A vertical agreement is a term used in competition law to refer to agreements between companies at different levels of the supply chain. For example, a consumer electronics manufacturer could enter into a vertical agreement with a retailer under which the retailer would advertise its products against a price drop. Franchising is a form of vertical agreement that falls within the scope of Article 101 under EU competition law.  In addition, the Bill will expand the Commission`s investigative powers to assess a wide range of anti-competitive agreements that AAEC may have. Therefore, the authors consider that the amendment of Section 3, paragraph 4, is a desirable step to eliminate uncertainty in the current area of anti-competitive agreements. The escalation of anti-competitive practices in the area of competition law has necessitated competition authorities to modify the existing competition framework. In order to create a robust competitive structure, the Competition Commission of India (“CCI” or “Commission”) presented the Competition Project (“Bill”) in February 2020 based on the recommendations of the Competition Law Review Committee (“CLRC”). The bill proposed amendments, both in material terms and in terms of the procedural aspects of the law. It seeks, inter alia, to solve the conundrum of vertical agreements existing under the Competition Act 2002 (“Act”) by amending Section 3(4) of the Act. The limited and narrow interpretation of Article 3(4) is considered to be an obstacle in the current competitive structure. The purpose of the Bill, through the examination of Section 3 (4), is to remedy its poor applicability in the examination of cases of anti-competitive agreements.
Only where a contextual assessment has a `sufficiently harmful` effect on competition (or the absence of a credible impact) can an agreement be considered `for purposes` within the meaning of Article 101(1) TFEU.  Article 101(1) of the Treaty on the Functioning of the European Union prohibits agreements between undertakings which have the aim or effect of restricting, preventing or distorting competition within the European Union and which concern trade between Member States of the Union. .