Explain what is meant by Bid-rigging, tie-in agreement, Exclusive supply agreement, and Refusal to deal.
CS Executive · Economic, Business and Commercial Laws · PYQS · June 2019
Explain what is meant by Bid-rigging, tie-in agreement, Exclusive supply agreement, and Refusal to deal.
Answer & Explanation:
Bid Rigging: According to Section 3 of the Competition Act, 2002 "bid rigging" means any agreement, between enterprises or persons engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding. Tie-in agreement: Section 3 of the Competition Act, 2002, defines the term "tie-in agreement" to include any agreement requiring a purchaser of goods, as a condition of such purchase, to purchase some other goods. A good example of tie-in agreement is where a gas distributor requires a consumer to buy a gas stove as a pre-condition to obtain connection of domestic cooking gas. Exclusive supply agreement: Section 3 of the Competition Act, 2002, defines the term Exclusive supply agreement to include any agreement restricting in any manner from acquiring or otherwise dealing in any goods other than those of the seller or any other person. Thus, where a manufacturer asks a dealer not to deal in similar products of its competitor directly or indirectly and discontinues the supply on the ground that dealer also deals in product of suppliers' competitor's goods is an illustration of exclusive dealing agreement. Refusal to deal: According to Section 3 of the Competition Act, 2002, the term "Refusal to deal" includes any agreement, which restricts, or is likely to restrict, by any method the persons or classes of persons to whom goods are sold or from whom goods are bought. For e.g. an agreement which provides that the franchisees will not deal in products or goods of similar nature for a period of three years from the date of determination of agreement within a radius of five kms from showroom amounts to exclusive dealing agreement.
Topics: Competition Act, 2002
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