OECD kpcdb

1. Scope

 

As per Section 4 of the Act, no enterprise or group shall abuse its dominant position. There shall be an abuse of dominant position if an enterprise or a group

 

a)  directly or indirectly, imposes unfair or discriminatory condition in purchase or sale of goods or service or price in purchase or sale (including predatory price) of goods or service;

b)  limits or restricts production of goods or provision of services or market there for or technical or scientific development relating to goods or services to the prejudice of consumers; or

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.

2. Assessment

As per the Section 4 of the Act, dominant position means a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to—

 

• operate independently of competitive forces prevailing in the relevant market; or
• affect its competitors or consumers or the relevant market in its favour.

 

There are no defined market share thresholds for a presumption of dominance.

The CCI while inquiring whether an enterprise enjoys a dominant position or not under section 4, has due regard to 13 factors which are listed in Section 19 (4) of the Act, 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;

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;

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 an appreciable adverse effect on competition;

m)  any other factor which the CCI may consider relevant for the inquiry.

3. Remedies and sanctions

See Section I.4 above. Under Section 27, where the CCI identifies an abuse which contravenes Section 4, it may impose upon the enterprise to discontinue the abuse, or a penalty of up to 10% of the average of the turnover for the last three preceding financial years, or the highest between up to three times the profit of the enterprise for each year of the continuance of the agreement or up to 10% of the turnover for each year of the continuance of the agreement.

 

 

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