Introduction

Hub-and-spoke cartels are horizontal arrangements between producers or suppliers located vertically in relation to other players in a market. Those situated horizontally are called the spokes and they engage in concerted anti-competitive action. The hub is vertically situated and colludes with the spoke to produce anti-competitive outcomes. These are often instances of indirect coordination and are difficult to prove in terms of substantive evidence. The primary obstacle in dealing with their treatment is that the collusion amongst hubs and spokes may not necessarily be a result of active agreements or understandings that could be traced to enterprises. It can be a result of, and is in many cases, an inadvertent result of tacit understanding. It may be in the form of knowledge, information of others’ conduct, algorithmic collusion, etc. This implies that such arrangements may also exist when there is no intention for such arrangements to happen among the enterprises. Setting prices at a standard rate, even when completely based on merit, can very well be scrutinized when an active governance is absent. As for the Indian legal landscape, the Competition (Amendment) Act, 2023 (“Amendment”) had sought to regulate such cartels. Their relevance grows as we see the recent decision by the Spanish Competition Authority decisively ruling on hub-and-spoke cartels with many lessons for the Indian regime. 

Codification of Hub-and-spoke Cartels and Applicable Provisions

The 2023 Amendment introduced a significant change to Section 3(3) by covering hub-and-spoke cartels within its scope. While the pre-amendment text confined itself to agreements “between enterprises or associations of enterprises… engaged in identical or similar trade of goods or provision of services” covering conduct such as “directly or indirectly determining purchase or sale prices,” “limiting or controlling production, supply, markets,” “sharing the market,” or “bid rigging,” the amendment clarifies that such agreements now also include those enterprises who are not engaged in identical trade but:

“participates or intends to participate in the furtherance of such agreement.”

This explicit codification ensures that even non-competing facilitators, like a manufacturer, distributor, trade association, or digital platform, are presumed to be part of a cartel, thereby shifting the law from purely horizontal arrangements to also vertical participation.

First, it broadens the scope of liability by extending cartel enforcement beyond the traditional “horizontal” space to include vertical players who act as hubs, thereby recognising that collusion can occur without direct contact among competitors. Second, it lowers the evidentiary threshold: actual facilitation is not always required, as the law recognises “intention” to participate as sufficient to trigger the assumption. Now, a critical question we must look out for is whether even passive awareness or tacit support could potentially attract liability. Third, the provision still retains the requirement of a horizontal agreement or understanding among the spokes which ensures that liability does not arise in the absence of competitor coordination.

Together, these elements fill a critical enforcement gap, giving the Competition Commission of India (“CCI”) sharper tools to deal with sophisticated cartel structures, especially in sectors dominated by platforms and digital intermediaries. At the same time, the broad wording, particularly the emphasis on “intention”, raises questions about the standard of proof, the scope of legitimate vertical arrangements that might get swept in, and the degree of discretion available to the regulator.

Cross-Border Perspectives & Standard of Proof 

Globally, authorities converge on the idea that hub-and-spoke liability turns on proving a horizontal understanding among the spokes plus facilitation by the hub, but they diverge on how readily that can be inferred in digital settings. Spain’s National Authority for Markets and Competition (“CNMC”) recently rejected a hub-and-spoke theory against ride and mobility platforms (Uber, Cabify, and Bolt), stressing that parallel conduct and data visibility on a platform aren’t enough without evidence of a meeting of minds among competitors or active orchestration by the hub. Similar conduct among players is not, by itself, an indicator of anti-competitive or unfair behaviour. In the EU, the CJEU’s Eturas judgment ruled that concerted practice among travel agencies can be assumed if the enterprises were aware of the actions alleged to be unfair. Mere knowledge is herein equated as concerted action inviting liability. Hence, if the enterprise does not publicly distance itself from the practice, then irrespective of their individual intention they can be held liable. This was also seen in the Cement Cartels case order by CCI where it was seen that silently remaining within a facilitating platform without active distancing can muddy the standard of proof, effectively bringing liability. U.S. courts, by contrast, have imposed liability when vertical dealings are used to organize a per se horizontal price-fix most famously in the E-Books case where the platform served as the coordinating hub; the appellate record underscores that while vertical links are assessed under rule-of-reason, they do not shield a deliberately orchestrated horizontal conspiracy. While the Standard of proof in each of these jurisdictions differs, the minimum of knowledge is taken as the base line for inferring substantial intention. The CNMC’s insistence on proof, the EU’s recognition of rebuttable presumptions, and the U.S. courts’ emphasis on deliberate orchestration, all highlight that liability must rest not merely on structural possibilities of coordination, but on demonstrable elements of intent or conduct that cross the line into collusion. 

The Amendment explicitly allows the CCI to hold a non-competing entity (which would most likely be the hub) liable on the basis of intent alone, so long as there is an established horizontal agreement among the spokes. Actual active involvement by this participant is no longer required. Knowledge of a collusive agreement, without proactive facilitation, may suffice to trigger liability. 

Possibility of Regulatory Overreach

While the codification of hub-and-spoke is an important step in regulating unfair advantages, the framing of the standard of proof as mere intent can prove to be detrimental to innovation and also prove inefficient from an enforcement perspective. Collusive structures need to be tackled; however, this cannot be done with a mere suspicion of information. The contours of information that put one in the liability need to be defined and expanding the inquiry into actual risks is important. The presumption that intention exists with knowledge is a standard which needs extraordinary proof. Even if intention is the first step for CCI, how it will eventually prove intention to collude remains to be answered. An effects-based analysis allows regulators to separate ‘good coordination’ (efficiency-enhancing) from ‘bad coordination’ (anti-competitive). The CCI was faced with a similar case of Samir Agarwal and held that understanding between spokes to coordinate their conduct is an important aspect in accruing liability to them. While the overreach into intending participants arises from reasonable suspicion of tacit collusion, the same cannot overlook the possibility of free informational exchange, especially in digital competitors. The liability for hub-and-spoke cannot be expanded to a point wherein vertically situated smaller players are made liable for possessing information that is reasonably within their reach in due course of business, or that such data itself is the life-blood of industry. 

Conclusion

The codification of hub-and-spoke cartels under the Amendment marks a decisive evolution in India’s competition law framework by formally recognising the liability of vertically placed entities that facilitate or intend to facilitate collusion. It undoubtedly strengthens the CCI’s enforcement arsenal against complex anti-competitive structures, particularly in the digital economy where platforms can serve as silent enablers of cartelisation. However, comparative perspectives show that while jurisdictions like the EU and US sanction hubs for facilitating collusion, they demand a demonstrable link between conduct, knowledge, and anti-competitive effects. If India’s standard of “mere intent” is applied without adequate safeguards, the risk of regulatory overreach looms large, potentially chilling legitimate vertical cooperation, data sharing, and innovation. The challenge ahead lies in striking the right balance: deterring collusive behaviour effectively while fostering a compliance environment that distinguishes harmful coordination from efficiency-enhancing arrangements.