Prohibited Agreements

§4 of the Act focuses on and prohibits agreements between and among undertakings and decisions by an association of undertakings that have either the objective or the effect of preventing, restricting, or reducing competition within the relevant market.

In the Act, an agreement means both written or verbal agreements, arrangements, practices, or decisions between two or more businesses or by an association of undertakings, regardless of their legal form.

§4 focuses on agreements between competing businesses in terms of the competition concerns they cause. In this context, an agreement refers to implicit or explicit understanding of intent and/or behaviour between businesses to derive mutual benefits based on restricting competition between themselves as their object and/or effect. Thus, the term ‘agreement’ is not limited to a formal contract. It also includes co-operation through informal agreements, understandings, concerted practices, or decision by businesses or their associations. Exchanging information of a strategic nature, e.g., prices, markets, commercially sensitive information disseminated through circulars, minutes of meetings, telephone calls, and emails, etc., may infringe §4 of the Act.

Types of Agreements

Agreements are generally of two types: