Roll No.

R760218055
SAP ID 500070291

UNIVERSITY OF PETROLEUM AND ENERGY STUDIES

Mid Semester Examination, September/October 2022

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Course: Competition Law Course Code: CLCP 5001
Programme: BBA. LL.B.(Hons) (Corporate Law) Semester: IX

Time: 02 hrs. Max. Marks: 100 (weightage 20% in the grade sheet)

Instructions:
1. Strictly no plagiarism. Write in your own words.
2. Write each answer in 500-700 words.

S. No. Marks CO
1 With help of case law, analyse the role of trade associations in exchanging commer-
cially sensitive information in case of Cartels to various participants of the cartel. 25 CO 3
Ans. Any agreement between rivals is unlawful if it results in an appreciable adverse effect
on competition under the Indian competition act 2002.
The Act defines cartel creation as a grievous offence. In the section 2(c) of the act
The Commission has the authority to conduct an investigation into any cartel and to
fine any individuals or businesses involved up to three times their annual profit for
each year the agreement is in effect or 10% of their annual revenue, whichever is
higher.
Trade association is formed for the purpose of establishing and maintaining the in-
dustry standards, exchanging the information and ideas and also for the mutual pro-

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tection.
According to the Organization for Economic Co-operation and Development
(OECD), an information exchange is a competitor-to-competitor exchange of infor-
mation that lies between overt cartelization and covert cooperation and is typically le-
gal. An advantage of information exchanges is increased economic certainty, which
boosts productivity and earnings. In some instances, there is also an advantage for
buyers and consumers, who can more readily compare and choose offers thanks to
the enhanced openness. A competitive market requires such interactions and ex-
changes between competitors, and regulators have acknowledged that information ex-
changes do have certain pro-competitive consequences. An information exchange, al-
though lowering ambiguity, may also encourage collusive behaviour. Sensitive infor-
mation is defined as information that encourages collusive behaviour. European
Commission also treated the sensitive information as concerted practices.
In India trade association influence and control the vertical and horizontal agree-
ments, the association may encourage cartelization among its member companies,
which could subsequently result in anti-competitive consequences like price-fixing
and obstacles. Hence, section 3(3) and 3 (4) violations can be arise in a some of the
specific industries.

CASE LAW -In the case of Big Entertainment and UTV software v. the Cham-
bers of Commerce and Motion Picture Association, the court found that requiring
new films to be registered before release and forbidding association members from
doing business with non-members of the chamber or society is anti-competitive and
in violation of the law. CCI also pointed out that compulsory registration also lessens
market competition by allowing everyone access to information on films that have
been released. CCI penalised. Trade Association for anti-competitive practices for
example fixing prices fixed in trade margins compulsory membership price determi-
nation commission and discounts and also imposition of arbitrary rules.

2 Discuss the essentials of an ‘enterprise’ defined under the Competition Act. Analyse
25 CO 1
the criterion evolved as a decisional practice to interpret the definition of Enterprise.
Ans. According to Section 2 (h) of the Competition Act of 2002, an enterprise is defined as
a person or a government department that engages in any activity related to the pro-
duction, storage, supply, distribution, acquisition or control of articles or goods, the
provision of services of any kind, or in investment, or in the business of purchasing,
holding, underwriting, or dealing with shares, debentures, or other securities of any
other body corporate, either directly or indirectly. However, excludes any actions car-
ried out by the Central Government departments dealing with atomic energy, money,
military, and space, as well as any activity related to the Government's sovereign
powers. In the case of Trade Organizations, although the constituent members may be

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a "business," associations are primarily intended to give their constituent members a
platform. The association itself shall not be regarded as an enterprise and its behav-
iour shall be immune from review under Section 4 if the primary purpose of the asso-
ciation is to offer a forum for their members to debate subjects of common interest.

