Competition Act Section 3

Can an enterprise agree with its competitors not to hire each other’s employees without violating antitrust laws? Like any other practice of an enterprise, hiring practices may also violate antitrust laws. From an antitrust perspective, enterprises competing against each other to hire or retain employees are competitors in the employment marketplace irrespective of whether they sell the same product or provide the same services. Therefore, any agreement between employers, expressly or implicitly, agreeing not to hire each other’s employees, even if done to reduce costs, may violate antitrust laws.

With increasing protectionist barriers around the globe, companies are rushing to find new opportunities to expand and grow. As a result, competition among companies is unavoidable. This competition is not limited to goods or services offered by these companies and may extend to the hiring of employees, especially in industries where skilled talent is required. Companies have a collective interest to eliminate this competition by forming a no-poaching agreement amongst themselves, which restricts hiring each other’s employees. However, no-poaching agreements may be in violation of antitrust laws as they impose restrictions on employees to pursue other jobs, as well as limiting their remuneration.

The Hong Kong Competition Commission (HKCC) has highlighted this issue by publishing an Advisory Bulletin: ‘Competition concerns regarding certain practices in employment marketplace in relating to hiring and terms and conditions of employment’. Before reporting some of the key findings and recommendations of the HKCC, we map the competition law developments in this area from around the globe.*

Continue Reading Non-solicitation in the Context of Competition and Labour Laws

On 31 October 2017, the Competition Commission of India (CCI) passed cease and desist orders against certain national and regional trade associations of film artists and producers for engaging in practices of controlling/limiting the supply of services and market sharing. Such acts have been held to be in contravention of Sections 3(3)(b) and 3(3)(c) read with Section 3(1) of the Competition Act, 2002 (Competition Act).

Background

Mr. Vipul Shah (Informant), a producer of films, filed an information against Artists’ Associations, comprising the All India Film Employees Confederation, Federation of Western India Cine Employees (FWICE) and its affiliated associations[1], as well as Producers’ Associations, comprising the Indian Motion Picture Producers Association, the Film and Television Producers Guild of India, and the Indian Film and Television Producers Council (Artists’ Associations and Producers’ Associations are collectively referred to as the Opposite Parties). The information alleged a contravention of provisions of the Competition Act on the grounds that:

Continue Reading CCI Reprimands Film Industry Trade Unions for Engaging in Anti-Competitive Behaviour

The enforcement of any new law can throw many issues. These become especially prominent in the case of a law that is brought into force in phases – i.e. different provisions are made operational at different times.

The Competition Act, 2002 (Competition Act) is one such legislation. Though the statute was passed in 2003, its phase-wise notification extended up till 2011. More importantly, the sections/ provisions relating to anti-competitive agreements were notified[1] to come into force from 20 May 2009. The application of a provision/ section after an event is one such prickly issue.

The Supreme Court of India (SC) has examined the issue in the context of the Competition Act in the recent decision of Excel Crop Care Limited v Competition Commission of India & Anr[2].

Continue Reading An Antitrust Time Machine: Application of Competition Act to Pre-Enactment Conduct