COMPETITION LAW

ASSINGMENT ON ‘ABUSE OF DOMINANT POSITION’

NAME: SOMYA SRIVASTAVA

ROLL NO.: 17FLICDDN02132

COURSE: BA.LL.B. 4th YEARS

ICFAI UNIVERSITY DEHRADUN

ICFAI LAW SCHOOL

Abuse of Dominance Position in Competition Law of India : Analysis
I. HISTORY

How Competition law Evolve in India

• The New policy of 1991 that led to Alleviation, Privatisation and globalization (LPG) of the Indian

Economy, more and more widened the house for economic process and reduced the role of presidency in
business and numerous different economic sectors.
• It absolutely was realized that a replacement competition law was conjointly drawn up as a result of the
prevailing Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) had become obsolete
in bound respects which currently there was a requirement to shift focus from kerb monopolies to
promoting competition within the Indian market.
• A high-level committee was appointed in 1999 to counsel a contemporary competition law in line with
international developments to suit the Indian conditions. The committee suggested the enactment of
latest competition law, known as the Competition Act, and also the institution of a contest authority, the
Competition Commission of Bharat, in conjunction with repealing of the MRTP Act and also
the polishing off of the MRTP Commission.
• The Competition Act came into existence in January 2003 (Bill accepted by the president) and also
the Competition Commission of Bharat (CCI) was established in Gregorian calendar month 2003. The
Act states that it shall be the duty of the Commission to eliminate practices having Associate in
nursing adverse result on competition, to market and sustain competition, shield the interests
of customers and guarantee freedom of trade carried on by different participants, in markets in Bharat.
( OBJECTIVE)
• Competition laws have an extended history. Some authors claim that the primary laws against anti-
competitive practices date as way back because the middle ages, once cartels, the supposed guilds,
were shaped in most European cities. The primary prohibition of contracts that restrain trade may
be derived to English common law of the first fifteenth century.1
• In October 1999, the govt. of Bharat established a High Level Committee beneath the situation of adult
male. SVS Raghavan [‘Raghavan Committee’] to advise a contemporary competition law for the country
in line with international developments and to recommend legislative framework, which can entail a
replacement law or appropriate amendments within the MRTP Act, 1969. The Raghavan
Committee conferred its report back to the govt. in 2000.
• On the idea of the recommendations of the Raghavan Committee, a draft competition law
was ready and conferred in Gregorian calendar month 2000 to the govt. and also the Competition Bill
was introduced within the Parliament that referred the Bill to its committee. When considering the
recommendations of the committee, the Parliament passed December 2002 the Competition Act, 2002.
• Hence, the Monopolies and Restrictive Trade Practices Act, 1969 [MRTP Act] was repealed and was
replaced by the Competition Act, 2002, with impact from one Gregorian calendar month, 2009.

Abuse of Dominance Position : Key Concept

The Competition Act, 2002 deals with mainly three concepts:

(I) Anti-Competitive Agreements
(II) Abuse of Dominant Position
(III) Combinations and their regulation

