A Detailed Perspective into the nitty-gritty Aspects of the Competition Act, 2002 drawing a Comparative Analysis

Subhadeep Ray Choudhury

School of Law, KIIT University

Editor’s Note: The paper deals with the aspects of the Indian Competition Act, 2002 specifically with the concept of Exclusive Dealership Agreements in the Indian context as compared with the same in the European Union.”


In this multifaceted world of cosmic complex diversity there are numerous quandaries and predicaments and among these, the persistent dilemma omnipresent in the field of Competition Law has been taken as the subject matter of the research paper. The wide ambit of the Competition Act, 2002 along with other various legislations, both operating in the Domestic as well as International arena finds its presence in the paper.

The authors have tried to segregate the paper into two different parts for the better understanding and effective competitive analysis of the Law at stake. The nitty-gritty point of Part I is the General Aspect of the Competition Act, 2002 and the relationship of the Competition Act with other domestic legislations. A general understanding of the law along with the benefits and disadvantages of the Competition Act, 2002 in Pari Materia with the other statutes operating in this field of Competition. The main focus of the paper is the concept relating to Vertical Restraints enshrined in Section 3 of the aforementioned Act.

The second part of the paper leads us to a deliberate attempt on the part of the authors to bring out the various facets of the Exclusive Dealership Agreement and Vertical Restraints present in the European Union.


Backdrop And Introduction

Competition is not defined in law but is generally understood to mean the process of rivalry to attract more customers or enhance profit. Competition law deals with market failures on account of restrictive business practices in the market. Competition in the market means competing for quality, price and resources, leading to a market oriented towards consumer rights, fair trade, and efficient resource allocation, development of small businesses, incentives for innovation and dispersion of economic power. Modern day competition law is generally accepted to have had its foundations in the Sherman Act (1890) and the Clayton Act (1914) –both instituted in the United States[1]. Since attaining Independence in 1947, India, for the better part of half a century thereafter, adopted and followed policies comprising what are known as Command-and-Control laws, rules, regulations and executive orders[2].

The governing legislation in the cosmic field of competition laws in India is the Competition Act of 2002 which replaced the Monopolies and Restrictive Trade Practices Act, 1969[3]. The main object of the Act is to shift the focus from curbing monopolies to promoting competition both in domestic and the international field.[4]

The nitty-gritty focus of the Competition Act is to benefit the Consumers and Prohibit Anti-Competitive Agreements which finds a situation in Section 3 of the Competition Act, 2002. The section declares any such agreements to be void. The section covers agreements in respect of production, supply, distribution, storage, acquisition or control of goods or provision.

Exclusive Dealership Agreement embraces sole selling or exclusive sale agencies. The Explanatory says that this category includes any agreement to limit, restrict or withhold the output or supply of any goods or allocate any area or market for disposal or sale of goods.

Exclusive Dealing

Exclusive Dealing agreements are an agreement to sell a product on the condition that the buyer takes all (or effectively all) of its requirement of that product from the seller[5]. Such agreements have possible anticompetitive effects, but may also have possible redeeming efficiencies. Exclusive dealership agreements are agreements to sell a product on the condition that the buyer takes all (or effectively all) of its requirements of that product from the seller. The major anti-competitive concern us that such agreements might foreclose enough of the market to rival competition to impair competition. In most industries, there are economies of scale, so that firms can lower their costs by expanding until they reach the output levels that minimises their costs, which is called the minimum efficient scale. In markets where competition by innovation is important, foreclosure can deny rivals economies of scale in recouping investments in research. In an oligopolistic market[6], exclusive dealing agreements might aid oligopolistic coordination by effectively allocating the market among oligopolists, making it difficult to increase market share by decreasing prices.[7] Although such agreements may also have positive effects such as they might reduce uncertainty about whether future sales will occur at the contractually set price. This can lower risk-bearing costs or inventory costs, or give firms the contractual commitments they need to invest in expanding their capacity in a way that achieves economies of scale. Exclusive dealership might also encourage relation specific investments between the seller and buyer that increase their efficiency only with each other.[8] Another possible efficiency justification might reflect the economics of contracting

Possible Anticompetitive Effects

The major anticompetitive concern is that such agreements night foreclose enough of the market to rival competition to impair competition. Such foreclose might impede rival efficiency, entry, existence or expandability, any of which can anticompetitively increase the power of the foreclosing firm[9]. In most industries, there are economies of scale, so that firms can lower their cost, which is called minimum efficient scale[10]. Foreclosure can similarly deprive rivals of economies of scope of if without the foreclosure, rival expansion would have enabled them to offer a variety of products that can be more efficiently produced or sold together than separately. Further, even if rivals are able to achieve their minimum efficient scale and scope of production, foreclosure that bars rivals from the most efficient suppliers[11] or means of distribution[12] can also impair rival efficiency by increasing their costs. Most of the market can impair rival efficiency by simply slowing down rival expansion even though it does not outright prevent the expansion[13]. Similarly Foreclosure can take the form of seller- buyer collaboration to exploit downstream buyers by precluding rival competition[14]. Similarly, in an oligopolistic market, exclusive dealing agreements might aid oligopolistic coordination by effectively allocating the market among oligopolists, making it difficult to increase market share by decreasing price.

Possible Redeeming Efficiencies

Although exclusive dealing agreements can have many possible anticompetitive effects, they also have much possible redeeming efficiency that explain why they are often used even by firms without market power who are not foreclosing a substantial share of any market. They might reduce uncertainty about whether about future sales will occur at the contractually set price. This can lower risk-bearing costs or inventory costs, or give firms the contractual commitments they need to invest in expanding their capacity in a way that achieves economies of scale. Exclusivity avoids this risk while still providing the seller with at least the assurance that the buyer will take it can profitably use.[15] When the buyers are distributors, exclusive dealing might encourage manufacturers to spend on things like advertising that will increase foot traffic to its distributors without fear that customers will be diverted to other brands[16].

Another possible efficiency justification might reflect the economies of contracting. Modern economic theory on contracts emphasizes that often the optimal performance that contracting parties want to specify is not verifiable in the sense that parties cannot have high confidence that deviations will be detected and proven in a Court of Law[17].

In short, exclusive dealing can have precompetitive efficiencies. This, the general modern view in antitrust economies is that exclusive dealing agreements have sufficient mixed effects that they should be neither per se illegal nor per se legal. Instead, they should be judged under a rule of reason that weights the likely or actual anticompetitive effects any efficiency justifications[18].

The common thread in prohibition of “Anti-competitive Agreements[19] as well as “abuse of dominant position[20] is that both seek to sustain competition in the markets and are to be enforced “ex post”. An enterprise or association of enterprises is liable under Section 3, only when, they enter into an agreement relating to production or supply of goods or rendering of services which causes or is likely to cause appreciable adverse effect on competition within in India[21].

Kinds Of Vertical Restraints

The following are the vertical restraints specifically stated as to be considered anti-competitive if they fall under the prescription of the subsection 4 of section 3: (a) tie-in arrangement; (b) exclusive supply agreement; (c) exclusive distribution agreement; (d) refusal to deal; (e) resale price maintenance. There could be other types of agreements falling under the category of vertical restraints as those stated in section 3(4) of the Competition Act, 2002 are not exhaustive. The explanation to this subsection gives an inclusive definition of each of the vertical restraints, which means that there could be vertical restraints other than those stated in the subsection.

