
(c) persons who have rights or interests which may be adversely affected by
the use of any such services by persons acting on their behalf or in a
fiduciary capacity in relation to them.
In India, Consumer Protection Act gives a narrow definition of “Consumer”.
Customer is a very broad term and is used generally but the term Consumer is
understood in a narrow sense as under the Act.
Commercial Purpose:
Eg: You bought a car and you’re utilizing it – evening – Ola/ Uber & day –
personal use. If there is a damage in the car, can he file a case under CPA? –
not a consumer.
You are keeping a photocopy machine in a small office outside your house. You
start a shop with it. You are using it for your livelihood. But when the
customer base increases, you are in need of more machines. Is this
commercial/ self-consumption? If used exclusively for livelihood – only
source of income/ used for self-employment purpose – you’ll still be
considered as Consumer.
The above highlighted portion can be taken from the explanation added to 2(1)
(d) in 2003. Before the amendment, there was confusion as to what constituted
“commercial purpose”. The sellers exploited this.
Pushpa Meena v. Shah Enterprises Ltd. – before 2003
Purchase of Jeep – motive hiring passengers. Hence not “consumer”.
Different approaches were taken by judges then (before 2003)
Consumer Act is a broad beneficial Act – so consumer should also be
construed widely.
Consumer Act is only wide, but definition is restrictive in nature. So, we must
go by the letter of law.
Because of this confusion, amendment was made by acting an explanation.
Laxmi Engineering Works v. PSG Industrial Institute
Generally, limitation is 2 years. But if sufficient/ adequate reasons, court can
condone the delay.
Chairman, Board of Examination v. M.A. Kuder
Student is not a consumer.
Definition of Consumer under Competition Act
MRTP & CPA – same definition. But Competition Act and CPA is different.
Why does Competition Act have a broader definition of Consumer? CPA- more
direct relationship. Competition Act – market chain.
21/03/2019

2(c) - “Complaint” under Consumer Protection Act must be seen

RTP, UTP, Defective products/ deficient services – for this complaint may be
filed in writing/ more than fixed price/ hazardous goods
2(b) - “Complainant” – Consumer/ voluntary consumer association that is
registered/ CG/ SG/ in case of death of a consumer, his legal heir or
representative.
The definition clause of Competition Act doesn’t define the term “informant”
anywhere. The equal term in the CPA is “Complainant”.
Section 19(1) – Who can file information under Competition Act?
Commission may inquire into alleged contravention of 3(1) or 4(1).
 on its own motion
 receipt of any information – from “any person”, consumer/ association/
trade association, as prescribed
 CG/ SG or Statutory authority – makes reference.
Section 20 – inquiry – relation to Section 5 & 6
Merger/ amalgamation – if found in contravention to the Act upon inquiry, may
order for de-merger.
DK Srivatsava v. UP Housing & Development Board
S entered into a real estate agreement with UPH. The price is paid and the time
of performance of the agreement is fixed. UPH after sometime claims that 4
more lakhs should be paid due to change in some market factors. So they say
they can hand it over the flat only if you pay it. Further, they say there will also
be a delay in delivering flat.
Case under S. 3(1) & 3(3)
Commission says this is only a breach of contract and hence – civil suit/
consumer. There is also no cartel as envisaged in 3(3). Hence no prima facie
case under CA.
Ashish Gupta v. Panchasheel Built tech pvt. Ltd. & Tata Housing
Finance.
Three parties involved. P is a real estate developer. A makes a down payment to
P and for the balance of the payment & delivery of service, he wants to enter
into a tri-partite agreement – A, P & T. A takes a loan from T and according to
the agreement T will pay P the remaining money in EMI. T after sometime fails
to pay and so P tells it will not give the house. It also says down payment is
forfeited. A goes to the CCI saying these two have colluded and have abstained
from honoring their obligations.
Case filed under S. 3(1) & 3(4)(d)
First, must prove an agreement between T & P. Since it couldn’t be proved, the
commission dismissed in under Section 26(2). Further, it is a tri-partite
contract which can be better challenged for breach of contract – as a civil suit/
consumer suit. It should also be noted that 3(4)(d) deals with vertical
agreements but in this case there is no possibility of vertical agreement as they
(P & T) deal with different markets.
Rajendra Agarwal v. Shopper’s stop (2018)
SS gave coupons to RA for discount on future products. When RA tried to
encash it during his next visit, the shop did not let him. They said he had to do
another purchase of a certain value. Further, the coupon itself clearly gives the
condition. But RA says he is a senior citizen and he didn’t see it. So, they
should’ve explained it when it was given to him.
RA says there is a competition law issue here – unfair trade practice under
Section 3 of the Act.
Is there? No – dismissed.
In all these cases – these are individual consumer disputes that do not come
under the Competition Act. There have been other cases that held the same.
Eg: Sanjeev Pandey v. Mahendra – in this case a differentiation was made
between objective of Consumer Protection Act and Competition Act, wherein it
was held that CPA – for individual consumer against UTP and CA – curb anti-
competitive practices in the markets. SP wants to buy a car – Mahendra. But
not available in Rajasthan. He has to come all the way to Delhi.
Held: You can’t force a trader to come and sell a car somewhere. Hence no
competition concern at all.
Same was also held in Subhash Yadav v. Force Limited & Ors.
Section 26(2) – can be dismissed off if there is no prima facie case under the
Competition Act. – The above case.
Akhil Bhansali v. Skoda
Bought a car. After-sale service – there is some deficiency – UTP. Complaint
under CA. Commission says you have approached the wrong forum. Go under
CPA.
What is Individual Consumer Dispute?
Shamsher Kattari v. Honda – currently before the SC
When more number of consumers are having consumer disputes of the kind
mentioned in above cases, can it then be a CA case?
Bought a new car. Two clauses:
Service: You must get service only from this service provider within the
warranty period
Spare parts: You can replace it only with authorized spare parts service
provider.
Commission in this case held – it’s a consumer dispute which can be converted
into a competition dispute as it does not only affect the consumer but the
market as a whole. There are alternatives to Service providers and spare parts
providers who may be better.
22/03/2019

