Horizontal And Vertical Agreements Competition Law India

September 22nd, 2021| Posted by admin
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The ICC in Ghanshyam Que Vij considered and rejected the claims of territorial restrictions and the maintenance of an exclusive distribution system (see question 28) because the supplier that imposed the restrictions did not have sufficient market power and the presence of other players did not harm trademark competition in the FMCG sector. To what extent does antitrust law apply to vertical restraints in agreements entered into by public bodies? Similarly, the ICC rejected the allegations of exclusivity in the distribution agreements, both parties having rejected the agreement on insignificant market shares. The ICC decided that this reduced the likelihood of a market foreclosure (Automobiles Dealers Association v. Global Automobiles Limited &Ors.; SIPL). The ICC reiterated its view in a recent preliminary ruling, which noted that the extent of anti-competitive effects resulting from vertical restraints would depend, inter alia, on the market power of the large company/platform (MMT case). Recently, in its report on e-commerce, the ICC identified two types of exclusivity agreements between brands/service providers and online platforms: (i) agreements in which a specific product offering is launched exclusively on a single online platform; and (ii) agreements that lead a platform to list only one brand in a given product category. The e-commerce report finds that exclusive agreements can entail considerable additional costs for competing platforms in order to induce brands/service providers to renounce the exclusive contract with the large platform. Also, listing a single brand/service provider in a given product category on a large platform can make it more difficult for competing brands/service providers to promote their products in front of their customers. 2.8 What is the role of market share in the review of a vertical agreement? The Competition Act does not impose specific rules for commercial representation contracts and the prohibition of vertical restraints applies to all agreements between undertakings operating at different stages or levels of the production chain. Under the Indian Contract Act, an “agent” means a person who is responsible for doing an act for another or representing another person in his or her dealings with third parties; and the person for whom such an act is performed shall be referred to as the `contracting entity`. Courts in India have often distinguished principal agent relationships between buyer-seller relationships. Therefore, the Agency assumes the lack of independence of the agent and the continuous monitoring of the client over the acts assigned to the agent.

A vertical agreement within the meaning of competition law presupposes that the agreement includes at least two or more independent entities (or entities). It therefore seems unlikely that the standard rules on vertical restraints would apply to restrictions imposed on a representative by its procuring entity with the same stringency as the main agreements. In all ICC infringement decisions, Wendige estimates that less than 5% of cases concern vertical restraints. The vast majority of decisions taken so far by the ICC concern anti-cartels. The ICC`s decision-making practice has confirmed that the ICC will intervene in relation to vertical restraints only if the undertaking imposing the restriction has sufficient market power on the relevant market and there are disproportionate or non-objective justifications for the restrictions imposed. The law regulates the conduct of dominant enterprises. Please see our responses to questions 1.12 and 1.13 regarding the relevance of sector regulators in promoting competition in their respective sectors. A resale price maintenance agreement, which is the origin or probable origin of an AAEC in India, is prohibited. See the second question on the definition of resale price fixing. In addition, the Competition Act only prohibits vertical agreements imposing a minimum selling price.

It is unlikely that the setting of the maximum resale price by a supplier will raise concerns about the maintenance of the resale price. . . .

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