COMPETITION LAW PROBLEMS

1. Combination Between Enterprises A and B

Facts:

 Enterprise A entered into a combination with enterprise B.

 The purpose of the combination is to cause an appreciable adverse
effect on competition (AAEC) in the relevant market.
 Consumer forum C wants to challenge the combination.

Issues:

 Can a consumer forum challenge the combination under Indian

competition law?
 Does the combination violate provisions of the Competition Act,
2002?

Relevant Law & Case Law:

1. Section 3 & Section 4: Deals with anti-competitive agreements and

abuse of dominant position.
2. Section 6: Regulates combinations causing or likely to cause AAEC in
India. Combinations must be notified to the Competition Commission of
India (CCI) if they meet the thresholds.
3. Section 19(1): Allows any person, consumer, or association to file
information with the CCI about anti-competitive practices.
4. Relevant Case: Competition Commission of India v. Steel Authority of
India Ltd. (2010) - The Supreme Court emphasized the role of the CCI
in preventing combinations that harm competition.

Decision:

The consumer forum (C) has the right to approach the CCI under Section 19(1). If the CCI finds
that the combination creates or is likely to create AAEC, it may order the combination to be
modified or annulled under Section 31.

2. Agreement Between Anand and Gopal

Facts:

 Anand and Gopal agree not to compete and fix prices.

  Consumers raise objections about quality and affordability.

Issues:

 Does the agreement amount to anti-competitive behavior under the

Competition Act, 2002?
 Can price-fixing be challenged?

Relevant Law & Case Law:

1. Section 3(3): Horizontal agreements, including price-fixing, are

presumed to have AAEC and are void.
2. Explanation to Section 19(3): Such agreements harm competition
by reducing consumer choice and innovation.
3. Relevant Case: Suo Motu Case v. Cartelization by Cement Companies
(2012) - The CCI imposed penalties on companies for cartel-like
behavior and price-fixing.

Decision:

The agreement between Anand and Gopal violates Section 3(3). The CCI can impose penalties,
and the agreement will be declared void.

3. Agreement for Geographical Allocation Between X and Y

Facts:

 Enterprises X and Y agree to allocate geographical areas to avoid

competition.
 A consumer forum challenges the agreement as anti-competitive.

Issues:

 Does geographical allocation violate the Competition Act?

 Can the consumer forum file a challenge?

Relevant Law & Case Law:

1. Section 3(3)(c): Agreements for market allocation are anti-

competitive and presumed to cause AAEC.
2. Relevant Case: Hindustan Lever Ltd. v. SEBI (1998) - Highlighted the
anti-competitive nature of such agreements.
3. Section 19(1): Consumer forums or individuals can report anti-
competitive practices to the CCI.
Decision:

The agreement violates Section 3(3)(c) and will be declared void. The consumer forum can
challenge the agreement under Section 19(1). If proven, penalties can be imposed under Section
27.

4. TELCO's Territorial Restriction on Dealers

Facts:

 TELCO entered into an agreement with its dealers, assigning fixed

territories for selling Tata vehicles.
 The territorial restriction was challenged as a Restrictive Trade
Practice (RTP).

Issues:

1. Does the territorial restriction amount to an RTP under the

Competition Act, 2002?
2. Can such restrictions harm competition in the relevant market?

Relevant Law & Case Law:

1. Section 3(4)(c) of the Competition Act: Vertical agreements imposing

exclusive distribution arrangements are examined for potential adverse
effects on competition.
2. Section 19(3): Factors to determine appreciable adverse effect on
competition (AAEC).
3. Relevant Case: MRTP Commission v. TELCO (1977) - The court held
that territorial restrictions imposed for ensuring efficient operations are
not inherently restrictive unless they harm competition.

Decision:

If the territorial restriction improves efficiency, reduces costs, or ensures better service without
harming consumer choice, it will not be considered anti-competitive. However, if it creates
barriers to entry, monopolistic tendencies, or denies consumers competitive options, it will be an
RTP. The CCI can decide based on evidence whether the practice has AAEC.
5. Discriminatory Freight Rates for Non-Members
Facts:

 A company charged higher freight rates for non-member truck

operators and lower rates for members.
 Non-members alleged this was an RTP.

