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Legal Focus
OCTOBER 2013
Antitrust
Continuing with our focus on Antitrust we turn our attention towards India and the issues that arise there. Samir Gandhi is a partner at AZB & Partners’ New Delhi office, where he deals with a range of competition, antitrust, international trade and WTO issues. Who’sWhoLegal 2013 lists him as a leading competition practitioner in India, and Who’sWhoLegal 2010 as a leading trade and customs practitioner, making him perfectly placed to comment on this vast practice area.
S
amir began: “AZB & Partners are closely associated with the development and practice of competition law in India. We participated in the consultation
process leading up to the framing of merger control regulations under the Competition Act 2002 (‘CA02’). We have since interacted closely with the Ministry of Corporate Affairs, Government of India (‘MCA’) and the Competition Commission of India (‘CCI’), India’s competition regulator. The firm’s lawyers have also acted as counsel to the CCI in its early litigation to overcome the initial roadblocks to its functioning.”
Explaining the function of the CCI, Samir said: “The CCI has a threefold responsibility under the CA02 to, (i) prevent anticompetitive activities, (ii) promote and sustain competition in markets, and (iii) protect the end-consumer. Collaborations with competitors, imposition of vertical
the restraints upon
suppliers/distributors and the conduct of dominant enterprises necessarily need to be within the bounds of the CA02.
“A number of landmark decisions by the CCI have focused on the role of trade associations as a possible conduit for anti-competitive activity. The cases thus far arise from two types of allegations - (i) trade associations acting as a platform for the exchange of commercially
restrict the supply of goods/services through various means such as boycotts.
“In Builders Association of India vs. Cement Manufacturers’ Association
(‘Cement
Decision’), the trade association was found to have facilitated the exchange of commercially sensitive information relating to prices, production and sales that allowed the member cement manufacturers to cartelize and fix prices in concert. The CCI’s finding of price parallelism was based on a review of price fluctuations after certain association meetings,
from which cartelization was
inferred. The decision is now on appeal to the Competition Appellate Tribunal. On the other hand, in All India Tyre Dealers’ Federation vs. Tyre Manufacturers, the CCI did not correlate pricing patterns with trade association meetings. While the CCI noted several discussions at these meetings that were very similar to those scrutinized in the Cement Decision, no inference of cartelization was made. This was partly because the investigation revealed that no confidential data was discussed and exchanged at these meetings. On a different note, the boycott of certain market players by members of the trade association in Santuka Associates Pvt. Ltd. vs. All India Organization of Chemists and Druggists was held to be a clear case of limiting or controlling supplies/distribution/ availability of drugs, in violation of the CA02.”
sensitive
information among competitors enabling them to cartelize effectively, or (ii) members using trade associations to take decisions to
Samir continued: “However, mere participation in legitimate activities under the aegis of trade associations is not a violation of antitrust
law. Much-needed reassurance was given in Advertising Agencies Guild vs. Indian Broadcasting Foundation, when the CCI recognized trade associations as valid platforms for industry players to meet, discuss common issues, and generate public benefits such as efficiency-enhancing technical standards.
“The CCI is a very pro-active regulator that has not shied away from imposing substantial penalties. Given the spotlight on trade associations,
industry members are
encouraged to exercise caution to ensure that ordinary meetings do not turn into opportunities for exchange of commercially sensitive information or other activity that could fall foul of the CA02.” LM
contact:
SaMIR R GandHI Partner aZB & Partners aZB House Plot no. a8, Sector 4, noida new delhi 201301 India
tel: +91 120 417 9999 Fax: +91 120 417 9900 Email: samir.gandhi@azbpartners.com