Under the Competition Act, 2002, an agreement between competing firms to fix prices or rig bids is called:
- A.A vertical agreement
- B.A cartel
- C.A combination
- D.A tie-in arrangement
Correct answer
Explanation
The correct answer is B, a cartel. A cartel is a horizontal agreement, that is one between enterprises at the same level of the production or supply chain, to fix prices, limit or control output, share markets or territories, or rig bids in a tender. Such agreements are presumed under Section 3 to cause an appreciable adverse effect on competition, so the firms must show otherwise, and the leniency provision rewards a member who discloses the cartel. Option A is wrong because a vertical agreement is one between parties at different levels, such as a supplier and a dealer, and is judged by the rule of reason. Option C is wrong because a combination means a merger, amalgamation or acquisition regulated under Sections 5 and 6. Option D is wrong because a tie-in arrangement, which forces a buyer to purchase a second product, is one kind of vertical restraint.
Read the full article: Consumer Protection and Competition Law: Notes and PYQs
Practice Questions
View allAs per the Consumer Protection Act, 1986 a complaint can be filed in the District Consumer Disputes Redressal Forum if the value of the claim is up to:
- A.Rs. 5 lakh
- B.Rs. 15 lakh
- C.Rs. 20 lakh
- D.Rs. 10 lakh
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The Consumer Protection Act, 1986 created a three-tier machinery and fixed a money limit for each tier: the district forum could hear a complaint where the value of the goods or services and the compensation claimed did not exceed twenty lakh rupees, the state commission took claims above that limit…
Read the full explanation →Which of the following is NOT an element of the Competition Act 2002?
- A.Prohibition of anti-competitive agreements
- B.Regulation of combination
- C.Abuse of dominant position
- D.Prohibition of trade
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The Competition Act, 2002 rests on three pillars, and freedom of trade is the very thing it protects, so no provision of it prohibits trade; on the contrary, the Act opens by stating that it seeks to ensure freedom of trade carried on by other participants in markets in India.
Read the full explanation →Which Act governs consumer protection in India at present?
- A.The Consumer Protection Act, 1986
- B.The Consumer Protection Act, 2019
- C.The Monopolies and Restrictive Trade Practices Act, 1969
- D.The Essential Commodities Act, 1955
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The new Act widened the definition of a consumer to cover online, teleshopping and multi-level marketing purchases, created the Central Consumer Protection Authority, introduced product liability and rules for electronic commerce, allowed mediation and e-filing, and renamed the three redressal bodies as Commissions.
Read the full explanation →The Central Consumer Protection Authority (CCPA) was established under which law?
- A.The Competition Act, 2002
- B.The Consumer Protection Act, 2019
- C.The Legal Metrology Act, 2009
- D.The Bureau of Indian Standards Act, 2016
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The CCPA is a regulator created by that Act to protect the interests of consumers as a class, and not merely to decide an individual complaint.
Read the full explanation →Which is the apex body in the three-tier consumer dispute redressal machinery in India?
- A.The District Commission
- B.The State Commission
- C.The National Commission
- D.The Supreme Court
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It is headed by a sitting or retired judge of the Supreme Court, hears complaints above the pecuniary limit prescribed for the State Commissions, and also hears appeals from them.
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