Prohibition of anti-competitive agreements

  • Act/Rule/Legislation

  • Online Link to Act/Rule/Legislation

  • Initial Setup or Ongoing Maintenance

    Ongoing compliance requirement

  • Filing and Maintenance Requirements

    • An agreement that causes, or is likely to cause, an appreciable adverse effect on competition within India is anti-competitive and is prohibited by the Competition Act.

    • Agreements between competitors in the same market for price fixing, territory allocation, limiting production, business strategy and bid rigging are presumed anti-competitive.

    • Agreements entered into with suppliers, distributors and customers will be said to be anti-competitive if such agreements are determined to be anti-competitive on scrutiny.

    Examples:

    • tie-in arrangements

    • exclusive distribution/ supply agreements

    • re-sale price maintenance

  • Penalty

    (i) Monetary penalty for contravention of provisions of the Competition Act:

    • 10% (ten percent) of the average turnover of the preceding 3 (three) financial years.

    • In case of a cartel, the penalty may be up to 3 (three) times the profits for each year of the continuance of the agreement, or 10% (ten percent) of the turnover for each year of continuance of the agreement, whichever is higher.

    (ii) Non-monetary penalty for contravention of provisions of the Competition Act:

    The CCI may pass orders:

    • directing the enterprises to terminate the agreement and to refrain from re-entering such an agreement;

    • directing a modification of the agreement; or

    • directing the division of the dominant enterprise.

    (iii) Other Penalties

    In addition to monetary penalties relating to the specific substantive provisions, the Competition Act also provides that:

    • a person who makes a materially false statement or knowingly omits any material information or alters or destroys evidence can be penalised up to Rs. 10,000,000 (Rupees Ten Million only);

    • failure to comply with the orders of the CCI is punishable with a fine extending up to Rs. 100,000 (Rupees One Hundred Thousand only) for each day of non-compliance, subject to a maximum of Rs. 100,000,000 (Rupees One Hundred Million only);

    • non-compliance of orders of the CCI by a person is punishable with a fine extending up to Rs. 250,000,000 (Rupees Two Hundred and Fifty Million only) and/ or imprisonment extending up to a maximum of 3 (three) years;

    • non-compliance with the orders issued by the appellate tribunal can result in criminal liability by way of a fine extending up to Rs. 10,000,000 (Rupees Ten Million only) and/ or imprisonment extending up to a maximum of 3 (three) years.

  • Application Guidelines / Responsible Persons / Comments

    Not available