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2015 (4) TMI 1354 - Commission - Indian LawsAnti-competitive practices in the nature of ‘exclusive agreements’ with sellers of goods/services - It has been urged that due to such practices, the consumer is left with no choice in regards to terms of purchase and price of the goods and services as thebuyer/consumercan either accept the terms and conditions in totality of the e-portal or opt not to buy the product - contravention of the provisions of section 4 of Competition Act, 2002 - HELD THAT:- For analysing allegations pertaining to contravention of section 3 (4) read with section 3(1) of the Act, it is necessary to first establish the existence of an agreement/arrangement. Once the agreement is proved, the next enquiry is into the effects of such agreement/arrangement; the test being AAEC as per the factors laid down under section 19(3) of the Act. Though the OPs have denied exclusive arrangements, accepting that such exclusive arrangement did in fact exist, the important question is whether such arrangements/agreements are anti-competitive. Section 3(1) of the Act unequivocally condemns only such agreement/arrangement/understanding which has or is likely to have an AAEC in the market. Section 3(3) of the Act presumes AAEC in case of certain horizontal agreements/arrangements which have been specifically identified therein. However, vertical agreements/arrangements under section 3(4) and other agreements/arrangements which do not fall under section 3(3) are anti-competitive only when AAEC is proved. The bare perusal of the agreement on the touchstone of the factors laid out suggests that such agreements do not result into AAEC. It does not seem that such arrangements create any entry barrier for new entrants. It seems very unlikely that an exclusive arrangement between a manufacturer and an e-portal will create any entry barrier as most of the products which are illustrated in the information to be sold through exclusive e-partners (OPs) face competitive constraints. For example, mobile phones, tablets, books, camera etc., are neither alleged nor seem to be trodden by monopoly or dominance. Further, it does not appear that because of these exclusive agreements any of the existing players in the retail market are getting adversely affected, rather with new e-portals entering into the market, competition seems to be growing. With regard to allegations pertaining to section 4 of the Act, the relevant market needs to be determined where OPs are operating. In this context, the Commission is convinced with the OPs that every product cannot be taken as a relevant market in itself. Irrespective of whether we consider e-portal market as a separate relevant product market or as a sub-segment of the market for distribution, none of the OPs seems to be individually dominant - the Commission does not consider it necessary to go into the question of abuse of dominance by the OPs as raised by the Informant and ADCTA. The Commission is of the prima facie view that no case of contravention of the provisions of either section 3 or section 4 of the Act is made out against the OPs - the matter is closed under the provisions of section 26(2) of the Act.
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