An Overview Of Regulations Of Abuse Of Dominant Position Under Competition Act
- IJLLR Journal
- Jan 20
- 2 min read
N Nikhil Teja, BA.LLB, LLM, Karnataka State Law University
1. Introduction:
General competitive markets, the presence of multiple firms ensures that no single entity can unilaterally dictate market conditions, such as pricing, supply, or quality of goods and services. However, when a set of organizations attains leading position, it can disturb this balance by exercising disproportionate market power.1 The concept of dominant position is active in competition law, it highlights fine line between healthy market leadership and harmful market control. While dominance itself is not prohibited, the potential for abuse necessitates close monitoring and regulation to prevent actions that could stifle competition and harm consumers.
1.1. Dominant Position:
A dominant position denotes the facility of companies to operate with large degree of autonomy in marketplace, usually because such a firm has huge market shares, is in a superior financial position, or has commanding control over resources. Dominance thus enables an organization to have substantial effect over the market’s, often at expense of effective competition2. The said concept is frequently judged on a number of issues, including:
Dominance can be assumed for firm with maximum market portion, particularly if that share is way above rivals.
High entry barriers to entry, whether in terms of capital investment, ownership of essential facilities, or access to raw materials, may cause a dominant position of the firm by deterring original applicants in the markets.
The relationship of firm with its customers also comes into play. If customers have few choices, the firm is stronger place to order prices and sale, the number and strength of competitors come into consideration. If there are a few competitors to a market, a firm is added probable to adore a leading position.
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