TRADE ASSOCIATIONS AND

CARTELS

A BLURRED LINE OF DIFFERENCE

SUBMISSION IN THE SUBJECT OF

COMPETITION LAW

By

VILAKSHAN SAXENA

4th YEAR BA.LLB (Hons)

BA0130076

ABSTRACT
 People of the same trade seldom meet together, even for merriment and diversion, but the
conversation ends in a conspiracy against the public, or in some contrivance to raise prices

- Wealth of Nation by Adam Smith

The trade associations helps in recognizing the common interest of the competitors in a market
and subsequently allows the government to make favorable policies for both consumers and the
producers. Due to the changing structure and growing complexity of the market, the members of
the trade associations, in order to maintain their individual dominance and market share, Control
or attempt to control the prices, production, selling etc. of the goods by anti-competitive
methods. Generally such associations indulge in anti-competitive practices such as compulsory
membership, price fluctuation and determination, commission and discounts, imposition of
arbitrary rules etc. However the decisive test to determine as to what activity of the Trade
association would make them function as cartel, what factors shall be taken in consideration for
such determination, what shall be the probable defense to such liability for the Trade
Associations etc. The Competition Commission of India in many cases has attempted to answer
these questions. Henceforth by making a detailed case study of

1. CCI Penalises Chemists & Druggists Association, Goa (CDAG) and Chemists &
Druggists Association, Baroda (CDAB) Case.
2. Reliance Big Entertainment and UTV Software Vs. Film Chambers of Commerce and
Motion Picture Associations (of different states)

The following research project is directed to determine the existing activities of the trade
associations and their control over the market. The Research project aims at to distinguish
between the legitimate role of an association and an association acting as a cartel. The Research
is based on the hypothesis that due to absence of rules relating to the functioning of Trade
Associations many act as cartels and direct the market in manner unfavorable to consumers and
economy per se. The Researcher takes Legal and academic opinions, research articles, books,
judicial precedents and Administrative reports as it primary source of research

Keywords

Trade Associations- Cartel- Dominance- Anti-Competitive- Legitimate Role- Control over

Market