Relevant Section: Sections 4 & 5 of the Competition Act, 2002.
Section 4 of the Competition act discussed about the Anti-Competitive Agreement.
What is Anti-Competitive Agreement?
1. Any agreement entered into in contravention of the provisions of the Act,
2. Any agreement entered into between-
i. enterprises or
ii. Association of enterprises, or
iii. Persons, or
iv. Association of persons
Engaged in identical or similar trade of goods or provisions of services, which have following impacts?
| 1. | Determination of Purchase Price | Directly or indirectly determines purchase or sale price. |
| 2. | Control the various activities | Limits or control, production, supply, markets, technical developments, investments or provisions of service. |
| 3. | Share the Geographically the price, supply and customer | Share the market or source of production or provision of service by way of allocation of geographical area of market, or type of good or service, or No. of customers in the market or any other similar way: |
| 4. | Bid rigging | Directly or indirectly result in bid rigging or collusive bidding. |
3. Any agreement amongst enterprises or persons at different stages or level of the production chain in different market, in respect of-
i. Production,
ii. Supply,
iii. Distribution,
iv. Storage,
v. Sale,
vi. Price of Goods or Services,
vii. Trade of Goods or Services Including-
| a | Tie-in arrangement | It includes any agreements requiring a purchase of goods as a condition of such purchase, to purchase some other goods. |
| b | Exclusive supply agreement | It includes any agreement restricting in any manner the purchaser in the course of his trade from acquiring or otherwise dealing in any goods other than those of the seller or any other person. |
| c | Exclusive distribution agreement | It includes any agreement to limit, restrict, or withhold the output or supply of any goods or allocate any area or market for the disposal or sale of the goods. |
| d | Refusal to deal | Includes any agreements which restricts or likely to restricts by any method the persons or classes of persons to whom goods are sold or from whom the goods are bought. |
| e | Re-sale price maintenance | It includes any agreement to sell goods on condition that the prices to be charged on the resale by the purchaser shall be the price stipulates by the seller unless it is clearly stated that prices lower than those price may be charged. |
Section 5 of the Competition Act 2002 discussed about the abuse of dominance Position.
What is Dominance position?
Means a position of strength, enjoyed by an enterprise in the relevant market in India, which enables to-
a. operate independently of competitive forces prevailing in the relevant market, or
b. affects its competitors or consumers or the relevant market in its favor
What is Abuse of Dominance?
If an enterprise-
| A | Directly or indirectly impose unfair or discriminatory–
|
1. Condition in purchase or sale of goods or service, or
2. Price in purchase or sale of goods or service. |
| B | Limit or restricts- | 1. Production of goods or provision of service or market thereof
2. technical or scientific development relating to goods or services to the prejudice of consumers; or |
| C | Denial of Market access | Indulges in practice or practices resulting in denial of market access |
| D | Cancellation of Contracts | Makes conclusions of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage have no connection with the subject of such contracts, or |
| E | Dominant position in one relevant market | Uses its dominant position in one relevant market to enter into, or protect other relevant market. |
What is relevant Market?
The market which may be determined by the commission with reference to relevant product market or the relevant geographical Market or with reference to both the market.
Two Types of Relevant Market as per CCI
| 1 | Relevant Product Market | Means a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their price and intended use. |
| 2 |
Relevant Geographical Market |
Means a market comprising the area in which the conditions for supply of goods or services are distinctly homogenous and can be distinguished from the conditions prevailing in the neighboring areas. |
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