Dominant position

Indian Economy glossary

Also called: Dominance · Topic: Market Structures, Market Failure and Competition · NCERT: Beyond NCERT

Meaning

A dominant position is a position of strength that lets a firm act independently of competitive forces, or affect competitors or consumers in its favour. It is judged within a relevant market (the product and area where firms really compete). Under Section 4 of the Competition Act 2002, being dominant is lawful. Only abusing it is illegal. Abuses include:

  • unfair or discriminatory prices;
  • predatory pricing (selling below cost to push out rivals);
  • denying market access;
  • tying (forcing buyers to take an unrelated product);
  • leveraging (using strength in one market to enter or protect another).

Example

The CCI found Google dominant in the Android ecosystem and fined it ₹1,337.76 crore in October 2022. The penalty was for abusing that position, not for being large. NCLAT upheld the penalty in March 2023.

Don't confuse with

  • Monopoly: in economics, a monopoly means a single seller. A firm can be dominant in law without being the only seller.
  • Abuse of dominance: this is the illegal conduct. Dominance itself is not an offence.

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