XX Pvt. Ltd. has entered into an agreement with one of the most reputed car manufacturers of the country. The terms and conditions of an agreement are as follow: (a) Car manufacturer has restricted XX Pvt. Ltd. from acti

(a) Exclusive Supply Agreement and Refusal to Deal: The requirement to get prior consent from Car manufacturer for dealing with competing brands was not a prohibition. Hence, it did not amount to an exclusive supply agreement under Section 3(4)(b) and/or refusal to deal under Section 3(4)(d) of the Act. Hence this clause is valid under Competition Act, 2002. (b) Resale Price Maintenance: Fixing of a maximum retail price and maximum permissible discount which could be given by dealers effectively amounts to setting a minimum resale price, thereby resulting in Resale Price Maintenance. Hence this clause is not valid under Section 3(4)(e) of the Competition Act, 2002. (c) Tie-in Arrangement: Car manufacturer mandated its dealers to purchase engine oil only from its two designated vendors, at the price indicated by car manufacturer in its circular. In case of non-compliance by the dealers, car manufacturer threatened to terminate the dealership agreement. This practice will result in price discrimination, without accruing any benefit to the dealers or consumers, thereby contravening Section 3(4)(a) of the Act. Hence this clause is not valid. Hence, Car manufacturer is engaging in the practices of resale price maintenance (RPM) and tie-in arrangement in contravention of the provisions of Sections 3(4)(e) and 3(4)(a) read with Section 3(1) of the Competition Act, 2002. Therefore, this agreement between XX Pvt Ltd. and a car manufacturer is not valid as per Competition Act, 2002.