The Competition Act expressly prohibits any agreement that falls into one of the above-mentioned categories. Subsection 2 expressly prohibits the above-mentioned enterprises from entering into agreements on the production, supply, distribution, purchase or control of goods or services likely to cause damage or likely to have significant adverse effects on competition (AAEC) in India. The AAEC may be defined as a phenomenon observed in the event of an offence under any of the provisions of this Act. These include the negative effects it has on market participants and healthy competition in the market. The scope of Section 3 is sufficiently broad, since it covers not only the agreements expressly mentioned, but also tacit agreements within its competence. The classic competitive perspective was that certain trade agreements and plants could constitute an inappropriate restriction on the individual freedom of traders to support themselves. The restrictions have been deemed admissible or not by the courts, when new cases have arisen and because of changing conditions of activity. Consequently, the courts considered that certain categories of agreements, specific clauses, were contrary to their doctrine of economic fairness and did not invent a global conception of market power. On this basis, ancient theorists like Adam Smith refused any monopoly power. Given this power of the ICC, it becomes important for parties operating in India to be aware of agreements that can be considered “anti-competitive”.
In this bulletin, we will discuss the situations and conditions under which an agreement can become anti-competitive. The Common Law of Restraint of Trade is the direct precursor of modern competition law later developed in the United States.  It is based on the prohibition of agreements contrary to public policy, unless the adequacy of an agreement could be demonstrated. It effectively banned agreements aimed at restricting the trade of another. The Dyer`s of 1414 is the first known restrictive trade agreement to be examined under English common law. A dyer had given an obligation not to operate in the same city as the complainant for six months, but the complainant had not promised anything in his favour. When Hull J heard the applicant`s attempt to impose this restriction, he exclaimed: “By God, if the plaintiff were there, he would have to go to prison until he paid a fine to the king.” The court refused to collect bail in the event of a breach of the dyer`s contract, as the agreement was considered a commercial restriction.  Subsequently, the English courts ruled on a number of cases that gradually developed competition-based jurisprudence, which was eventually transformed into law.  Article 19(1) of the Act provides that the ICC may investigate, alone or after receiving information from a person, a consumer or his association or your economic association, against payment of the costs and in the prescribed manner.
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