INTERDICTION OF CARTELS WITHIN INDIA

Abstract

The basic need of a conceptual analysis of cartel is to distinguish between cartels and other types of cooperative agreements.

Black’s Law Dictionary defines cartel as:

‘[a] combination of producers or sellers that join together to control a product’s production or price; [a]n association of firms with common interests, seeking to prevent extreme or unfair competition, allocate markets, or share knowledge.’

The Organisation of Economic Co-operation and Development (OECD) defines cartel as:

‘A cartel is a formal agreement among firms in an oligopolistic industry. Cartel members may agree on such matters as prices, total industry output, market shares, allocation of customers, allocation of territories, bid-rigging, establishment of common sales agencies, and the division of profits or combination of these.’

Oxford’s Advanced Learner’s Dictionary defines cartel as:

‘A group of separate companies that agree to increase profits by fixing prices and not competing with each other.’

It is visible from the above stated definitions that a cartel is basically an agreement of cooperation amongst firms with similar interest to protect their mutual interests rather than competing with each other. Such agreements can be also termed as horizontal agreements as they are between firms of same levels.

MAJOR CASES OF CARTELS AND THEIR OUTCOMES

As it is already evident from the definitions that cartels are opposite of competing business bodies hence it is important to study as to what leads the business rivals to form cartels. This can be very well understood by analysing the cases of United States, Germany and Japan which are considered as highest cartelised countries throughout world. Further a comparative analysis between India and the former countries will help in finding out where the fault line actually occurs.