(I) Abuse of Dominant Position

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 (i) A person or an enterprise is deemed to be in dominant position when such entity is in a
position of strength and such position enables that entity to operate independently of
competitive forces prevailing within the relevant market or affects its competitors or
consumers or the relevant market in its favour. Dominant position has been defined in
broadly similar terms in the competition laws of several other jurisdictions. The European
Commission’s Glossary states that ‘a firm is in a dominant position if it has the ability to
behave independently of its competitors, customers, suppliers, and ultimately, the final
consumer.’ For the aim of Competition Act, 2002 the definition of ‘dominant position’
depends upon the definitions of relevant market, which are explained above. Thus, for an
abuse of dominance finding, it is necessary to first find the enterprise in question
occupied a position of dominance in terms of a particular product market and the
demarcation of the geographic marketplace for that product. Section 4 of the Act provides
for control of such abuse. It states that no enterprise or group abuse its dominant position.
It also provides for instances on what acts amounts to abuse of Dominant position. The
acts which amount to ‘abuse of dominant position’ are enshrined below:
(ii) (i) Direct or Indirect imposition of unfair or discriminatory condition in purchase or sale
of goods or services or prices in purchase or sale (including predatory price) of goods and
services. ‘Predatory price’ means selling of goods at a price which is below the cost of
production of goods or provisions of service in order to eliminate competitors or to reduce
competition. The Competition Commission of India (Determination of Cost of
Production) Regulations, 2009 are enacted for the determination of predatory pricing cost.
According to Regulation 3(1), average variable cost will generally be taken as a proxy for
marginal cost.
(iii) (ii) Limiting or restricting the assembly of products or services or putting restrictions
on technical or scientific development concerning goods or services to the unfairness of
consumers.
(iv)(iii) Indulging in practices which result in denial of market access in any manner.
(v) (iv) Using Dominant position in one relevant market to guard or to enter into another
relevant market.
(vi)One of the criticisms of Section 4 of the Act is that the offence of ‘abuse of dominant
position’ does not depend on a finding of an appreciable adverse effect on competition
(AAEC), as is required just in case of anti-competitive agreements and combinations. The
only place where AAEC is to be taken into consideration, when dealing with cases falling
under Section 4, is contained in the factors that the Commission is required to take into
consideration when determining whether an enterprise enjoys a dominant position under
Section 19(4) of the Act. Section 19(4) (1) states that the Commission may take into
consideration ‘any relative advantage, by way of the contribution to the economic
development, by the enterprise enjoying a dominant position having or likely to have an
appreciable adverse effect on competition’ while coming to a determination of whether an
enterprise enjoys a dominant position.
II. MEANING AND ITS PROVISION
Meaning : Abuse of dominant position took place when an ascendants firm in a market or an ascendants
group of firms engages in an act that is focused to eliminate or remove a competitor or to put off future
entries by the new competitors with a view to obtain less competition in the market.
In easy terms ‘dominant position’ means that one thing is in a very superior position as compared to others
supported some factors. This idea of dominance was, however, prevailing within the Indian society itself,
wherever one “caste” was thought-about to be superior to others. However, staying in a very better-off
position doesn’t damage anyone, unless a personal is exploiting such power. so having a dominant position
cannot be thought-about unhealthy as such. However, abusing such a footing supported its superiority is
taken into account inadequate.
Provision: Section 4(2) of the Act enumerates that there shall be associate abuse of a dominant position if
associate enterprise or a group: directly or indirectly imposes unfair or discriminatory conditions or prices
at intervals the acquisition or sale of product or services; restricts or limits production of product or
services at intervals the market; restricts or limits technical or scientific development regarding
merchandise or services to the bias of consumers; involves in practices resulting in a denial of market
 access; makes the conclusion of contracts subject to acceptance by entirely completely different parties of
supplementary obligations, which, by their nature or per business usage, haven't got any respect to the
subject uses its dominance in one market to enter into or defend its position in various relevant markets
(i.e., leveraging).

Abuse of dominant position- Concept

Abuse is expressed to happen once associate in nursing endeavour or a gaggle of endeavors uses its
prevailing state of affairs within the vital market in Associate in nursing exclusionary. The Act offers a
comprehensive list of practices which will comprise abuse of a dominant position and, within which
circumstances these are disallowed. Such practices can establish misuse simply once received by a shot
obtaining a charge out of a prevailing state of affairs within the pertinent market in Asian nation. Abuse of
dominant position is set as way because the predefined kinds of acts committed by a prevailing
endeavor.Any abuse of dominant position indicated within the Act by a prevailing firm can stand denied.
As per rationalization affixed to Section four of the Competition Act, 2002, dominant position implies the
standard of a shot within the vital market in Asian nation that empowers the enterprise to figure
autonomously of significant powers winning within the market and to influence the shoppers or
contenders or the market in support of it.

Relevant Market

The first issue to be resolved in quite whereas of supposed abuse of dominant position is that the ‘relevant
market’ within which the defendant party incorporates a predominant position. The explanation served by
portrayal a relevant market is to characterize the degree within that true of a shot is to be tried for strength
and misuse therefrom. The ‘relevant market’ is characterised as ‘product’ and ‘geography’, in different
words, the applicable market acknowledges the precise item/administration or category of things created
or edges rendered by AN enterprise(s) during a given geographic territory.

In the case of Atos Worldline v VeriFone India2, the Competition Commission of India (CCI), control
that the relevant product market is to be checked out from each demand and provide perspective supported
the characteristics of the merchandise, it’s worth and meant use.
Similarly, within the case of Surinder Singh Barmi v The Board of management for Cricket in Asian
nation (BCCI)3, it absolutely was control that the relevant market was settled on the thought of demand
interchangeableness of various kinds of amusement or recreation. It absolutely was control that a match
couldn’t be control to be substitutable by another game obsessed with neither qualities nor the intention of
the person looking the match.
Identification of abusive use of dominant position under Section 4(2)

There are 5 styles of abusive use of dominant position-

(i) Unfair or biased trade practices: In step with this, abuse of dominant position happens once
Associate in Nursing enterprise or gathering lawfully or in Associate in Nursing indirect means
forces detrimental conditions on the sale of {products} or rendering of prices or value in deal or
acquisition of untying value of products or administrations.
(ii) Limiting creation or specialised or scientific improvement: Associate in Nursing abuse of
dominant position happens within the market wherever a trial or cluster lawfully or in Associate in
Nursing indirect means forces conditions that limit the creation of the merchandise or specialised
or logical advancement transferral regarding the creation of the product or administrations.
(iii) Denial of access to showcase, barriers to entry Associate in Nursing development: Any condition
that produces rejection access to the market in any means can comprise an abuse of the dominant
position.
(iv) The imposition of useful commitments: once Associate in Nursing enterprise makes the end of
agreements subject to Associate in Nursing acknowledgment of advantageous commitments by
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 totally different parties and people commitments are to such Associate in Nursing extent that by
their terribly nature or as per business use in this field, they need no association with the subject of
the topic of the agreement.
(v) Protection of various markets–Protections of different markets–when an enterprise utilizes its
situation in a significant market to go into another market, at that point there is an abuse of
dominant position.

