Anti Competitive Agreements under Competition Act

When it comes to competition law in India, anti-competitive agreements are a serious concern. Under the Competition Act, 2002, such agreements are strictly prohibited by the Competition Commission of India (CCI). This law aims to promote competition in the market and prevent any activity that might hinder it.

Anti-competitive agreements typically involve two or more parties agreeing to act in a way that would restrict the competition in the market. The agreement could include price-fixing, market sharing, bid-rigging, or any other activity that distorts the market and harms the consumers. Such agreements can also affect the small and medium-sized businesses, which might not have the resources to compete with larger players in the market.

The Competition Act outlines specific provisions related to anti-competitive agreements. Section 3 of the Act declares that any agreement that causes or likely to cause an appreciable adverse effect on competition is void. The Act also defines different types of agreements that are prohibited, including those that:

– Fix prices or dictate pricing policies

– Limit or control production, supply, distribution, or technical development

– Allocate geographic or product markets

– Rig bids or pre-determine the outcome of tenders

The CCI has the power to investigate and penalize such anti-competitive agreements. The penalties can range from a simple cessation of practice to a monetary fine up to ten percent of the company’s average turnover for the preceding three financial years. The CCI can also direct the parties to discontinue the anti-competitive behavior or even dissolve the agreement altogether.

It is important for businesses to monitor and review their contracts and agreements to ensure compliance with the Competition Act. Even if a business is not intentionally engaging in anti-competitive behavior, they may still be penalized if they are found to have entered into an agreement that restricts competition.

For businesses that find themselves in a situation where they believe their competitors are engaging in anti-competitive behavior, they should report it to the CCI. The CCI provides a confidential complaint filing mechanism for businesses to report such behaviors. It is important to note that the CCI only investigates cases that are reported to them.

In conclusion, the Competition Act, 2002 prohibits anti-competitive agreements and provides the CCI with the power to investigate and penalize the parties involved. Businesses must ensure that their agreements do not violate the provisions of the Act and should report any anti-competitive behavior to the CCI. This will promote healthy competition in the market and benefit the economy as a whole.