Dominant position
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.
Related concepts
- Anti-competitive agreements
- Appreciable adverse effect on competition
- Horizontal agreement
- Bid rigging
- Vertical agreement
- Resale price maintenance
- Leniency programme
- Relevant market
- Abuse of dominance
- Predatory pricing