Revisiting The Concept Of Single Economic Entity Under The Indian Competition Act, 2002

The basic principle of competition laws is the prevention of practices that harm the normal market forces between independent parties competing for a larger slice of the market. For this reason, market participants that form part of the same group are normally excluded from their purview as all such participants are together seen as one economic unit in the market place. The evolution of the concept of 'single economic entity' can be traced back as early as the 1960s when the European Commission (EC), in Mausegatt¹, observed that "affiliation to the group deprives the subsidiary company of the ability to act according to an economic scheme of its own. The 'given conditions' of such a subsidiary's operations are prescribed not by the market but by the instructions of the principal company". In this case the relationship between the parent and the subsidiary was used to demonstrate that a cartel could not be formed between the parent and subsidiary, as they must be