 Section 4 (1) prohibits any enterprise from abusing its dominant

position.
 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, (ii) affect its competitors or consumers or the
relevant market in its favour.
 Relevant market u/s 2 (r )as market which may be determined by
the Commission with reference to the relevant product market or
the relevant geographic market or with reference to both the
markets.
 Section 2 (s) states that the relevant geographic market means a
market comprising the area in which the conditions of competition
for supply of goods or provision of services or demand of goods or
services are distinctly homogenous and can be distinguished from
the conditions prevailing in the neighbouring areas.
 Section 19 (6) mentions the factors which are considered while
determining the relevant geographic market.
 They include (a) regulatory trade barriers, (b) local specification
requirements, (c ) national procurement policies, (d) adequate
distribution facilities, (e) transports costs, (f) language, (g) consumer
preferences, (h) need for secure or regular supplies or rapid after-sales
services.
 Section 19 (4) provides the factors that CCI will look into to examine
abuse of dominant position, (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, (g) monopoly or
dominant position whether acquired as a result of any statute or by
virtue of being a Govt. company or public sector undertaking,
 The usual forms of abuse of dominant position in India include,
directly or indirectly imposing unfair or discriminatory prices
relating to similar goods or services.
 Also applying trading conditions in the supply of goods or
services.
 Limiting supply or technical knowhow in respect of the goods.
 Denial of market access, like refusal to deal.
 Making the conclusion of contracts subject to acceptance by other
parties of supplementary obligations.
 Getting involved in predatory pricing.
 Using the dominant position to enter into another market.
 Creating entry barriers.
 Boycotting a group of suppliers in the retail chain.
 Section 4 (1) prohibits the abuse of its dominant position by an
enterprise.
 Section 4 (2) (a) sets out what conduct would be an abuse of
dominant position under the Act.
 Any practice set out in section 4 is treated as anti-competitive and
is subject to regulation by CCI.
 U/s 4 (2) (a) – An enterprise is said to abuse its dominant position
if it directly or indirectly, impose unfair or discriminatory (i)
condition in purchase or sale of goods or service,
 (ii) price in purchase or sale (including predatory price) of goods
or service.
 Dominant position includes a position of strength enjoyed by the
enterprise in the relevant market, in India to (i) operate
independently of competitive forces,
 (ii) affect its competitors or consumers or the relevant market in its
favour.

 Cases.
 Hoffman La Roche v. Commission of The European Communities
In Brussels, Case 85/ 76 – The European Commission held that
Roche, with a dominant position within the common market
relating to certain vitamins, abused that position by concluding
with 22 purchasers of these vitamins, agreements which contained
obligation upon them, to buy all or most of their requirements of
vitamins exclusively, or in preference from Roche.
 The Court listed the following as the relevant factors in
determining the existence of a dominant position; the relationship
between the market shares of the undertaking and its competitors
 Especially those of the next largest,
 The technological lead of an undertaking over its competitors,
 The existence of a highly developed sales network,
 The absence of potential competition.
 The Court held that the exclusive purchase contracts amounted to
abuse of dominant position because they distorted competition
between producers as they deprived consumers of Roche of the
scope of choosing their suppliers.
 And the effect of the contract was to apply dissimilar conditions to
equivalent transactions, that is Roche would be charging two
different prices for the same quantity of the same product,
depending upon whether the buyer was prepared to forego
purchasing from Roche’s competitors.
 Article 82 of the EC Treaty mentions the lists of acts of abuse.
 Any abuse by one or more undertakings of a dominant position
within the common market or in a substantial part of it shall be
prohibited as incompatible with the common market in so far it
may affect trade between Member States.
 Such abuse shall consist in,
 (a) directly or indirectly imposing unfair purchase or selling prices
or other unfair trading conditions,
 (b) limiting production, markets or technical development to the
prejudice of consumers,
 (c ) applying dissimilar conditions to equivalent transactions with
other trading parties, thereby placing them at a competitive
disadvantage,
 The Commissions Order in Ajay Devgan Films v. Yash Raj Films Private
Limited, Case No. 66 of 2012  raises some testing questions, which is
probably why the informants were keen to appeal to the Competition
Appellate Tribunal (For the record, the COMPAT issued notices to opposite
parties but refused to stay the release of the film.)
 whether the relevant market in the present case should have been restricted
to only single screen theaters and not all theaters, including multiplexes
across the country.
