A viewpoint on cartels: an Indian perspective

Abstract

Purpose

The purpose of this paper is to critically analyze the adverse effects of cartels on the economy and the interests of consumers and how they are sought to be regulated under the Indian Competition Act, 2002.

Design/methodology/approach

The paper focuses on the definition of cartels and the various factors conducive for the promotion of cartels and how they are sought to be regulated in the select jurisdictions with the help of decided case laws. It also sheds adequate light on the deficiencies of the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 in curbing cartels and how such deficiencies are sought to be remedied under the Competition Act, 2002. The paper further highlights the new trends and investigative tools in busting of cartels in the developed world and the salutary lessons that could be drawn by the competition regimes of the developing countries.

Findings

The paper discloses that the earlier MRTP Act, 1969 as well as the prevailing Competition Act suffers from various flaws in curbing cartels, resulting in the feeble regulation of cartels with all attendant baneful consequences on the economy and consumer interests. The paper strongly advocates the need to treat cartels as criminal offences warranting prosecution and punishment apart from encouraging leniency and whistle blowing for facilitating the busting of cartels.

Practical implications

The paper identifies the potential difficulties and intricacies that could be encountered by the competition authority in addressing the cartels owing to shortcomings in the Competition Act, 2002. Hence, the paper articulates that these concerns should be addressed by the legislature at the earliest for further strengthening the regulatory mechanism over cartels in the interests of economy and consumers.

Originality/value

The subject focused in the paper is a topic of utmost contemporary importance having wide implications on the national economies across the world, calling for novel methods and techniques in dealing effectively with the menace of cartels.

Citation

Babu Chennupati, D. and Mouly Potluri, R. (2011), "A viewpoint on cartels: an Indian perspective", International Journal of Law and Management, Vol. 53 No. 4, pp. 252-261. https://doi.org/10.1108/17542431111147774