Legal Aspects of Business | Orders and Procedures for Anti-Competitive Agreements and Combinations | MCQs
MCQ 1: Which of the following actions can the Commission take during the enquiry of an anti-competitive agreement or abuse of dominance?
A) Issue a penalty on the involved party
B) Grant interim relief to restrain a party from continuing with the anti-competitive activity
C) Award compensation to the aggrieved party
D) Permanently close the case without further investigation
Answer: B) Grant interim relief to restrain a party from continuing with the anti-competitive activity
MCQ 2: In the case of a cartel, what is the maximum penalty that can be imposed by the Commission?
A) 10% of the total revenue of the involved enterprises
B) 3 times the profit made from the cartel or 10% of the turnover, whichever is higher
C) Double the amount of the cartel profits
D) No penalty can be imposed on cartel participants
Answer: B) 3 times the profit made from the cartel or 10% of the turnover, whichever is higher
MCQ 3: What can the Commission direct a delinquent enterprise to do after an enquiry?
A) To merge with a competitor to reduce market power
B) Discontinue the anti-competitive agreement and refrain from re-entering such agreements
C) Increase market share to maintain dominance
D) Provide financial compensation to competitors
Answer: B) Discontinue the anti-competitive agreement and refrain from re-entering such agreements
MCQ 4: Which of the following actions can the Commission take in case of abuse of dominant position?
A) Reprimand the dominant enterprise
B) Award compensation to the competitors
C) Modify the agreement to reduce market dominance
D) Recommend the Central Government to divide the dominant enterprise
Answer: D) Recommend the Central Government to divide the dominant enterprise
MCQ 5: When investigating combinations, if the Commission finds a combination is likely to cause adverse effects on competition, what is the next step?
A) Automatically approve the combination with conditions
B) Issue a show-cause notice to the parties involved in the combination
C) Approve the combination immediately after a preliminary investigation
D) Dismiss the case without further action
Answer: B) Issue a show-cause notice to the parties involved in the combination
MCQ 6: When the Commission investigates a combination, it may invite which of the following?
A) Only the competitors of the involved parties
B) Any person likely to be affected by the combination to file objections
C) Only the parties involved in the combination to file objections
D) The general public to submit opinions but not objections
Answer: B) Any person likely to be affected by the combination to file objections
MCQ 7: If the Commission finds no appreciable adverse effect on competition from a combination, what action will it take?
A) Approve the combination without any modifications
B) Reject the combination immediately
C) Approve the combination subject to minor adjustments
D) Request further investigation into the combination
Answer: A) Approve the combination without any modifications
MCQ 8: What action can the Commission take if it finds that a combination has caused an appreciable adverse effect on competition?
A) Approve the combination with minor changes
B) Disapprove the combination
C) Request a public consultation before making a decision
D) Increase the fines on the involved parties
Answer: B) Disapprove the combination
MCQ 9: In case of a combination, which action can the Commission propose as a solution?
A) Impose a heavy penalty on all the involved parties
B) Suggest a suitable modification to the combination, if accepted by the parties
C) Force the parties to dissolve the combination immediately
D) Introduce government oversight over the combination for a set period
Answer: B) Suggest a suitable modification to the combination, if accepted by the parties
MCQ 10: What is the primary goal of the Commission when investigating combinations?
A) To approve all combinations regardless of their effect on competition
B) To assess the impact of the combination on competition and market fairness
C) To ensure that large corporations dominate the market
D) To encourage mergers and acquisitions to strengthen businesses
Answer: B) To assess the impact of the combination on competition and market fairness
MCQ 11: What happens if the Commission finds that a combination has an appreciable adverse effect on competition after receiving objections?
A) The Commission may approve the combination with modifications
B) The Commission will immediately disapprove the combination
C) The Commission will propose a modification to the combination based on the objections
D) The Commission will recommend a public hearing for further clarity
Answer: B) The Commission will immediately disapprove the combination
MCQ 12: What kind of penalty can the Commission impose for violations related to anti-competitive agreements or abuse of dominance?
A) A fine equal to the market value of the enterprise
B) A fine of up to 10% of the turnover of the enterprise
C) Only a warning with no financial penalty
D) A penalty equal to the cost of the investigation
Answer: B) A fine of up to 10% of the turnover of the enterprise
MCQ 13: The Commission may direct a delinquent enterprise to discontinue an anti-competitive agreement for how long?