CASE LAW - Dilip Modiwil and insurance regulatory and development authority
(IRDA)The Commission had the chance to look into whether IRDAI qualified as a
"enterprise" under the Act in the . The Commission had noted that if an entity en-
gages in any action that is related to the economic and commercial activities listed
therein, it might be considered a "enterprise" within the meaning of that word. It was
further noted that regulatory tasks carried out by an entity are not always subject to
the Commission's authority.

3 Comment on the working of Leniency Programme as incorporated in the Competition

25 CO 4
Act and the regulations.
Ans. In exchange for reporting the existence of the cartel agreement or for their assistance
during the authorities' investigation by submitting evidence, competition authorities
may completely waive or partially reduce fines or other penalties assessed to enter-
prises participating in cartels.
In other words, Program for leniency is an official method that rewards a cartel
member with immunity or leniency if they come forward with knowledge about such
anticompetitive agreements and help the Commission. A member of the cartel who
has violated Section 3 of the Act may receive a lesser penalty under the leniency pro-
visions of Section 46 of the Competition Act, 2002 (Act), provided that the member

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makes a full and truthful disclosure regarding the alleged violations and that the dis-
closure is also essential. If the investigative report from the DG was already obtained
before making a disclosure or if the person making the disclosure refuses to partici-
pate until the procedures are through, the Commission cannot reduce the penalty.
The following factors are used by the regulations to determine whether to lower the
financial penalty:
- the point at which the applicant first reveals the information - the evidence that the
Commission already has
- all of the relevant facts and circumstances
- the applicant's information's accuracy

CASE LAW - In zinc carbon dry cell batteries market in India v. Eveready In-
dustries India Ltd. In this case cartels who were eveready industries and Panasonic
energy industries ltd. Exchanges with the regard to the cartel and identifying the
names, locations and email addresses of the persons involved in the cartel and in re-
turn 30% of the penalty were reduced.

In the case of Nagrik Chetna manch considering the nature of the cartel, the stage at
which the lesser penalty application was "led," the evidences gathered by the DG in-
dependently of the lesser penalty application, and the cooperation extended in con-
junction with the value addition provided in establishing the existence of the cartel, a
40% reduction in the penalty was granted to Mahalaksmi and Lahs Green and their
individuals.

4 Analyse the scope of powers of Director General Investigation as provided under the
Competition Act, 2002. Cite relevant case law. 25 CO 2
Ans. The Competition Commission of India was founded with the mandate to uphold and
promote competition, safeguard consumer interests, and secure market players' free-
dom of trade in India. The Director General ["DG"], the CCI's investigative arm,
works with it to look into business activities that are anti-competitive anyone who
feels wronged by an enterprise's anti-competitive actions may submit information to
the CCI and seek an investigation. When an inquiry appears to be justified, the CCI
may issue an order under Section 26(1) of the Competition Act instructing the DG to
carry it out.
According to Section 19(1) of the Competition Act, any consumer, person, or associ-

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ation may warn the Competition Commission of any anti-competitive activities.
According to Section 41 of the Competition Act read with Section 36(2), the Director
General has the authority to look into the allegations.
Following an inquiry, the Director General draughts a report that includes all of the
facts, documentation, and proof. It is quite likely that the Director General may find
additional information throughout the inquiry that would have broken Competition
Act rules and regulations that were not present in the Prima Facie Order.

CASE LAW - Excel crop care Ltd versus competition commission of India and
others
The Supreme Court of India ruled in this case that the Competition Act's entire
premise would be defeated if the scope of the probe was limited to its first observa-
tions.

CASE LAW - Indian Competition Commission v. Mahindra & Mahindra & Co.
The Delhi High Court noted that the Director General investigation's jurisdiction is
significantly broader than the Prima Facie ruling in this particular instance as well.
Facts: The Competition Commission of India launched an investigation into three au-
tomakers that were engaging in anti-competitive behaviour. However, as part of the
examination, the Director General looked into other automakers and discovered that
they engaged in same anti-competitive behaviour.