Abuse of Dominant Position

By
Apoorva Pathak
SOL, Auro University
 Dominant Position
Sec 4: Abuse of dominant position.—
(1) No enterprise shall abuse its dominant position.
(2) There shall be an abuse of dominant position under sub-section (1), if
an enterprise,[or a group]—
(a) directly or indirectly, imposes unfair or discriminatory— (i) condition
in purchase or sale of goods or services; or
(ii) price in purchase or sale (including predatory price) of goods or service;
or
Explanation.—For the purposes of this clause, the unfair or discriminatory
condition in purchase or sale of goods or services referred to in sub-clause
(i) and unfair or discriminatory price in purchase or sale of goods
(including predatory price) or service referred to in sub-clause (ii) shall not
include such discriminatory conditions or prices which may be adopted to
meet the competition; or
 Dominant Position
(b) limits or restricts—
(i) production of goods or provision of services
or market therefore or
(ii) technical or scientific development relating
to goods or services to the prejudice of
consumers; or
 Dominant Position
• (c) indulges in practice or practices resulting in
denial of market access; [in any manner]or
• (d) makes conclusion of contracts subject to
acceptance by other parties of supplementary
obligations which, by their nature or according to
commercial usage, have no connection with the
subject of such contracts; or
• (e) uses its dominant position in one relevant
market to enter into, or protect, other relevant
market.—
 Dominant Position
• Explanation .—For the purposes of this section, the expression
• (a) “dominant position” means a position of strength, enjoyed by an
enterprise, in the relevant market, in India, which enables it to—
• (i) operate independently of competitive forces prevailing in the relevant
market; or
• (ii) affect its competitors or consumers or the relevant market in its
favour;
• (b) “predatory price” means the sale of goods or provision of services, at
a price which is below the cost, as may be determined by regulations, of
production of the goods or provision of services, with a view to reduce
competition or eliminate the competitors.
• (c) “group” shall have same meaning as assigned to it in clause (b) of the explanation to
section5
 Dominant Position
The Act defines dominant position (dominance)
in terms of a position of strength enjoyed by an
enterprise, in the relevant market in India,
which enables it to:
i. operate independently of the competitive
forces prevailing in the relevant market; or
ii. affects its competitors or consumers or the
relevant market in its favour
 Section 4
• There are 12 factors listed in sub section (4)
of section 19 on the touchstone of which the
market position of an enterprise is to be
tested during the course of enquiry by the
Commission to evaluate whether or not it
constitutes dominant position.
 Enterprise
• Section 4 is applicable to all the enterprise, which
is defined under sec 2(h) of CA
• Definition of enterprise includes person as
defined under sec 2 (l) or a dept Govt engaged in
any activity relating to –
• A. production , storage, supply, distribution or
acquisition or control of goods or articles
• B. provision of services of any kind
• Investment
 Enterprise
• business of acquiring, holding, underwriting or
dealing with shares, debentures or other
securities of any other body corporate, either
directly or through one or more of its units or
divisions or subsidiaries, whether such unit or
division or subsidiary is located at the same
place where the enterprise is located or at a
different place or at different places
 Enterprise
• Once an association is not an “enterprise” in
terms of section sec 2(h), its conduct cannot
be examined under sec 4.
• The term enterprise must be engaged in any
activity which is relatable to the economics
and commercial activities.
• Activity covers any activity relating to any
profession or occupation
 Sovereign function
• Exception under “enterprise” is of sovereign functions
of Govt dealing with atomic energy, currency, defense
or space
• In Bangalore Water Supply and Sewage Board v
Rajappa, 7 judge bench of SC held that ‘ only
primary , inescapable, inalienable and non delegable
functions of Government should qualify for sovereign
functions of govt.’
• Welfare , commercial and economic activities are not
covered within the meaning of sovereign function
 Sovereign function
• In PWD Employee Union v State of Gujarat it
was observed that the welfare activities or
economic activities of govt or statutory bodies
do not qualify to be treated as statutory
functions
• In N. Nagendra Rao & Co v State of AP , SC held
that the State is immune only in case where its
officers perform primary or inalienable functions
such as defense of the country, administration
of justice, maintenance of law and order
 “Group”
• Definition of group is restricted to entities under same
