The concept of pricing the resale was examined by the Commission in the case of Fx Enterprise Solutions India Pvt. Ltd. against Hyundai Motor India Limited4. In this case, the informant had stated that, pursuant to the hyundai agreement, the dealers had been instructed to procure all components and accessories of the automobile only from Hyundai or its suppliers. While working on Hyundai`s allegedly anti-competitive practices, the informant explained that Hyundai had imposed a “discount control mechanism” in which merchants could only grant a maximum rebate and where merchants were also not entitled to grant discounts beyond a recommended area, which would amount to “resale price retention” in violation of Section 3 (4)e) of the Act. The Competition Act 2002 regulates anti-competitive behaviour in India. The Competition Commission of India (ICC) is the legal authority responsible for enforcing competition law. The ICC is assisted by its investigative arm, the Office of the Director General (DG), in achieving the objectives of the Competition Act, including preventing practices that have significant negative effects on competition (AAEC), promoting and maintaining competition in markets, protecting consumer interests and ensuring free trade. Given this power of the ICC, it becomes essential that parties present in India be aware of the agreements that may fall within the framework of the designation “anti-competitive”. In this newsletter, we will discuss the situations and conditions under which an agreement may become anti-competitive. While operating in India, parties are prohibited from entering into anti-competitive agreements. In general, agreements that have or are likely to have significant negative effects on competition (“AAEC”) are anti-competitive agreements.
These chords can be horizontal or vertical. However, the Competition Act 2002 (“Law”) recognizes intellectual property rights and, to facilitate their protection, allows reasonable restrictions imposed by their owners. Similarly, the law exempts agreements between exporters, as exports do not affect Indian markets. The Competition Commission of India (“ICC”) has been empowered to order any company or person to modify, terminate and not recontract an anti-competitive agreement and impose a penalty of up to 10% of the average turnover of the last three years. This was an important case for the ICC. The ICC found that AIOCD controlled major drug and drug retailers across India. Because of its breath, AIOC`s anti-competitive actions have limited controlled supply and prices in a major consumer product. The ICC stated that “if these practices had not been there, there had been no doubt that consumers as a whole would have benefited from them in monetary terms and through other means, and the AIOCD must therefore be treated rigorously.” Article 19, paragraph 1 of the Act provides that, in the event of payment of the fees and the prescribed terms, the ICC may request any alleged violation of Section 3 (1) of the Act itself or in the case of receiving information from individuals, consumers or their association or professional association. The ICC may also act when the central government or a state government or legal authority refers to it. The ICC only continues the investigation in cases of prima facie and then orders the Director General to open an investigation into the matter.
In cases where, as a result of an investigation, the ICC finds that the agreement is anti-competitive and has an AAEC, it may take any of the following injunctions, with the exception of the injunctions it may take under Section 33 of the Act: the Indian Competition Act, 2002, was enacted to “promote and maintain competition… protection of consumer interests and free trade.” (i) Competition law reflects established competition rules to the extent that it is linked to agreements between parties, mergers or combinations, as well as the abuse of dominant behaviour, which has adverse effects