Supreme Court approves objective justifications and emphasizes effects based analysis

In a significant development shaping competition enforcement in India, the Supreme Court recently delivered a detailed ruling in the case of CCI v. Schott Glass India Pvt. Ltd. This ruling solidifies the effects analysis principle within the framework of the Competition Act. It emphasizes the importance of a demonstrable objective justification in balancing commercial rationale with proven harm.

The Supreme Court's judgment delves into various critical aspects including volume-based and functional rebates, the efficient competitor test, and margin squeezes. By establishing clear parameters for assessing these issues, the Court offers valuable guidance to businesses, enhancing overall clarity in the competitive landscape. Of particular note is the Court's endorsement of the theory of harm through the effects test. This principle dictates that CCI intervention is warranted only in the presence of demonstrable harm to the market, be it to competitors or consumers. In the absence of such harm in the case at hand, the Court set a precedent that will shape future antitrust enforcement in India, providing much-needed certainty for businesses, multi product companies. 

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