 There is also another issue on the overall presence of single screen theaters
across the country. It is a well known fact that cities and large towns are
predominantly dominated by multiplexes and single screen theaters are
prevalent mostly in small towns and villages (though admittedly it is
important to conduct a proper economic analysis and survey on this
subject). Thus, consumers in rural areas would stand to lose the right of
choice as to what film to watch if the single screen theater in their area
could only screen one film over a particular period of time.
 Obviously, the holiday season means a larger audience
across theaters and so prima facie one may feel that the
tie-in arrangement may be anti-competitive. However,
the Competition Act in determining the relevant
market does not recognize the concept of a particular
period of time in determining relevant market either
under the definitions in Section 2 or under Section
19(5), (6) and (7) of the Act. Lawyers may try to
interpret it into the factors enumerated under Section
19, however, I do not believe such interpretations
would be able to stand judicial scrutiny and feel it
would be stretching Section 19 a bit too far.
 The Commission seems to be correct in its analysis that Yash Raj Films does not
have a dominant position in the market. Fair trade regulator CCI has rejected
actor-producer Ajay Devgn’s complaint alleging abuse of dominant position by
Yash Raj Films, saying that there are no violations of competition norms in the
case.
 “The Commission is prima facie of the opinion that there is no contravention of
the provisions of the (Competition) Act in the present case,” it said in an order
dated November 5, 2012.
 The CCI said Devgan did not place on record any data related to market share or
economic strength to show how the YRF was in a dominant position in the
relevant market.
 “It was argued by the counsels for the informant that the opposite parties were
dominant because Opposite Party was big banner production house and had big
name and had given several blockbuster films.
 “No enterprise can be considered dominant on the basis of big name. Dominance
has to be determined as per law on the basis of market share, economic strength
and other relevant factors stated under... the Competition Act,” the order said.
 (d) making the conclusion of contracts subject
to acceptance by the other parties of
supplementary obligations which, by their
nature or according to commercial usage, have
no connection with the subject of such
contracts.
 Section 18 of the Competition Act 1998 UK also
prescribes the same conditions of abuse of
dominant position.
 Matsushita Elec. Industrial Co. and others v. Zenith Radio Corp.
and others, 475 US 574 (1986) – The action was initiated under
sections 1 and 2 of the Sherman Act, section 2 (a) of the Robinson
Patman Act, and section 73 of the Wilson Tariff Act, by American
companies manufacturing and selling television sets, against a
group of Japanese companies.
 The charge was that the Japanese companies had entered into an
illegal conspiracy to drive American firms from the American
consumer electronic product market.
 The scheme was to fix and maintain artificially high prices for
television sets sold by petitioners in Japan and also to maintain low
prices for the sets exported to and sold in the US.
 The Japanese companies denied any conspiracy, and submitted that
they had no motive to get involved in predatory pricing conspiracy.
 The Court explained the concept thus:
 A predatory pricing conspiracy is by nature speculative.
 Any agreement to price below the competitive level requires the
conspirators to forgo profits that free competition would offer them.
 For the investment to be rational, the conspirators must have a
reasonable expectation of recovering, in the form of later monopoly
profits, more than the losses suffered.
 The Court held that the conspiracy alleged against 21 Japanese
companies, to charge below-market prices, to stifle competition, for
a number of years, was considered difficult to execute.
 The Court held that evidence of a conspiracy was not satisfactory
and the Court of Appeals had failed to consider the absence of a
plausible motive for the Japanese companies to engage in predatory
pricing.
 The SDP is a loyalty program under which Canada
Pipe offers rebates and discounts to distributors that
purchase all of their requirements for cast-iron pipe,
cast-iron fittings and mechanical joint couplings
(collectively known as cast-iron "drain, waste and vent"
or DWV products) exclusively from Canada Pipe.
 Under the terms of the consent agreement, Canada
Pipe will implement and offer a modified rebate
program to distributors in Canada as an alternative to
the SDP, which Canada Pipe may continue to offer.