Issues:

1. Does discriminatory pricing amount to an RTP under the Competition

Act, 2002?
2. Can such pricing create anti-competitive effects in the transportation
market?

Relevant Law & Case Law:

1. Section 4(2)(a): Abuse of dominant position includes imposing unfair

or discriminatory pricing.
2. Section 19(4): Factors for determining dominance, such as market
share, economic power, and dependence of consumers.
3. Relevant Case: Excel Crop Care Limited v. Competition Commission
of India (2017) - The Supreme Court held that discriminatory practices
by a dominant player are anti-competitive if they harm competition or
consumers.

Decision:

If the company is in a dominant position and the discriminatory freight rates unfairly harm non-
member truck operators, it constitutes an abuse of dominance under Section 4(2)(a). The CCI can
impose penalties and direct the company to cease such practices.

6. Proposed Merger of KIX, PIX, SIX, MIX, and MAX Enterprises

Facts:

 KIX, PIX, and SIX propose a merger.

 Combined assets in India: ₹1,000 crores; combined turnover: ₹2,000
crores.
 They also seek to merge with MIX and MAX (USA-based), with assets of
$500 million and turnover of $2,000 million.
Issues:

1. Does the merger meet the thresholds under the Competition Act,
2002?
2. Can the merger adversely affect competition in India?

Relevant Law & Case Law:

1. Section 5 (Combination Regulation): Thresholds for mergers:

o Assets: ₹1,000 crore in India or $500 million worldwide.
o Turnover: ₹3,000 crore in India or $1 billion worldwide.
2. Section 6(1): CCI must prohibit combinations causing appreciable
adverse effect on competition (AAEC).
3. Relevant Case: CCI v. Holcim Limited (2012) – Mergers meeting
thresholds were reviewed for AAEC.

Decision:

The proposed merger meets the thresholds for CCI scrutiny. The CCI will examine whether the
merger leads to AAEC in the relevant market. If it improves efficiency without harming
competition, the merger may be allowed with conditions.

7. Agreement by Optometrists on Reimbursement Rates

Facts:

 A group of optometrists refused to join a vision care network unless

reimbursement rates were increased.
 This amounts to collective price-fixing.

Issues:

1. Does the agreement constitute price-fixing under the Competition

Act, 2002?
2. Can such collusion harm consumer welfare?

Relevant Law & Case Law:

1. Section 3(3)(a): Price-fixing agreements between competitors are

anti-competitive and presumed to cause AAEC.
2. Relevant Case: CCI v. All India Tyre Dealers Federation (2013) –
Collusive behavior for price manipulation was penalized.
Decision:

The optometrists’ agreement violates Section 3(3)(a). The CCI can impose penalties and direct
them to cease the anti-competitive practice.

8. Exim Corp India Pvt Ltd v. Google India Pvt Ltd

Facts:

 Exim Corp alleges Google abused its dominant position.

 Specifics of abuse include unfair pricing or discriminatory practices.

Issues:

1. Did Google India abuse its dominant position under Section 4 of the
Competition Act?
2. Were Exim Corp's rights or competition harmed?

Relevant Law & Case Law:

1. Section 4: Abuse of dominance includes unfair practices.

2. Relevant Case: Matrimony.com v. Google (2020) – Google was fined
for abusing its dominance in online search and advertising.

Decision:

If Exim proves abuse of dominance, Google could face penalties and remedial orders from the
CCI.

9. MCX Stock Exchange Ltd v. National Stock Exchange of India

Ltd
Facts:

 MCX alleged NSE abused its dominance in the currency derivatives

market by predatory pricing and other practices.

Issues:

1. Did NSE violate Section 4 of the Competition Act?

2. Did NSE’s practices harm MCX or competition?
Relevant Law & Case Law:

1. Section 4: Prohibits abuse of dominance.

2. Relevant Case: MCX v. NSE (2011) – NSE was fined for predatory
pricing and unfair practices.

Decision:

NSE was found guilty of abusing its dominant position and penalized by the CCI.