  • Tie-in arrangement: Tying is the practice of a supplier of one product, requiring a buyer also to buy a second product, the tied product.[22] A tie-in arrangement would arise only where the intending purchaser of a product or service is required by the supplier to purchase some other product or service, as a condition of that purchase, that is, there would be no supply of the first product or service unless the buyer did not buy the second product or service also, offered by the supplier.[23]
  • Exclusive Supply Agreements: An exclusive supply agreement includes an agreement that restricts the purchaser from acquiring any goods or services from anyone other than the seller or any other person who may be nominated[24].
  • Exclusive Distribution Agreements: An exclusive distribution agreement includes an agreement that stipulates limiting, restricting or withholding the output or the supply of any goods, or allocating any area or market for the sale of any goods[25].
  • Refusal to Deal: An agreement providing for refusal to deal includes any agreement that restricts by any method, the persons or classes of persons to whom goods may be sold or from whom the goods may be bought[26]. There are some circumstances in which a refusal on the part of a dominant firm to supply goods or services can amount to abuse of a dominant position[27].
  • Resale Price Maintenance: Resale price maintenance means the imposition of a condition by a seller fixing the price at which his purchaser may resell the goods. Resale price maintenance is a negation of the right of a buyer to resell the goods at a price he considers appropriate, considering the market conditions, as on sale, the seller has transferred the property in goods sold to the buyer. The Competition Act, 2002 prohibits it because it is a clog on the free play of the market forces which alone shall determine the prices at which goods are sold[28].

Exclusive Dealing In Context Of Intellectual Property

In the intellectual property context, exclusive dealing occurs when a license prevents the licensee form licensing, selling, distributing, or using competing technologies. Exclusive dealing agreements are evaluated under the rule of reason[29]. In determining whether an exclusive dealing arrangement is likely to reduce competition in a relevant market, the agencies will take into account the extent to which the arrangement

1) Promotes the exploitation and development of the licensors technology, and

2) Anti-competitive forecloses the exploitation and development of, or otherwise constraints competition among, competing technologies[30].

The likelihood that exclusive dealing may have anti-competitive effects is related, inter alia, to the degree of foreclosure in the relevant market, the duration of the exclusive dealing arrangement, and other characteristics of the input and output markets, such as concentration, difficulty to entry, and the responsiveness of supply and demand to changes in price in the relevant markets[31]. If the agencies determine that a particular exclusive arrangement may have an anti-competitive effect, they will evaluate the extent to which the restraint encourages licenses to develop and market the licensed technology, increases licensor’s incentives to develop or refine the licensed technology, or otherwise increases competition and enhances output in a relevant market.

Exclusive Dealership Agreement And Indian Contract Act, 1872.

In the leading case of Satyavrata Ghosh v. Kurmee Ram Bangor[32] it was stated that “A contract which has for its object a restraint of trade is, prima facie void”. Under the pretext of  S.27 of ICA if there exists a contract whether in partial or in general restraint of trade such that every such agreement is void. Section 27[33] of the Contracts Act is general in terms, and declares all agreements in restraint void pro tanto, except in the case specified in the application and unless a particular contract can be distinctly brought within Exception I there is no escape from the prohibition[34]. A negative covenant, if subsisting during the existence of contract, must not be greater than necessary to protect the interest of employer, nor unduly harsh and oppressive to the employee”[35]

Vertical restraint in European Union


The Rome Treaty of 1957[36] established what is known as the European Union[37]. There are currently 27 Member States. The Rome Treaty was renamed the Treaty on the Functioning of European Union (“TFEU”) by the Lisbon Treaty with effect from 1 December 2009. The TFEU consists of 358 Articles.[38] Much of the EU law is concerned with the elimination of obstacles to the free movement of goods, services, persons and capitals; the removal of these obstacles in itself promotes competition within the Union.  EU Competition law is contained in Chapter 1of Title VII of Part Three, which consists of Articles 101 to 109.[39] It is necessary to read these provisions in conjunction with the objectives and principles laid down in the TFEU and also the Treaty on European Union (‘TEU’). Article 3(3) provides that one of the EU’s objectives is a highly competitive social market economy.[40] The Lisbon Treaty repealed Article 3(1)(g) of the EC Treaty that established as one of the activities of the European Community the achievement of a system of undistorted competition. In Kornkurrensverket v TeliaSonera Sverige AB[41] the Court of Justice referred to Article 3(3) TEU and Protocol 27 on the internal market and competition (annexed to TEU and TFEU), as though there was no difference from Article 3(1) (g) EC.

