EconomyGS3+ GS2

CCI sanctions agro-input dealer associations for cartelisation under Competition Act

PIB·2026-08-23· Read original

"CCI sanctions agro-input dealer associations for cartelisation under Competition Act"

Prelims Facts

  • •The Competition Act, 2002 replaced the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969.
  • •CCI was established under the Competition Act, 2002 and became fully operational in 2009.
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Key Terms

Cartelisation

collusion among competitors to fix prices, limit supply, or divide markets, treated as a per se violation under Section 3(3) of the Competition Act.

Per se violation

a category of conduct presumed illegal without needing proof of actual market harm; applies to horizontal agreements under Section 3(3).

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Study Note

BackgroundCore Concept

Background

The Competition Act, 2002 is the principal legislation governing market competition in India. It replaced the older Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, which was considered inadequate for a liberalised economy. The Act established the Competition Commission of India (CCI) as a statutory body to prevent practices that harm competition, protect consumer interests, and ensure freedom of trade. The CCI became fully operational in 2009.

The Act prohibits two broad categories of conduct. First, anti-competitive agreements under Section 3, which covers both horizontal agreements (between competitors at the same level of the supply chain) and vertical agreements (between entities at different levels). Second, abuse of dominant position under Section 4, which targets firms that misuse their market power. Cartelisation, where competitors collude to fix prices, limit supply, or divide markets, is treated as a per se violation under Section 3(3), meaning no further proof of market harm is required.

The agriculture sector is particularly vulnerable to anti-competitive conduct. Input dealers, distributors, and trade associations can collectively restrict supply, fix margins, or coordinate boycotts, all of which raise costs for farmers and distort the market. Regulatory intervention in this space is therefore significant for both competition policy and agricultural welfare.

The Topic Explained

Section 3(3) of the Competition Act specifically targets horizontal agreements among competitors. It presumes that agreements between enterprises engaged in identical or similar trade that fix prices, limit production, share markets, or engage in bid-rigging are anti-competitive. Section 3(3)(b) in particular covers agreements that limit or control production, supply, markets, technical development, investment, or provision of services. When read with Section 3(1), which is the general prohibition on anti-competitive agreements, a violation is established once the agreement and its anti-competitive nature are demonstrated.

Section 27 of the Act empowers the CCI to pass orders after an inquiry. Under Section 27(a), the Commission can direct parties to cease and desist from the offending conduct. …

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Related PYQs

2023GS2 Mains

Discuss the role of the Competition Commission of India in containing the abuse of dominant position by the Multi-National Corporations in India. Refer to the recent decisions.

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2015GS1 Prelims

In India, markets in agricultural products are regulated under the

AEssential Commodities Act, 1955
BAgricultural Produce Market Committee Act enacted by States
CAgricultural Produce (Grading and Marking) Act, 1937
DFood Products Order, 1956 and Meat and Food Products Order, 1973
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Practice MCQs

Economymedium

With reference to the Competition Act, 2002, consider the following statements:

1.Section 3(3) treats horizontal agreements on price-fixing and market-sharing as per se violations, requiring no proof of actual market harm.

2.Under Section 27(b), the maximum monetary penalty the CCI can impose is 5% of the average turnover of the enterprise.

3.Section 48 extends personal liability to individuals who were in charge of and responsible for the conduct of an enterprise at the time of a violation.

Which of the statements given above is/are correct?

A1 and 2 only
B1 and 3 only
C2 and 3 only
D1, 2 and 3
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Economyeasy

Which of the following best describes 'cartelisation' as understood under the Competition Act, 2002?

AA single dominant enterprise setting prices above competitive levels by exploiting its market power
BCollusion among competing enterprises to fix prices, limit supply, or divide markets, treated as a per se violation
CA vertical agreement between a manufacturer and its distributor restricting the distributor's territory
DA merger between two enterprises that results in a combined market share exceeding 50 percent
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Economyhard

Under the Competition Act, 2002, which section empowers the Competition Commission of India to direct parties found guilty of anti-competitive conduct to organise competition compliance training programmes?

ASection 3(3)
BSection 27(a)
CSection 27(g)
DSection 48
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Economymedium

Consider the following statements about the Competition Commission of India (CCI):

1.The CCI was established under the Competition Act, 2002, which replaced the Monopolies and Restrictive Trade Practices Act, 1969.

2.The CCI has jurisdiction only over private enterprises and cannot investigate public sector undertakings.

3.Under Section 48 of the Competition Act, 2002, individuals in charge of an enterprise can be held personally liable for the enterprise's violations.

Which of the statements given above is/are correct?

A1 only
B1 and 3 only
C2 and 3 only
D1, 2 and 3
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Economyhard

Assertion (A): Trade associations in the agricultural inputs sector can be held liable for cartelisation under the Competition Act, 2002, even if no single member enterprise holds a dominant market position.

Reason (R): Section 3(3) of the Competition Act, 2002 treats horizontal agreements among competitors as per se anti-competitive, irrespective of the individual market shares of the participating enterprises.

ABoth A and R are true and R is the correct explanation of A
BBoth A and R are true but R is NOT the correct explanation of A
CA is true but R is false
DA is false but R is true
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