10. Shamsher Kataria v. Honda Siel Cars and 13 Others

Facts:

 Shamsher Kataria alleged car manufacturers limited spare parts

availability to authorized dealers, inflating prices.

Issues:

1. Does restricting spare parts supply amount to anti-competitive

behavior?
2. Were consumer rights harmed?

Relevant Law & Case Law:

1. Section 3: Restrictive supply agreements.

2. Relevant Case: Shamsher Kataria v. Honda Siel Cars (2014) – The CCI
fined manufacturers for anti-competitive practices.

Decision:

The manufacturers violated Section 3. The CCI directed them to modify their practices and
imposed penalties.

11. Facts

 Jindal Steel & Powers Ltd: Alleged that Steel Authority of India Ltd.
(SAIL) had an exclusive supply agreement with Indian Railways for
rails, leading to anti-competitive practices and abuse of dominant
position.
 CCI Actions: Found a prima facie case and referred the matter to the
Director General (DG) without allowing SAIL to file a detailed reply.
  SAIL Challenge: Challenged the CCI's order before the Competition
Appellate Tribunal (COMPAT), which stayed the DG's investigation and
excluded CCI as a party.
 CCI Appeal to the Apex Court: Discontented with COMPAT's
decision, CCI approached the Supreme Court.

Issues Formulated by the Supreme Court

1. Is an opportunity to file a detailed reply mandatory before referring a case
to the Director General?

 Relevant Law: Under Section 26(1) of the Competition Act, 2002,

the CCI is required to determine whether a prima facie case exists
before ordering an investigation.
 Case Law: In CCI v. Steel Authority of India Limited (2010), the
Supreme Court clarified that the CCI's formation of prima facie opinion
does not require giving a detailed hearing or allowing a reply.
 Analysis: The prima facie determination under Section 26(1) is
preliminary, and no detailed reply or hearing is mandatory at this
stage.

2. Can COMPAT interfere in investigations ordered by the CCI?

 Relevant Law: Under Section 53B, COMPAT has appellate jurisdiction

over CCI orders. However, appeals cannot generally be entertained for
procedural orders like those under Section 26(1).
 Case Law: The Supreme Court in CCI v. SAIL held that Section 26(1)
orders are administrative in nature and cannot be directly appealed
before COMPAT.
 Analysis: COMPAT overstepped its jurisdiction by staying the
investigation ordered by the CCI.

3. Should the CCI be a necessary party in appeals against its orders?

 Relevant Law: Under the principle of natural justice, any body whose
decision is challenged must be made a party.
 Case Law: In M/S Competition Commission of India v. Bharti Airtel Ltd.
(2018), the Supreme Court held that the CCI must be impleaded as a
party in such appeals.
 Analysis: COMPAT erred by refusing to prosecute CCI as a party.

Decision by the Supreme Court

The Supreme Court ruled in favor of the CCI, holding that:

 1. No detailed reply or hearing is required before forming a prima facie
opinion under Section 26(1).
2. COMPAT has no jurisdiction to interfere with administrative orders
under Section 26(1).
3. CCI must be made a party to appeals challenging its orders.

The Apex Court emphasized that the CCI’s role is crucial in ensuring a competitive market, and
procedural interventions should not hinder its investigations.

12. United States v. Continental Can Company (1964)

Facts

 The U.S. government challenged a merger between Continental Can

Company and Hazel-Atlas Glass Company under Section 7 of the
Clayton Act.
 Continental Can, a dominant metal can producer, acquired Hazel-Atlas,
a major glass container producer, arguing the merger was for
diversification.
 The government alleged the merger would significantly reduce
competition in the food and beverage container market.

Issues

1. Did the merger substantially lessen competition in the relevant

market?
2. Could it create a monopoly or reduce consumer choice?

Relevant Law

 Section 7 of the Clayton Act: Prohibits acquisitions that may

substantially lessen competition or tend to create a monopoly.

Decision

 The U.S. Supreme Court ruled that the merger violated Section 7 of the
Clayton Act.
 The Court emphasized that the combination of two major firms in
related markets (metal cans and glass containers) reduced potential
competition, discouraging market entry and innovation.
Significance

 This case established that mergers in related but distinct product

markets could still violate antitrust laws if they harm competition or
consumer welfare.

