Vertical Restraints Under Indian Competition Law: Whither Law and Economics

Abstract

The correct welfare assessment of vertical agreements in competition law is a difficult craft. The more mature jurisdictions such as the EU and the US have struggled to develop the optimal framework. This paper scrutinises the vertical agreements cases of the Competition Commission of India (CCI) that is now ten years old. The objective is to understand the overall level of legal and economic analysis in the competition case, and also to assist the CCI in strengthening its legal and economic framework vis-à-vis vertical agreements. The scrutiny of some leading cases reveals that there are some legal ambiguities in the interpretation. More problematic, however, is the economic analysis that is incoherent and truncated. The scrutiny also reveals overreliance on the EU jurisprudence that does not go along with the legislative scheme of the Indian Act. The paper draws out some lessons towards the end.

Keywords: Vertical agreements, Competition Commission of India, economic analysis, legal ambiguities, rule of reason

JEL Classification: K21, K40, L42