Vertical restraints: the positive effects

India’s antitrust regime has seen a paradigm shift from the reporting requirements under the old Monopolies and Restrictive Trade Practices Act to a self-assessment mechanism provided for in the Competition Act. However, various decisions of the Competition Commission of India (CCI), particularly those where large penalties have been imposed on the opposite parties, appear to have heightened enterprises’ awareness regarding competition compliance.

Vertical agreements, in particular, are being assessed by various enterprises with a huge element of caution. Therefore, the self-assessment mechanism, although well intentioned, may not be serving its purpose.

Recent case

In a recent decision in Sonam Sharma v Apple Inc & Ors (the Apple case), the CCI considered the aspect of tie-in arrangements (one form of a vertical restraint). In this matter, the CCI considered the sale of locked iPhones to consumers as a result of which the consumers were required to subscribe to the cellular service of Airtel or Vodafone.

Udwadia Udeshi & Argus Partners is a full-service law firm with offices in Mumbai, Delhi, Bangalore, Kolkata and Chennai. Mihir Kamdar is an associate partner at the firm. The views expressed in this article are those of the author and do not reflect the views of the firm.