ENTITY GROUP IN INDIA IN INDIA OR OUTSIDE INDIA IN INDIA IN INDIA OR OUTSIDE INDIA Assets > Rs. 1000 crores OR Turnover > Rs.3000 crores Assets > US$ 500 million, including at least Rs.500 crores in India, OR Turnover > US$ 1500 million , including at least Rs.1500 crores in India; Assets > Rs. 4000 crores OR Turnover > Rs.12000 crores Assets > US$ 2 billion, including at least Rs.500 crores in India, OR Turnover > US$ 6 billion , including at least Rs.1500 crores in India; 3.6.Rule of Reason: Of determining whether a combination would have the effect of or is likely to have an appreciable adverse effect on competition in the relevant market, the Commission shall have due regard to all or any of the following factors, namely: — (a) Actual and potential level of competition through imports in the market; (b) Extent of barriers to entry into the market; © Level of combination in the market; (d) Degree of countervailing power in the market; (e) Likelihood that the combination would result in the parties to the combination being able to significantly and sustainably increase prices or profit margins; (f) Extent of effective competition likely to sustain in a market; (g) Extent to which substitutes are available or arc likely to be available in the market;
24 (h) Market share , in the relevant market, of the persons or enterprise in a combination, individually and as a combination; (i) Likelihood that the combination would result in the removal of a vigorous and effective competitor or competitors in the market; (j) Nature and extent of vertical integration in the market; (k) Possibility of a failing business; (l) Nature and extent of innovation ; (m) Relative advantage , by way of the contribution to the economic development, by any combination having or likely to have appreciable adverse effect on competition; (n) Whether the benefits of the combination outweigh the adverse impact of the combination, if any. 3.7. Anti Competition Agreements Agreements which cause or are likely to cause appreciable adverse effect on competition are anti-competitive agreements. Horizontal agreements are those that are between enterprises at the same stage of the production chain. For example, agreement between two rivals is a horizontal agreement. In cases of agreements between rivals for fixing prices or for limiting production or for sharing markets, there is a presumption in the Act that such agreements cause appreciable adverse effects on competition. Cartel is a horizontal agreement between producers of goods or providers of services for price-fixing or sharing of market, and is generally regarded as the most pernicious form of anti-competitive agreement. Vertical agreements are those that are between enterprises at different stages of the production chain. For example, an agreement between the manufacturer and a distributor is a vertical agreement. The presumptive rule does not apply to vertical agreements. The question whether the vertical agreement is causing appreciable adverse effect on competition is to be determined by rule of reason, which essentially means that the
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- Spring '19