"The importance of determining the relevant market is only there in cases where a dominant player is

accused of engaging in anticompetitive agreement"- Do you agree? Explain in the light of relevant
provisions and case laws.

Yes, I agree.

India is a mixed economy, where public and private enterprises compete in order to sustain and operate
in the market. On enactment of the Competition Act, 2002, the Competition Commission of India (CCI)
was formed and empowered to regulate the competitive environment in India. The CCI is committed to
stop any abuse of dominance by a player. It relies on the findings of the Director General (DG), its
investigative arm, to pronounce an order. The order passed by the CCI is asserted through examination
of the factors mentioned in Section 19(4) of the Competition Act, 2002.

In Belaire Owner’s Association v DLF Limited & Ors., CCI passed an order which contradicted the
definition of relevant market. And soon after more such orders by the CCI was passed where similar
contradiction was noticed. Relevant market is crucial for the determining the abuse of dominant player
in the market. Thus, it can be stipulated that the concept of relevant market is subjected to change with
the distinctive specific facts of each particular case. So, the CCI interprets the concept of ‘relevant
market’ for every case.

Relevant market as defined in Section 2(r) of the Competition Act, 2002, are market determined by the
Commission with reference to the relevant product market or the relevant geographic market or both.

Relevant geographic market under Section 2(s), means the area where the conditions of competition for
supply of products or services are homogeneous in nature. They differ from the conditions in the
neighbouring areas.

Relevant product market under Section 2(t), refers to all those products and/or services which are
regarded as interchangeable or substitutable by the consumer by reason of the products' characteristics,
their prices and their intended use.

Dominant position as defined in Section 4(2)(e)(a) of the Act, is a position of strength enjoyed by an
enterprise, in the relevant market in India, enabling it to operate independently of competitive forces
prevailing in the relevant market thus, affecting its competitors or consumers or the relevant market in
its favour.

The CCI had to deal with various challenges since its formulation. One such challenge curtailing
competition in India are ‘Anticompetitive agreements’. Sec 3 of the Act deals with Anticompetitive
agreements.

Anticompetitive agreements can be defined as agreements between two persons (or association of
persons) or enterprises (association of enterprises) relating to production, supply, distribution, storage,
acquisition or control of goods or provision of services, which severely compromises the
competition in India. Section 3(1) of the Competition Act, 2002, deals with anticompetitive agreements.

These agreements are void-ab initio, i.e., the Competition Act, 2002, under Section 3(2) exclusively
mentions that anticompetitive agreements are void in nature.
The Cement Cartel Case (Also known as the Builders Association of India vs. Cement Manufacturers
Association & Ors. ("BAI case"))

The CCI demanded a critical investigation into the matter through the Director General. After
investigation, the DG recommended that a cartelization and infringement of Section 3 of the
Competition Act, 2002, had taken place.

The CCI agreed with the DG’s recommendation. The CCI stated that the cement companies had
established a cartel and they together have limited, controlled and also attempted to control production
and price in India. The CCI further stated, the act of the cement companies in limiting and controlling
supplies in the market and in determining prices through an anti-competitive agreement has not only
harmed the consumers but also damaged the whole economy.

The CCI imposed fines of just over US$1.13 billion against the 10 largest cement manufacturers in India
and the Cement Manufacturers Association.

Further, in NK Natural Foods Pvt. Ltd. v. Akshaya Pvt. Ltd., the CCI observed that agreements under
Section 3 are held anti-competitive only if they are detrimental for the market by causing an appreciable
adverse effect on competition either through agreement of horizontally placed enterprises or through
agreement between or among vertically placed enterprises.

Anticompetitive agreements can be of 5 types, as defined in Sec 3(4):

1. Tie-in arrangement
2. Exclusive supply agreement
3. Exclusive distribution agreement
4. Refusal to deal
5. Resale price maintenance

Tie-in arrangement

An agreement where the purchaser is forced to buy some other products along with the original
purchase.

Eg: A goes to a iPhone retailer outlet to buy a new phone. He was forced to a condition of purchase, that
he has to buy a Apple airpod along with his purchase in order to complete his transaction/purchase.

Exclusive supply agreement

An agreement where two enterprises or persons agree to facilitate each other in business by compelling
the purchase to purchase/acquire some goods of the other party to the agreement.

Eg: A and B agrees to facilitate each other. Ramesh, a purchaser, approaches A to purchase a particular
good. A asks Ramesh to buy another product belonging to B.

In Ramakant Kini v. Hiranandani Hospital, Mrs. Jain who was a patient admitted in Hiranandani Hospital
for the delivery of her child. She had entered into an agreement with Life Cell (a stem cell bank), for
collection of stem cells of her child within 10 minutes of the delivery. When she requested the
Hiranandani Hospital to allow Life Cell to extract the stem cells of her child, they refused allow entry of
Life Cell within the hospital premises and instead asked her to avail the services of Cyrobank (another
stem cell bank) for collection of the stem cells, if she wanted to. Life Cell was also requested not to book
any appointments of any patients from the same hospital and they would not be allowed to enter their
premises. It was admitted that Mrs. Jain was not informed earlier about an exclusive agreement
between Hiranandani Hospital and Cyrobank, and it does not allow other stem cell banks to collect stem
cells from the hospital.

After examining, the Competition Commission of India, declared that the above said impugned
agreement was in contradiction to Section 3(1) of the Competition Act, 2002, and thus shall be void. As
it had severely effected the competition in the relevant market.

Exclusive distribution agreement

Any agreement which restricts the distribution and sale of goods to a particular area.

Eg: Flipkart and Amazon are two prominent companies in the Indian E-commerce market. Suppose they
come to an agreement where, Amazon shall offer its services in the Northern India and Flipkart in the
Southern India. This shall reduce competition in the Indian market and a monopoly shall prevail.

Refusal to deal

An agreement which restricts the persons or classes of persons to whom goods are sold or from whom
goods are bought.

Eg: X, a buyer, goes to Y, a seller, to buy a product/good. Y refuses to sell him the product. Thus reducing
competition in the market and facilitating other sellers to sell their product.

Resale price maintenance (RPM)

An agreement that requires the reseller to sell the goods or services at or above a specified price
margin, which is usually decided by the supplier.

Fx Enterprise Solutions India Pvt Ltd v Hyundai Motor India Limited was the first and the only case in
India where a company was found to have engaged in anticompetitive resale price maintenance (RPM)
in violation of Section 3(4)(e) of the Competition Act, 2002.

However, there are some exceptions to the provisions in the Competition Act, 2002, discussed under Sec
3(5) of the Act:

1. The Copyright Act, 1957 (14 of 1957)

2. The Patents Act, 1970 (39 of 1970)
3. The Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act, 1999 (47 of
1999)
4. The Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of
1999)
5. The Designs Act, 2000 (16 of 2000)
6. The Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000).

Thus, I would conclude mentioning that competition in the market creates better opportunities for the
economy to thrive as more the competition, more the participation of enterprises/companies in modern
innovation and use of technology. Thus ensuring a proper competitive environment and restricting
monopoly a single company.