Thus it may be explicit that Section 4(2) of the Act indicates the incidental to practices by a dominant
enterprise or cluster of endeavours as misuses are foursquare or in Associate in Nursing indirect means of
imposing out of line or oppressive condition within the sell or purchase of {products} or administration;
foursquare or in Associate in Nursing indirect means of imposing Associate in Nursing unjust or detrimental
value in get or deal (counting unpitying cost) of product or administration; restricting or confining the
creation of products or arrangement of administrations or market; restricting or confining specialised or
logical improvement distinctive with merchandise or administrations to the fondness of buyers; denying
market access in any way; creating the end of agreements subject to acknowledgment by totally different
teams of useful commitments that, by their temperament or as per business use, don't have any association
with the topic of such agreements; and mistreatment its dominant state of affairs in one vital market to enter
into or guarantee alternative applicable markets.

Types of Dominant Position

There square measure 2 varieties of domination:

(i) Exploitative like excessive rating

Exploitative activities square measure those wherever the prevailing body abuses its strength by forcing
biased or doubtless low conditions on completely different companies or shoppers. within the case of,
Pankaj Agarwal v. DLF4, where, for a scenario concerning the distribution of flat, the agreements written
singularly by metropolis Land and Finance (DLF), make them to be discretionary regarding the designation
of super-area, closemouthed regarding information pertinent to the client, just like the range of the flat on
the ground, and to drop parts and relinquish booking sums. The Commission control the agreements to be
consumptive against purchasers, and consequently, it had been one-sided and abusive.

(ii) Exclusionary like a denial of market access

Exclusionary activities square measure those within which the dominant body utilizes its strength to confine
entry of competition into the relevant market. as an example, within the case of Re Shri Shamsher Kataria
v Seil Honda5, wherever there already existed agreement between the dominant entities and also the
Overseas Suppliers of distinctive vehicle components that unbroken the Overseas Suppliers from providing
components to free repairers, such understandings were control to be anti-competitive as they restricted
passage of recent companies.

Procedure followed by the Commission

Inquiry into the abuse of dominance

In exercise of powers unconditional beneath Section nineteen of the Act, the commission might raise into
any supposed negation of Section 4(1) of the Act that states regarding the abuse of dominant position.
Section 19(4) provides a close list of parts that the Commission can contemplate whereas asking into any
claim of abuse of dominance. a little of those elements is that the market share of the endeavour, size, and

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assets of the venture, size, and significance of the contenders, reliance of patrons, passage obstructions, and
social commitments and expenses within the pertinent geographic and item showcase.

Powers of the Commission

After request, the Commission could pass inter-alia any or the whole thing of the subsequent orders below
Section twenty seven of the Act:
1) Direct the parties to suspend Associate in nursing to not re-emerge into such an understanding;
2) Direct the endeavour or enterprise involved to {change} or change the agreement.
3) direct the enterprise involved to meet up with such totally different requests because the Commission
could pass and change to the bearings, as well as payment of expenses, presumptuous any; and
4) pass such totally different orders or problems such directions because it may esteem work.
5) Will force such penalization because it may think about work. The penalization will be up to 100% of the
traditional turnover for the last 3 preceding money years of endless offer of such individuals or ventures that
are parties to bid-rigging or covert bidding.
6) Section twenty eight permits the Commission to coordinate the division of a venture or enterprise
appreciating the prevailing scenario to ensure that such Associate in Nursing enterprise doesn’t showcase
Associate in Nursing abuse of dominant position.
Thus the offered remedies are, once the abuse of dominant position has been engineered up, the competition
specialists will take sure measures for the same:
(i) A restraining order.
(ii) The penalty which could be 100% of yearly turnover.
(iii) Direct the enterprise to create a move that the authority regards work.
(iv) Give the other request that it would suppose work.
(v) Divide the prevailing endeavour.
(vi) In the instance of attract to the Competition legal proceeding assembly, the assembly could
prepare for payment to the party bearing misfortune.
Thus with the increasing use of abuse of dominant position, our implementation of statutory laws
concerning the Competition Act conjointly became relevant. The explanation behind such a law is to
confirm the independence of business and conjointly to possess a unstigmatized economic outlook with
none concern of the dominant position of the other within the economy. Therefore, within the market,
there ought to be a civil right and civil right to any or all United Nations agency need to try to the
business. However, competition ought to prevail as long because it is healthy and as long because it
helps the whole society to grow however it becomes fatal once one starts to overpower the opposite in
their own ways that of business.

Bibliography
1. Bare Act

o Competition Act, 2002.

o The Competition Amendment Act, 2020.