Section 3(1) – Catch-all provision. If it doesn’t fall under any other provision,
invoke this.
 Unlike the Consumer protection Act, the CA has no direct role to protect the
consumers. CA only tries to maintain fair competition (in the course may
protect consumers) in the market by preventing anti-competitive practices.
 Under CPA, there are multi-tier forums – Section 6 of CPA
S. 6 Objects of the Central Council
S. 8 Objects of the State Council
In Competition Law – there is only two-tier forums (CCI & NCLAT) and don’t
have a direct role to protect rights given in S. 6&8 of CPA given above.
 Concept of Compensation – A consumer has multiple remedies apart from
Consumer forums. But the basic idea behind Consumer forum is to
adequately compensate. Compensation is an inherent element under the
CPA.
Under Competition Act, there is no compensation i.e. you aren’t trying the
indemnify or compensate any consumer. Only a penalty (for deterrent) is
imposed although sometimes rarely compensation is given.
Eg: (1) A theatre starkly increases prices of tickets – Commission said go to
Consumer forum for this.
(2) Inside a theatre, can you sell bottles and snacks at a higher rate? Personal
food items are prohibited. In some theatres you find only Pepsi and in some
only Coke.
This was taken to the CCI – as Right of Choice is getting violated – this results
in a Monopoly market.
Theatre is a closed market – because you need to get a ticket.
Primary service – movies. Ancillary services – to enhance the experience –
snacks and drinks.
S. 3(4) – explanation – (b) and (c) – Vertical arrangement. Eg: Dominos + Coke
(Only).
Per se Rule & Rule of Reason
Per se Rule (Rule of Presumption) – Offence on the face of it. Eg. S. 3(3) –
Horizontal agreements – Per se Rule applies. Burden of Proof starts from the
respondent’s side (Opposite Party). In the present competition Act, this per se
rule applies only for Horizontal cartels.
S. 3(3)(d) – “Shall be presumed to have an appreciable adverse effect on
competition”
Rule of Reason – Starting from a clean state. No presumption is made and
burden on the informant first. It is followed by usual procedure.
S. 3(1) – “which causes or is likely to cause an appreciable adverse effect on
competition within India”. – This is an example of Rule of Reason.
Let’s go back to the above example:
PVR + Pepsi – Exclusive agreement
Inox + Coca Cola – Exclusive agreement
In these cases, there is Rule of Reason, i.e. they are allowed to enter into such
agreements. The question is, are such agreements anti-competitive?
Agreement need not have a form. Mere meeting of minds is sufficient.
Vertical – you may deal with different goods, different markets but may be
connected through a vertical chain.
Held: It is a competition case and not a consumer case. But it is not illegal.
There is no case of an anti-competitive agreement. All the theatres do this. –
Rule of Reason.
Cartel – Price fixation – this means that every form of horizontal agreement is
not cartel.
Eg: Horizontal agreement that is not a cartel – WB film producers’
association – they decide to not produce dubbed serials. This is not a cartel,
although a horizontal arrangement.
Ramakant Kiny v. Heer Nandhini Hospital
Consumer is a patient – pregnancy treatment. Service provider – Stem cells.
Hospital says that we have stem cell bank and we cultivate stem cells. You
need to enter into an agreement with us to use our bank only.
Hospital + Stem cell bank – Vertical agreement
There is an exclusive agreement between two different entities.
Consumer says: There is restriction of choice and alternatives. We are being
forced to choose something because we have come to a place for a different
reason. Section 3(1).
Held: This agreement is anti-competitive as the consumers are being robbed off
their freedom of choice. Further, when consumer is going for one particular
service, he can’t be forced to agree to another.
23/02/2019

Individual Consumer/ business/ contractual disputes and no larger

question of Competition involved.
Sesharathnam v. Sudarshan Reddy & Ors (2018) CCI – S. 26(2) Order
Development agreement for construction of residential complex in the land of
the informants. After entering into the contract, they named someone else as
the developer/ builder – novice in the agreement
They used sub-standard materials in building the complex & they caused delay
in the project. They failed in rent payment which made the Development
agreement null and void. It was dismissed under 26(2) stating that it involved
an individual dispute – contractual.
Tamil Nadu Consumers Product Distributors Association v. Vivo
Communication Tech Co. & Anr. (2018) CCI – 26(2) Order
TNC entered into distribution agreement with Vivo to sell the smartphones. The
agreements had several clauses which were challenged.
 TNC cannot deal with Oppo & Honor. (Main competitors)
 No sale can be done to corporate buyer without permission
 No discount can be given
 If damage caused to show piece – they must bear it.
CCI – There is no dominant position. Further the disputes seem more of
contractual and business disputes than competition.
Gajendar Singh Kohli v. Genius Property Builders Pvt. Ltd. (2016) CCI –
26(2) Order.
Residential building agreement – according to the terms, if possession isn’t
delivered will have to find an alternate home or pay the amount paid with 10%
interest. But if delay in payment by buyer, 24% interest. The possession was
delayed.
GS – There is abuse of dominant position. CCI – there is no dominant position
as alleged under S. 4.
Conclusion – Only cases where CCI disregards cases is where there is no
substantial effect on competition in the market. They can send it to Consumer
forums – S. 61, 62, & 63 of CA.
Consumer Court has to hear the case even if Competition Act applies. As
Section 3 of CPA- Presence of adequate alternate remedy is no bar.
Is UTP/ RTP mentioned in Competition Act?
Earlier it was there in MRTP Act. Now, although not explicit, S. 3 provides for
RTP = Anti-Competitive agreements.
CPA – 2(r) – Unfair Trade Practise
2(nn) – Restrictive Trade Practise
After passing of CPA
 Under MRTP – RTP & UTP
 Under CPA – UTP
After 1993 – 2(nn), CPA started dealing with both.
When 2002 Act – CA came,
Legislative Intent
There was conscious decision to not include these terms. RTP – Section 3 & 4
UTP – under CPA.
Even though UTP/ RTP not included under the Act, can such cases still be
tried under the Competition Act?
If it has an overall effect on Competition in the market – CCI takes up the case.
CCI time and again uses the terms – UTP & RTP.
SEBI Prohibition of fraudulent and unfair trade practices in securities market
Regulation – this creates overlaps
There are multiple regulators
01/04/2019 – Post-Mid-semester – UTP, RTP & MTP
DLF case – read
RTP has metamorphosized into Anti-Competitive practices under the
Competition Act (Sec. 3). What about the concept of UTP? Does it come under
the Competition Act?
Why did UTP come? RTP – is a situation between one trader and another for
their own benefit to affect another trader. This may impose unfair restrictions
on the consumers (this is why UTP came into being).
Difference between misrepresentation and fraud? - read
A is going to a shop to avail some offer for a commodity. The trader sees that
the crowd is unmanageable. So, he says, “Not everyone can enter the premises.
Pay 100$ to enter the premises which will be refunded from your “bill price”
when you come out,” which means that to get this refund, they have to buy.
Is this an unfair practice?
Defamation of the goods/ services – disparaging them by making comparative
advertisement against maybe a specific product. There is a competition
Advertisement to the same – Is this unfair practice? If there is a mis-
information, then it affects the choice of the consumer.
02/02/2019

All frauds are misrepresentation, but all misrepresentation may not be fraud.
Main difference – Intention to Deceive. Can it be used interchangeably in the
MRTP, CPA/ CA regime? Yes they have been used synonymously in judgments
as under UTP – Misrepresentation always has an element of fraud.
Before 1984 – No UTP. But there were sector-specific legislations – Essential
Commodities Act.
In 1984 – Justice Rajendar Sachar made some recommendations – report – we
should define something called as “UTP” and that should also be absolutely
prohibited. Further, appoint an authority called as DGIR for investigation
purpose (the precursor to DG in Competition Act).
After 1984 – S. 36A was included in MRTP Act to bring in UTP.
In 1986 – Consumer Protection Act also included a similar definition of UTP –
2(1)(r). Post 2002, scenario changed. CA does not have explicit mention of UTP.
Hence, if it is a pure case of UTP, they must go to CPA – Consumer forum only
as legislative intention is clear when UTP is not provided under CA.
Section 4 – Abuse – to establish a claim – 3 elements
1) Dominant Player in the market
 2) Abuse of Dominance
3) This results is anti-competitive effects/ appreciable effect on the
competition in the market.
Therefore, even if there may be UTP cases under S.4, it can be enforced only if
the opposite party is a dominant player. Check the DLF case for this.
The concept of UTP is much wider than RTP and MTP.
World Bank & OECD
Who will you affect when you’re carrying out anti-competitive activities like
defaming advertisements/ misrepresentation
1) You affect other competitors
2) Consumer
Eg. This bike will give 70kms/ liter (according to “tested factory conditions”).
This is a subjective phrase which may result in unfairness.
MRTP Act – Section 36A – UTP – read.
03/04/2019

Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan Ltd. – SC

The court used 103rd (1984) and 199th (2006) Law Commission Report. Should India
have a separate law to deal with Unfair terms in Contract Act?
SPS Raghavan Committee Report – Can Unfair contractual terms be dealt with
under new Competition regime? The Committee answered – certain cases can
be taken under S. 4. But in cases which don’t fall under it, Consumer
protection Act should be resorted to.
Medical Industry & Pharmaceutical Industries
1. Drugs and Cosmetics Act, 1940
2. Drugs and Magic remedies (Prevention of objectionable Ads) Act,1954
These were laws that prevented UTP before it was included in MRTP. It was
sector specific.
Food Sector
1. Food Safety and Standards Act, 2006 – under this authority/ regulator –
FSSAI
Insurance Sector
1. Insurance Regulatory and Development Authority – regulator
2. IRDA Insurance Ads and disclosure regulation, 2000
Securities Market
1. SEBI Prohibition of fraudulent and UTP in Securities Market Regulation,
2003
2. SEBI Prohibition of Insider trading Regulation
RhoopChand v. Mahavir Prasad
Trying to interpret the word “Statement”. It means the art of stating something,
orally or in written form. It must be sufficiently communicated to the
Consumer, who should rely upon the same and buy the product. Loss/ injury
should be due to the Statement. If the trader is able to prove otherwise, then
won’t come under UTP.
Central Inland Water Transport Corp v. Brojonath Gangoly
UTP in an employment agreement – Employment sector. The Courts have all
the power to strike down all the unfair terms in a contract entered into by
parties when it can be proved that the parties are not possessing equal
bargaining power. They were dealing with a Govt. Co. and hence said this is an
off-shoot of unequal bargaining power.
04/04/2019
UTP – S. 36A (1) False representation and misleading acts
(2) Bargain Sales – You make an offer as if there is some kind of a bargain but
in reality, there isn’t.
(3) Gift Offers/ Prize Contests – if intention isn’t true – UTP.
In Consumer Act, another aspect is added after the above three.
(3A) – Date of closure of gift offer – must be properly communicated to the
world Exp: In some newspaper/the same way the initial offer was made.
A1 Cycles Ltd. cases – Prize scheme/ Gift offer
(4) Safety standards – Any kind of good which is not adhering to the safety
standards. If the standards are put by regulators, you must adhere to it. Eg.
FSSAI. Ads must also adhere to it.
There is a company – it wants 1 ton of apples – goes to the market sees
different buyers. Since it is a huge quantity gets it from different buyers. One
person (outsider to the Co.) gets to know that. This person goes to all the shops
and buys all the apples and starts his own market. Instead of selling it for 10$
(which is normal price if this person hadn’t interfered), the person sells it for a
higher price – this is an example of frontrunning concept.
05/04/2019

S.14 – Orders that a District forum can pass

It gives some remedies for UTP s well. Can give compensation, seize and desist
order, issue corrective advertisements to neutralize the effect etc.
In MRPT – there was an investigation body of its own, but CPA doesn’t. CPA
always directed by a complaint. But MRPT not like that and hence it was better
and more effective.
Ramesh v. Prakash Moped house & Ors. (2001)
Bajaj Auto Ltd. v. Pankaj Kumar (2006) – National Consumer Commission
Kinetic Engineering & Anr. v. Rahul, (2006)
All these cases have almost similar facts. There is an Ad – promising
something. Less space in the Newspaper (Fine prints) – Hence adequate
information not given in the Ad. Should the consumer go and check the
website or something for full information? Is it a UTP? The promise is made but
it isn’t delivered?
They held that Ads were deceptive in nature – read
TATA Chemicals Ltd. v. Couriers Pvt. Ltd. (2002) – You can’t put up an offer/
benefit and say it will be valid only in “ideal conditions”. These ideal conditions
must be clearly provided in the Ad itself/ reference must be made to the
website.
Making false claims relating to Education institutions – is this UTP?
Buddhist mission dental college and hospital v. Bhupesh Khurana & Ors.
A college is coming up and it applies for affiliation with Dental Council of India.
In its invitation to students, it says it is affiliated. But a few years later Dental
Council says they are not fit enough for affiliation. – Is this UTP?
You should see if the student when they joined relied on the affiliation.
Tesol India v. Govind Singh
Ad - “If you attend 120 hours you ll learn the course and get a certificate. And
this certificate will 100% fetch you jobs.”
Is this UTP?
S. 2(1)(r)(10) CPA – Disparaging Advertisements
Coke v. Pepsi
Hindu v. TOI – implicit comparison
09/04/2019

There is a difference between comparative and disparaging Ads. You are

allowed to compare – they are not banned per se – same jurisprudence
throughout the world.
When Comparative Ads lead to disparaging/ belittling of the other person’s
brand it becomes illegal.
MRPT – 36A and CPA – 2(1)(r)(x)
Both these provisions deal with disparaging Ads.
Although they say it is UTP, they don’t say when a comparative Ad becomes
disparaging. In the videos, were there any infringement of TMs?
It is a tortious issue
It is a violation of TM
Common law remedy – Passing off, conversion and Attribution.
Read:
S. 29(8) Trade Marks Act
S. 30(1) TM Act
It was also an MRTP issue
But now MRPT has been repealed. So, does it come under CA?
May 14, 2013 – Sanofi Aventis Pharmaceuticals v. FCA
There is an established drug manufacturer and there is a new person in
market producing certain generic medicines that he produces. The old one had
a patent but it was going to run out. Old one made some Ads claiming that his
is original and all the newer ones are not efficient and will cause health
problems.
Sanofi – dominant player and is creating an entry restriction with the help of
the comparative Ads.
What is Comparative Ad and when does it become Disparaging?
Hindustan Unilever Ltd. v. Emami Ltd. (Cal) HC
Case of Fair & Handsome v. Fair & Lovely. The latter targeted women. Men’s
fair & lovely was introduced only after fair & handsome was introduced for men
– Unilever said this. Fair & lovely says it is our product. In fair and handsome’s
Ad they called Fair and lovely men as “Doosra”. This pissed them off and they
sued HUL.
Reckitt Colman India Ltd. v. MT Ramachandran & Ors
Case of Robin Blue v. Ujala – law relating to disparaging Ad was laid down. (1)
A trader is entitled to declare his good as the best in the world in any form he
wants even though such declarations may be untrue. (2) As part of Ad, he can
also compare with competitors and say that his is better than theirs even if
such statement is untrue. (3) For the purposes of comparing, trader can even
discuss about the advantages of his goods over the competitors’ goods. (4)
However when making such comparison, he cannot say his competitor’s goods
are bad (may become libel/ slander against the products of the competitor). (5)
In such cases of disparagement, if the trader is not able to prove the
truthfulness of the statement, it will become a disparaging Advertisement.
10/04/2019
Hindustan v. Colgate Ltd. 1998
Godrej soaps Ltd. v. Hygienic research institute
11/04/2019

Section 66 CA- Repeals and Savings

CA might have been enacted in 2002 but it fully came into effect only in 2009.
If there is a UTP case under section 36A ongoing as on September 2009 – the
matter has to be shifted to National Consumer Redressal forum. In case of
disparaging/ belittling Ads alone – the Act itself decided that it should be heard
before the Competition forum.
Till now we have only seen disparaging Ads by Competitors. What if it had been
done by the Consumer?
Palmer v. Klear Gear.com Dec 18, 2013 – not an Indian case
Whether a trader can include a non-disparagement clause in a contract with
the consumer?
USA before 2013 – including non-disparagement clauses in consumer contract
– was a trend.
It was held the above cannot be done. The concept of the close results in
Streisand effect.
Streisand Effect – You wanted to close down negative review and by doing that
you only get more negative reviews as it led to more backlash, litigations etc.
Concept of RTP in MRTP has only metamorphosized into Sec. 3 of CA.
Report on High level committee on Law and Policy – S.P.S. Raghavan
Let’s check if MRPT is keeping in line with foreign counterparts. If not, we can
go for new one. If yes, we can just amend and continue with MRTP. They
decided that it was outdated and hence time had come to move on.
Next issue was, how will people understand this new concept that the
Competition Law is trying to cover? That is why they decided to add an
Advocacy provision – S. 49
49(3) – first provision which came into force – as first it is necessary to improve
awareness among people.
3,4,5, and 6 were in effect only from 2009 – Substantive provisions
Difference between CA, CPA and MRTP – exam question
Ramakant Kiny case – read
12/04/2019

