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CS Professional · Corporate Restructuring, Valuation and Insolvency · Regulation of Combinations

Aarav Tools and Bharat Fasteners, rivals in the same line of trade, agree that Aarav will sell only in northern India and Bharat only in southern India, so that neither competes in the other's area. Which provision of the Competition Act, 2002 is directly attracted?

Section 3(3)(c) applies, because competitors in identical trade have agreed to allocate geographical areas of the market between themselves. This is market sharing, and the agreement is presumed to have an appreciable adverse effect on competition and is void if it contravenes section 3(1).

  1. ASection 3(4), as a tie-in arrangement
  2. BSection 3(3)(c), as sharing of the market by allocation of geographical areaCorrect
  3. CSection 3(5)(ii), as an export-related right
  4. DSection 3(3)(d), as bid rigging

Explanation

Allocating geographical areas of the market between competitors in identical or similar trade is market sharing under section 3(3)(c), and is presumed to have an appreciable adverse effect on competition. A tie-in under section 3(4) needs a condition to buy other distinct goods. Bid rigging concerns bidding processes, which are not involved here.

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