Hub-and-Spoke Cartels: Enforcement Challenges under India’s Competition Act
Author: Tejaswini Nair, 4th-year B.B.A. LL.B. (Hons.) student at Symbiosis Law School Pune
INTRODUCTION
Hub-and-spoke cartels are a sophisticated form of anti-competitive practice under the Competition Act, 2002[1]. In these arrangements, a central entity, the “hub,” such as a supplier, distributor, or digital platform facilitates coordination among competing firms, the “spokes.”[2] Unlike traditional cartels defined in Section 2(c)[3] as direct agreements on prices, markets, or output, hub-and-spoke structures mask horizontal collusion within vertical agreements. Section 3(3)[4] presumes such conduct to have an appreciable adverse effect on competition (AAEC).[5] Their complexity lies in the lack of direct spoke-to-spoke communication, often replaced by indirect alignment through the hub. This problem is especially acute in digital markets, where algorithms and data-sharing can synchronize pricing and suppress innovation, undermining Section 18’s mandate of fair competition.[6]
The Competition (Amendment) Act, 2023, strengthens this framework by extending Section 3(3)’s presumption to hubs that “participate or intend to participate” in collusion, thereby reinforcing consumer protection goals. Yet, enforcement remains challenging. Proving the existence of the horizontal “rim” and the hub’s intent is difficult, as seen in Samir Agrawal v. ANI Technologies[7], where alleged hub-and-spoke conduct was misclassified as vertical restraint. The CCI’s dependence on direct evidence further weakens oversight.
This article critically evaluates hub-and-spoke cartels as a growing threat to Indian markets, highlighting evidentiary and legislative gaps. Drawing from U.S. and EU approaches, it argues for stronger regulatory tools to address collusion in digital ecosystems and safeguard consumer welfare.[8]
RESEARCH QUESTIONS
- How do hub-and-spoke cartels operate within the framework of Section 3 of the Competition Act, 2002, and what impact does the 2023 Amendment have on their regulation?
- What are the primary evidentiary challenges in establishing the horizontal “rim” and the hub’s intent in these arrangements?
- In what ways can the Indian competition regime be fortified to effectively combat hub-and-spoke cartels in the digital age?
METHODOLOGY
This research adopts a doctrinal approach, analysing legal provisions, judicial decisions, and scholarly literature to dissect hub-and-spoke cartels under the Competition Act, 2002. Primary sources include Sections 2(c), 3, and 19(3)[9], 2023 amendments[10], CCI orders, and appellate rulings. Secondary materials encompass academic papers, the 2019 Competition Law Review Committee report, and U.S./EU antitrust frameworks. Qualitative evaluation identifies enforcement patterns, focusing on legal interpretation without empirical data collection.
LITERATURE REVIEW
- “Hub and Spokes Cartel”[11]
– Anshika Tyagi
Review: The article provides a foundational overview of hub-and-spoke cartels under Indian Competition Law, emphasizing their recognition under the Competition (Amendment) Act, 2023. Tyagi elucidates the structural mechanics, where a vertical hub (e.g., a supplier or platform) facilitates tacit horizontal collusion among competitors (spokes) through vertical agreements, distinguishing it from traditional cartels. The paper highlights the role of digital platforms, where pricing algorithms enable indirect coordination, drawing parallels with U.S. case Interstate Circuit v. United States[12]. It differentiates hub-and-spoke arrangements from resale price maintenance (RPM) under Section 3(4)(e), situating them within Section 3(3)’s anti-competitive framework. Tyagi explores international perspectives, citing EU’s Vertical and Horizontal Guidelines, which address information exchange as a collusion mechanism. The article underscores the necessity of proving the horizontal “rim” (agreement among spokes) via direct or circumstantial evidence, emphasizing the hub’s role as a facilitator.
