Cartelization: Malum Prohibitum​

Ms. Anushka Sharma
School of Law, Devi Ahilya Vishwavidyalaya, Indore, Madhya Pradesh, India.

Volume III, Issue VI, 2020

The Constitution of India secures the balance between economic and social justice. It bestows and protects the rights of all citizens of India, and simultaneously seeks growth and development of the Indian economy. Fair-trade practices and healthy competition warrants diversification of industries, generation of new opportunities, consumers triumph, efficient use of factors of production, traders’ opulence, and rise in national income. Conversely, cartelization contravenes the modus operandi set forth by various legislations. Cartels are a confederacy to knock out competition by administering unfair trade practices. The cartel-members, by market apportionment, cooperate to increase their profit without considering other cogent factors. It undermines the interests of consumers as well as of co-traders. Moreover, the poor suffer disproportionately from the ramifications of collusion in commerce.

Cartels are commonly evident where few business entities have dominant market shares in the industry, whereas it is untraceable in the informal sector. Cartels avoid disclosure of any information through agreement containing adamant terms. However, the Parliament has formulated various laws to promote and regulate competition in trade and commerce, such as the Competition Act, 2002. Competition law prohibits anti-competitive practices, including cartels. The Act of 2002 has established the Competition Commission of India and the Director-General as ombudsman to prosecute firms indulged in unlawful trade practices for hampering robust competition. Cartelization is the most egregious of offenses under competition law. The Commission has put meticulous efforts to investigate cartels and has imposed heavy monitory penalties to dissuade others. Besides, CCI sponsors research works for assessing competitiveness in different sectors of the Indian economy.

In the post-pandemic era, both authorities and companies shall reject superannuated conventions and adopt new ideologies. Multidisciplinary policies, sincere compliance, and effective enforcement practices would ameliorate the current situation and eliminate the propensity to form cartels.

Keywords: Cartelization, Competition, Constitution, Economy, Trade.