With almost 497 million citizens[42], the EU combined generates an estimated 30% of the world’s nominal gross domestic product. The need for a common European Competition Policy has been recognized from the very beginning of the European Communities. At the European summit of 22 and 23 June 2007, in Lisbon, it was greed that both the Treaty on European Union and the Treaty establishing the European Community will be amended by a new Treaty of Lisbon to have most provisions of the European Constitution included. In the EC Treaty, the principal competition rules were set out in the Articles 81 to 89 of the EC Treaty and are positioned in the Part Three, Policy of the Community, Title VI, Common Rules, and Chapter 1. They relate to anti-competitive behaviour by an enterprise, which has an effect on trade between Member States, and are aimed at preserving and enhancing competition rules by different means.[43]

 Vertical Restraints and Economics

It is evident that the EC competition policy comprises a delicate balance of multiple objectives. Three Community objectives that promote competition within the Community are central: an open trade free policy, the internal market and an active competition policy.

Credible competition policy requires competition law enforcement: Cartel cases, merger cases, abuse of dominance cases.[44] But competition policy is not only about cases. It is about putting in place the condition for companies to deliver better goods and services to the consumers.[45]In European Union, the model or concept of a ‘social market economy’ takes a central position. Article 2(3) of the Treaty of Lisbon reads as ‘The Union shall establish an internal market’. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of environment.[46]

The competition process leads not only to competitiveness and greater economic efficiency, but also to increased social and consumer welfare, which plays an important role in the EU Treaty. The focus on consumer benefit can be evidenced by the wording of the competition rules itself.

In the European belief, it is crucial for a social market economy that the economy is not left alone, but that a strong framework is created that ensures (a) that social standards and other objectives of society are respected and (b) that the beneficial workings of market forces are not blocked, restrained or distorted by short-sighted actions of the market actors themselves. Economics in the EC Competition Rules comes into play twice: first, in the design of the EC competition rules and secondly in their application. The first aspect is a normative one embodied in the EC Treaty in the sense that European society demands a social market economy including the functioning of competition. The second aspect is the concrete application of economics in the EC competition rules.

Vertical restraints may be broadly defined as provisions contained in agreements between a supplier of goods and services and an acquirer of those goods and services. The assumption is that the output of the supplier and output of the acquirer are complimentary. Vertical restraints typically restrict the supplier from supplying the same or similar goods or services to certain other potential acquirers and/or restrict the acquirer from acquiring such goods and services from certain other suppliers and/or from entering into supply agreements with certain potential acquirers. Similarly, terms that impose minimum, fixed or maximum resale prices constitute vertical restraints, as do conditions that the acquirer shall resell a minimum or fixed quantity of the acquired goods or shall provide specific services in connection with their resale. Vertical agreements are therefore those that arise in a channel of distribution between firms at different levels of trade or industry i.e., between a manufacturer and wholesaler, between a supplier and customer or between a licensor of technology and his license.

A channel of distribution is the structure of intra-company organization units and extra-company agents and dealers, wholesale and retail, through which a commodity, product, or service is marketed. Channel strategy is one of the most challenging and difficult components of international marketing programs. With larger multinational companies, operating via country subsidiaries, channel strategy is an integral part of the total marketing program and must either fit or be fitted to product design, price and communications aspects of the total marketing program. Smaller companies are often blocked by their inability to establish effective channel arrangements.[47]

The core problem to vertical restraints in the past was the Commission’s adherence to the doctrine of economic freedom. However, this approach had two flaws. First, this approach can be applied to virtually every contract. And secondly under this approach there is no principle which provides a means to distinguish between a benign and an anti-competitive restriction.[48] The impact on competition and efficiency of any vertical agreements and distribution system very largely depends very largely on the market context and the barriers to entry.

