Section 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Several of the Competition Act's prohibitions turn on a handful of definitions in Section 2: what counts as an "agreement", what a "cartel" is, how the "relevant market" is drawn, and what is meant by "acquisition". The 2023 amendment widens the test for the relevant product market and adds two new defined terms, "commitment" and "settlement". This article explains each as it reads after the amendment.
Read from the consolidated text of the Act published by the Competition Commission of India (amendments shown up to the Finance Act, 2017), with the Competition (Amendment) Act, 2023 as published in the Gazette of India on 11 April 2023. An agreement includes any arrangement, understanding or action in concert, written or not. The relevant product market now has a demand-side test and a supply-side test, and "commitment" and "settlement" are new defined terms pointing to Sections 48B and 48A. The 2023 change applies from the date notified for that provision; the notification is not in the sources consulted and should be checked.
Acquisition: Section 2(a)
"Acquisition" means, directly or indirectly, acquiring or agreeing to acquire two things. One is shares, voting rights or assets of any enterprise. The other is control over management or control over assets of any enterprise. The word "agreeing to acquire" matters: the definition catches the commitment to acquire, not only the completed purchase. The clause is not touched by the 2023 Act. It feeds Section 5, which decides when an acquisition is a combination; see our article on combination thresholds under Section 5.
Agreement: Section 2(b)
"Agreement" includes any arrangement or understanding or action in concert. It does not matter "whether or not, such arrangement, understanding or action is formal or in writing", and it does not matter "whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings". In practice, an informal understanding between two distributors reached in a phone call can be an agreement within the Act. The 2023 Act does not amend this clause. The prohibitions that use the word are explained in our article on anti-competitive agreements, cartels and bid rigging, and a short overview is in the guide on anti-competitive agreements under Section 3.
Cartel: Section 2(c)
A cartel "includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services". The word "attempt" means the cartel does not have to succeed. The clause is not touched by the 2023 Act; the lesser-penalty provisions that apply to cartel members are explained in a later article of this series.
Example. Four dealers of a building material in one district agree each month on a common minimum price list and share it by message. They are an association of sellers who, by agreement, control price, and fit the clause even if one of them occasionally undercuts the list. Trade bodies that circulate such lists should take a legal consultation on their practices before a notice arrives.
Relevant market: clauses (r), (s) and (t)
Clause (r) says a "relevant market" is the market which may be determined by the Commission "with reference to the relevant product market or the relevant geographic market or with reference to both the markets". The consolidated text prints "commission" with a small initial letter in this clause; it is the Commission.
Relevant geographic market, clause (s). A market comprising the area in which the conditions of competition for supply of goods or provision of services or demand of goods or services "are distinctly homogenous and can be distinguished from the conditions prevailing in the neighbouring areas". The 2023 Act does not amend it.
Relevant product market, clause (t). The consolidated text says it means "a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use".
The 2023 Act (its Section 3(f)) substitutes the clause. As substituted it reads: "'relevant product market' means a market comprising of all those products or services— (i) which are regarded as inter-changeable or substitutable by the consumer, by reason of characteristics of the products or services, their prices and intended use; or (ii) the production or supply of, which are regarded as inter-changeable or substitutable by the supplier, by reason of the ease of switching production between such products and services and marketing them in the short term without incurring significant additional costs or risks in response to small and permanent changes in relative prices".
| Test | Before | After (2023 Act) |
|---|---|---|
| Demand side | Products or services interchangeable or substitutable by the consumer (characteristics, prices, intended use) | Same, now sub-clause (i) |
| Supply side | None | Sub-clause (ii): production or supply regarded as interchangeable or substitutable by the supplier, by reason of ease of switching production and marketing in the short term without significant additional costs or risks, in response to small and permanent changes in relative prices |
| Link between the two | Not applicable | The two are joined by "or" |
The word "or" at the end of sub-clause (i) means a market can be drawn on either test on the printed words. Do not read more into it than that: the text states no further method. The factors the Commission has regard to when it examines a relevant market are in Section 19, covered in our article on the factors for adverse effect, dominance and relevant market. The meaning of "dominant position" in Section 4 depends on the "relevant market", as explained in our article on abuse of dominant position.
New terms: commitment and settlement
The 2023 Act adds two definitions that point to new sections.
- Clause (ea), "commitment": inserted after clause (e) by Section 3(a) of the 2023 Act, it reads "'commitment' means the commitment referred to in section 48B". Section 48B is explained in our article on commitment offers.
- Clause (ua), "settlement": inserted after clause (u) by Section 3(g), it reads "'settlement' means the settlement referred to in section 48A". Section 48A is explained in our article on settlement of proceedings.
Both definitions are only pointers. The conditions, the stage at which an application can be made and the effect of an order are in Sections 48A and 48B, not here.
What the 2023 Amendment Act changed in this article's clauses
| Clause | Before | After |
|---|---|---|
| 2(a) acquisition | As printed | Not changed |
| 2(b) agreement | As printed | Not changed |
| 2(c) cartel | As printed | Not changed |
| 2(ea) commitment | No such term | New: the commitment referred to in Section 48B |
| 2(r), 2(s) | As printed | Not changed |
| 2(t) relevant product market | Demand-side test only | Substituted: demand-side (i) or supply-side (ii) test |
| 2(ua) settlement | No such term | New: the settlement referred to in Section 48A |
Need help with market definition or an agreement review?
How the relevant market is drawn can decide whether a business is dominant, whether an agreement is likely to harm competition and whether a deal needs notice. If you want a second reading of your own agreements or market position, a legal consultation can walk through the definitions against your facts.
Key takeaways
- An agreement can be informal, unwritten and not legally enforceable.
- A cartel includes those who "attempt to control" production, distribution, sale or price.
- The relevant product market now has a supply-side limb in addition to the consumer's view of substitutes.
- "Commitment" and "settlement" are new terms that point to Sections 48B and 48A.
- The 2023 change applies from the date notified for that provision; the notification is not in the sources consulted and should be checked.
Read next
- Enterprise, person, consumer, goods, service and turnover defined
- Anti-competitive agreements, cartels and bid rigging
- Abuse of dominant position and predatory pricing
- Competition Act 2023 amendment: key changes
Disclaimer: Based on the consolidated text of the Competition Act, 2002 published by the Competition Commission of India (amendments shown up to the Finance Act, 2017), read with the Competition (Amendment) Act, 2023 as published in the Gazette of India on 11 April 2023, and on the regulations and guidelines of the Commission as notified in 2024, as consulted on 2 October 2026. Commencement notifications, notified thresholds, rules and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.