management or control.
• Sec 5 (b) explanation: “group” means two or more
enterprises which, directly or indirectly, are in a position to—
• (i) exercise twenty-six per cent. or more of the voting rights
in the other enterprise; or
• (ii) appoint more than fifty per cent. of the members of the
board of directors in the other enterprise; or
• (iii) control the management or affairs of the other
enterprise;
 “Group”
• The term implies a degree of connection,
cooperation or common interest among its
members
• CA includes both de jure & de facto control.
• De jure is legal control i.e. right to control
attached to ownership of such numbers of
shares as entities the holder to elect a majority
of the board of directors of such numbers of
shares etc.
 “Group”
• In Arshiya Rail Infrastucture Ltd. (ARIL) v MoR (Ministry of
Railway, DG report concluded Mor and CONCOR (Container
Corporation of India) constitute a group in relevant market
but MoR do not have de jure or de facto control over
CONCOR on following grounds-
• shares in CONCOR are owned by Govt, however govt did not
participate in daily affairs
• Appointment of directors done on the recommendation of
PESB, ultimate decision rests with cabinet committee.
• Independence of director preserved
• Only 2 out of 10 directors are connected with MoR
 Relevant Market in India
• Dominant Position has to be determined by
the Commission in the relevant geographic
market and relevant market in India on
factors specified in (6) and (7) of section 19.
 Relevant Market in India
• Sec 19(6) The Commission shall, while determining the “relevant
geographic market”, have due regard to all or any of the following
factors, namely:—
• (a) regulatory trade barriers;
• (b) local specification requirements;
• (c) national procurement policies;
• (d) adequate distribution facilities;
• (e) transport costs;
• (f) language;
• (g) consumer preferences;
• (h) need for secure or regular supplies or rapid after-sales services.
 Relevant Market in India
Sec 19(7)The Commission shall, while determining the
“relevant product market”, have due regard to all or
any of the following factors, namely:—
(a) physical characteristics or end-use of goods;
• (b) price of goods or service;
• (c) consumer preferences;
• (d) exclusion of in-house production;
• (e) existence of specialised producers;
• (f) classification of industrial products.
 “Operates independently of competitive
forces prevailing in the relevant market”
• If a seller actions intends to create entry
barrier , drive out existing rivals control output
or price, impose restrictive and supplementary
obligations on captive consumers, impose
unfair discriminatory conditions or prices to
the disadvantage of consumer or rival firms or
leverage strength in one market to enter or
protect another market would taken as having
adverse effect on competition
“ affects its competitors or consumers or the
relevant market in its favor
• Sec 4 explanation (ii) provides for ability of
enterprise to  affect its competitors or
consumers or the relevant market in its favor
 Principle of Dominance
• The underlying principle in the definition of of
a dominant position is linked to the concept of
market power which allows an enterprise to
act independent of market forces.
• The evaluation of “strength” is to be done not
merely on the basis of the market share of the
enterprise in the relevant but various other
factors as mentioned under sec 19(4)
 Principle of Dominance
Sec 19 (4) The Commission shall, while inquiring whether an
enterprise enjoys a dominant position or not under section 4,
have due regard to all or any of the following factors, namely:—
(a) market share of the enterprise;
(b) size and resources of the enterprise;
(c) size and importance of the competitors;
(d) economic power of the enterprise including commercial
advantages over competitors;
(e) vertical integration of the enterprises or sale or service
network of such enterprises;
(f) dependence of consumers on the enterprise;
 Principle of Dominance
(g) monopoly or dominant position whether acquired
as a result of any statute or by virtue of being a
Government company or a public sector undertaking
or otherwise;
(h) entry barriers including barriers such as regulatory
barriers, financial risk, high capital cost of entry,
marketing entry barriers, technical entry barriers,
economies of scale, high cost of substitutable goods or
service for consumers;
(i) countervailing buying power;
 Principle of Dominance
(j) market structure and size of market;
(k) social obligations and social costs;
(l) relative advantage, by way of the contribution
to the economic development, by the enterprise
enjoying a dominant position having or likely to
have appreciable adverse effect on competition;
(m) any other factor which the Commission may
consider relevant for the inquiry.
Factors to determine Dominant Position