Differences between MRTP, CA and CPA

Authorities:
MRTP – MRTP Commission
CPA – Three tier authority – District, State and National Forum
Councils:
CPA – District, State councils etc – not only to pass orders but also to improve
consumer literacy. They are directly established by the CG
MRTP – Nothing like that.
Section 3 of MRTP Act – Provisions of the Act did not apply to certain
government entities until 1991. After 1991 – started applying.
CPA never exempted these agencies.
Banks and Insurance:
UTP, RTP and MTP – not applicable to Banking and Insurance companies
under MRTP Act.
These kinds of exemptions not there under CPA.
Definition of RTP:
MRTP – 2(o) + 33 – 33 gives certain instances of RTP apart from merely
defining. Same available in CA as well.
CPA – 2(1)(nn) – does not give instances. Only the definition.
Presence of DGIR:
MRTP – DGIR – if someone else is filing a complaint the commission may
forward to him for investigation/ he himself may raise a complaint/ if
commission suo motu raises an issue, investigation may be done by him.
CPA – Does not have any investigating officer
Definition of goods:
CPA – ‘goods’ – as defined under Sale of Goods Act
MRTP – Apart from Sale of Goods, it also includes shares and stocks, including
the issue of shares before allotment. Hence this is broader.
Restrictive Definition of the term ‘Consumer’:
MRTP – not as restrictive as CPA. (See above)
Article: Metamorphosis from MRTP – CPA/ High level committee – give more
differences.

S. 3(1) of CA
RTP has only been modified as Anti-competitive activities.
If Agreements under S. 3 create an appreciable adverse effect in the
competition (AAEC) in the market – becomes anti-competitive.
Are clauses under S. 3 mutually exclusive? Or should all the ingredients
(clauses) be fulfilled to make out a case under S.3?
Until 3(3) and 3(4) – the effect is not very clear. 3(1) talks about all kinds of
agreements – General provision and 3(2) gives punishment for it. 3(4) is an
extension of 3(1) and 3(2).
3(3) – talks about horizontal agreement. 3(3)(d) – AAEC – Hence, it comes under
3(1) and therefore, 3(2) – effect.
S. 3 is not exhaustive. There are certain agreements – neither horizontal nor
vertical – they should also be fit in if anti-competitive.
E.g. If you take a loan, the Bank will check your credit score to decide
credibility. Certain banks have “pre-penalty loan agreements”. If you want to
close down the loan before the term period, you need to pay a penalty.
If you want to transfer loan to another bank – penalty.
Pre-penalty loan clauses – if this practise is considered unfair – where to go?
Heera Nandhini case
Savithri Leasing & Finance Ltd. v. PNB & Ors.
Pre-penalty case
Sonam Sharma v. Apple
Jitendar Gupta v. BMW
Insurance services enter into a bundle arrangement. Insurance cost is attached
to your BMW car cost. Buyer says I ll get my own insurance. Just give me the
car. BMW says no.
Consumer guidance society v. Coca Cola & Inox.
13/04/2019

Ramakant Kiny v. Heeranandhini Hospitals

A & B husband and wife. B gets pregnant – want to take maternity services of
Heeranandhini hospitals. B enters into an agreement with the Hospital. She
also enters into agreement with a Stem Cell Co. (1). A & B when they first went
to hospital, they did not disclose about the Stem Cell agreement. Hospital
objects another stem cell Co. from coming to their premises and taking the
stem cell.
Further they add, if you want collect stem cell, come to stem cell co. (2), with
whom we have an agreement.- tie-up arrangement/ bundle arrangement.
A & B hence had to go to another hospital at the 11 th hour of the pregnancy.
They raised the contention before the CCI that the agreement (2) is anti-
competitive and abuse of dominant position. Further, it is risking lives. It is not
A/B who file the complaint. An unrelated party filed it.
Under which clause of S. 3 will this agreement fall under?
CCI – This is a case which falls within 3(1) as 3(4) talks about similar markets
whereas stem cell and maternity care belongs to different markets. 3(1) has
stand alone applicability without 3(3) and 3(4).
Fine and seize and desist order.
26/04/2019

Employment agreement
We have freedom under Constitution 19(1)(g) to work anywhere we want. But if
there is any restriction – restrictive covenant.
Restrictive covenants – can be of multiples types. Some of the common ones
are – non-compete clauses, Non-disclosure agreements, Non-solicitation
agreement, employment service bonds, etc. Garden Leave agreement / Cooling
off period (for a particular period you cannot work in a competing company)
When are these enforceable? Some are enforceable when the agreement is still
subsisting – can these be enforced post the termination of agreement?
You work in a bank and you get some client data. The bank tries to stop the
employee from working in other banks after termination of employment with
the bank. Court says this is not possible as there is trade secret or business
strategy. It is merely business data and it doesn’t need protection.
Zahir Khan case – Post contractual restrictive covenants are valid provided
they are reasonably necessary to protect the interest of the Business.
Niranjan Shankar case – Post contractual restrictive covenant is allowed.
LPO case – High profile employee – wants to resign and move to a better
company. The Company (A) he is working in says they’ll give better salary and
retention bonus. The employer isn’t able to fulfill this obligations at a later
point of time. Because of this,
Employee couldn’t go to a better company due to the offer of the employer –
restrictive covenant?
Dr. Bhatra Ayurvedi hospital case – Consultancy service agreement. It employs
doctors on a consultancy basis. The agreement says when you are acting for
Bhatra, you cannot have a private practice. This agreement seems to be
contrary to the meaning of Consultancy.
The hospital takes an advance from the employees saying if you violate
conditions of the agreement, your advance will be forfeited – essence of a bond
Jayadeep case – Client associate’s case – Post-contractual restriction – to not
work in a competing company for a specific period.
In all these cases they say, there is no offence under Section 3. It is only a
contractual issue – what is affected is the rights of the employers and
employees and not the market as a whole.
Bhatra’s case – the patients might come out with the consultant therefore
restrictive covenant makes sense
Exam: Draft clauses that are mentioned above – which doesn’t violate contract
Act/ competition or constitutional law.
27/04/2019

Market – goods are bought and sold for a consideration.

Competition Act – defines what a relevant market is, and – geographical and
product market as well.
But they don’t define what exactly a “market” constitutes.
Whether determination of relevant market is necessary for Section 3? – SC
Clarification order May 2018 – to the WB Co-ordination committee case. S. 3-
operative provisions – (3) (1) and (4)
(1) Does not have the term “market”
(3) – uses “market” but not relevant market.
(4) -

S. 4 – second explanation (a)

S. 6(1) – “relevant market”
Since the word “relevant market” is nowhere used under S. 3, we don’t have to
determine relevant market in a case that comes under that provision.
But in S. 4 – it is a necessity. First informant will say there is a relevant
market. After him the DG might check if relevant market. After that Opposite
party may take a stance. After all this CCI – will decide if a relevant market.
Sonam Sharma v. Apple – Apple was to be sold in India for the first time.
Before that the market was Grey – not illegal but irregular. In the initial days
Apple is skeptical about how the market might be. Hence, they did not want to
start their own establishment but decided to enter into agreements with
telephone operators – Apple + Vodafone etc. – Eg. Of tie-up arrangement/
exclusive arrangement.
Sonam alleges that violation of S. 3 & 4. With regard to S.3, the court held that
the market in India is GSM market and held that as per the market, it isn’t
competitive.
Cement cartelization case – There is a cement trade association – Cement
manufacturers association – oligopoly as the capital required is much more. In
an oligopoly price is fixed on the basis of price fixed by others. There is no
abuse of dominant position. But there is cartelization under S. 3(3).
DG – identified the market in this case.
CCI – there is no need to determine relevant market at all as it is immaterial
under S. 3.
S. 3(3) – per se rule – rebuttable presumption. – hence no need for
determination
But what about 3(4) – different market co-ordinate – should we determine
market in this? – open question.
Samsher Kataria case – NCLAT
Whenever a case under Competition Act is alleged, they file both under S. 4&3.
WB Co-ordination Committee case
In one part of the judgment they said there is a Sec. 3 agreement
Are all horizontal agreements cartels? Or are all cartels horizontal?
02/02/2019