Gap: Tyagi’s analysis focuses heavily on theoretical structures but lacks a detailed examination of how hub-and-spoke cartels impact specific Indian sectors like media or pharmaceuticals. It does not explore sector-specific economic effects or enforcement strategies, limiting its practical applicability for CCI’s targeted interventions beyond digital markets
- “Finding the Hub and the Spoke of Cartels: Mapping the Indian Experience[13]”
-Lovely Dasgupta
Review: The article critically maps the Indian experience with hub-and-spoke cartels, arguing that the Competition Act, 2002’s framework is inadequate for addressing their complexity. Dasgupta examines CCI’s historical enforcement, focusing on Fx Enterprise Solutions India Pvt. Ltd. v. Hyundai Motor India Ltd.[14], where hub-and-spoke allegations were dismissed as vertical restraints due to insufficient rim evidence. The article critiques the Act’s reliance on rebuttable presumptions under Section 3(3), which allow defenses under Section 19(3), weakening deterrence compared to U.S. per se rules. Dasgupta highlights the 2019 Competition Law Review Committee’s recommendations, which led to the 2023 Amendment’s inclusion of hub-and-spoke provisions, emphasizing the need for legislative clarity to address these hybrid arrangements effectively.
Gap: Dasgupta’s work overlooks the role of trade associations as potential hubs in traditional sectors, such as media or cement, which are prevalent in India. This gap limits its analysis of non-digital hub-and-spoke arrangements, reducing guidance for CCI’s enforcement in industries where associations facilitate collusion.
- “Hubs and Spokes Arrangement through Algorithmic Collusion – Economic and Legal Implications[15]”
-Abhishek Rudra
Review: The paper focuses on algorithmic collusion in hub-and-spoke cartels, analysing their economic and legal implications. Rudra contrasts CCI’s direct-evidence approach in Samir Agrawal v. ANI Technologies Pvt. Ltd.[16], which dismissed algorithmic price-fixing due to lack of explicit agreements, with U.S. inference-based models using “plus factors” (e.g., pricing anomalies). The article emphasizes the economic impact of algorithms in e-commerce, enabling tacit coordination without direct spoke communication. Rudra advocates for integrating competition law with emerging data protection frameworks to address algorithmic opacity, highlighting the state’s role in ensuring market efficiency under public law principles.
Gap: Rudra’s analysis does not address the challenges of proving hub intent in non-algorithmic contexts, such as traditional supply chains (e.g., manufacturing). This limits its applicability to cases where digital platforms are not the hub, leaving a gap in understanding broader hub-and-spoke enforcement strategies.
- “An Analysis of Hub and Spoke Cartels in the E-Commerce Sector[17]”
– Vismay G. R. N
Review: The paper examines hub-and-spoke cartels in India’s e-commerce sector, particularly post-COVID-19, when reliance on online platforms surged. The paper discusses how e-commerce platforms act as hubs, facilitating pricing parity agreements among sellers (spokes), leading to anti-competitive effects like market foreclosure. It analyses economic incentives for such arrangements, such as coordinated price hikes during shortages, and reviews global approaches, including U.S. and EU treatments. The article critiques CCI’s handling of hub-and-spoke cases, noting shortcomings in detecting hybrid agreements, and explores food delivery services as potential hubs for collusion.
Gap: The article, predating the 2023 Amendment, does not explore how leniency programs could uncover e-commerce cartels. It lacks analysis of Section 46’s potential to incentivize disclosures, limiting its guidance on leveraging whistleblower mechanisms for effective enforcement in digital markets.
