Consider the following statements related to the Prohibition of Certain Agreements under the…
Only statement I is correct: agreements that contravene section 3(1) are void under section 3(2) of the Competition Act. Vertical agreements such as resale price maintenance…
Choose your answer
Consider the following statements related to the Prohibition of Certain Agreements under the Competition Act, 2002 :
I. Anti-competitive agreements are void ab initio.
II. Vertical agreements, such as resale price maintenance, are always considered anti-competitive under the Act.
III. The rule of reason is applied when evaluating horizontal agreements under Section 3(3) of the Competition Act, 2002.
Which of the above statements are correct?
Answer and explanation
Correct answer B
Only statement I is correct: agreements that contravene section 3(1) are void under section 3(2) of the Competition Act. Vertical agreements such as resale price maintenance require an assessment of appreciable adverse effect on competition, rather than being automatically prohibited. Section 3(3) instead presumes such an effect for the specified horizontal agreements, subject to rebuttal; the rule-of-reason approach applies to agreements outside that presumptive category.
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