OECD kpcdb

1. Scope

 

Section 10 of the Act (abuse of dominant position) prohibits abuse of dominant position including, as examples, the following conducts:

 

a)  Direct or indirect imposition of unfair prices or trading conditions on any supplier or customer

b)  Limiting or controlling production, market outlets or market access, technical or technological development, or investment.

c)  Refusing to supply to a particular enterprise

d)  Applying different conditions to equivalent transactions with other trading partners,

e)  any predatory behaviour towards competitors

2. Assessment

Section 2 of the Act defines a dominant position as one where one or more enterprises possess such significant power in a market to adjust prices or outputs or trading terms without effective constraints from competition or potential competitors.

 

Section 10 (4) stipulates that the fact that the market share of an enterprise is above or below any particular level shall not in itself be regarded as conclusive as to whether that enterprise occupies, or does not occupy, a dominant position in that market.

 

The Guidelines on Abuse of Dominant Position sets out that Section 10 essentially deals with two kinds of abuse: exploitative abuse, e.g. mainly setting high prices; and exclusionary abuse, e.g. predatory conduct that stops competitors from competing which leads, indirectly, to higher prices, lower quality products, less innovation, etc.

 

The Guidelines also provide further information as to how the analysis will be undertaken for each of these types of abuses.

 

The Guidelines on Abuse of Dominant Position specifies which factors are considered to assess the dominance:

 

a)  A market share above 60% to be indicative that an enterprise is dominant;

b)  Constraints imposed by existing competitors: market shares;

c)  Other competitive factors: Degree of product differentiation, likely response by buyers to price increases, the degree to which innovation drives competition;

d)  Constraints imposed by potential competitors: are there barriers to new entry?; economies of scale or size; economies of scope; regulated entry; limited access to necessary inputs or distribution outlets; network effects; high sunk costs; conduct by incumbents; or

e)  Other constraints.

3. Remedies and sanctions

See Section I.4 above.

 

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).