Cartels
Criminal Conspiracy – Sec. 120A & B
A Conspiracy cannot be done by a single individual. Like in a conspiracy, in a
cartel too you need more than one person.
Cartel is a form of Conspiracy agreement. Further, Cartels happen through
oligopoly (where the products are homogenous in nature) only as it can never
work in a monopoly or in a market where there are several players.
S. 3(3) – “including cartels”
When the terms horizontal agreement is used, does it mean that there can be
cartels only in horizontal agreement and not vertical?
Cartels – always horizontal – should be people in the same/ similar level of the
chain. Definition – 2(c).
Do all horizontal agreement mean cartel? It is a term fiction by law.
Let’s take example of Co-ordination committee case – non-co-operation –
horizontal agreement – from this it can be seen that cartels are only one kind of
horizontal agreements.
Cartel originally means – price fixation agreement.
“cartel” includes an association of producers, sellers, distributors, traders or
service providers who, by agreement amongst themselves, limit, control or
attempt to control the production, distribution, sale or price of, or, trade in
goods or provision of services;
This “by amongst themselves” shows that it can only be a horizontal
agreement.
Eg. Bid-rigging – Process begins with invitation to offer (calls for bid). – there is
a collusion among the big players to get the bid/ they may collude and allocate
bids among themselves if the market players are few.
These are cartels.
Explanation to S. 3(3) - “bid rigging” means any agreement, between
enterprises or persons referred to in sub-section (3) engaged in identical or
similar production or trading of goods or provision of services, which has the
effect of eliminating or reducing competition for bids or adversely affecting or
manipulating the process for bidding.
Cartel is the most serious of all the anti-trust concerns.
Generally no person will come and openly admit that they have entered into a
cartel.
Dowl raids – you can suddenly inspect premises of a person and seize
documents and materials
Whistleblower protection
Leniency program – competition law
Read cement cartelization judgment in full.
03/05/2019

What are the various kinds of factors that help cartelization?

 It usually happens in Oligopoly market.
 The players should be more than 1 in number
 High concentration of competitors
 Barriers to entry and exit is high
 Identical and similar products
 Dependence upon consumers is high
 Trade association – active presence

Can your intentions validate a horizontal agreement? No. s. 3(3) -Intention is

not considered when there is a per se rule. Only thing you can do is to prove
that there is no horizontal agreement at all or there is no anti-competitive
agreement.
1) Price fixation cartels – you take away the option of the consumers to
bargain. And you do it against the market forces.
Various instances:
i. Agreement on price increase – Eg. Holiday seasons – Bus operators
etc.
ii. Few players together join to kick another competitor out
iii. Agreements relating to discounts.
iv. Agreement to fix prices based on any agreed formula
2) Market allocation/ Market division agreements:
3) Quality limitation agreements
Kinds of bid-rigging
Bid Rotation – read
Inflated bidding and Cover bidding - read
Sub-contract bid-rigging – you win the contract, but you give us a sub-
contract,
04/05/2019

Marker – Marking an approver – a person who was part of the cartel but comes
and blows the whistle – he gets full immunity (the first approver).
How to unearth cartel conspiracy?
Substantive cartel issue – Eg. Can price parallelism lead to price cartelization?
If no evidence, make one of the parties to approve. If no one is coming forward,
can you use circumstantial evidence? Yes – cement cartelization case.
Competition law – a civil/ criminal law? If criminal law – proof beyond
reasonable doubt. Civil – preponderance of probabilities.
Section 27 - Orders by Commission after inquiry into agreements or abuse of
dominant position
It is a civil offence – hence preponderance of possibilities
Rajasthan cylinders and containers ltd. v. Union of India, 2018 – read - In case
of cartel – no proof via circumstantial/ indirect evidence as it is the gravest
competition offence.
Exel corp judgment
OECD policy round tables cartels without direct evidence
Leniency regulation – Section 46
It is applicable only in case of cartels.
Cylinder case – can you prosecute a case in the absence of direct evidence?
Maximum punishment – 3% of your profit/ 10% of total turnover, whichever is
higher.
No direct/ indirect evidence – in such a case, if one approver comes, you can
bust all the participants of the cartel – this is done by extraction of confession.
P1 & P2 – suspected of cartel. Investigation is going on. No evidence. So –
Prisoner’s dilemma – to extract confession.
To P1 – “If you confess, you won’t be punished. But co-conspirator will be fully
punished”
To P2 – Similar offer is made.
This is the procedure in the leniency program under Competition Act as well.
If both are ready to make confession, they will get moderate punishment – 6
years each.
If they are not confessing in the same time – first – fully exempt, second – 50%,
third – 70% and the Act does not provide punishment for after third.
If both remain silent, you get two years each.
The Dominant strategy that they follow usually is – both confess.
In other jurisdictions it is called leniency scheme or leniency program.
Exam: Under what circumstances, CCI can pass regulations? – S. 64
CCI lesser penalty/ leniency Regulation – important regulations
2(f) – designated authorities
2(h) – priority status
2(b) – applicant – enterprise was only included. Now “person” is also included.
It can be an application for a past or a continuing cartel.
2(e) - “vital disclosure” – Full and true – two important elements.
Disclosure can be a mere piece of information or an evidence.
It is helpful for:
 Forming prima facie opinion
 Sustaining a conviction
09/05/2019

Section 3(3) – instances of several cartels

Proviso – Joint ventures are exempted – is this blanket or with reservations? Is
this exemption also creating a presumption?
They are not blanket exemptions as the reservation of “if they are increasing
efficiency etc.” is given.
Further there is a presumption created that if such JV result in increase of
production, they will be exempted. There is a presumption in favour of validity.
Things that should be seen – Whether the JV is entered into properly – this is
where merger control regulations come. Once it is adhering to such laws,
should see under the Competition Law.
You check it under S. 3, 4, 5 & 6 of the Act.
Zee turner case – 2013 case
Yogesh v. Zee turner & Anr.
There are two companies – Zee turner & Star Den. Both are proposing to enter
into a JV. They are Content aggregators.
JV can be of two types – Contractual & Equity based. Two independent
personalities come together for a common objective/ business purpose. In the
case of Contractual JV, there is no creation of a new incorporated company.
Their relationship exists in the nature of an agreement alone. Eg: Restaurant
Franchising – KFC combines with a restaurant business in India – they are still
two separate entities.
In the case of equity JV, there is a new entity created. – A + B = C. Decisions
are taken by C itself – this is an incorporated way.
LLP can also be started, and Partnership can also be started – JV – this is in an
unincorporated way – also includes the contractual JV we saw above.
A +B = C – now C can do JV with D – there is no end to the number of JVs.
In Zee Turner case, the proposal was to start a new company. Zee turner and
Star Den were already resultants of JVs. These two wanted to start another JV
– another content aggregator.
It is a proposed JV and the same is published in the news. One informant
approached the CCI. Says – already Cable operators’ business is deteriorating
because of the trend of the DTH to issue channels in a package and not a la
carte.
Two claims – 3(3)(a) and 4
But no JV has been entered into. Sec. 3 talks about post-cartel. Whereas 5 & 6
talks about proposal itself – when there is a combination.
Also, the exemption of increased efficiency applies only to S. 3 and not 4, 5,
and 6.
CCI – Under Section 3 there is already a presumption in their favour – Section
3 – JV as the parties were able to prove improved efficiency.
DG – what is the price under two independent and what is it when JV comes? –
no difference. But it increases production
TRAI – telecommunication service inter-connection regulation 2004. – this
covers the issue raised by the informant.
Hence, CCI said it is exempt. This is a section 26(6) Order – where the
Commission agrees with the findings of the DG that there is no case made out
and shall close the matter.
Under Section 4 – relevant market – broadcasting throughout India.
Before the JV, there were four established players doing this business. In
addition to them, there are other lesser known players as well.
Test applied to see dominance – how many channels are with you? How
popular are these channels?
Ultimately, they proved that the proposed JV will only have 20% of the market.
Hence no question of dominance. Therefore, no abuse.
Concentrative JVs (S. 5& 6) and Co-operative JVs (S. 3 & 4).
10/05/2019

