Nikita Koradia, Rohan Dembani
Predatory pricing policy in India is at crossroads
with Jio becoming the largest player in the wireless telecommunication market
and reducing the market to a triopoly. There is a need for the Competition
Commission of India to reflect on its enforcement policy under Section 4 of the
Indian Competition Act, 2002. The article starts by exploring the concept of
predatory pricing and why it remains a contested concept. The second part of
the paper argues the need for revisiting the dominance requirement to initiate an
investigation under Section 26 read with Section 4 of the Indian Competition
act by drawing inferences from US and France antitrust law. It shall discuss in
detail the need for adopting an attempted monopolization benchmark for cases of
predatory pricing. The third part proposes two thresholds (a) common market
share and; (b) proof of exclusion, that the commission can adopt in order to
differentiate legitimate promotional pricing from illegitimate predatory
pricing. The article questions the major premises on which predatory pricing
abuse can be invoked. It will be illustrated, that a non-dominant entity can
achieve the same result of distorting competition as a dominant entity can, by
predation. In particular, it will be argued that for an entity to commit
predation, market power is not a prerequisite instead the commission must look
at the effect in the market. Therefore, the Competition Commission of India is
well advised to revisit the prerequisite of dominance for predatory pricing
wrongs.
Predatory pricing, promotional pricing, exclusion,
dominance.
VOL.13, ISSUE No.3, September 2021