13. Proposed Merger of X, Y, Z with A and B

Facts

 Indian enterprises X, Y, and Z proposed a merger.

 Assets in India: ₹900 crore; Turnover: ₹2,000 crore.
 They also want to merge with U.S.-based A and B, whose assets are
$300 million and turnover is $1,000 million.

Issues

1. Does the merger meet the notification thresholds under the

Competition Act, 2002?
2. Will it have an appreciable adverse effect on competition (AAEC) in
India?

Relevant Law

1. Section 5 (Combinations):
o Assets Thresholds: ₹1,000 crore in India or $500 million
globally.
o Turnover Thresholds: ₹3,000 crore in India or $1 billion
globally.
2. Section 6: CCI examines whether the combination causes AAEC.

Decision

 The merger does not meet the Indian asset threshold (₹900 crore
< ₹1,000 crore). However, it meets the global turnover threshold
($1,000 million).
 The CCI can allow the merger if it improves efficiency, innovation, or
consumer welfare without harming competition.
 If it restricts competition in India, the CCI can impose conditions or
disallow the merger.
14. Mr. Jagat Singh v. Uttar Pradesh State Power Corporation Ltd.
Facts

 Mr. Jagat Singh alleged that UP State Power Corporation Ltd.

abused its dominant position as the sole electricity supplier by
indulging in price fixing and charging higher connection rates.

Issues

1. Does the CCI have jurisdiction over public utility providers like UP
Power Corporation?
2. Does the alleged price fixing amount to abuse of dominance under the
Competition Act, 2002?

Relevant Law & Case Law

1. Section 4: Abuse of dominant position includes price fixing and unfair

conditions.
2. Relevant Case: Shri Neeraj Malhotra v. North Delhi Power Ltd. (2011)
– The CCI held that a dominant public utility provider could be
scrutinized under the Competition Act if it engaged in anti-competitive
practices.

Decision

 The CCI can treat the information as a complaint and investigate under
Section 19(1).
 If UP State Power is found to abuse its dominant position, the CCI can
impose penalties and direct remedial measures.
 Public utilities, despite being state entities, must comply with
competition laws to prevent consumer exploitation.

15. DLF Ltd. and Abuse of Dominance in the Belaire Project

Facts

 The informants alleged that DLF Ltd. abused its dominant position in
the real estate market.
 DLF imposed arbitrary, unfair, and unreasonable conditions on
apartment allottees of the housing complex "The Belaire."
 These conditions adversely impacted the rights of allottees, including
delay in possession, unilateral changes in project specifications, and
high penalties for cancellations.
Issues

1. Did DLF Ltd. hold a dominant position in the relevant real estate
market?
2. Did DLF’s conduct amount to an abuse of its dominant position under
the Competition Act, 2002?

Relevant Law & Case Law

1. Section 4 of the Competition Act, 2002: Abuse of dominance

includes imposing unfair terms or conditions in the sale of goods or
services.
2. Relevant Case:
o CCI v. DLF Ltd. (2011): The CCI found DLF guilty of abusing its
dominant position in a similar matter, where it imposed unfair
conditions on buyers in the Gurgaon real estate market.

Decision

The Competition Commission of India (CCI) held that:

 DLF had a dominant position in the Gurgaon real estate market.

 The imposition of arbitrary and one-sided conditions amounted to
abuse of dominance under Section 4.
 DLF was fined ₹630 crores and directed to revise its terms to ensure
fairness.

16. Refusal to Supply and Price Discrimination by X Company

Facts

 X Company refused to supply its product to Y, a long-standing

distributor, without reasonable justification.
 X charged excessive prices in Denmark while offering lower prices in
Ireland for the same product.