CRITICAL ANALYSIS
Theoretical Framework and Legislative Tensions
Hub-and-spoke cartels challenge India’s Competition Act by exploiting the distinction between vertical agreements, evaluated under a “rule of reason” (Section 3(4)), and horizontal agreements, presumed illegal (Section 3(3))[18]. These cartels disguise anti-competitive horizontal practices, like price-fixing, as vertical arrangements, violating Section 3(1)’s prohibition on agreements causing an appreciable adverse effect on competition (AAEC). The 2023 Amendment extends Section 3(3)’s presumption to non-competing hubs based on their “participation or intent,” aligning with Section 2(b)’s definition of an agreement[19]. However, Budholia[20] notes that defenses under Section 19(3), unlike the U.S.’s stricter “per se” rules, may weaken enforcement in digital markets where algorithms enable subtle collusion[21]. Sharma highlights that efficiencies, as in the EU’s Webtaxi case, may justify certain cartels, complicating India’s framework. This tension undermines Section 18’s[22] consumer protection goals, as hubs may claim legitimate motives without clear intent standards, necessitating a balanced approach to innovation and enforcement. [23]
Evidentiary Challenges in Proving Rim and Intent
Proving the “rim”, the horizontal agreement among spokes, such as competitors colluding on prices through a hub, and the hub’s intent is a significant challenge. The 2023 Amendment’s “intent” criterion holds hubs liable for facilitating anti-competitive agreements but lacks clarity on whether awareness, data sharing, or active coordination constitutes intent. Rudra critiques the Competition Commission of India’s (CCI) reliance on direct evidence in Samir Agrawal, which dismissed algorithmic price-fixing due to absent explicit spoke agreements, unlike the U.S.’s use of “plus factors” (e.g., synchronized pricing) or the EU’s Eturas presumption of harm when foreseeable[24]. Sharma notes that algorithmic opacity in digital hubs, like e-commerce platforms, obscures evidence, risking misidentification of legitimate data exchanges as collusion. Pandey and Mishra[25] highlight the 2024 leniency plus regime’s potential to uncover tacit collusion through disclosures, but fragmented evidence in algorithmic cases poses challenges. Advanced detection methods are needed to address indirect coordination in digital markets.
Indian Jurisprudence and Case Analysis
Indian enforcement remains cautious. In Fx Enterprise Solutions v. Hyundai[26], CCI dismissed hub-and-spoke claims against Hyundai for dealer collusion via resale controls, focusing only on vertical restrictions[27] (Section 3(4)). Jasper Infotech v. KAFF[28] similarly overlooked spoke coordination in online restrictions. Samir Agrawal v. ANI Technologies[29] rejected Ola/Uber as hubs for driver price-fixing, citing no explicit spoke agreement, a flaw Sharma attributes to CCI’s neglect of algorithmic collusion. Post-2023, CCI’s 2025 raids on media agencies such as Dentsu, GroupM, Publicis and broadcaster associations probe rate-fixing via trade bodies, using Section 46 leniency. Among 35 cartel probes (2020–2025), this case tests the amendment but faces delays, reflecting enforcement gaps.
International Comparative Perspectives
In the U.S., hub-and-spoke cartels are per se illegal under Section 1 of the Sherman Act when a horizontal “rim” is proven, as in United States v. Apple[30], where Apple facilitated e-book price-fixing using circumstantial evidence like coordinated pricing. Toys “R” Us v. FTC[31] used “plus factors” (e.g., pricing anomalies) to infer collusion. This contrasts with India’s direct-evidence reliance in Samir Agrawal. In the EU, Eturas[32] (2016) under Article 101 TFEU presumed harm from platform discount coordination, rebuttable by non-participation proof. EU’s Horizontal Guidelines flag indirect information exchange via hubs, while Webtaxi allowed efficiencies. India’s rebuttable presumption under Section 3(3) risks under-enforcement in digital markets compared to U.S. per se rules. Adopting U.S. “plus factors” (e.g., data-sharing patterns) and EU’s harm presumption, as Tyagi and Rudra suggest, could strengthen CCI’s enforcement under Section 18.
Sectoral Implications: Digital vs. Traditional Markets
Digital markets amplify hub-and-spoke risks, as platforms enable algorithmic collusion. CCI’s 2025 newsletter notes that price uniformity in e-commerce inflates consumer costs and excludes smaller firms, violating Section 18’s fair competition mandate. Sharma warns that unchecked digital cartels entrench platform dominance, stifling innovation[33]. In contrast, traditional sectors like media, as seen in 2025 raids on agencies, involve trade associations facilitating rate-fixing, raising advertising costs and limiting consumer access to competitive media[34]. Pandey and Mishra note that leniency disclosures aid traditional sector cases, but digital markets require advanced forensics due to algorithmic complexity. Tailored enforcement i.e. algorithmic audits for digital markets and stronger oversight of associations in traditional sectors are essential to mitigate AAEC and protect consumer welfare under Section 18.
