Question

Anti-competitive practices include _________.

• A. insider trading
• B. grey markets
• C. employment of child labour in production activities
• D. tie-in arrangements

Answer 1

The correct option is D tie-in arrangements

Section 3(4) (a) of the Competition Act defines "tie in arrangement" as an agreement including any agreement requiring a purchaser of goods, as a condition of such purchase, to purchase some other goods.

A tie-in arrangement becomes illegal if it has an appreciable adverse effect on the competition. Tie-in arrangements have both good and bad effects on the competition. On one hand tie-in arrangements may result in price discrimination, barriers to new entry in the market, monopolization of the tied and tying products. On the other hand tie-in arrangement may benefit the consumers by providing them with goods or services in a bundle which are required and at lower price. But tie-in arrangements are more likely to adversely affect the economy than being beneficial to the economy.