Issues

1. Does the refusal to supply amount to abuse of dominance?

2. Does price discrimination in different markets constitute abuse of
dominance under competition law?
Relevant Law & Case Law

1. Section 4(2)(a) of the Competition Act, 2002: Abuse includes

imposing unfair or discriminatory prices.
2. Section 4(2)(c): Refusal to deal amounts to abuse if it harms
competition.
3. Relevant Case:
o United Brands Company v. Commission (1978) (European Case
Law): A dominant banana supplier was penalized for price
discrimination and refusal to supply, harming market
competition.

Decision

 Refusal to Supply: X’s refusal to supply to a long-standing distributor

without a valid reason is anti-competitive.
 Price Discrimination: Charging different prices in Denmark and
Ireland constitutes abuse under Section 4(2)(a) if it lacks economic
justification and harms competition or consumers.
 X Company’s conduct amounts to abuse of dominance. Remedies may
include penalties and orders to ensure fair supply and pricing.

17. Joint Venture Between A and B Challenged as Anti-Competitive

Facts

 Firms A and B entered into a joint venture to manufacture shoes,

aiming to increase efficiency and improve quality.
 C, a third party, challenged the agreement as anti-competitive and
sought to declare it void.

Issues

1. Does the agreement between A and B qualify as an anti-competitive

agreement under the Competition Act, 2002?
2. Can the agreement be exempted if it enhances production or benefits
consumers?

Relevant Law

1. Section 3(1) of the Competition Act, 2002: Prohibits agreements

causing an appreciable adverse effect on competition (AAEC).
2. Section 3(3): Agreements such as production control and price fixing
are presumed anti-competitive unless justified.
 3. Exemption: Agreements increasing efficiency, benefiting consumers,
or promoting innovation may not be void.

Decision

If the agreement genuinely enhances production efficiency and improves quality without
restricting market access or competition:

 It may not fall under anti-competitive practices, as per Section 19(3)

factors like benefits to consumers and technical efficiency.
 However, if AAEC is proven (e.g., market control, price fixing), the CCI
can declare it void.

18. C’s Civil Suit for Losses Due to Anti-Competitive Agreement

Facts

 X and Y entered into an anti-competitive agreement, causing C to

suffer losses.
 C approached a civil court seeking remedies.

Issues

1. Can civil courts entertain cases involving anti-competitive practices?

2. What remedies are available to C under competition law?

Relevant Law & Case Law

1. Section 61 of the Competition Act, 2002: Civil courts lack

jurisdiction over matters that fall exclusively under the CCI.
2. Section 53N: CCI can award compensation for harm caused by anti-
competitive agreements.
3. Case Law: Competition Commission of India v. Bharti Airtel Ltd. (2018)
– SC held that competition matters are solely within the CCI's purview.

Decision

 Civil courts cannot entertain the suit. C must approach the CCI or the
National Company Law Appellate Tribunal (NCLAT) for compensation
under Section 53N.
19. Supreme Prize Offer by X: Unfair Trade Practice?
Facts

 X Company offered a prize scheme for Delhi consumers during a

specific period, placing prize coupons inside its product.

Issues

1. Does the scheme constitute an unfair trade practice (UTP) under

the Consumer Protection Act, 2019?
2. Does it lead to consumer exploitation or restrict competition?

Relevant Law

1. Section 2(47) of the Consumer Protection Act, 2019: UTP

includes false representations, misleading schemes, or exploitation of
consumers.
2. Monopolies and Restrictive Trade Practices Act, 1969:
Promotional schemes must not unfairly restrict competition.

Decision

 If the scheme is transparent, provides promised benefits, and does not

mislead consumers, it is not an UTP.
 However, if it leads to false promises or misrepresentation, it violates
consumer protection laws.

20. Restrictive Trade Practices: Asha Sales Pvt Ltd

Facts

 Asha Sales Pvt Ltd entered into an agreement with XYZ dealers to
stock and sell only its products, regulating selling points and excluding
other brands.

Issues

1. Does the agreement qualify as a restrictive trade practice (RTP)

under the Competition Act?
2. Does it harm competition or dealers' freedom to trade?
Relevant Law & Case Law

1. Section 3(4) of the Competition Act, 2002: Exclusive supply

agreements leading to AAEC are anti-competitive.
2. Relevant Case: M/s Fx Enterprise Solutions India Pvt. Ltd. v. Hyundai
Motor India Ltd. (2018) – Exclusive agreements restricting trade were
found anti-competitive.

