The Competition Commission of India (CCI) has since its inception dealt with as many as 846 cases (till June 2022) as regards abuse of dominant position, Rajesh Verma, Secretary, Ministry of Corporate Affairs, has said. 

Of this 846 cases, one was initiated suo motu by the Commission, 794 cases were admitted on receipt of complaints by the consumers or their associations or trade associations and 8 cases were referred by the Central or State governments, Verma wrote in MCA’s monthly newsletter for June.

Abuse of dominance

Verma highlighted that Section 4 of the Competition Act 2002 prohibits the abuse of dominance by any enterprise or group of enterprises.  He said that under the Competition law, enacted in 2002, dominance is not bad per se, but its abuse is prohibited. 

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A firm is said to be in a dominant position if it enjoys a position of strength in the relevant market in India, which enables it to operate independently of the competitive forces prevailing in the relevant market, or affects its competitors or consumers or the relevant market in its favour. 

Verma said that a firm may achieve a dominant position in the market legitimately through innovation, entrepreneurial efforts, etc. 

But abuse of its dominant position is stated to occur when an enterprise (or a group of enterprises) uses its leading position in the relevant market in an exclusionary or exploitative manner.

The exploitative manner could include excessive or discriminatory pricing, excessive sale/purchase conditions etc, and exclusionary manner of abusing dominant position could be denial of the market access, refusal to deal etc. 

Verma said that CCI can direct an investigation by the Director General and upon receipt of such DG report can either (I) direct dominant entity to discontinue abuse of dominant position; (ii) impose penalty of up to 10 per cent of the average of the turnover for the last three preceding financial years; (iii) direct modification of the agreements with abusive clauses and (iv) order division of dominant enterprises to ensure that such enterprises do not abuse their dominant position. 

Dominant position

Verma also highlighted that the concept of ‘dominant position’ is not just limited to India but is an international phenomenon. There are anti-trust laws in two globally prominent markets —the US and the EU. A basic distinction in enforcement approach in the EU and the US is that in the US, there is a criminal enforcement of anti-trust laws while in the EU it is administrative. 

As the Competition Act in India enters its 20th year, it is evident that the legal framework has contributed in striking a balance between fostering competition and safeguarding the interests of the market, Verma added. 

The Competition Act 2002 is in sync with the philosophy of modern competition laws and plays a critical role in ensuring competition culture and compliance. The aim is to strike a balance and remove barriers while ensuring that no single firm gets to “amass power”, Verma said.