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CMA Final · Corporate and Economic Laws · The Competition Act, 2002

A foreign enterprise outside India enters into an agreement with another foreign enterprise, also outside India. The agreement is likely to cause an appreciable adverse effect on competition in the relevant market in India. Under the Competition Act, 2002, what is the position of the Competition Commission of India?

The Commission has power to inquire. Under section 32, it is irrelevant that the agreement was made outside India or that the parties are abroad, so long as the agreement has, or is likely to have, an appreciable adverse effect on competition in the relevant market in India.

  1. AIt has no power to inquire because both parties and the agreement are outside India
  2. BIt may inquire only if at least one party has a place of business in India
  3. CIt has power to inquire, as the agreement's location and the parties' location outside India do not matter if the effect is in the relevant market in IndiaCorrect
  4. DIt may only refer the matter to the Central Government for diplomatic action

Explanation

Section 32 gives the Commission power to inquire notwithstanding that the agreement was entered into outside India or that any party is outside India, provided the agreement has or is likely to have an appreciable adverse effect on competition in the relevant market in India. The first option ignores this effects-based reach.

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