The impact of the draft Commission Regulation on the application of Article 81(3) of the Treaty on categories of vertical agreements and concerted practices was discussed in Committee X’s sessions at the Business Law International Conference in Barcelona in September 1999. The Commission adopted a new Block Exemption Regulation (BER), Regulation (EC) No. 2790/1999 on December 22 1999. These regulations covered distribution and supply agreements.

Vertical agreements of the category defined in this Regulation can improve economic efficiency within a chain of distribution or production by facilitating better coordination between the participating undertakings; in particular, they can lead to a reduction in the transaction and distribution costs of the parties and to an optimization of their sales and investment levels.[49]

The Earlier Commission Regulation 4087/88 included a variety of clauses thereby including all the key matters to be included in franchising agreements. A significant factor to be seen while drafting a franchising agreement under the old Regulation was picking up (amending where appropriate) or discarding the clauses contained in the rules provided in the Regulation. The result was that the basic form and contents of all franchising agreements in Europe were dictated by the contents of Regulation 4087/88.[50]

The BER and the guidelines represented a radical change in the treatment of vertical agreements. It was the first important step by the Commission in its comprehensive modernization process towards the so-called more economic based approach that was very significant according to the modern economic thinking as the Commission believed that in the field of competition law economics is an unavoidable companion.[51]

It can be presumed that, where the share of the relevant market accounted for by the supplier does not exceed 30%, vertical agreements which do not contain certain types of severely anti-competitive restraints generally lead to an improvement in production or distribution and allow consumers a fair share of the resulting benefits; in the case of vertical agreements containing exclusive supply obligation, it is the market share of the buyer which is relevant in determining the overall effects of such vertical agreements on the market.


All the Member States of the EU have systems of competition law, in large part modelled upon Articles 101 and 102. Some Member States require that domestic law should be interpreted consistently with the EU rules, thereby reinforcing the alignment of EU and domestic laws. Under the regime introduced by Regulation 1/2003[52] the Commission shares the competence to apply Articles 101 and 102 with national competition authorities (‘NCAs’) and national courts; of course NCAs and national courts can also apply domestic law to agreements or practices, to also apply Article 101 and 102 where those provisions are applicable. In its report on the functioning of Regulation 1/2003 the Commission reported that Article 3(1) had led to a very significant increase in the application of Articles 101 and 102, ‘making a single legal standard a reality on a very large scale’.[53] Recital 8 of the Regulation 1/2003 states that it is necessary to create a ‘level playing field’ for agreements within the internal market. What this means is that, if an agreement is prohibited under EU competition law, it should not be possible for an NCA or national court to apply stricter national competition law to it; this may be termed a ‘convergence rule’.[54]

Those agreements which are prohibited by Article 101(1) and which do not satisfy Article 101(3) automatically void by the virtue of Article 101(2). Article 101(1) prohibits those agreements, decisions by associations of undertakings and concerted practices that are restrictive of competition. Those agreements in particular are prohibited, which fix purchase or selling prices, control the market, keeping one party in an advantageous position, make contracts subject to obligations on other parties which have no connection with the subject of such contract.[55] The Treaty does not define an ‘undertaking’. The Court of Justice held in Hofner and Elser v Macrotron GmbH[56] that the concept of an undertaking encompasses every entity engaged in an economic activity regardless of the legal status of the entity and the way in which it is financed.  The fact that an organization lacks a profit-motive or does not have an economic purpose does not in itself mean that an activity is not economic. Activities provided on the basis of ‘solidarity’ are not economic; not is the exercise of public power.[57] Article 101 does not apply to agreements between two or more legal persons that form a single economic entity: collectively they comprise a single undertaking and there is no agreement between undertakings.

The application of Article 101(3) to agreements, in particular by the Commission, was for many years controversial. In essence the complaint of many commentators was that Article 101(1) was applied to broadly, catching many agreements that were not detrimental to competition at all.[58] Article 2 of the Regulation 1/2003 confirms well settled case law that burden of proof is on the Commission, the NCAs or the person opposing an agreement in a national court to show that it infringes Article 101(3). The Commission must examine the arguments and evidence put forward by the undertaking relying on Article 101(3). Article 101(3) foreshadowed the advent of block exemptions by providing that the prohibition in Article 101(1) could be declared inapplicable both in relation to agreements and to categories of agreements.

