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    Question

    Consider the following statements regarding Section 3

    (Prohibitions on anti-competitive agreements) of the Competition Act, 2002: Statement 1: Section 3 prohibits agreements that directly or indirectly determine purchase or sale prices. Statement 2: Section 3 applies only to formal written agreements between competitors. Statement 3: Hub-and-spoke cartels involving a single distributor can violate Section 3 if coordinated. Statement 4: Vertical agreements between manufacturers and distributors are always prohibited under Section 3. Which statements are correct?
    A Statements 1, 2, and 3 only Correct Answer Incorrect Answer
    B Statements 1 and 3 only Correct Answer Incorrect Answer
    C Statements 2 and 4 only Correct Answer Incorrect Answer
    D Statements 1 and 4 only Correct Answer Incorrect Answer
    E All statements are correct Correct Answer Incorrect Answer

    Solution

    Section 3 covers price-fixing agreements—Statement 1 is correct. Agreements can be formal or informal (emails, messages)—Statement 2 is incorrect. Hub-and-spoke arrangements are covered—Statement 3 is correct. Vertical agreements have exemptions under Section 3(3)—Statement 4 is incorrect. Statements 1 and 3 are correct.

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