1. Market Share
• It provide information about market
structures and of the competitive importance
of various undertakings active on the market.
• However market shares alone do not
determine whether an undertaking is
dominant or has substantial market power
Factors to determine Dominant Position
1.Market Share
• Case : ESYS v Intel (2014 CompLR 126 (CCI))
Based on data on market share, revenue, prices, volume of
output etc.it was reported that in “the market of
microprocessors for desktops , tablets/laptops and market of
microprocessors in India was taken into consideration. Intel
enjoyed a dominant position cumulative market between 2009-
11 was more than80%and it was more than 85% during 2012
Held: Commission held that in the light of strong entry barriers
in the relevant markets on account of significant IPRs of Intel
combined with market share, Intel acquired a position of
dominance.
Factors to determine Dominant Position
1. Market Share
• While assessing market share, it is often may be
helpful to consider market data over several past
years.
• The higher the market share, and the longer the
period of time over which it is held, the more likely
it is to be a preliminary indication of dominance.
• Market share test consists of two steps (i)calculate
the market share of the allege dominate company
(ii) compare the alleged dominant company’s
position with competitors market shares.
Factors to determine Dominant Position

2. Size and resources of the enterprise: the

superior financial strength in the market coupled
with superior resources is an important indicator
of dominance of enterprise.
3. Size and importance of the competitors : Size
of the competitors being volume sold, range
products, network and acceptance with the
customers of the competitors in relation to the
company concerned.
 Factors to determine Dominant Position
• Case : Atos worldline India Pvt. Ltd. V Verifone India Sales Pvt
Ltd., (2015 CompLR 327 (CCI)
Commission agreed with the findings of DG Verifone India Sales
Pvt Ltd was in dominant position in the relevant market of POS
Terminals in India. Based on RBI data it had 70% market share in
the sales of POS terminals to banks,30% was of Ingenico.
It was further reported that in terms of size, resources and
economic power verifone was in advantageous position
compared to Ingenico.
It was found that presence of verifone across the country and its
capabilities in terms of hardware, software and nos of machines in
use made consumers dependent on it. Thus it was having
dominant position in the relevant market.
Factors to determine Dominant Position

• Case: Saint Gobain Glass India Ltd. V Gujarat

Gas Company Ltd.(2015 CompLR 431 (CCI))
• Though Gujarat Gas market share was 47-52%
however in relevant geographical area ie
Surat, Bharuch districts, players such as
GSPC,IOCL,GAIL etc. were operating , Gujarat
Gas just had marginal higher share in gas
sales.
Factors to determine Dominant Position

4. Economic power of the enterprise including

commercial advantages over competitors :
Commercial advantages may be in the form of
size, capacity, technological superiority etc.
Case : The National Stock Exchange of India Ltd.v
Competition Commission of India, 2014 CompLR
304 (CompAT)
https://www.youtube.com/watch?v=-FFi-79QhDE
Factors to determine Dominant Position
Case : National Stock Exchange case(2013)
Tribunal held NSE having dominant position in market
only for currency derivatives. It has ( 70.43% of equity
segment, 99% of F & O segment, over 90% in WDM
segment 47-48 & in CD segment against 52-53% of MCX
SX), this tells us about the market share, other factors
were sound financial position, weak position of
competitions, greater number of buyers and sellers to
NSE, benefits of network effects resulting from higher
liquidity and lower transaction costs.
https://www.youtube.com/watch?v=-FFi-79QhDE
Factors to determine Dominant Position
5. Vertical Integration of the enterprises or sale
service network of such enterprises: vertical
integration may be potentially pro competition but
also could be anti competitive.
Anti competitive when there is refusal to deal with
independent distributors, or a price or supply.
Case : Belaire Owner’s Association v DLF Ltd. Haryana
Urban Authority Department of Town and Country
Planning, State of Haryana, (2011) 104 CLA 398 (CCI).
Factors to determine Dominant Position
• In Belaire Case DLF’s level of vertical integration in
comparison was to its competitors was taken as factor
to attribute dominant position.
• It was noted that DLF had developed more than 22
urban colonies spread across over 32 cities and had
about 300 subsidiaries which constituted a
redoubtable sales network and provided incomparable
services of integrated township I Gurgaon with wide
array of commercial properties, retail spaces,
recreation facilities etc.
• https://www.youtube.com/watch?v=QnP03fyRnJU
Factors to determine Dominant Position
6. Dependence of Consumers on the enterprise :
U/s 18 of CA, “ it shall be duty of the Commission to
eliminate practices having adverse effect on
competition, promote and sustain competition , protect
interests of consumers and ensure freedom of trade
carried on by other participants in markets in India.”
Case : Commercial Solvents v Commission held that an
undertaking having a dominant position in market of
raw material using for its own derivatives and refusing to
other manufacturer, risks elimination of competition.
Factors to determine Dominant Position
7. Monopoly or dominate position whether acquired as
a result of any statute or by virtue of being a
Government company or a public sector undertaking or
otherwise:
State Monopolies can lead to certain harmful effects like
a) the dominant power enjoyed by the state monopolies
may be abused because of government patronage
b) because of that they may adopt policies which
amounts to restrictive trade practices ,
c) suffer from schemes of administered prices.
Factors to determine Dominant Position
• It is well accepted that competition is a key to
improving the performance of State monopolies
and public enterprise.
• Case: Coal India and Mahandi Coalfields Ltd.
(MCL) : the Commission concluded that opposing
parties were resorted to unfair and discriminatory
conduct by inserting different clauses in FSAs with
PSU power producers for supply of non-coking
coal. Fined 3% of the average turnover of 3yrs.
Factors to determine Dominant Position