Enforcement Gaps and Strategic Reforms
Key gaps include limited digital forensics expertise and unclear “intent” definitions under the 2023 Amendment, hindering hub-and-spoke detection. CCI’s 2024 penalty guidelines address hubs but fail to clarify Section 19(3) defenses, allowing firms to evade liability via efficiency claims[35]. The Competition Commission of India’s (CCI) reliance on direct evidence in Samir Agrawal v. ANI Technologies Pvt. Ltd. (2018) overlooks algorithmic collusion, highlighting the need for AI audits to analyze pricing algorithms. Adopting efficiency assessments similar to the EU’s Webtaxi case could prevent over-penalizing innovative platforms. Proving the horizontal “rim” in digital markets remains difficult due to subtle coordination, underscoring the challenge of detecting tacit collusion without clear evidence.
Proposed reforms include: issuing 2026 guidelines defining “intent” with “plus factors” (e.g., pricing anomalies); mandating algorithmic audits; expanding leniency to incentivize algorithmic disclosures; and enhancing CCI’s AI forensics capacity, drawing from EU expertise. These align with Section 18’s goals, balancing innovation and enforcement.
FINDINGS
Hub-and-spoke cartels erode the Competition Act’s protections by masking horizontal harms as vertical, with the 2023 Amendment’s intent proviso exposing but not resolving evidentiary gaps[36]. CCI’s direct-evidence bias fosters tacit collusion, particularly in digital markets, inflating prices and concentrating markets[37]. Algorithmic facilitation evades Section 3(3) presumptions, risking false positives[38]. SMEs face compliance burdens, undermining Section 18. Adopting “plus factors” and digital forensics could strengthen AAEC enforcement, ensuring robust market protection in dynamic sectors.
CONCLUSION & SUGGESTIONS
Hub-and-spoke cartels, blending vertical facilitation with horizontal collusion, pose a significant threat to India’s competitive markets under the Competition Act, 2002. The 2023 Amendment strengthens CCI’s ability to target non-competing hubs by presuming liability based on intent or participation, yet persistent evidentiary challenges, particularly proving the horizontal “rim” and defining “intent”, undermine enforcement, especially in digital ecosystems where algorithms enable tacit collusion. The critical analysis reveals CCI’s historical reliance on direct evidence, as seen in Samir Agrawal and Fx Enterprise, limits detection of hybrid violations, while the 2025 media raids signal progress but highlight adjudication delays. Comparative insights from U.S. and EU frameworks underscore the need for inference-based approaches to align with global standards.
To strengthen enforcement, CCI should implement the following:
- Issue Comprehensive 2026 Guidelines: Define “intent” under the 2023 proviso using “plus factors” like abrupt pricing uniformity, data sharing patterns, or hub-enforced terms, drawing from U.S. cases like Apple Inc. and EU’s Eturas. This clarifies evidentiary thresholds, reducing false negatives in tacit collusion cases.
- Mandate Algorithmic Audits: Require digital platforms to submit AI-driven pricing and data-sharing logs for CCI review, as Rudra suggests, to detect patterns of collusion in e-commerce and media sectors, balancing innovation with accountability.
- Enhance Leniency Plus Regime: Expand Section 46 incentives to include partial disclosures of algorithmic collusion, easing the burden of full cooperation in opaque digital cases
- Pilot Digital Forensics: Leverage the 2025 media raids to test AI forensics, integrating with India’s Digital Personal Data Protection Act, 2023, for real-time monitoring of platform behaviour, ensuring compliance without stifling innovation.
- Capacity Building: Train CCI investigators in algorithmic analysis, drawing from EU’s expertise, to bridge the digital forensics gap.
These measures, grounded in the article’s analysis, address legislative tensions, evidentiary hurdles, and sectoral challenges, ensuring the Act’s relevance in combating hub-and-spoke cartels while fostering competitive, consumer-friendly markets.
[1] The Competition Act, No. 12 of 2002, India Code (2002)
[2] Anshika Tyagi, Hub and Spokes Cartel, 6 INT’L J.L. MGMT. & HUMAN. 860 (2023).
[3] The Competition Act, No. 12 of 2002, § 2(c), India Code (2002).
[4] The Competition Act, No. 12 of 2002, § 3(3), India Code (2002).
[5] Lovely Dasgupta, Finding the Hub and the Spoke of Cartels: Mapping the Indian Experience, 14 INDIAN J.L. & JUST. 110 (2023).