 The modified rebate program will provide rebates and
multiplier discounts to distributors meeting a minimum
purchase requirement, but will not be conditional on
exclusive purchases of DWV products from Canada
Pipe. Significantly, total rebates and discounts under the
SDP (or any other rebate program) are not to exceed
those available under the modified rebate program,
although Canada Pipe retains the right to offer
additional price concessions or discounts "on an as-
needed basis in order to match what Canada Pipe
believes to be legitimate competing offers." The consent
agreement therefore effectively nullifies Canada Pipe's
SDP during the five-year term of the agreement.
 The Bureau began its challenge of the SDP in
2002, with an application to the Tribunal seeking
an order for its elimination as a contravention of
the Act's civil exclusive dealing (s. 77) and abuse
of dominance (s. 79) provisions. The Tribunal
rejected the Commissioner's application in
February 2005, finding that while Canada Pipe
was dominant in relevant markets, its conduct
did not amount to an "anti-competitive act" and
did not prevent or lessen competition
substantially.
 On appeal, the Federal Court of Appeal ordered a re-
determination of the case in June 2006, finding that the
Tribunal erred by applying the incorrect legal tests under s.
79. With respect to the test for a "substantial lessening or
prevention of competition," rather than focusing on whether a
substantial level of competition continued to exist (evidenced
by new entry and switching by distributors), the Court held
that the Tribunal should have asked whether relevant
markets would have been substantially more competitive "but
for" the impugned practice of anti-competitive acts. The Court
also held that the Tribunal erred in requiring a link between
the impugned conduct and a negative impact on competition
for a "practice of anti-competitive acts" to exist.
 Instead, the Court held that an anti-competitive act is
identified by having as its purpose (based on the overall
character of the act, including its reasonably foreseeable
or expected effects, any business justification and
evidence of subjective intent) an intended predatory,
exclusionary or disciplinary effect on a competitor. Effects
of the practice on competition are examined in
determining the existence of a substantial lessening of
competition. Finally, the Court held that for a valid
business justification to exist, an impugned practice must
have a credible efficiency or pro-competitive
explanation; enhanced consumer welfare is on its own
being insufficient.
 In US and China monopoly power is determined in
more precise economic terms, by looking to whether
the firm has the ability to raise prices substantially
above competitive levels for a sustained period of time.
 If a firm's power to control prices is only temporary --
until, for example, other firms complete their entry into
the market -- we would not find a dominant market
position, since the market itself would correct any
competitive problems without the need for
intervention by the antitrust authorities.
 The experience in the United States indicates that a
market share of 50 percent is too low to provide a firm
with monopoly power. We generally would not begin
examining whether a firm has a dominant market
position unless it has at least a 60 or 70 percent market
share. Even when a firm has such a share, we examine
the actual market situation -- including barriers to
effective new entry, the likelihood of leapfrog
competition, and the durability of the high market
share -- to determine whether the firm actually has the
power to raise price significantly over competitive
levels
 Low prices -- even prices below cost -- should be lawful unless they
can be shown to harm the competitive process. Theoretically, a
firm with a dominant market position could engage in below-cost
pricing that would be anticompetitive and that would warrant
antitrust enforcement action. This could occur where a dominant
firm prices its products below cost for a sufficient time to drive out
competitors, and then, once it has succeeded in creating or
strengthening its monopoly power, recovers the lost revenues by
raising prices to monopoly levels. We call this "predatory pricing."
But our practical experience is that it almost never makes economic
sense for a firm with a large market share to use this technique to
obtain monopoly power, since it must lose money on a large
volume of sales in order to drive competitors out of the market,
and the firm may never recover these lost revenues.
 The competition agencies across the world had
divided abuse of dominant position into two
categories, (a) exclusionary abuses and (b) exploitative
abuses.
 In exclusionary abuse, the firm attempts to prevent the
entry or expansion of new competitors in the relevant
markets.
 Exclusionary abuses are tested in three ways.
 One is the sacrifice test, the other is as efficient
competitor test, and third is the consumer harm test.
 The sacrifice test identifies as abuse any behaviour by a dominant
firm that would be profitable, or make business sense, but for its
tendency to eliminate or lesson competition.