For S. 5 & 6 we need to look at Companies Act

Chapter XV – 230 – 240
What is important is 230(5) – Regulatory or third-party approval within 30
days.
Notice should be given to several regulatory bodies, including CCI, “if
necessary”. The reason for “if necessary” phrase insertion is – there are some
thresholds. Only those mergers/ amalgamations/ acquisitions that cross the
threshold will have to be notified to the CCI.
PROCESS
 Overview of mergers and amalgamation
 Preparing of Scheme
 Approval from the lenders
 Approval from Board of Directors
 Approval from SEBI in the case of Listed CO. and Public notification
 Application to NCLT
Types of mergers – Fast track, cross border etc.
Companies Act says – 30 days for reply from any authority
Competition Act – 6(2A)- - 210 days
This may result in procedural inconsistencies. But the rule may be that
Competition Act is a special Act and hence, it may prevail over Companies Act.
COMBINATIONS
S. 5, 6, 20, 29 and 31
CCI (Procedure in Regard to the Transaction of Business Relating to
Combinations) Regulations, 2011
CCI (General Regulations, 2009
Notifications – S.0. 93(E) – Jan 8, 2013
673(E) – Mar 4, 2016
674(E) – Mar 4, 2016
675(E) – Mar 4, 2016 – recent thresholds – read
Section 5 – Combination
Acquisition of shares, acquisition of control by the enterprise over another and
amalgamation or merger between or amongst enterprises.
Exemptions – acquisition or Financing Facility by PFIs, VCFs etc. – In case of
share subscription of financing facility or any acquisition, inter alia, by a public
financial institution, foreign institutional investor, bank or venture capital
fund, pursuant to any covenant of a loan agreement or investment agreement,
details of such acquisition are required to be filed with the Commission within
7 days from the date of acquisition.
This exemption has been granted under Section 54.
S. 6 – Regulations of Combination.
S.6(5) – Exempts from enquiry but not exemption from giving notice.
Explanation (c) to Section 5 tells how the turnover and asset can be calculated.
What combinations are void?
A Combination becomes void only if it causes an appreciable adverse effect on
competition within the relevant market in India.
Relevant market enquiry has to be done under this Section also.
Mandatory Pre-Combination Notification
A firm proposing to enter into a combination, shall notify the Commission in
the specified form disclosing the details of the proposed combination within 30
days
 Of the approval of such proposed by the Board of Directors
 Execution of any agreement or other documents to that effect – there is Co. A
and B are discussing about a proposed merger – should this itself be notified?
No. But there are some exceptions to it.
Like when confidential information is passed etc. depending on the stage of
the discussion. – Clean team agreement – indirect cartel. The moment you
enter into a clean team agreement, you have to notify the anti-trust
authorities.
Combination approval order – C-2016/11/459 – Para 25 – “rule of information
control” – read
The italicized part is open for interpretation.
Failure to notify – if they don’t notify, commission has power to enquire into it
within one year of taking into effect of the combination.
Penalty – upon failure, can also impose penalty of 1% of turnover or assets of
the combination.

Exemption from Notification

Combinations that do no result in AAEC – Regulation 4 and Schedule 1 to CCI
Combination Regulations, 2011 – it lists down 8 instances.
S. 20(4) – Inquiry into Combination
Factors that need to be taken into consideration to see if combination results
in AAEC.
Hindustan Lever Employees’ union v. Hindustan Lever Ltd. and Ors.
Instead of AAEC, we used “detrimental to public interest” under MRTP Act.
Procedure for investigation of Combinations – S. 29
1) Forming an opinion
If the Commission is of the opinion that a combination is likely to cause
or has caused AAEC
2) SCN
It shall issue a SCN to parties
3) Response from parties not satisfactory
On receipt of response, if Commission is of the prima facie opinion that
there might be an AAEC may direct,
i. Publication of details, inviting objections from public and hearing
them
ii. It may invite any person, likely to be affected by the combination,
to file his objection
iii. CCI may also enquire whether disclosure made in the notice is
correct and if combination will result in AAEC.
United States v. International Harvesting Co. (Aug 12, 1914) – can be used for
abuse of dominance and combinations.
Is a Consolidation of competing industrial companies into one large corporation
resulting in the acquisition by that corporation of a large proportion of a
certain field of business, necessarily valid? The answer of the court in the
Harvester case is in the affirmative, when there is not sufficient excuse shown
for the consolidation. And this is irrespective of the conduct of the corporation
after the combination has taken place.
What needs to be seen is the motive and intention at the time of entering into
combination. Their subsequent conduct may not be that relevant.
Section 31 – what kind of orders can be passed by CCI
 Approve
 Disapprove
 Modifications
Effects Doctrine – S. 32 read with S. 18.
When we are exporting something – S.3
What about when we import goods? – AAEC happens outside India and effect is
found within India – does the CCI have jurisdiction over this? Principle of
territoriality?
Extra-territorial principle – can CCI use this? In the MRPT – there was no
provision which spoke about it. In the absence of it only, effects doctrine
came into place.
Even when the situs is not in India but its effect is felt, effects doctrine will
apply and CCI will have jurisdiction – this was judicially introduced.
From a practical angle, is it possible to enforce this extra-territorial
jurisdiction?
Substantial order and enforcement order – Substantial is terming it to be illegal
or legal and enforcement is the punishment for the same. – enforcement may
be difficult. It is at this point S. 18 of the Competition Act will be useful.
S. 18 – may enter into MoU with foreign agencies.
S. 32 – acts taking place outside India but having adverse effect in India.
In all these cases should an Indian entity also be involved? Not really. There
can also be a situation where everything is happening outside India and only
effect is felt here.
Floor Glass Manufacturer’s Association case, 2002 SC & American
Natural Soda Ash Corporation case – it’s combination of 2 cases. This case
was under MRTP Act. It happened outside India and the court incorporated
principles of USA and brought in the effects doctrine in India. This decision
was challenged in two cases – Whether MRTP Commission has the powers to
cover offshore transactions? SC held you cannot randomly bring a US doctrine
without a legislative backing.
This was considered as one of the problems of MRTP Act and as a result, S. 32
and 18 was introduced.
In both USA and UK, they have gone one step ahead and have enacted a
special anti-trust law to govern international transactions
USA – 1994 International Anti-trust Enforcement Assistance Act
U.K. – 1980 Protection of Trading Interest Act
USA Case which first laid down this doctrine – ALCOA case – USA v.
Aluminum Co. of America
Ratio
1. Any state may impose liabilities
2. Even upon persons not within its allegiance
3. You can impose liabilities on those kinds of conduct happening outside
its borders that has consequences within its borders.
Cases
Merger between GE Co. and Honeywell
Merger between Boeing and McDonnel Douglas
In these cases, activities were happening in USA and effects were felt in EU and
vice versa. They felt a problem with the effects doctrine – your country may
allow it but ours may prohibit the merger. At this point only, the principle that
is incorporated in S. 18 now was used.
Danaraj Pillai v. Hockey India Federation (2013) – effects doctrine in the CCI
regime. Two competing associations with respect to Hockey. One of the
federations (FIH) – not registered in India. Objections was raised saying that
since it is outside, CCI can’t interfere. CCI said – S. 32 of the Act so we can.
13/05/2019

