3. 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
5. Objective Of This Act
1. Restrict monopoly
2. Predatory pricing
3. Unfair trade practices – price discrimination
4. To prevent abuse of dominant position
6. 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.
7. 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)]
8. 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.
9. 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.
10. 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
11. A firm may achieve dominance
through –
•
Innovation
•
Superior product
•
Affordable price
•
Efficient distribution system
•
Satisfactory after sale service
12. 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.
13. 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)]
14. 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].
16. 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.
17. 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.
18. 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.
19. 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.
20. 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.