[6] Ankit Sharma, Algorithmic Cartels and Economic Efficiencies: Decoding the Indian & EU Perspective, 17 NUALS L.J. 137 (2023).
[7] Samir Agrawal v. ANI Techs. Pvt. Ltd., (2018) SCC OnLine CCI 86.
[8] Bharat Budholia et al., The Intent Dilemma in Hub and Spoke Offences, INDIA L. ASIA (May 9, 2025)
[9] The Competition Act, No. 12 of 2002, § 19(3), India Code (2002).
[10] The Competition Act, No. 12 of 2002, as amended by The Competition (Amendment) Act, No. 7 of 2023, India Code (2002)
[11] Supra note 2
[12] Interstate Circuit, Inc. v. United States, 306 U.S. 208 (1939)
[13] Supra Note 5
[14] Fx Enter. Sols. India Pvt. Ltd. v. Hyundai Motor India Ltd., (2017) SCC OnLine CCI 26.
[15] Abhishek Rudra, Hubs and Spokes Arrangement through Algorithmic Collusion – Economic and Legal Implications, 4 INDIAN J.L. & LEGAL RSCH. 1 (2022-2023).
[16] Supra Note 4
[17] Vismay GRN, An Analysis of Hub and Spoke Cartels in the E-Commerce Sector, 2 Indian J.L. & Legal Res. 1 (2021)
[18] Supra note 13
[19] SCC Online, Navigating Hub-and-Spoke Cartel in India: An Analytical Overview of New Provision, SCC ONLINE (Oct. 5, 2023),
[20] Bharat Budholia et al., The Intent Dilemma in Hub and Spoke Offences, INDIA L. ASIA (May 9, 2025), https://law.asia/hub-spoke-cartel-liability/.
[21] United States v. Apple Inc., 791 F.3d 290 (2d Cir. 2015).
[22] The Competition Act, No. 12 of 2002, § 18, India Code (2002)
[23] AZB & Partners, Hub and Spokes Cartels – Codification and Challenges, AZB PARTNERS (Feb. 12, 2024), https://www.azbpartners.com/bank/hub-and-spokes-cartels-codification-and-challenges/.
[24] Eturas UAB v. Lietuvos Respublikos konkurencijos taryba, C-74/14, ECLI:EU:C:2016:42 (ECJ 2016).
[25] Ayush Pandey & Shivendra Nath Mishra, Leniency Regime in India: Recent Developments, 5 INT’L J.L. MGMT. & HUMAN. 984 (2022).
[26] Fx Enter. Sols. India Pvt. Ltd. v. Hyundai Motor India Ltd., (2017) SCC OnLine CCI 26.
[27] Supra Note 3
[28] Jasper Infotech Pvt. Ltd. v. KAFF Appliances (India) Pvt. Ltd., (2014) SCC OnLine CCI 61.
[29] Supra note 7
[30] Supra note 21
[31] Toys “R” Us Inc. v. FTC, 221 F.3d 928 (7th Cir. 2000).
[32] Supra note 24
[33] Supra note 1
[34] Shardul Amarchand Mangaldas & Co., Hub-and-Spoke Cartels: The Next Big Thing?, AMS SHARDUL (2023), https://www.amsshardul.com/insight/hub-and-spoke-cartels-the-next-big-thing/.
[35] Bid-rigging or rate-fixing? CCI’s investigation into ad giants deepens, EXCHANGE4MEDIA (Mar. 25, 2025), https://www.exchange4media.com/advertising-news/bid-rigging-or-rate-fixing-ccis-investigation-into-advertising-giants-deepens-142042.html
[36] SCC Online, Navigating Hub-and-Spoke Cartel in India: An Analytical Overview of New Provision, SCC ONLINE (Oct. 5, 2023), https://www.scconline.com/blog/post/2023/10/05/navigating-hub-and-spoke-cartel-in-india-an-analytical-overview-of-new-provision/.
[37] Vismay G. R. N., An Analysis of Hub and Spoke Cartels in the E-Commerce Sector, (2021).
[38] Abhishek Rudra, Hubs and Spokes Arrangement through Algorithmic Collusion – Economic and Legal Implications, 4 INDIAN J.L. & LEGAL RSCH. 1 (2022-2023).
