Distinguish between the following: (i) 'Bid rigging' and 'Resale Price Maintenance'
CS Professional · Secretarial Audit, Compliance Management and Due Diligence · PYQS · June 2019
Distinguish between the following: (i) 'Bid rigging' and 'Resale Price Maintenance'
Answer & Explanation:
Bid Rigging [Section 3(3)(d) of Competition Act, 2002] An 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. Bid rigging is a particular form of collusive price-fixing behaviour by which firms coordinate their bids. Resale Price Maintenance [Section 3(4)(e) of Competition Act, 2002] Resale price maintenance includes any agreement to sell goods on condition that the prices to be charged on the resale by the purchaser shall be the prices stipulated by the seller unless it is clearly stated that prices lower than those prices may be charged. It is a situation in which the supplier forces the distributor/retail seller to sell the good to the customer at prices stipulated by the supplier. Bid rigging is a horizontal agreement i.e. agreement between enterprises or persons engaged in identical or similar production or trading of goods or provision of services whereas Resale Price Maintenance is a vertical agreement i.e. agreement between enterprises that are at different stages or levels of production chain and therefore in different markets.
Topics: Competition Act, 2002
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