Case : Prasar Bharati v TAM Media Research

Private Limited (2016)
TAM given clean chit for case filed against the
abuse of dominant position in relation to the
procedure adopted for measurement of
Television Rating Points(TRP) and Television
Viewership Ratings(TVR).
Within this market TAM occupied 100% market.
 Factors to determine Dominant Position
DG held TAM to be abusing dominant position on following
grounds-
a. Exclusion of semi urban and rural areas from the sample
size resulted in imposition of unfair and discriminatory
conditions on those broadcasters whose shows are for
rural market.
b. Conduct of TAM in charging higher annual subscription
fees from advertisers and media agencies to provide TV
viewership data was discriminatory
c. Since TAM was only user of such measurement, this
resulted in limiting technology and scientific
development.
Factors to determine Dominant Position
• Commission did not find TAM to have abused
dominant position on following grounds
a. For non coverage of rural areas, this was
informed to the stakeholders and was stated on
the website as well detailing about the
subscription as well as individual contracts too.
b. With regard to discriminatory pricing , held that
broadcasters and advertiser were not similarly
placed subscribers.
Factors to determine Dominant Position

8) entry barriers including barriers such as

regulatory barriers, financial risk, high capital
cost of entry, marketing entry barriers, technical
entry barriers, economies of scale, high cost of
substitutable goods or service for consumers;
In TAM case it was observed that for television
audience measurement there were certain
technical expertise requirements to handle the
complexities involved acted as technical barriers.
Factors to determine Dominant Position

9) countervailing buying power;

• even an undertaking with higher market share
may not be able to act to an appreciable
extent independently of customers with
sufficient bargaining power.
• It may result from customer’s size or their
commercial significance and their ability to
switch quickly to competing suppliers etc.
Factors to determine Dominant Position

10) market structure and size of market;

11) social obligations and social costs;
12) relative advantage, by way of the contribution
to the economic development, by the enterprise
enjoying a dominant position having or likely to
have appreciable adverse effect on competition;
13) any other factor which the Commission may
consider relevant for the inquiry
 Technical specificity and product differentiation

Case : Samsher Kataria v Honda Siel Cars India Ltd.

