This document provides an overview of bid rigging and competition law in India. It defines bid rigging as competitors coordinating their bids to ensure either a higher price or lower quality wins the contract. It outlines different types of anticompetitive agreements prohibited under the Competition Act 2002 such as tie-in, exclusive distribution, and exclusive supply agreements. It also discusses the powers and duties of the Competition Commission of India in regulating combinations, inquiring into anticompetitive practices, and advocating for competition.

2. BID RIGGING
UNDER
COMPETITION ACT 2002
Presented by: M Ravali
Bharath Chandra
Balaji Reddy
Siva Madduri

3. What is Bid Rigging:
• A bidding process is one by which a government or company
seeks and receives quotes from various firms for a particular
project (such as a construction job) that is to be contracted
out.
• The award of contract is based on quality and price
considerations. The bidding process can only work when
competitors make their bids honestly and independently.
• However, the competitive system in bidding process can be
tailor-made for anticompetitive conduct, such as bid rigging.

4. • Where two or more competitors work together on bids that are
supposed to be submitted independently this will generally be
to ensure that who ever wins does so at a price that would be
higher than the price deliver by a competitive bid or at a lower
quality than would otherwise be the case in a competitor tender
process

5. Types of Agreements
• Tie-in Agreement: Tie-in agreement includes any arrangement requiring a
purchaser of goods as a requirement of such purchase to purchase some
other kinds of goods. It is also referred to as tying agreement, tying
arrangement, tie-in sale, tie-up sale, or clubbed sale. As prescribed under
Section 3(4) explanation, tie-in arrangement includes any arrangement
requiring a purchaser of goods, as a condition of such purchase, to purchase
some other goods. The product or service that is obtain by the buyer as per
as requirement is called the tying product or service and the product that is
compelled or forced to the buyer is called the tied product.

6. Types of Agreements(CONT…)
• Exclusive Distribution Agreement: An exclusive distribution agreement can
manifest as a territorial restriction, where the supplier agrees to sell his products
only to one distributor for resale in a particular territory, or as a customer
restriction, where the supplier is restricted to sales only to a particular group of
customers. It is quite popular in the pharmaceutical sector where chemists are
appointed exclusively for institutional sales to large buyers like hospitals etc.
• Exclusive distribution agreements can also operate as an agreement providing for an
exclusive medium/channel for sale/distribution of goods, e.g., either offline or
online. Under EU competition law, online sales are treated as passive sales, and any
restrictions on such passive selling are considered as a hard-core restriction.

7. Types of Agreements(Contd…)
• Exclusive Supply Agreement: Exclusive Supply Agreements are defined
under Section 3(4)(c) of the Competition Act, 2002 ("Act") as agreements
restricting the purchaser from purchasing/dealing with goods other than
those of the seller. Exclusive supply agreements operate a restriction on the
seller. Exclusive supply agreements are also known as 'single branding'
agreements or 'quantity forcing' arrangements. Under EU Competition law,
an agreement that induces the buyer to purchase more than 80% of his
requirement from a particular seller/supplier constitutes a 'single branding'
agreement.

8. REFUSAL TO DEAL
• The practice of refusing or denying supply of a product to a purchaser,
usually a retailer or wholesaler. The practice may be adopted in order to force
a retailer to engage in resale price maintenance (RPM), i.e., not to discount
the product in question, or to support an exclusive dealing arrangement with
other purchasers or to sell the product only to a specific class of customers
or geographic region. Refusal to deal/sell may also arise if the purchaser is a
bad credit risk, does not carry sufficient inventory or provide adequate sales
service, product advertising and display, etc. The competitive effects of
refusal to deal/sell generally have to be weighed on a case-by-case basis.

9. Powers and Functions of the Commission
To eliminate practices having adverse effect on competition, promote and sustain competition,
protect interests of consumers and ensure freedom of trade by other participants
• Inquire into certain agreements and dominant position of enterprise– It provides that
the Commission may either suo moto or on receipt of any information of alleged
contravention of Section 3 (prohibits anti-competitive agreements) may inquire into the
same.
• Inquiry into combinations– Section 20 of the Act entrusts the Commission with the
power to inquire into any information relating to acquisition and determine whether such
combination or acquisition may have an appreciable adverse effect on competition (AAEC).

10. Powers and Functions of the Commission(Contd…)
• Reference of an issue by a statutory authority to the Commission– Section 21
of the Act enumerates that in the course of a proceeding if any issue is raised that
any decision of a statutory authority will be in conflict with the provisions of the
Competition Act, 2002, the statutory authority shall make a reference in this regard
to the Commission.
• Reference by Commission– Section 21A of the Act provides that if in the course
of proceeding an issue is raised by any party that any decision taken by the
Commission is in contravention of the provisions of Competition Act, whose
authority is entrusted to a statutory authority then the Commission may make a
reference in respect of the issue to the statutory authority.

11. Powers and Functions of the Commission(Contd…)
• Power to issue interim order– Section 33 of the Act empowers the Commission
to issue interim orders in cases of anti-competitive agreements and abuse of
dominant position, thereby temporarily restraining any party from carrying on such
an act.
• Competition Advocacy– Section 49 of the Act provides for competition advocacy
and enumerates that the Central or the State Government may while formulating
any policy on Competition or any other matter may make reference to the
Commission for its opinion on possible effect of such policy on Competition.
However, the opinion given by the Commission is not binding on the Central
Government.

12. Duties of Commission
• Sec 18 of Competition act deals with duties of CCI
• CCI Eliminates the practices which have adverse effect on Competition
• CCI is to Promote & sustain Competition
• CCI is to Promote Interest of Consumers
• CCI ensures freedom of trade carried by all the participants in Indian
Market.

13. Combination Under Competition Act 2002
• Section 5 of the Competition Act explains combination as- “Combinations
mean mergers, amalgamations of companies or acquisitions of control,
shares, voting rights or assets of one company by another company or
group. Good combinations lead to a more efficient business which passes on
some of those efficiency savings to its customers. On the other hand, bad
mergers lead to a situation where one or more businesses have the power to
raise their prices to their customers. That is, they substantially lessen
competition.