LITMUS TEST OF COMPETITION LAW: BUYER’S CARTEL
‘Competition’ is mostly a progressive word. It is a critical driver of performance and also gives life to innovation. Competition is beneficial to the society as a whole, at the same time, profit making institutions need to acquire market to earn more profit. Competition generally gives a societal benefit, therefore the consumers must also get adequate benefit of fair trading prevalent in the market. The competition law is intended to protect buyers but the legislation has manifestly lacked in interpreting the buyers’ cartel. The previous legislation used to restrict the buyers from entering into such anti- competitive agreements which may eliminate fair competition from the market. However, the Competition Act, 2002 fails to acknowledge the concept of buyer’s cartel.
The authors will emphasise on the ability of buyers’ to form a cartel and how this practice lead to unfair trade practices. The reason to eliminate such agreements is to promote fair competition as there have been instances where such agreements hamper the economic development. Buyers can also enter into an agreement wherein they fix prices beforehand or agree to put such conditions which may jeopardize the rights of the sellers which leads to elimination of competition. The purpose of this article is to show how such agreements can manifestly effect the economic development and must be specifically banned and would be to lay down the intention of the legislation to put an end to such agreements. Further, the authors have considered various instances of Supreme Court, interpreting the Buyers’ Cartel which have been analysed in the article. Lastly, a comparison is made with the laws related to buyers’ cartel from foreign jurisdictions. “A monopsonist buyer who also enjoys monopoly (cartel power) over consumers will sell to consumers at a higher price than a non- monopsonist.”