A) Until the enterprise submits a corrective action plan
B) For a set period determined by the Commission, or permanently
C) For a temporary period only during the investigation
D) Only until the next audit of the enterprise
Answer: B) For a set period determined by the Commission, or permanently
MCQ 14: If the Commission believes a combination will cause a significant adverse effect on competition, what additional step may it take?
A) Approve the combination after a further review
B) Direct the companies to reduce their market share
C) Publicly invite objections and hear affected parties
D) Delay the investigation until further data is collected
Answer: C) Publicly invite objections and hear affected parties
MCQ 15: Which of the following can the Commission do if it finds that a combination violates anti-competitive practices?
A) Approve the combination subject to market regulation
B) Recommend its disapproval
C) Immediately approve the combination after scrutiny
D) Let the parties self-regulate their practices
Answer: B) Recommend its disapproval
MCQ 16: If a combination is approved but later found to have adverse effects, what action can the Commission take?
A) Revoke the approval and impose penalties
B) Approve further modifications to the combination
C) Conduct an additional investigation and issue a corrective order
D) Maintain the approval and take no further action
Answer: C) Conduct an additional investigation and issue a corrective order
MCQ 17: What role does the Central Government play in cases of abuse of dominant position?
A) The government has no role unless a financial penalty is involved
B) The government may recommend the division of the enterprise to address market dominance
C) The government directly imposes fines on the violating enterprise
D) The government can only suggest changes to the market structure without any legal authority
Answer: B) The government may recommend the division of the enterprise to address market dominance
MCQ 18: What is the main purpose of the Commission's investigation into combinations?
A) To verify the financial health of the enterprises involved
B) To assess whether the combination could lead to anti-competitive effects in the market
C) To understand the political implications of the combination
D) To calculate the total profits generated by the combination
Answer: B) To assess whether the combination could lead to anti-competitive effects in the market
MCQ 19: In case of a combination, if the Commission believes there might be an adverse effect on competition, what will it issue to the parties involved?
A) A final decision on the combination’s fate
B) A notice to show cause why the investigation should not proceed
C) A directive for the parties to revise the combination
D) An automatic penalty for the combination’s effect on competition
Answer: B) A notice to show cause why the investigation should not proceed
MCQ 20: What is the maximum penalty the Commission can impose for the abuse of a dominant position?
A) 5% of the enterprise's total assets
B) 10% of the enterprise's turnover
C) A penalty equal to the profits derived from the abuse of dominance
D) A penalty set by the Central Government
Answer: B) 10% of the enterprise's turnover
MCQ 21: In case of a combination, which of the following is a likely outcome if the Commission finds no adverse effects on competition?
A) The combination will be dissolved
B) The combination will be approved without any changes
C) The parties will be asked to modify the combination
D) The Commission will initiate a full market review
Answer: B) The combination will be approved without any changes
MCQ 22: If the Commission determines that a combination has an adverse effect on competition, what is the next logical step?
A) Approve the combination but impose restrictions
B) Disapprove the combination
C) Suggest that the parties dissolve the combination
D) Allow the parties to amend the combination and resubmit
Answer: B) Disapprove the combination
MCQ 23: Which of the following is an example of an action the Commission can take during an enquiry into anti-competitive behavior?
A) Approve the agreement if the dominant enterprise compensates the affected parties
B) Impose a fine for every day the anti-competitive agreement is in place
C) Grant interim relief to prevent the continuation of anti-competitive practices
D) Reduce the penalty if the enterprise agrees to self-regulate
Answer: C) Grant interim relief to prevent the continuation of anti-competitive practices
MCQ 24: When the Commission investigates anti-competitive agreements, it can direct the enterprise to do which of the following?
A) Continue with the agreement if it leads to lower prices for consumers
B) Modify or discontinue the agreement and refrain from re-entering into it
C) Pay a fee to cover the investigation costs
D) Increase market participation to reduce dominance
Answer: B) Modify or discontinue the agreement and refrain from re-entering into it
MCQ 25: Under what condition can the Commission approve a combination after an investigation?
A) If the combination creates a monopoly
B) If it does not have an appreciable adverse effect on competition
C) If it generates significant profits for the parties involved
D) If all competitors approve of the combination
Answer: B) If it does not have an appreciable adverse effect on competition
MCQ 26: Which of the following is a potential consequence if a company violates anti-competitive regulations by forming a cartel?
