Section 3, paragraph 3 of the Act provides that horizontal agreements are agreements between companies/persons that engage in identical or similar exchanges of goods or services. The “in itself” rule for horizontal agreements does not apply to vertical agreements. Therefore, a vertical agreement is not in itself anti-competitive or does not have a material negative effect on competition. A particularly serious type of anti-competitive agreement would be cartels. Agreements on cartels and abuse of dominance generally consist of setting prices, manipulating tendering procedures, dividing markets or limiting production. As a result, cartels have little or no incentive to lower prices or offer better quality goods or services. According to economic studies, cartels overload an average of 30%. There are four main types of agreements: VERTICAL AGREEMENTS- Vertical agreements are agreements between two or more companies operating at different levels of production2. For example, between suppliers and distributors. Other examples of anti-competitive vertical agreements are: Section 19 (1) of the Act provides that the ICC may request any alleged violation of Section 3 (1) of the Act, either alone or after receiving information from individuals, consumers or their association or professional association, at the time of payment of fees and in the prescribed manner. 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: given this power of the ICC, it becomes essential that the parties operating in India be aware of the agreements that can be considered “anti-competitive”. In this newsletter, we will discuss the situations and conditions under which an agreement may become anti-competitive. In the case of Shri Shamsher Kataria v. Honda Siel Cars India Ltd. – Ors3, the concept of vertical agreements, including exclusive supply agreements, exclusive distribution agreements and contract refusal, was examined by the Commission. Section 3 (1) of the Act provides for a general prohibition on the conclusion of agreements that originate or originated an AAEC in India: vertical agreements include agreements concluded by two companies at different stages of the production agreement. B for example between the manufacturer and the seller or between the seller and the distributor.