Section 8 – Constitution of CCI

In MRTP – Commission was formed by the Government itself. But under
Competition Act, a selection committee constituted under S. 9 decides the
members of the Commission.
S. 15 – Vacancy – no act or proceeding of the Commission shall be invalid
merely because of vacancy or defect in the constitution of Commission/
because of vacancy in the appointment/ procedural irregularity.
If CCI forms an opinion that there is a “prima facie” case, it is forwarded to DG
for investigation. But at the time of forming this opinion, the parties are not
heard. Is this in violation of NJ?
ICAI case is an example – Arun Anandagiri ICAI
They said before even consulting us, they decided we were enterprises and
formed an opinion of prima facie case – in violation of NJ?
No it is not because adjudicating and adversarial proceedings start only after
DG submits the report. The initial opinion is a=only asking for co-operation
and it is the DG who carries out investigation where materials will be gathered.
Is there any provision in the Act that talks about interim orders? – S. 33 –
“without giving notice” interim orders may be passed if CCI is “satisfied”. Is this
in violation of NJ? – on this ground the parties file cases in HC asking for
injunction – this is the trend.
Brahmmdutt v. UOI – earlier version of Competition Act did not have COMPAT
(later only through an amendment established under 53A – COMPAT also has
subsequently became NCLAT). It was challenged. As a result the appellate
provisions in the Act.
S. 53A – appeal against “any orders” to NCLAT. Hence, when they approach the
HC as above, they can just say there is an adequate alternate remedy already
provided for. But HC sometimes may still allow saying NJ principles, FR etc.
Eg. Arun Anandhagiri case.
Can NCLAT give interim orders? – No explicit provision. But it can be
interpreted from 53B(3), COMPAT regulations and the CCI (General)
regulations, 2009 that NCLAT has the power to issue interim orders.
S. 53O – Procedure and powers of Appellate Tribunal. Read it along with S. 36.
Needn’t follow CPC but will still be considered as Civil Court for certain
purposes. CCI and NCLAT have the power to frame their own procedures.
Read procedural part on your own.
For Abuse of Dominance read S. 4, 27 and 28.

The General principle under the MRTP Act – Size plays a huge role
Under the current competition Act, abuse of dominance is prohibited because,
Fair competition – need for new businesses and startups, improvement in the
quality of goods and services and fair price.
Abuse of Dominance is anti-thesis to fair competition and it is an unfair play in
the Business.
Big is not bad only abuse of the bigness is.
Outline of the provisions
4(2) – Explanation (a) – Definition of Dominant Position
19(4) – Factors for determining whether an enterprise has abused its dominant
position under S. 4.
27 – Orders by Commission after inquiry onto agreements or abuse of
dominant position
28 – Division of enterprise enjoying dominant position.
Excel Corp case – calculation of turnover (S.27). – cease and desist order and
penalty orders.
S. 28 – De-merger- if you find an entity to be growing very large in size – and
you feel that 27 orders aren’t adequate, you go for split up of enterprises that
hold dominant position.
It is a non-obstante clause.
Microsoft Corp v. Commission of the European Communities ECJ 2009 –
Under the current Act, dominance is required to be decided on a case by case
basis and the rules are subjective in nature. The erstwhile MRTP Act defined
dominance in terms of a percentage of market share.
Dominance not linked to any arithmetic figure of market share.
Dominant position referes to a
United Brands Company v. Commission of European Communities – Affects
its competitors or customers or consumers or the relevant market in its favour.
What is Dominance?
 Essentially a lack of rivalry in the market
 Competitive pressure from rival firms usually ‘keeps firms honest’,
preventing them from charging prices which are excessively above costs.
 Without competitive pressure, a dominant firm has market power and so
is able to profitable raise prices and restrict output.
Case 85/76 – Hoffmen La Roche v. EC Commission (1979)
The European Court held – “such a position does not preclude some
competition. But enables the undertaking which profits by it, if not to
determine at least to have an appreciable influence under which competition
will develop, and in any case to act largely in disregard of it so long as such
conduct does not act to its detriment”
A dominant position may, in part, be obtained through:
 A firm gaining market share by being more efficient than competitors and
better at product and process innovations.(Eg. Cases of Microsoft, Ola,
and Jio).
 A firm buying out or merging with competitors (Eg. Proposed Walmart –
Flipkart deal).
 A state-owned enterprise (Eg. IRCTC).
You can go for pre-merger consultation with the CCI to know if anti-
competitive. But this is not binding.
Who can exercise dominance?
 Agreement among enterprises or persons
3(1) – No enterprise or association of enterprise or person or association of
persons shall enter into an agreement”
  Abuse of dominance by enterprises
4(1) – No enterprises or group shall abuse its dominant position.
 Combination among enterprises or persons
6(1) – No person or enterprise shall enter into a combination
ONLY ENTERPRISES CAN EXERCISE DOMINANCE
14/05/2019

When will Abuse of Dominance occur?

S. 4(1) – No enterprise shall abuse its dominance.
Abuse arises if enterprise,
 Imposes unfair/ discriminatory conditions in purchase or sale of goods
or process (including predatory prices)
 Limits or Restricts production, markets or technical development
 Denies market access
 Concludes contracts subject to acceptance by other parties of
supplementary obligations having no connection with the subject of such
contracts.
 Uses dominance to move into or protect other marks
Holding a dominant position is not outlawed (although it is controlled where
possible)
Abusing a dominant position is outlawed.
Meaning of Abuse
 Conduct which exploits customers or suppliers such as excessive pricing
 Conduct which amounts to exclusionary behavior by,
 either weakening or removing existing competition
 or weakening or removing potential competition by raising barriers
to entry.
 Most cases concern exclusive behavior.
 Another helpful categorization is price and non-price abuses
Price abuses include:
 Predatory pricing, margin squeezes and loyalty discounts
Non-price abuses include:
 Tying, bundling, exclusive dealing and refusal to supply.
Types of abuses
  Exploitative abuses: conduct which results in exploitation of others in
the value chain Eg. Imposition of unfair and discriminatory conditions,
predatory pricing etc.
 Exclusionary abuses: denial of market access, limiting production etc.
Economic effect is more important than specific legal form.
DLF India case and Coal India transportation case – both exploitative and
exclusionary.
Assessment – three tests:
1) What is the relevant market?
2) Is the firm dominant in the relevant market?
3) If the firm is found to be dominant, has it abused that dominance?
There is little point investigating an abuse when there is no dominance.
i. Determining the market
ii. After that identify the dominance
Never confuse market power with market share.
Relevant market = relevant product + geographical market
Relevant product market – comprises all the products or services which are
regarded as interchangeable or substitute by the consumer – United Brands v.
Commission ECJ case.
Relevant geographic market – refers to market comprising the area in which
the conditions of competition are distinctly homogenous.
 Dominance or market power is the ability to profitable raise prices above
competitive levels.
 Market power therefore depends on the extent or rivalry or competitive
constrains
 Existing competitors
 Potential competitors
 Buyer power
 A dominant position may result from a number of factors which looked at
alone may not be determinative.
Dominance – under MRTP and Competition
MRTP COMPETITION
Pre 1991 command and control Post 1991 – LPG regime
regime
Premised on size Premised on conduct
Concentrates more on structure Behaviour rather than conduct
Frowns upon dominance per se Dominance per se not bad, Frown
only upon abuse of dominance

Horizontal and vertical agreements

Vertical – raw materials supplier – manufacturer – wholesaler – retailer
Horizontal – same level.
Important cases:
 Ajay Devgn films v. Yash Raj Films Pvt. Ltd.
 Shri Ramakant Kini v. HeeraNandini Hospitals
 Matrimony.com v. Google
 Surinder Singh Bami v. CCI
Player restrictions, broadcasting agreement restrictions, conducting rival
leads
 IRCTC case – 100/2013
Read above for exam.
Ericson PUBL v. CCI – Delhi HC order
S. 60 & 62, 3(5) – important - FRAND
15/05/2019