A) The company can be banned from the market permanently
B) A fine up to 3 times the profit generated from the cartel, or 10% of the turnover, whichever is higher
C) The company may be forced to sell its assets
D) The company can pay a flat penalty regardless of the profit made
Answer: B) A fine up to 3 times the profit generated from the cartel, or 10% of the turnover, whichever is higher
MCQ 27: How does the Commission typically handle a case where it suspects that a combination may adversely affect competition?
A) It approves the combination with immediate effect
B) It investigates the combination to assess its impact on market competition
C) It requests the parties to voluntarily dissolve the combination
D) It imposes a fine before proceeding with the investigation
Answer: B) It investigates the combination to assess its impact on market competition
MCQ 28: In cases of abuse of dominant position, which action can the Commission take if it finds evidence of such behavior?
A) Allow the enterprise to continue its practices if no harm is evident
B) Propose the modification of market conditions but not the agreement
C) Impose a fine and recommend the division of the enterprise
D) Ignore the violation if it does not affect consumers directly
Answer: C) Impose a fine and recommend the division of the enterprise
MCQ 29: When investigating a combination, how does the Commission assess if there is a potential adverse effect on competition?
A) By consulting financial reports and tax records only
B) By conducting a public hearing and inviting objections from affected parties
C) By only analyzing the market share of the involved companies
D) By ensuring that there are no penalties for the parties involved
Answer: B) By conducting a public hearing and inviting objections from affected parties
MCQ 30: After investigating a combination, if the Commission decides to approve it with conditions, what will typically occur?
A) The approval will be followed by an automatic market monitoring program
B) The parties must modify the combination as per the Commission's conditions
C) The Commission will impose a fixed penalty for the modification
D) The Commission will not take any further action once approved
Answer: B) The parties must modify the combination as per the Commission's conditions
MCQ 31: In the context of anti-competitive agreements, what kind of relief can the Commission provide during the inquiry?
A) Long-term financial support for the affected enterprise
B) A restraining order to prevent the continuation of the anti-competitive activity
C) Tax exemptions for the violating party
D) A settlement that allows the party to continue the behavior with minor restrictions
Answer: B) A restraining order to prevent the continuation of the anti-competitive activity
MCQ 32: Which of the following is a possible order the Commission may pass in case of anti-competitive agreements or abuse of dominance?
A) Approve the enterprise’s dominance if it contributes to the economy
B) Modify the agreement or business practice to avoid anti-competitive behavior
C) Allow the enterprise to continue the anti-competitive practices for a specific time period
D) Mandate the enterprises to merge for greater efficiency
Answer: B) Modify the agreement or business practice to avoid anti-competitive behavior
MCQ 33: If the Commission finds that an enterprise has abused its dominant position, it can take which of the following actions?
A) Ask the enterprise to increase its market share to improve competition
B) Award compensation to the affected consumers only
C) Suggest breaking up the enterprise if its dominance harms the market
D) Impose no action if the market dominance is within legal limits
Answer: C) Suggest breaking up the enterprise if its dominance harms the market
MCQ 34: The Commission may propose suitable modifications to a combination. Under what condition will the parties accept these modifications?
A) If the modifications are non-binding
B) If the parties agree to the proposed changes
C) If the government enforces them immediately
D) If the Commission is unable to prove that the combination has adverse effects on competition
Answer: B) If the parties agree to the proposed changes
MCQ 35: What is the primary concern of the Commission when reviewing combinations between enterprises?
A) To ensure that the combination leads to the highest possible profits for the parties involved
B) To check if the combination increases market competition and benefits consumers
C) To prevent any loss of market share for the dominant enterprise
D) To determine if the combination helps in eliminating smaller competitors
Answer: B) To check if the combination increases market competition and benefits consumers
MCQ 36: If the Commission decides that a combination is likely to have an appreciable adverse effect on competition, it will:
A) Approve the combination with conditions
B) Disapprove the combination entirely
C) Recommend the combination with modifications that the parties must accept
D) Only notify the parties involved and take no further action
Answer: B) Disapprove the combination entirely
MCQ 37: Which of the following is a possible step the Commission might take if a combination leads to market distortion or less competition?
A) Approve the combination with additional penalties on the parties involved
B) Suggest measures to rectify the adverse effects and modify the combination
C) Increase the market power of other competitors to balance the market
D) Dismiss the combination as long as it does not immediately harm consumers
Answer: B) Suggest measures to rectify the adverse effects and modify the combination
MCQ 38: In the context of anti-competitive behavior, what role does the investigation of combinations serve?
