LEGAL AND ECONOMIC REVIEW OF CARTELS IN AIRLINE INDUSTRY – ACRITICAL ANALYSIS

Abstract

The Competition Act 2002 prohibits vertical and horizontal agreements that have an appreciable adverse effect on the competition. The Indian Aviation Sector being an oligopoly market has tendency of collusion amongst its players thereby proving detrimental to the consumers and social welfare at large.In an oligopoly the products may be homogeneous or differentiated. Oligopolies are able to set prices (they have market-making power) but they also compete with other firms in the industry based on product differentiation. In the present paper the Authors have discussed the law and economics of cartels in an oligopolistic market and the effects thereof. Also, the nature, scope and effect of cartels in airline industry in India and at the end of the article suggested few measures to fight the menace of cartelisation in the Industry.