Edited by Amoolya Khurana

[1] www.ftc.gov

Last visited: 29-09-2013 at 15:35.

[2] See Id.

[3] See Competition Act, 2002.

[4] See Avtar Singh, “Competition Law: Introduction”, Eastern Book Company.

[5] See Elhauge and Geradin ,“Global Competition Law and Economics: Vertical Agreement that Restrict Dealing with rivals”, , ch. 4, p.454, Hart Publishing, Oxford and Portland, Oregon, 2007.

[6] See Id.

[7] See generally P Bolton and M Dewatripont, Contract Theory (2005) at 456.

[8] See Id at 458

[9] See Id.

[10] Note that this anticompetitive effect is not necessarily eliminated if the unforeclosed market can sustain merely one rival, for if one rival exits it would be less likely to undercut monopoly pricing since it knows of will make less profit in the long run if it did. Rather, to avoid this anticompetitive effect, the unforeclosed market must be large enough to susutain the number of rivals at their minimum efficient scale that is sufficient to prevent such coordination.

[11] See Krattenmaker and Salop, “Anticompetitive Exclusion” (1986) 96 Yale LJ, 234-45:  SC Salop and DT Scheffman, “Raising Rivals” Costs’ (1983) 73 Am Econ Rev 267 (Special Issue).

[12] See Le Page’s v 3M, 324  F3d 141, 159-60 and n 14 (3rd cir 2003) (en banc).

[13] See, eg, JE Hodder and YA Illan, “Declining prices and optimality when costs follow an experience curve’ (1986) Managerial & Decision Econ 229; AM Spence, “The Learning Curve and Competition’ (1981) 12 Bell j Econ 49.

[14] Supra Note 1.

[15]  See Id, p. 456.

See H.P. Marvel, ‘Exclsuive Dealing’ (1982) 25 JL & Econ 1.

[17] See generally P Bolton and M Dewatripont, Contract Theory (2005).

[18] Supra Note 1, p. 458- 459.

[19] Section 3 of the Competition Act, 2002.

[20] Section 4 of the Competition Act, 2002.

[21]  See G.R. Bhatia, “Assessment Of Dominance : Issues And Challenges Under The Indian Competition Act, 2002”.

[22] See Whish & Bailey, “Competition Law : Abuse of Dominance”, Oxford University Press, 7th Ed., P 689.

[23] T.Ramappa, Competition Law in India: Policy, Issues, and Developments, 101 (2nd ed., Oxford University Press, Delhi).

[24] An illustration of an exclusive supply agreement could be gathered from the case of Standard Oil Co. of California v. United States[24] where Standard Oil Co. had entered into agreements with its retailers that they would buy all their requirements of gasoline and petroleum products only from Standard Oil Co.  The US Supreme Court held that this requirement under the agreement violated section 3 of the Clayton Act, 1914[24], as it restricted access for its retailers of other channels of procuring gasoline and petroleum products and that therefore, competition had been foreclosed in a substantial share of the line of commerce.

[25] Such an exclusive distribution arrangements limit the sources of supply and, thus, limit competition. One of the cases on allocation of a market for the sale of goods is Timken Roller Bearing Co. v. United States[25] whereby the Court found that, under agreements between them, the corporation’s (the appellant corporation, a British corporation and a French corporation), had allocated trade territories among themselves; fixed prices on products of one sold in the territory of the others; cooperated to protect each other’s markets and to eliminate outside competition, and participated in cartels to restrict imports to, and exports from, the United States. The court concluded that appellant had violated the Sherman Act as charged, and entered a comprehensive decree designed to bar future violations.