 The as efficient competitor and the consumer harm test defines as
exclusionary only those practices that exclude as efficient rivals
and therefore it is a standard under which competition , as
opposed to the competitors is protected.
 According to the consumer harm test , the law against
exclusionary practices by dominant firms should prevent the
exclusion of rivals whose presence enhances consumer welfare.
 In practice, the consumer harm test would imply that conduct is
not exclusionary unless it can be shown to have the effect of
raising prices and reducing output, again a very broad standard.
 The Antitrust Division's anti-cartel enforcement program has been
built over many years of dedicated effort. Based on US experience,
the following seven practices can be discussed that have
contributed to the success of the program: (i) focus prosecutors on
"hard core" collusive activity; (ii) treat cartels as serious crimes;
(iii) provide an amnesty program and "amnesty plus"; (iv)
vigorously prosecute obstruction of justice; (v) charge cartels in
conjunction with other offenses; (vi) provide transparency and
predictability; and (vii) publicize these enforcement efforts.
Together these practices serve to emphasize the importance of
cartel enforcement, change the cost-benefit calculation to cause
firms to avoid or withdraw from cartel activity, and draw public
attention to the harm that cartels cause and the public benefits
from stopping them.
 At the same time, the Division focuses its criminal
enforcement only on hard core violations. By focusing
narrowly on price fixing, bid-rigging, and market
allocations, as opposed to the "rule of reason" or
monopolization analyses used in civil antitrust law, US
have established clear, predictable boundaries for
businesses. This narrow focus also helps conserve
prosecution and judicial resources by reducing the
number of potential cases and also by reducing the
complexity of proof: proving the existence of an
agreement establishes the violation without the need for
the detailed economic testimony common in civil
antitrust actions.
 Second, the penalty for cartel violations should fit the crime.
Penalties should reflect the fact that cartels inflict enormous
consumer harm with no corresponding efficiency gains. Because
cartelists are capable of making a cost/benefit decision that
discounts a possible fine as merely a cost of doing business
illegally, cartel penalties not only should be large enough to negate
financial incentives to conspire, but also should include substantial
jail time for responsible individuals. Nothing is a greater deterrent
and nothing is a greater incentive for a cartelist, once exposed, to
cooperate in the investigation of his co-conspirators than the threat
of substantial incarceration in a U.S. prison. Keeping our criminal
cases focused on hard core conduct that has no plausible business
justification ­and that usually occurs in secret, accompanied by
coverups and lies ­also makes judges and juries feel more
comfortable in sending these defendants to jail.
 Third, a criminal antitrust program should provide for
an amnesty or leniency option and for "amnesty plus."
Amnesty programs are invaluable in detecting cartels
and in collecting the evidence necessary to obtain a
conviction. It is notoriously difficult to discover cartel
behavior or, once discovered, to compile sufficient
evidence to successfully prosecute cartel members in
court. To penetrate the elaborate concealment strategies
cartels use, prosecutors must have a tool to convert cartel
members into cooperative witnesses, so that prosecutors
can gain access to background information, testimony,
and the documents that otherwise might be destroyed.
Amnesty programs are such a tool.
 Under EU law, very large market shares raise a presumption that a firm is
dominant, which may be rebuttable. If a firm has a dominant position, because it
has beyond a 39.7% market share then there is "a special responsibility not to allow
its conduct to impair competition on the common market" Same as with collusive
conduct, market shares are determined with reference to the particular market in
which the firm and product in question is sold. Then although the lists are seldom
closed, certain categories of abusive conduct are usually prohibited under the
country's legislation. For instance, limiting production at a shipping port by
refusing to raise expenditure and update technology could be abusive.Tying one
product into the sale of another can be considered abuse too, being restrictive of
consumer choice and depriving competitors of outlets. This was the alleged case
in Microsoft v. Commission leading to an eventual fine of €497 million for including
its Windows Media Player with the Microsoft Windows platform. A refusal to
supply a facility essential for all businesses attempting to compete can constitute an
abuse. An example was a case involving a medical company named Commercial
Solvents. When it set up its own rival in the tuberculosis drugs market, Commercial
Solvents were forced to continue supplying a company named Zoja with the raw
materials for the drug. Zoja was the only market competitor, so without the court
forcing supply, all competition would have been eliminated.