A) To measure the financial impact of the combination on the parties
B) To determine whether the combination causes or is likely to cause adverse effects on competition
C) To help the Commission choose which businesses should merge in the future
D) To assess the political implications of such combinations on the government
Answer: B) To determine whether the combination causes or is likely to cause adverse effects on competition
MCQ 39: In cases where a cartel has been found, what is one possible penalty the Commission may impose?
A) Ban on the cartel for only one fiscal year
B) A fine equal to the total value of the cartel's assets
C) A penalty of three times the profit made from the cartel, or 10% of the turnover, whichever is higher
D) Suspension of the company’s operations for one month
Answer: C) A penalty of three times the profit made from the cartel, or 10% of the turnover, whichever is higher
MCQ 40: Which of the following is the Commission's authority when it suspects that a combination will lead to an adverse effect on competition?
A) To impose a fine without further investigation
B) To approve the combination after minor modifications
C) To issue a show-cause notice and further investigate the combination’s impact
D) To refer the matter to another regulatory body for final approval
Answer: C) To issue a show-cause notice and further investigate the combination’s impact
MCQ 41: What can be the outcome if the Commission finds that a combination will substantially harm competition?
A) The combination will be fully approved with no conditions
B) The Commission will disapprove the combination to prevent anti-competitive effects
C) The Commission will approve the combination under strict government supervision
D) The Commission will allow the combination to proceed but impose a minimal fine
Answer: B) The Commission will disapprove the combination to prevent anti-competitive effects
MCQ 42: What is the purpose of the Commission inviting public objections when reviewing combinations?
A) To allow competitors to bid for the combination
B) To gain insights from stakeholders potentially affected by the combination
C) To speed up the approval process
D) To ensure that the parties involved comply with all tax regulations
Answer: B) To gain insights from stakeholders potentially affected by the combination
MCQ 43: If the Commission finds that an enterprise is abusing its dominant position, what can it propose?
A) The enterprise must pay all competitors to level the playing field
B) The enterprise should divest some of its assets to reduce dominance in the market
C) The enterprise must enter into a joint venture with its competitors
D) The enterprise can continue its practices if it benefits consumers
Answer: B) The enterprise should divest some of its assets to reduce dominance in the market
MCQ 44: What is the maximum time frame for which the Commission can impose penalties or orders on enterprises involved in anti-competitive agreements?
A) Indefinitely, depending on the nature of the violation
B) Up to five years from the date the violation is discovered
C) Up to 10% of the annual turnover for the past two years
D) A set period of three years for all cases
Answer: A) Indefinitely, depending on the nature of the violation
MCQ 45: If an enterprise is found to be in violation of competition laws but has voluntarily ceased the anti-competitive behavior, the Commission may:
A) Take no action if the violation was minor
B) Dismiss the case as long as the behavior has stopped
C) Continue to investigate and impose a fine even after the behavior has ceased
D) Reward the enterprise for voluntarily stopping the behavior
Answer: C) Continue to investigate and impose a fine even after the behavior has ceased
MCQ 46: Which of the following is a measure the Commission can take to address abusive market practices?
A) Award compensation to the offending enterprise
B) Recommend corrective actions to the government, including possible structural changes in the enterprise
C) Prevent smaller businesses from entering the market
D) Force the dominant enterprise to pay fines only to competitors
Answer: B) Recommend corrective actions to the government, including possible structural changes in the enterprise
MCQ 47: What happens if the Commission finds that a combination between enterprises could lead to an anti-competitive effect but the parties agree to modify it?
A) The Commission may approve the combination with the agreed modifications
B) The Commission will disapprove of the combination regardless of modifications
C) The Commission will request a full market investigation before considering any changes
D) The Commission will immediately impose penalties on the parties for agreeing to modify the combination
Answer: A) The Commission may approve the combination with the agreed modifications
MCQ 48: Which of the following is true regarding the powers of the Commission when dealing with anti-competitive behavior?
A) The Commission has no authority to impose fines on individuals; only companies are fined
B) The Commission may investigate a combination if it has a potential anti-competitive effect, even if no formal complaints are filed
C) The Commission can only recommend actions but cannot enforce penalties
D) The Commission is solely concerned with market size and does not focus on pricing practices
Answer: B) The Commission may investigate a combination if it has a potential anti-competitive effect, even if no formal complaints are filed
