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Discussing Abuse of Dominance under Competition Law of India

Riya Raj is a Law Student from Amity Law School, Noida

Published onDec 15, 2021
Discussing Abuse of Dominance under Competition Law of India

The Competition Act, 2002 came into the picture to regulate competition amongst businesses in India and restrict adverse activities in this regard. It replaced The Monopolies and Restrictive Trade Practices of 1969.1

In this highly competitive world, everyone works really hard to be at the top and once they become the top-notch players, one would do almost anything to remain on the top. ‘Dominant position’ in simple sense means a position superior to others which conclusively allows the dominant to guide or impose rules on the inferiors. More often than not, this position becomes dominant on other players in the market in the same league. Had the competition laws not been strict, it would create menace and the tyranny-like situations in the market.

‘Abuse of Dominance’ as the name suggests occurs when a player having a monopoly in the market uses that position to dominate other players that would eventually result in either establishment of indirect control over the other players or would create so much pressure that the latter would have to exit the market. This would result in a monopoly and the customers would have to suffer too as there won’t be many options left for a particular product.

Legally speaking, The Competition Act, 2002 under section 4 defines the ‘dominant’ position as the prevailing position of an endeavor in the market that empowers the enterprise to function autonomously and eventually result in the conduct of competitors and customers.

Section 4 states that no enterprise shall abuse its dominant position in the market by imposing either directly or indirectly: - 2

  • Unfair prices on commodities,

  • Unfair conditions on the sale of commodities.

Herein, it is explained that such conditions on the sale of goods and services shall not include prices (including predatory prices) or conditions necessary to survive in the competitive market.

(Predatory prices are prices that are below the justified prices and are often opted upon to increase the customer base.)


Whether or not a competitor in a dominant position can be determined by assessing the following factors: -

  • The market share of the competitor.

  • The size of the enterprise in relevance to its assets.

  • The size and number of competitors.

  • The financial power of the “dominant”

  • The customer base of the competitor

  • The degree of section and exit barriers in the market

  • The purchasing powers

  • The market structure and the type of market in question

  • How the dominant position acquired


Dominance being practiced by competitors can be defined as below: -

  1. Exploitative Behavior

  2. Exclusionary Behavior

  1. Exploitative Behavior (Excessive or Discriminatory Pricing)

When the prevailing body uses its superior strength and power to exploit the prices of a commodity, it is termed as exploitative behavior of the dominant to abuse the dominant power.

CASE: Pankaj Agarwal v. DLF: The Delhi Land and Finance (DLF) was accused of exploitative behaviour by the Commission. The Commission held the agreements to be exploitative against purchasers, and consequently, it was one-sided and abusive.

  1. Exclusionary Behaviour (Denial of Market Access)

When the dominant position is used to stop other competitors from entering the market, such behaviour is exclusionary in nature.

CASE: Re Shamsher Kataria v. Sheil Honda: The government has ruled that the agreement between the dominant firms and the Overseas Suppliers of unique vehicle parts is anti-competitive.


Once it is noticed by the relevant adjudicating authority that there exists an abuse of dominance in a relevant market, they would establish an inquiry into the matter in relevance to Section 19 of the Act. The enquire will take into account the activities being carried on by the accused and come to a conclusion. If it gets established that in fact there has been an abuse of dominant position, the committee has been given certain powers under section 27 of the Act to stop such activities and charge the ones involved in it.

The powers of the commission pertaining to assigning punishment to those abusing the dominant position in the relevant market, defined under section 27 of The Competition Act, 2002 are as follows: -

1) direct the parties to suspend and not to reappear into such an understanding;

2) direct the endeavour or enterprise concerned to alter or change the agreement.

3) direct the enterprise concerned to submit to such different requests as the Commission may pass and conform to the bearings, including payment of expenses, assuming any; and

4) pass such different orders or issues such directions as it might esteem fit.

5) can force such punishment as it might consider fit. The punishment can be up to 10% of the normal turnover for the last three preceding financial years of an endless supply of such people or ventures which h are parties to bid-rigging or collusive bidding.

6) Section 28 enables the Commission to coordinate the division of a venture or enterprise appreciating the prevailing situation to guarantee that such an undertaking doesn’t showcase an abuse of dominant position.


In the market, there should be an equal opportunity and equal opportunity for all who want to do the business. However, it becomes disastrous when one starts to overpower the other in their own ways of business. The reason behind such a law is to ensure the independence of business and to have an unstigmatized economic outlook without any fear of the dominant position of any other in the economy.

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