Decision

 If the agreement limits dealer choice or restricts competition, it

qualifies as an RTP under Section 3(4).
 Asha Sales Pvt Ltd must justify its practice by proving benefits like
efficiency or consumer advantage to avoid penalties.

21. Trans-Missouri Freight Association Case

Facts

 18 railroad companies west of the Mississippi River formed the Trans-

Missouri Freight Association (TMFA) to set freight schedules and
rates.
 The U.S. government challenged the agreement as a violation of the
Sherman Act (1890).
 The railroads argued that only "unreasonable" trade restraints should
be deemed unlawful.

Issues

1. Does the Sherman Act prohibit all trade restraints, or only

unreasonable ones?
2. Was the TMFA agreement a violation of the Sherman Act?

Relevant Law

 Sherman Act, Section 1: Prohibits every contract, combination, or

conspiracy in restraint of trade.

Decision

 In United States v. Trans-Missouri Freight Association (1897), the U.S.

Supreme Court ruled that all trade restraints, whether reasonable or
unreasonable, were prohibited under the Sherman Act.
  The TMFA agreement violated the Act, as it fixed rates and suppressed
competition.

Significance

This case established a strict interpretation of the Sherman Act, disallowing any agreements that
restrained trade, even if argued to be reasonable.

22. ABC and XYZ Agreement on Viral Fever Tablets

Facts

 ABC and XYZ entered into an agreement for the distribution of viral
fever tablets.
 The agreement likely caused an appreciable adverse effect on
competition (AAEC) in India.

Issues

1. Does the agreement violate the Competition Act, 2002?

2. Can the agreement be justified under any exemptions?

Relevant Law

 Section 3(1) of the Competition Act, 2002: Prohibits agreements

causing AAEC.
 Section 3(4): Vertical agreements, such as distribution arrangements,
are anti-competitive if they create barriers to market access or
eliminate competition.

Decision

If the agreement results in AAEC, it is invalid under Section 3. Factors like market foreclosure,
price fixing, or exclusive supply arrangements are crucial in the CCI’s assessment.

 If the agreement increases efficiency or consumer welfare without

restricting competition, it may be allowed.
23. Exclusive Stocking Agreement Between A and B
Facts

 Oil company A required service station dealers to stock tyres

exclusively from B, a rubber company.
 B agreed to pay commissions to A for all tyre sales.

Issues

1. Does this agreement qualify as an exclusive supply agreement

under the Competition Act, 2002?
2. Does it adversely affect competition in the tyre or service station
markets?

Relevant Law

1. Section 3(4)(b) of the Competition Act, 2002: Exclusive supply

agreements may violate competition law if they cause AAEC.
2. Relevant Case: M/s Fx Enterprise Solutions v. Hyundai Motor India
Ltd. (2018) – Exclusive agreements restricting dealership options were
deemed anti-competitive.

Decision

 The agreement restricts dealers' freedom to choose suppliers, creating

a risk of market foreclosure.
 If AAEC is proven, the agreement is void. The CCI can impose penalties
and direct the parties to amend their practices.

24. Northern Securities Co. v. United States

Facts

 Northern Securities Company was formed to control two major

railroads (Great Northern and Northern Pacific), which reduced
competition in the U.S. railroad market.
 The government challenged this as a violation of the Sherman Act
(1890).

Issues

1. Did the formation of Northern Securities constitute a restraint of trade

or monopolization under the Sherman Act?
 2. Could consolidation of competitors be justified?

Relevant Law

 Sherman Act, Section 1: Prohibits contracts or conspiracies that

restrain trade.
 Sherman Act, Section 2: Prohibits monopolization or attempts to
monopolize.

Decision

 In Northern Securities Co. v. United States (1904), the U.S. Supreme

Court ruled that the company’s actions violated the Sherman Act by
reducing competition in the railroad industry.
 The Court ordered the dissolution of Northern Securities.

Significance

This case reinforced the government’s ability to break up monopolistic combinations and protect
market competition.