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CSEET · Economic and Business Environment · Key Government Institutions

A CCI investigation finds that a cartel of four tyre manufacturers fixed prices. Which of the following reflects the CCI's powers regarding such a finding under the Competition Act, 2002?

The CCI can issue a cease and desist order and impose a penalty. For cartels the penalty can reach up to three times the profit for each year of continuance of the cartel or ten per cent of turnover, whichever is higher. It cannot imprison anyone itself.

  1. AIt may only issue a non-binding advisory and cannot impose any monetary penalty
  2. BIt may pass a cease and desist order and impose a monetary penalty, which for cartels can extend to up to three times the profit for each year of continuance or ten per cent of turnover, whichever is higherCorrect
  3. CIt may send the managers to prison directly without any court
  4. DIt may only recommend the Reserve Bank to cancel the firms' licences

Explanation

The CCI can direct the parties to discontinue the practice and impose penalties. For cartels, the Act provides a higher penalty, up to three times the profit for each year of continuance or ten per cent of turnover, whichever is higher. It does not imprison people directly, and its orders are binding, not merely advisory.

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