Competition Law Questions and Answers

Q: Under the Competition Act, the power to check whether appreciable adverse effect on competition has caused or not is that of :

The power belongs to the CCI, the Competition Commission of India.Under Sections 3, 4 and 20 of the Competition Act, 2002, the Commission inquires whether an agreement, an abuse of dominant position or a combination causes or is likely to cause an appreciable adverse effect on competition in India. Section 19(3) and Section 20(4) list the factors the Commission must consider in deciding this.The Central Government makes rules and appoints members, but it does not decide this question. The Finance Minister and the Finance Commission have no role under the Act.

Q: 'A firm having market power substantial enough to act independent of the competitive forces that prevail in the relevant market.' What does this statement refer to ?

The statement describes a dominant position.The Explanation to section 4 of the Competition Act, 2002 defines a dominant position as a position of strength enjoyed by an enterprise in the relevant market in India which enables it to operate independently of the competitive forces prevailing in that market, or to affect its competitors, consumers or the market in its favour. Abuse of such a position is prohibited.A cartel is an agreement among competitors, market equilibrium is the balance of supply and demand, and 'predominant nature of activity' is not this concept.

Q: The rationale for prohibition of anti-competitive agreements is :

The rationale is both (A) and (B): the best allocation of economic resources, and the lowest prices with the highest quality.Competition law, in India the Competition Act, 2002, prohibits anti-competitive agreements such as cartels, bid rigging and price fixing because free competition allocates resources to their most efficient uses and drives firms to offer consumers the lowest prices and the highest quality. Both are the economic benefits the prohibition protects.Higher wages for workers is not the aim of competition law; that is the subject of labour law. Each of the first two options states only one half of the rationale.

Q: 'Cartel' as defined under the Section. 2(C) of the Competition Act may take place between :

A cartel may take place between service providers among themselves.Section 2(c) of the Competition Act, 2002 defines a cartel as an association of producers, sellers, distributors, traders or service providers who, by agreement among themselves, limit, control or attempt to control the production, distribution, sale or price of, or trade in, goods or provision of services.A cartel is a horizontal arrangement among competitors on the supply side. Producers with consumers is a vertical relationship, consumers do not form cartels under the Act, and workers combining are a matter for labour law.

Q: Under the Competition Act 2002, Abuse of dominant position is explained under :

Abuse of dominant position is dealt with in Section 4 of the Competition Act, 2002.Section 4 prohibits any enterprise or group from abusing its dominant position, for instance by imposing unfair prices or conditions, limiting production or denying market access.Section 3 deals with anti-competitive agreements such as cartels, Section 5 defines combinations (acquisitions and mergers above thresholds), and Section 6 regulates those combinations.

Under the Competition Act, the power to check whether appreciable adverse effect on competition has caused or not is that of :

A.CCI
B.Central Government
C.The Finance Minister
D.Finance Commission

Exam Year(s)

MH SET - 2019, SET Exam - 2019,

Answer: A

The power belongs to the CCI, the Competition Commission of India.

Under Sections 3, 4 and 20 of the Competition Act, 2002, the Commission inquires whether an agreement, an abuse of dominant position or a combination causes or is likely to cause an appreciable adverse effect on competition in India. Section 19(3) and Section 20(4) list the factors the Commission must consider in deciding this.

The Central Government makes rules and appoints members, but it does not decide this question. The Finance Minister and the Finance Commission have no role under the Act.

Discuss in Forum

'A firm having market power substantial enough to act independent of the competitive forces that prevail in the relevant market.' What does this statement refer to ?

A.Cartel
B.Dominant position
C.Market equilibrium
D.Predominant nature of activity

Exam Year(s)

MH SET - 2020, SET Exam - 2020,

Answer: B

The statement describes a dominant position.

The Explanation to section 4 of the Competition Act, 2002 defines a dominant position as a position of strength enjoyed by an enterprise in the relevant market in India which enables it to operate independently of the competitive forces prevailing in that market, or to affect its competitors, consumers or the market in its favour. Abuse of such a position is prohibited.

A cartel is an agreement among competitors, market equilibrium is the balance of supply and demand, and 'predominant nature of activity' is not this concept.

Discuss in Forum

The rationale for prohibition of anti-competitive agreements is :

A.Best allocation of economic resources
B.Lowest price and highest quality
C.Higher level of wages to workers
D.Both (A) and (B)

Exam Year(s)

MH SET - 2021, SET Exam - 2021,

Answer: D

The rationale is both (A) and (B): the best allocation of economic resources, and the lowest prices with the highest quality.

Competition law, in India the Competition Act, 2002, prohibits anti-competitive agreements such as cartels, bid rigging and price fixing because free competition allocates resources to their most efficient uses and drives firms to offer consumers the lowest prices and the highest quality. Both are the economic benefits the prohibition protects.

Higher wages for workers is not the aim of competition law; that is the subject of labour law. Each of the first two options states only one half of the rationale.

Discuss in Forum

'Cartel' as defined under the Section. 2(C) of the Competition Act may take place between :

A.Producers and consumers
B.Indian consumers and foreign consumers
C.Workers of same sector situated in different states
D.Service providers among themselves

Exam Year(s)

MH SET - 2023, SET Exam - 2023,

Answer: D

A cartel may take place between service providers among themselves.

Section 2(c) of the Competition Act, 2002 defines a cartel as an association of producers, sellers, distributors, traders or service providers who, by agreement among themselves, limit, control or attempt to control the production, distribution, sale or price of, or trade in, goods or provision of services.

A cartel is a horizontal arrangement among competitors on the supply side. Producers with consumers is a vertical relationship, consumers do not form cartels under the Act, and workers combining are a matter for labour law.

Discuss in Forum

Under the Competition Act 2002, Abuse of dominant position is explained under :

A.Section 4
B.Section 5
C.Section 3
D.Section 6

Exam Year(s)

MH SET - 2025, SET Exam - 2025,

Answer: A

Abuse of dominant position is dealt with in Section 4 of the Competition Act, 2002.

Section 4 prohibits any enterprise or group from abusing its dominant position, for instance by imposing unfair prices or conditions, limiting production or denying market access.

Section 3 deals with anti-competitive agreements such as cartels, Section 5 defines combinations (acquisitions and mergers above thresholds), and Section 6 regulates those combinations.

Competition Law Questions and Answers

Topics

Other Subjects

Tags: Competition Law Questions and Answers

About Us

Competition Law Questions and Answers

Topics

Other Subjects

Tags: Competition Law Questions and Answers

About Us

Stay informed about all important Dates & Notifications