Madhulika Joshi

ANTI-COMPETITIVE
AGREEMENTS

1 By Madhulika Joshi
6th semester BA LLB
Pacific School Of Law
 INTRODUCTION

 Competition laws are introduced to regulate the manner

Madhulika Joshi
in which businesses are conducted in India, so as to
create a level playing field with effective competition in
the market.

 The underlying intent for this statue is for businesses to

compete on merit, and not with the aid of anti-
competitive agreements or conduct.

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 WHAT DOES THE COMPETITION ACT
COVER?
 The competition act, 2002 is not intended to prohibit
competition in the market. What the act primarily seeks to
regulate, are the practices that have an adverse effect o

Madhulika Joshi
competition in the market in India. In addition, the act
intends to promote and sustain competition in markets,
protect consumer interests, and ensure freedom of trade in
India.
 At the heart of the act are various activities that will be
prohibited a being anti-competitive. The activities comprise:
 Anti-competitive agreements;
 Abuse of dominant position; and
 Combinations that have an appreciable adverse effect on
competition in India. 3
 ANTI-COMPETITIVE AGREEMENTS
 Section 3 provides for protection of entering into anti-competitive
agreements.
 No enterprise or association of enterprises or person or association of

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persons
 Shall enter into any agreement in respect of
 Production,
 Supply,
 Distribution,
 Storage,
 Acquisition or control or likely to cause an appreciable adverse effect on
competition in India.

 Which causes or likely to cause an appreciable adverse effect on

competition within India.
 Any agreement entered into in contravention of this provision shall be void. 4
 TYPES OF AGREEMENTS
Horizontal And Vertical Relationships

Manufacturer 1 Manufacturer 2
Horizontal relationship
Productive/supply chain

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•Same Level Of Production Process
•Competitors
•Substitute Goods

•Complimentary Goods
•Different Level Of Production
Vertical
relationship
retailer 1

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 HORIZONTAL AGREEMENTS
 Horizontal agreements means an agreement between
enterprises, each of which operates at the same level in
the production or distribution chain.

Madhulika Joshi
 Defined under section 3(3) of the act, horizontal
agreements include agreements which:
 directly or indirectly determine purchase or sale prices;
 Limit or control output, technical development, services etc.;
 Share or divide markets;
 Indulge in bid-rigging or collusive bidding.

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 VERTICAL AGREEMENTS
 Vertical agreements are agreements between firms at
different levels of the manufacturing or distribution
processes. For example, an agreement between the

Madhulika Joshi
manufacturer and a distributor is a vertical agreement.
 Defined by section 3(4) of the act, vertical agreements
include:
 Tie-inagreements
 Exclusive distribution agreements
 Refusal to deal
 Resale price maintenance

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THE PROVISION OF SECTION 3 DOESN’T
APPLY TO:
 The right of any person to restrain any infringement of,
or to impose reasonable conditions, as may be necessary
for protecting any of his rights which have been or may

Madhulika Joshi
be conferred upon him under-
 The copyright act, 1957
 The patents act, 1970
 The trade marks act,1999
 The geographical indications of goods act,1999
 The designs act,2000
 The semi-conductor integrated circuits layout-design
act,2000
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 CONTINUED…

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 the right of any person to export goods from India to the
extend to which the agreement relates exclusively to the
production, supply, distribution or control of goods or
provision of services for such export.

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 Madhulika Joshi
10
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