Anti-competitive agreements are agreements between businesses that limit competition and harm consumers. These types of agreements are prohibited under the Competition Act, 2002 in India. This act was enacted to promote the interest of consumers and prevent acts that have an adverse effect on competition.
An anti-competitive agreement can take many forms, and it does not necessarily have to be a written agreement. These agreements can be made verbally or even implied through certain actions. Examples of anti-competitive agreements include price fixing, bid-rigging, market division, and exclusionary agreements.
Price fixing is an agreement between businesses to set a fixed price for a product or service. This practice can harm consumers by limiting their choices and maintaining high prices. Bid-rigging is when businesses collude to manipulate the bidding process, resulting in a predetermined winner. This practice can harm consumers by limiting competition and resulting in higher prices.
Market division is when businesses agree to divide the market among themselves. This agreement can limit competition and result in higher prices for consumers. Exclusionary agreements are agreements that prevent other businesses from entering the market. These agreements can limit competition and result in higher prices for consumers.
The Competition Act, 2002 prohibits anti-competitive agreements and provides for penalties and fines for businesses found guilty of such agreements. The act also provides for the establishment of the Competition Commission of India (CCI). The CCI is responsible for investigating and penalizing businesses found guilty of anti-competitive practices.
Businesses found guilty of anti-competitive agreements can face penalties up to 10% of their turnover. Individuals found guilty of such agreements can also face fines and imprisonment for up to three years. The CCI can also impose remedies for anti-competitive agreements, such as ordering the parties to terminate the agreement or prohibiting the parties from entering into similar agreements in the future.
In conclusion, anti-competitive agreements are prohibited under the Competition Act, 2002 in India. These types of agreements limit competition and harm consumers. The CCI is responsible for investigating and penalizing businesses found guilty of such agreements. Businesses should be aware of the types of agreements prohibited under the act and ensure that their business practices are in compliance with the law.