[26] The term Refusal in this context includes a constructive refusal, for example by charging unreasonable prices, by imposing unfair trading conditions for the supply in question or by unduly delaying or degrading the supply of the product in questions, see para 79 of the Commission Guidance on Article 102 Enforcement priorities.

[27] There are some circumstances in which a refusal on the part of a dominant firm to supply goods or services can amount to abuse of a dominant position In United States v. Parke, Davis & Co.[27], there was evidence showing that the defendant had announced a policy of refusing to deal with retailers who failed to observe the defendant’s suggested minimum resale prices or that the defendant would have discontinued direct sales to those retailers who failed to abide by the announced policy, and only permit the retailers to resume purchasing its products after they had indicated willingness to observe the policy which was clearly violated the Sherman Act.

[28] One of the examples of resale price maintenance can be illustrated through the case of Dr. Miles Medical Co. v. John D. Park & Sons Co[28], whereby the agreement between Dr. Miles Medical Co. (manufacturer of proprietary medicines) and the wholesale distributing agents, required among other obligations, that the goods were to be sold at not less than prices indicated therein. In the case of retailers, they were not to sell at less than the full retail price as printed on the packages. The wholesalers and retail agents were also prohibited from selling the proprietary medicines at any price to wholesale or retail dealers who were not accredited agents of the Dr. Miles Medical Company.

[29] Tampa Electric Co. v Nashville Coal Co, 5 Led 2d 580: 365 US 320 (1960) (evaluating legality of exclusive dealing under S. 1 of the Sherman Act and S.3 of the Clayton Act and evaluating legality of exclusive legality of eclusive dealing under S. 5 of the Federal Trade Commission Act.)

[30] See Avtar Singh, “Competition Law : Prohibition of certain agreements“, ch.2, p. 21, Eastern Book Company.

[31] See Id.

[32] [1954] SCR 310

[33] Section 27 in The Indian Contract Act, 1872 :Agreement in restraint of trade void.- Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. Saving of agreement not to carry on business of which good- will is sold.- Exception 1.- One who sells the good- will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the good- will from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business

[34] See Id.

[35] Superintendence Company of India v. Krishan,  1980 AIR 1717, 1980 SCR (3)1278.

[36] The Treaty of Paris of 1951 had earlier established a special regime for coal and steel which contained provisions dealing specifically with competition; this Treaty expired on 23 July 2002.

[37] The original name ‘European Economic Community’ was replaced by the ‘European Community’ by the Maastricht Treaty of 1992, which, in turn was subsumed into European Union by the Lisbon Treaty of 2009; it follows that references are now to EU, not to EC, competition law.

[38] The Treaty on Functioning of European Union

[39] Competition Law, Richard Whish and David Bailey, 7th Edition, pg 50.

[40] Id at pg 50

[41] Case C-52/09 [2011] ECR I-000

[42] The Role of Economic Analysis in the EC Competition Rules, 3rd Edition, Doris Hildebrand, pg 1

[43] Ibid

[44] Neelie Kroes, Being Open About Standards, European Commission for Competition Policy, OpenForum Europe, Brussels, 10th June 2008.

[45]Id at 7, 8.

[46] Title I, Common Provision Article 3, Treaty on European Union

[47] Id, at pg 258

[48] Id, at pg 278

[49] Global Competition Law and Economics, Einer Elhauge and Damien Geradin, Hart Publishing 2007, at pg454

[50] How Will the New Vertical Restraints Regulations Affect Franchising?, by Inigo Igartua,

[51] Supra note 7, pg 279.

[52] Council Regulation (EC) No 1/2003, Official Journal of the European Communities L1/1

[53] SEC (2009) 574, para 25.

[54] See the European Commission’s Guidelines on the application of Article [101(3) TFEU] OJ [2004] C 101/8, para 14.

[55] Treaty on the Functioning of European Union, Official Journal of the European Union, C 83/88.

[56] Case C-41/90[1991] ECR I-1979, [1993] 4 CMLR 306, para 21.

[57] Supra note 4, p. 86.

[58] Id at 114.

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