• Each original OEM controlled almost entire production
and supply of spare parts which can be used in
repairing and maintenance
• Due to technical specificity of the cars manufactured by
each OEM, the spare parts of particular brand could not
be used t repairs car manufacture by other OEM
• Each OEM created barrier to independent repairers to
the aftermath of the repairs and maintenance of the
cars
 Regulatory powers are potential source of
dominance
Case: Sh. Surinder Singh Barmi v Board for
Control of Cricket in India (BCCI) (2013)
https://
www.youtube.com/watch?v=eU3DhmPQ51o
An complaint was filed against BCCI for abuse of
dominant position in conduct of IPL, DG
delineated the relevant market as underlying
economic activities which are ancillary for
organizing the IPL 20-20 Cricket Tournament.
 Regulatory powers are potential source of
dominance
• Status of BCCI as national governing body for all
types of cricket activities in India with authority to
select and control players, umpires and officials held
it to control the game in India
• Relevant market TRP and TAM ratings were
considered
• Differentiated between first class/international event
and private professional league cricket event, taking
the later as relevant market. BCCI extended its
monopoly to it.
 Regulatory powers are potential source of
dominance
• BCCI assumed the right to sanction/approve cricket
events in India as per sec 32.4 of ICC Bye Laws
making approval of BCCI critical to the organization
and success of such events.
• Therefore owing to its regulatory role, monopoly
status, control over infrastructure (cricket stadiums),
control over players , ability to control entry of other
leagues, historical evidences (failure of ICL due
to lack of infrastructure facilities) BCCI was held to
be in dominant position in the market for organizing
private professional cricket events in India.
 Collective dominance
• The concept of collective dominance envisages
extending abuse of dominance provisions to
encompass those situations where independent
companies, in acting together, create situations
of dominance.
• Indian law does not recognize collective abuse
of dominance
• The word ‘group’ does not refer to different
independent enterprises.
 Collective dominance
• Case : Mannapuram Jewellers Pvt. Ltd. V Kerela Gold and
Silver Dealers’s Association(KGSDA), 2012 CompLr 548 CCI.
• Complaint was files that KGSDA was abusing dominant
position for imposing directly or indirectly unfair conditions
in purchase & sale of gold ornaments in the relevant market
• Commission noted from DG report that only 37% of jewelers
in Trissur district were part of KGSDA and market share of
members of KGSDA was on 10-12%
• Commission held that since no individual member held any
dominant position in the market there can no abuse of
dominant position.
 Abuse of Dominance
• Abuse of a dominant position occurs when a
dominant firm in a market, or a dominant
group of firms, engages in conduct that is
intended to eliminate or discipline a
competitors or a to deter future entry by new
competitors, with the result that competition
is prevented or lessened substantially.
 Types of Abuses
• Two types-
1. Exploitative Abuse
2. Exclusionary Abuse
1.Exploitative Abuse: whereby the dominant
undertaking takes advantages of its market
power to exploit its trading partners
Eg. Excessive pricing, unfair terms and
conditions
 Types of Abuses
2. Exclusionary Abuse : when the dominant
positioned enterprises forecloses the market for
their competitors
Factors to be considered are-
• The position of the dominant undertaking
• The condition on the relevant market: this
includes the conditions of entry and expansion,
such as the existence of economies of scale
and/or network effects.
 Types of Abuses
• The position of the dominant undertaking’s
competitors
• The position of the consumers or input
suppliers
• The extent of the alleged abusive conduct
• Possible evidence of actual foreclosure
• Direct evidence of any exclusionary strategy
 Abuse of Dominance
• U/s 4 (2) (a)
(2)There shall be an abuse of dominant position
under sub-section (1), if an enterprise,[or a group]—
(a) directly or indirectly, imposes unfair or
discriminatory— (i) condition in purchase or sale
of goods or services; or
(ii) price in purchase or sale (including predatory
price) of goods or
 Abuse of Dominance (sec 4(2) (a) (i))

• Unfair Condition : the act does not define

unfair activities , it depends on the
circumstance of each case.
• SC in HMM Limited v Director General, MRTP
Commission, held that for holding a trade
practice to be unfair , it must be found that it
causes loss or injury to the consumer.
 Abuse of Dominance(sec 4(2) (a) (i))
Case : Belair Housing (DLF case)
Facts : Belair was housing complex being built by DLF,
construction , it was conveyed would be completed in
36months. In place of 19 floors 29 floors were
constructed which led to reduction in allotment of land
to various facilities announced in the ad.
Construction was delayed. Apartment Buyer’s
Agreement (ABA) were signed after the substantial
amount was paid which did not leave option to
withdraw. Terms were not negotiated with buyers.
 Abuse of Dominance(sec 4(2) (a) (i))

Buyers forced accept following terms-

a) Absolute right with DLF to reject or refuse to
execute ABA, without assigning any reason.
b) Sole discretion with DLF to change the
number of zones, use property from
residential to commercial.
c) Unilateral power with DLF to reduce the land
for multi storey apartments
 Abuse of Dominance(sec 4(2) (a) (i))

d) Allotees could not carry out any investigation

or raise objections to the competency of DLF
e) Allotees had to pay sale price for the Super
Area of the Apartment in addition to their
undivided share in the land underneath, on
which the building has been erected.
f) No clause in the ABA to impose liability on
DLF in case of a breach of its obligations
 Abuse of Dominance(sec 4(2) (a) (i))