Whether India has recognized collective dominance? No

S. 4 – Enterprise or Group – what is this group? Literal interpretation – only
one entity or a group in which the entities are related – in management and
control.
4(2) – explanation (c) – defines “group” – refers to S. 5 explanation.
Jyoti Swarupa Arora v. Tulip InfraTech Ltd.
Sonam Sharma v. Apple
Both these cases have explicitly held that – no collective dominance
Royal energy ltd. v. IOCL – legislative intention – no collective dominance.
In re: Dish TV India Ltd. case – whether “group” refers to collective dominance?
No – on a combined reading of 4 and 5 it can be said that it does not refer to
collective dominance.
Consumer online foundation v. TATA Sky – just because European jurisdictions
have recognized collective dominance, India does not have to recognize it, if
there is no legislative sanction for the same.
In 2012, there was a bill to introduce this, but it had lapsed.
Should the DG only rely on 19(4) or can he go beyond that and use other
economic tests?
SSNIP test – Small but significant non-transitory increase in prices test.
NSE case, DLF case and Sun Direct DTH case
Whether SSNIP can be applied?
NSE – SSNIP case can be used but it should be used only for a combination
enquiry.
Sun Direct case – Didn’t use SSNIP test or even mention it
DLF – the apt test to use is SSNP test. But they did not use it.
Hence, since there is no uniformity, it depends upon the director general, if he
wants to use, he may.

S. 60 and 62 – overriding effect if harmonious interpretation fails. But in cases

of special laws, such laws will override the Competition Act. Eg. TRAI and IPR.
S. 3(5) – In order to protect your IPR, you can impose as many terms and
conditions even if they violate competition law. Aim of IPR – limited monopoly
rights to incentivize innovations. Whereas the aim of competition Act is an anti-
thesis to this as no monopoly or barriers are allowed. Hence, this is a conflict.
There are two doctrines – Essential facilities doctrine and FRANDS doctrine.
They impose limitation upon Competition law.

Essential facilities doctrine

Certain things that are “essential” for the competitors to exist in the market,
where one industry/ firm/ undertaking holds the dominant position and there
by restricting its competitors from the access to essential facilities by denying
to disclose such essential facilities that are required by the competitors.
Conditions to claim the doctrine – by Herbert J
1. Cost fixation by the dominant industry in the respective market, creating
a natural monopoly
2. Imposing regulatory
US v. Terminal Railroad association
Associated Press v. US
Lorain Journal Co. v. US
MCI Communication v. AT & T – 4 conditions were laid down
Commercial Solvents v. Commission
Sea containers v.
IMS health and co. v. NDC Health and co. – 3 conditions
In Indian jurisdiction still the jurisprudence is evolving – Eg. TRAI case
Terminal Railroad case
Facts: There is a river and to cross it only one bridge is available. But on one
side of the bridge there are 4 competitors and bridge is constructed by one, A.
Situation 1: A says that I am the owner of it and hence other can’t access it.
Situation 2: A says I ll use the others as long as you pay me the license fee.
Under the garb of IPR protection nobody is allowed to have an absolute
monopoly after the expiry period. They must license it. Next is, can they fix
prices however they want? No. that is where FRAND comes in. Any kind of
unfair and discriminatory pricing is prohibited. Fair Reasonable and Non-
discriminatory (FRAND) terms.
Micromax, Ericson case – according to the information, Ericson owned some
kind of patent over something and did not grant them license at FRAND terms.
CCI – used 61,62 and 63 said they have jurisdiction as this is not merely IPR
issue but a Competition issue. Nothing stops us from taking a case under S. 4
and S. 3(5) does not apply to us.
Approached Delhi High Court – said CCI has jurisdiction.
Sea-Link case
Amir Khan Productions ltd. v. UOI
Kingfisher v. CCI – Delhi High Court 2009 – CCI has jurisdiction to deal with
issues concerning matter that should be heard by the Copyright board, if it
cause Section 3, 4 or 5 violation.
FICCI v. UPDF - 2009 – you can’t use S. 3(5) to involve yourself in an IPR
cartel.
Hawkins Cooker ltd. v. Murugan Enterprises – 2008 – you can’t use an IPR
to create an absolute monopoly. If done, the CCI can intervene.
16/05/2019

Section 3(4) – vertical agreements – between different levels in a chain.

I. Tie-in arrangement – other name is bundling agreement.
“tie-in arrangement” includes any agreement requiring a purchaser of goods, as
a condition of such purchase, to purchase some other goods – Explanation (a).
As a buyer you have an absolute freedom of choice to buy any product you
want.
When you go to a shop – you are intending to buy A. Shopkeeper says, to buy
A, you have to buy B also compulsorily and, in some cases, it is only optional.
Both come in a tie-in arrangement. These products can be a seasonal or slow
moving etc.
Eg. Car and insurance or AC and stabilizer
i. Another kind of tie-in is Bundling agreement. Newspaper has several
papers – Hindu + Metro Plus + Property paper etc – all are bundled. We
can’t ask for just one of them. We can get all or none.
ii. Another eg. DTH – all the channels will come together, and you should
pay for it.
iii. Same in Amusement parks – you get ticket for all the rides even though
you may not want to use them.
Sonam Sharma v. Apple
Jitendar Gupta v. BMW

II. Exclusive agreements – results in foreclosure of market to the

Competitors.
Exclusive supply/ distribution can be of three kinds
(1) A seller may say that he’ll sell only to one buyer
(2) A buyer may say I will buy only from one seller
 (3) Reciprocity agreement – combination of both
People are free to enter into these agreements and only if it results in AAEC –
illegal.
Distribution – you talk about allocation of market or location. Eg. Telco case
under MRTP Act, Sonam Sharma v. Apple.
Telco – TATA locomotives – entered into a dealership agreement – for exclusive
supply. Further, the dealership can sell only within a particular jurisdiction.
Two things are there – it is voluntary, and it is a common market practice. It
further increases efficiency. Who does this affect?- Competitors and the
Consumers.
In the above case, they say that nothing is wrong as they are not against public
interest (MRTP) (under Competition Act public interest = AAEC).
Under the MRTP Act, all these RTPs were to be registered first. Under
Competition Act, it is not a necessity.
Consumer Guidance Society v. Coca Cola
III. Resale price maintenance
“resale price maintenance” includes any agreement to sell goods on condition
that the prices to be charged on the resale by the purchaser shall be the prices
stipulated by the seller unless it is clearly stated that prices lower than those
prices may be charged.
Dunlop case – I sell tire to you and you sell it to consumers. But I fill fix the
price at which you can re-sell. Is there something anti-competitive in this? It
may be valid unless it results in AAEC.
Hyundai case – you can only go to a particular dealer if you have an issue and
that price for repair is fixed by Hyundai.
If this price fixation is done on the basis of whims and fancies, it can be
challenged.
Esys Information technologies pvt. Ltd. v. Intel Corp & Anr.
Dhanshyam Das v. Bajaj
Hyundai Motors case
In the USA – there is Colgate doctrine (from the Colgate case) – when retailer
has been informed well in advance about the price band and if the retailer has
agreed to that price band without any objections, it can’t be challenged at a
later time.
“Sherman Act does not prevent manufacturer from announcing in advance the
prices at which its goods may be resold and then refusing to deal with those
distributors and retailers who do not respect these prices.”
IV. Refusal to deal
“refusal to deal” includes any agreement which restricts, or is likely to restrict,
by any method the persons or classes of persons to whom goods are sold or
from whom goods are bought.
It is a general clause. There is condition – “if you don’t agree this condition, I
will not enter into any kind of business with you”. Eg. In your showroom, you
should be selling only my car. If you don’t agree, I won’t deal with you.
This may be both horizontal and vertical. The Trade association cases are
examples.