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Questions on Consumer Protection Act

1. What are the objects of the Consumer Protection Act? - 40 2. Define the following terms as used in the Consumer Protection Act. Complaint, complainant, consumer, manufacturer, restrictive trade practice,

unfair trade practice, defect and deficiency.

3. What is the jurisdiction of a Consumer Disputes Redressal Forum( the District Forum)? In what manner is a complaint filed before it? What procedure is followed by it after receiving a complaint? 4. Write a note on Consumer Disputes Redressal Commission( the State Commission)? As to its composition, jurisdiction and procedure to be followed by it. 5. What is the composition of the National Consumer Disputes Redressal Commission (the National Commission)? What is its jurisdiction and what is the procedure applicable to it?

1.The Competition Act, 2002 deals with the agreement. Differentiate between Horizontal Agreement and Vertical Agreement.
Answer
Section 2(b) of Competition Act, 2002 defines the term “agreement” which includes any arrangement or understanding or action in concert: (i) Whether or not, such arrangement, understanding or action is formal or in writing; or (ii) Whether or not such agreement, understanding or action is intended to be enforceable by legal proceedings; Agreements may be horizontal agreements and vertical agreements. Horizontal agreements referred to agreements among competitors and vertical agreements to an actual or potential relationship buying or selling to each other; Horizontal agreements relating to prices quantities, bids and market sharing are particularly anticompetitive. Vertical agreements like tie in arrangements; exclusive supply/distribution agreements and refusal to deal are also generally anti-competitive. Horizontal agreements are those agreements among competitors operating at the same level in the economic process i.e., enterprises engaged in the same activity. For example the agreements between the producers or between whole sellers or between retailers, dealing in similar kind of products. Vertical agreements are those agreements between non competiting undertakings operation at different levels of manufacturing and distribution process. For example, the agreements between manufacturers of components, manufacturers of products, between producers and whole-sellers or between producers, whole-sellers and retailers.

Horizontal agreements or agreement between two or more enterprises that are at the same stage of the production chain and in the same market. Horizontal agreements and membership of cartels lead to unreasonable restrictions of competition and may be presumed to have an appreciable adverse effect on competition. Vertical agreements are agreements between enterprises that are at different stages or levels of the production change and therefore in different markets. An example of this would be an agreement between a producer and a distributor. This includes tie in arrangements, exclusive supply arrangements, exclusive distribution arrangements, refusal to deal and resale price maintenance.

2.P Ltd. and Q Ltd. both dealing in chemicals and fertilizers have entered into an agreement to jointly promote the sale of their products. A complaint has been received by the Competition Commission of India (CCI) stating that the agreement between the two is anti-competitive and against the interests of others in the trade. Examine with reference to the Provisions of the Competition Act, 2002, what are factors the CCI will take into account to determine whether the agreement in question will have any appreciable adverse effect on competition in the market. (6 Marks) Answer

Factors determining appreciable adverse effect on competition: The Competition Commission of India (CCI), while determining whether an agreement is anti-competitive under Section 3 of the Competition Act, 2002, will take into account the following factors. (a)...
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