g) In case of a change in the super area of the

apartment, it was provided that the price shall be
re-calculated without refund of additional
amount. The additional amount would be
adjusted towards last installment. No interest on
the same would be provided.
h) Time was made an essence of the contract w.r.t
allotees obligations. However, the same was not
applicable to DLF’s obligations under the contract.
 Abuse of Dominance(sec 4(2) (a) (i))
i) Right to delete/alter/modify the building plan was
retained by DLF without any right to the allotees to
object or withdraw from the same.
j) In case of a default by allotees, rate of interest was 18%.
Same terms were questioned. Also DLF did not take
clearances in time. Allotment were made without
preparation of building plans.
Held : the terms were of the agreement were held to be
in violation of 4(2) (a). Rs. 630 crores penalty impose i.e.
7% of the turnover.
 Pricing abuse (sec 4(2) (a) (ii))
• Pricing abuses may come under the purview of
competition law as an abuse of dominance.
• Pricing abuses maybe may be “exclusionary” ie
pricing strategies adopted by dominant firms to
foreclose competitors, includes wide variety of
measures like predatory pricing, price squeezes,
loyalty rebates.
• Pricing abuses may also be “exploitative” i.e. which
covers instances where dominant firm is accused of
exploiting its customers by setting excessive prices.
 Pricing abuse (sec 4(2) (a) (ii))
Case : Shivam Enterprises v Kiratpur Sahib Truck
Operators Co-operative Transport Society Ltd.
(2015).
Facts: the complaint was filed against (KSTOCL)
and its members to have abused its dominant
position in fixing freight charges, allowing only the
trucks owned by its members to engage in freight
transport of goods from Kiratpur region and
obstructing non-members to operate in the area.
 Pricing abuse (sec 4(2) (a) (ii))
• The relevant market taken was “ provision of services of
goods transportation by trucks in and around Kiratpur
area in Punjab” and on the basis of absence of any
competitors and complete dependence of the
consumers in the relevant market KSTOCL was held to
be in the dominant position.
• It was proved that M/s Jaiprakash Associate Ltd. Had
another transporter wiling to do the job @ 1.50 per
MT/KM was forced to enter into contract with (KSTOCL)
@ 2.56 per MT/KM.
• It was held KSTOCL abused its dominant position u/s 4
(2) (a) (ii).
 Predatory Price
• Explanation (b) sec 4 ,
• “predatory price” means the sale of goods or
provision of services, at a price which is below
the cost, as may be determined by regulations, of
production of the goods or provision of services,
with a view to reduce competition or eliminate
the competitors.
• The essence of predatory pricing is pricing below
one’s cost with a view to eliminate a trade rival.
 Predatory Price
Distinguishing predatory behavior from
legitimate competition is difficult.
The distinction between low prices which results
from predatory behavior and low prices which
result from legitimate competitive behavior is
often very thin not easily ascertainable.
 Predatory Price
• “ with a view to reduce competition or
eliminate the competitors:
• Means that a dominant enterprise will be
judged as guilty of predatory pricing if it is
found to be charging its customers below cost
price. The phrase “with a view to” implies
exclusionary intent also has to be
demonstrated.
 Predatory Price
• The Competition Commission of India (Determination of Cost of
Production Regulations,2009 defines cost.
• There is no unique price
• (b) “average variable cost” means total variable cost divided by total
output during the referred period
• “total cost” means the actual cost of production including items, such
as cost of material consumed, direct wages and salaries, direct
expenses, work overheads, quality control cost, research and
development cost, packaging cost, finance and administrative
overheads attributable to the product during the referred period ;
• ii. “total variable cost” means the total cost referred to in clause (i)
minus the fixed cost and share of fixed overheads, if any, during the
referred period;
 Predatory Price
• In case pricing is above average variable cost but below
average total cost it is possible that the pricing behavior of
the enterprise could make some business sense and
therefore “intent” in the sense of mala-fide has to be
positively established
• Selling below average variable cost is justified in rare cases
like low market demand, recession like condition,
promotional activity at the time of entry.
• A dominant player doesn't have any need to price below
average variable cost, excepts it intends to drive out the
competition.
 Predatory Price
• Assessing Predatory Pricing: It is difficult to
develop standards to detect and prevent
predatory pricing .
• No Rule: Bork, Mc Gee and Easterbrook say it
should not be concern of authorities.
