SUBMITTED TO PROF. ANUSMITA CHANDA

SUBMITTED BY YASH VARDHAN

TOPIC

ABUSE OF DOMINANT POSITION

IN COMPETITION ACT 2002

INDEX

1. what is dominance

2. what is relavant market

3. factors determining dominant position

4. what is abuse of dominance

5. it's unfair trade practices

MRTP ACT 1969 IS RELACED COMPETITION ACT 2002 BY

Objective Of This Act

1. Restrict monopoly

2. Predatory pricing

3. Unfair trade practices price discrimination

4. To prevent abuse of dominant position

What Is Dominant Position

Dominant position means position of strength which is enjoyed by an enterprise in the relavant market,Which enables it to :- 1. Operate independently of the competitive forces prevalling in market.

2. Affects its competitors, consumers or relavant market in its favour.

Relavant Market [sec-2(r)]

Relavant market means the market which is determined by the commision with reference to the :-

1. Relavant product market [SEC- 2 (t)]

2. Relavant geographical market [SEC- 2 (s)]

Relavant Product Market

Relavant product market is defined in terms of Substitutability.It means it is the smallest set of products (goods and services) which are substitutable among themselves( i.e they can be used in place of others). For example cars market consists of various relavant product market : 1. small 2. mid size 3. luxury cars

Substitutability will not be done if there is any small changes in the prices.

Relavant Geographic Market

It means a market comprising the area in which the conditions of competition for supply of goods , provision of services or demand of goods and services are distinctly( easy to percieve) homogenious and can be distinguished from the conditions prevalling in the neighbouring areas.

Factors Determining Dominant Position

Various factors are :-

1. Size and resources of enterprise

2. size and resources of competitor

3. Economic power of enterprise

4. Dependence of consumers on the enterprise

5. Extent of entry and exit barriers in the market

6. Vertical integrate

A firm may achieve dominancethrough InnovationSuperior productAffordable priceEfficient distribution systemSatisfactory after sale service

Abuse Of Dominant Position
Sec- 4

Abuse of dominance means :-

1. when an enterprise or group of enterprise

2. uses its dominant position

3. in the relavant market

4. in an exploitative manner or exclusionary manner.

Actions Considered As Abusive

Actions that are considered as abusive are :-

1. Unfair or discriminatory price( incl. Preadtory pricing) [sec-4 (2)(a)]

2. Restricting production of goods and services [sec-4 (2)(b)]

3. Denying market access [sec-4 (2)(c)]

4. Using dominant position to enter into new market [sec-4 (2)(e)]

Penalties By CCI [se-27]

Various penalties stated by competition commision of india are :-

1. CCI may direct enterprise to discontinue such abuse of dominant position.

2. may impose penalty not exceeding ten percent of the average turnover of last three preceding financial years.

3. Division of enterprise abusing dominant position [sec-28].

Example

COAL INDIA LTD.

About COAL INDIA LTD.

1. It is a public sector undertaking (PSU'S)

2. Market share of 70 % in india. (dominant position)

3. Several advantages vested by law as it is PSU.

What Is The Case ?

This is the first instance of PSU'S.

Abusive conduct in this instance was that

1. Imposition of one sided and unfair conditions in relation to supply of coal to various power companies. i.e that CIL is supplying low quality coal at higher rates/ prices.

2. No scope for biletral discussions.

Actions By CCI

1. Imposing a penalty on CIL of rs 1773 crore.

2. CCI orderd that fuel supply agreements should be modified in consultation of all the stakeholders.

Actions By CCI

1. Imposing a penalty on CIL of rs 1773 crore.

2. CCI orderd that fuel supply agreements should be modified in consultation of all the stakeholders.

DLF CASE

The CCI found DLF to be abusing its dominance in relation to the

1. ostensibly unilateral terms and conditions of the apartment purchase contracts, 2. on the basis of a complaint filed by the apartment owners association.

Actions by CCI are:-

1. penalty of 6.3 billion rupees

2. make biletral contracts.