Dominant Position and Abuse thereof Flashcards
(19 cards)
Different in CCI’s burden for dominant position
CCI does not have to prove AAEC. Only needs to prove
1. Concerned party is a dominant player
2. Concerned party has abused position
When does a government department come under CCI?
For the purposes of Section 4, A government department may have both, sovereign as well as
commercial functions. As far as its commercial functions are concerned, the said department is
an enterprise under Competition Act.
What does a relevant market essentially do?
It enables the competitive assessment by identifying SUBSTITUTABLE products or servivces which provide an effective competitive constraint.
Where is relevant market defined?
Section 2, both product and geographic is defined.
Demand side substitutability
Demand side substitutability exists when a sufficient number of purchasers of Product A regard product B as a credible alternative and would switch from A to B in response to a small change in relative prices.
What are the factors for relevant product market consideration?
Given in Section 19 of the Competition Act.
Relevant Market factor - Physical characteristics or end-use of goods
CCI distinguished between electronic ticketing machines and POS terminals
Relevant Market factor - Price of goods or service
Difference in price such as low end car and a luxury car are both modes of personal transport but not the same. in Coal india the CCI considered difference in price of domestic non-coking coal and imported non-coking coal.
Relevant Market factor - Consumer preferences
In BCCI case, cci considered consumer preference to conclude that the relevant market was the market for organisation of professional domestic cricket leagues in India.
Relevant Market factor - Exclusion of in-house production goods
which are produced and consumed in house by an enterprise are not available in the market.
Relevant Geographic Market factor - Need for secure or regular supplies
In Ladakh it will be difficult to procide after sales services for any electronic device. Therefore ladakh may be treated as a seperate geo market for after sales services.
Where has the CCI looked at consumers understanding of the market to determine relevant market?
CCI considered the consumers understanding of the car spare parts market and held that a consumer in the car aftermarket does not differentiate between a gear box and other ancilliary spare parts for like say a tire. therefore from the consumers perspecive does not put such spare parts in different relevant product markets.
EU definition for dominant position
The enterprise operates independently of competitive forces generated by its rivals. Dominance entails that the undertaking’s decisions are largely insensitive to the actions and reactions of competitors, customers and consumers.
Two types of abuses
- Exploitative
- Exclusionary
Exploitative Abuse
Dominant player may exploit other enterprises in its environment to increase its own revenue. It may force its suppliers to accept low prices or impose high prices on enterprises that purchase its products.
Exclusionary Abuse
These are the
abuses vide which a dominant
player tries to exclude an enterprise
from the market. For instance, a
dominant enterprise may offer
better prices to its subsidiary as
compared to the prices that it offers
to its subsidiary’s competitors. This
discriminatory pricing will ensure
that the competitors will not be able
to compete with its subsidiaries and
will be forced to exit the marke
United Brands Case
A price may be treated as excessive (Section 4 consideration) if it has no reasonable relation to the economic value of the product supplied.
IMPORTANT: Indepth analysis of Indian, American and European case law suggests what parameters for determining whether an intertwined market of primary product and its aftermarket shall be dileanated into two seperate relevant markets?
- Whether the consumer undertakes whole life cost analysis at the time of purchasing primary product
- Is it possible for a consumer to switch to aftermarket of another manufacturer
- What is the cost of switching to another primary product relative to the cost of the spare parts?
What does locked in mean?
If the secondary products for different brands are not compatible or substitutable, in a sense the consumer is locked in to use brand specific parts. Shamsher Kataria decided this.