• Areeda Turner Test: widely used.
 Predatory Price
• Precondition for Predatory Pricing
1. Dominance in the relevant market
2. Certain Level of entry barrier to prevent
competitors to re-enter the market.
3. Deep Pockets of Predator
4. Excess Capacity
 Predatory Price
• Dumping and Predatory Pricing
“ dumping “ explained by GATT Anti dumping
Code means introduction of the goods of one
country into commerce of another country at less
than the normal value prevailing in the importer
country.
Dumping accompanied by predatory pricing ,
causes material injury to the industry of importing
country.
 Predatory Price
• Case : HNG Float Glass Ltd v Saint Gobain Glass
India Ltd. (SGGIL)(2014)
• Information against saint gobain glass india ltd.
It was alleged that SGGIL was charging
unreasonably low prices in the clear float glass
segment and was forcing dealers to buy clear
glass from SGGIL if they wanted to buy value
added glass and therefore foreclosed
competition.
 Predatory Price
• Commission keeping in mind the use distinct
features and substitutability considered
relevant market as whole of India.
• Commission concluded that SGGIL does not
have a dominant position as it was a highly
competitive market
• The commission found that the prices of SGGIL
were not abnormal to show any independent
movement in the market.
Abuse of dominance under 4(2)(b)
• Abuse of Dominance- limiting or restricting
production or technical development.
Sec 4 (2)(b): limits or restricts—
(i) production of goods or provision of services
or market therefore or
(ii) technical or scientific development relating
to goods or services to the prejudice of
consumers; or
Abuse of dominance under 4(2)(b)
Case: Atos Worldline India Pvt. Ltd case.
• It was alleged that Verifone was abusing its dominant
position to force the Software Development Kits (SDK)
agreement with restrictive clauses on the information.
• It was very important for Atos to have access to core
POS Terminal applications and their crucial updates
along with SDKs and withholding that it would
negatively impact the market.
• Commission held that such restrictions amounted to
violation of sec 4(2)(b).
Abuse of dominance under 4(2)(b)
Case : Shivam Enterprises v Kirat Sahib Trck
Operators Co-operative Transport Society
Limited.
It was found that Society was had limited and
restricted provisions of services for freight
transport in Kiratpur area in violation of sec 4(2)
(b).
Abuse of Dominance under sec 4 (2) (c)
• Sec 4 (2)(c) - indulges in practice or practices resulting in
denial of market access; [in any manner]or.
Case : Fast Way Transmission Pvt. Ltd.,Hathway Sukamrit
Cable & Datacom Pvt. Ltd. Creative Cable Network Pvt. Ltd v
Kansan News Pvt Ltd.
Kansan News Pvt. Ltd. a broadcaster of news and current
affairs TV channel named “Day and Night News” operating in
states of Punjab, Haryana, Himachal Pradesh and Chandigarh
filed a complaint against Fast way Transmission & other
engaged in business of distribution of cable network channels
of broadcasters violating sec 3 and 4.
Abuse of Dominance under sec 4 (2) (c)
• It was alleged that MSO’s(multi system operators) as
group formed a cartel abusing dominant position
resulting in denial of market access.
• Commission noted relevant product market as cable
TV service. Relevant geographic market as Punjab
and Chandigarh.
• Commission held that action of group resulted in loss
to informant broadcaster as well as denial of service
to consumers as Kansan was effectively wiped out
from relevant market.
Abuse of Dominance under sec 4 (2) (c)

• Commission passed a cease and desist order

and imposed a penalty of 8.4 crores on
Fastway Group.
• Tribunal however set aside the Commission’s
order. Noted that Group and Kansan are not
competitors and are at different level of
supply. Therefore denial of market access
doesn’t arise
Abuse of Dominance under Sec 4 (2) (d)

• (d) makes conclusion of contracts subject to

acceptance by other parties of supplementary
obligations which, by their nature or according
to commercial usage, have no connection
with the subject of such contracts; or
Abuse of Dominance under Sec 4 (2) (d)

• Under the act forcing supplementary

obligations by their nature or commercial
usage have no connection with the subject
matter of the contract are anti competitive
prohibited by section 4 of the Act.
• Eg- Tying of the product
Abuse of Dominance under Sec 4 (2) (d)

• Tying is of two types

• 1. Technical Tying.
Eg : Microsoft case, wherein it integrated its
products into one program.
• 2. Contractual Tying: in this case , dominant
undertaking leaves the customer without any
choice of buying the two products separately.
Eg : Tetra Pak II case
Abuse of Dominance under Sec 4 (2) (e)

• (e) uses its dominant position in one relevant

market to enter into, or protect, other
relevant market.—
Eg: Shamsher Kataria Case,