INTERNAL FACULTY SEMINAR

In the series of Internal Faculty Seminar, today on 28th December 2020, Seminar was organized by School of Law on the topic Predatory Pricing: An Abuse of Dominant Position. This Seminar enabled the Faculty to understand the relevance of predatory pricing in competition law and how it is used as a price strategy by enterprises to manipulate the market and disturb the competition. In the Seminar the topic was presented by Mr. Kshitij Kumar Rai, Assistant Professor, School of Law. He explained the demerits of predation of price and how an enterprise manipulates the price of product or services by selling it below its cost of production to reduce the competition or eliminate the competitors from the market. It is an abuse of dominant position and taken as anti-competitive activities under the Competition Act.

In current scenario, every enterprise based on their financial strength and market share, provide huge discounts, and offers to consumers on their products or services, to induce and attract them. It is found to be better, for the short run, as consumers get huge benefits and enjoyment along with increased leverage and wide choice, but same cannot be beneficial for the long run. It is done by those enterprise holding any position of strength or working independently. Hence, it is an abuse of dominant position, if it creates unfair or discriminatory condition or price on sale or purchase of goods or services, restricts the production and technical or scientific development, denying market access to competitors, and using the dominant position of one relevant market to protect the other relevant market.

While taking the cognizance of the complaint, the Competition Commission of India (CCI), keeps track on factors including market share, size and resources of the enterprise, its economic power, service network, dependence of consumers, entry barriers, buying power, market structure, social obligation, and relative advantage. In matters like MCX v NSE, Transparent Systems v Tecro Systems and Bharti Airtel v Reliance Jio, the CCI has dealt with different concepts like zero price policy, collective dominance, and new entities with technological upgradation. Similarly, the apex court in Uber v CCI, found Uber liable based on relevant market. Thus, the low and discriminatory pricing and intention to disturb the competition and eliminate the competitors, plays a significant role in concluding the predatory pricing.