Skip to main content
SpringerLink
Log in

Legal Treatment of Abuse of Dominance in Indian Competition Law: Adopting an Effects-Based Approach

  • Published:
Review of Industrial Organization Aims and scope Submit manuscript

Abstract

Abuse of dominance investigations around the world are often form-based, primarily centred on the pre-requisite of dominance. This may lead to false positives or restrict innovation in today’s dynamic and complex markets. Accordingly, abuse of dominance enforcement requires a shift towards adopting an effects-based approach, weighing pro and anticompetitive effects and considering efficiency justifications. The European Union is increasingly moving in this direction, as is demonstrated by its case law that is analysed in this paper. The paper also explores competition law in India—traditionally a form-based jurisdiction for abuse of dominance investigations—and finds an encouraging trend towards an effects-based approach.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Notes

  1. Referred to as the ‘Act’ in this paper.

  2. There are some cases where the CCI has undertaken an investigation even when the firm was not dominant.

  3. Malik (2016), Patil et al. (2013).

  4. Members of the Committee.

  5. Report of the High Level Committee on Competition Policy & Law, SVS Raghavan Committee (2000).

  6. The discussion paper released in 2005 related to the application of Article 82 of the EC Treaty on exclusionary practices in the EU and the guidance paper released in 2008—‘Guidance on the Commission’s Enforcement Priorities in Applying Article 82 EC Treaty to Abusive Exclusionary Conduct by Dominant Undertakings’—allow for objective justifications and efficiencies (Objective Necessity Defense, Meeting Competition Defense, and Efficiency Defense) to be put forward by the dominant firm. However, Article 82 of the EC Treaty does not contain any specific provision on this. The decision of accepting such justifications and related evidence or the weight given to them is left to the courts.

  7. Pera (2008).

  8. Pera (2008).

  9. Petit (2009).

  10. Arezzo (2008).

  11. Gurkaynak et al. (2016).

  12. Gurkaynak et al. (2016), OECD (2009).

  13. Jhaku and Malik (2017).

  14. Gurkaynak et al. (2016).

  15. Jhaku and Malik (2017).

  16. Sidak and Willig (2016).

  17. Wheeler (2017).

  18. Pera (2008).

  19. OECD. (2006).

  20. Edlin (2012).

  21. Pollina (2014).

  22. Gual et al. (2005).

  23. Including work done in the EU through the EAGCP Report: Gual et al. (2005).

  24. Perrot (2005), Papandropoulos (2007), Gual et al. (2005).

  25. Walckiers (2012), Frot (2016), Hildebrand (2009), Gual et al. (2005).

  26. Këllezi (2009), Hildebrand (2009), Gual et al. (2005).

  27. The Unilateral Conduct Working Group (2010), Neven an Mano (2006), Gual et al. (2005).

  28. Osterud (2010), Gual et al. (2005).

  29. Bolton et al. (2000), Gual et al. (2005).

  30. View of lawyers and economists in Germany when the European competition law was enacted for the first time in 1923.

  31. Felice and Vatiero (2014).

  32. Behrens (2015), Pera (2008), Gerber (1995).

  33. Ahlborn and Evans (2009), Gerber (1995).

  34. Arezzo (2008), Ahlborn and Evans (2009) .

  35. Behrens (2015), Colomo (2016).

  36. Jones and Townley (2014).

  37. The introduction of merger control regulations (1989) that focused on undertaking an ex-ante assessment of any potential anticompetitive effects of a merger or an acquisition, primarily based on market conditions and structure.

  38. For instance, the Block Exemption Regulations and Guidelines on Vertical Restrictions (1999); guidelines on horizontal cooperation (2000) and transfer of technology (2004)—exempting agreements in the field of research and development, specialization and transfer of technologies from an application of Article 81(1); regulations on the application of Article 81 (2004)—adopting an effects-based framework for interpreting Article 101(1) and undertaking an efficiency assessment under Article 101(3); and new merger regulation and horizontal merger guidelines (2004).

  39. Albaek (2011), Pera (2008).

  40. Marty (2015), Gual et al. (2005).

  41. The Commission proposed that a firm could be exempted from the application of Article 82 of the EC Treaty if it could put forward a defence argument justifying its behaviour, or show that efficiencies created by its conduct outweigh any anti-competitive effects: DG Competition, European Commission. (2005).

  42. European E&M Consultants.

  43. Mandorf and Sahl (2013), Gormsen (2013), Edlin (2012).

  44. Colomo (2016).

  45. Judgment of the Court of 13 February (1979)—Hoffmann-La Roche & Co. AG v Commission of the European Communities - Dominant position - Case 85/76. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?isOldUri=true&uri=CELEX:61976CJ0085.

  46. Colomo (2016).

  47. Rokita (2015).

  48. Rokita (2015), Colomo (2016).

  49. Reckon (2007). British Airways v. Commission [2007] EUECJ C-95/04. Retrieved from http://www.reckon.co.uk/item/a9cb4c25; Judgment of the Court (Third Chamber) of 15 March 2007, British Airways plc v. Commission of the European Communities. Case C-95/04 P. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62004CJ0095.

  50. Court of Justice of the European Union. Press Release No. 90/17. Luxembourg, 6 September 2017, Judgment in Case C-413/14 P Intel Corporation Inc. v Commission.

  51. Crane et al., Gesmer (1978), Gohari (2016), OECD. (2005), Sandicchi (2005), Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP (02-682) 540 U.S. 398 (2004). 305 F.3d 89, reversed and remanded

  52. Rosenblatt et al. (2013).

  53. Oxera (2015).

  54. Colomo (2016).

  55. Gustafsson (2007).

  56. Ahlborn and Evans (2009).

  57. Skadden (2010).

  58. Judgment of the Court (First Chamber) of 17 February 2011. Konkurrensverket v. TeliaSonera Sverige AB. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62009CJ0052.

  59. Judgment of the Court (Fifth Chamber) of 11 November 1986. British Leyland Public Limited Company v. Commission of the European Communities. Retrieved from http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A61984CJ0226.

  60. Zenger and Walker (2012).

  61. Competition Act (2002).

  62. Malik (2016), Patil et al. (2013).

  63. Katsoulacos (2016).

  64. Franczyk (2016).

  65. Bhattacharjea (2003).

  66. Competition Commission of India, Case No. 47 and 56 of 2016.

  67. Competition Commission of India Case No. 73 of 2011.

  68. An important characteristic of two-sided markets is that the demand on each side vanishes if there is no demand on the other—regardless of what the price is. Men will not go to dating clubs that women do not attend because they cannot get a date. Merchants will not take a payment card if no customer carries it because no transaction will materialize. Computer users will not use an operating system that does not have applications they need to run. Sellers of corporate bonds will not use a trading mechanism that does not have any buyers. In all these cases, the businesses that participate in these industries have to figure out ways to get both sides on board: Evans (2003).

  69. Weyl (2010).

  70. Competition Commission of India Case No. 09 of 2013.

  71. Competition Commission of India Case No. 80 of 2012.

  72. Competition Commission of India Case No. 71 of 2012.

  73. Competition Commission of India Case No. 08 of 2014.

  74. Competition Commission of India Case No. 70 of 2012.

  75. Competition Commission of India Case No. 68 of 2013.

References

  • Ahlborn, C., & Evans, D. S. (2009). The microsoft judgment and its implications for competition policy towards dominant firms in Europe. Antitrust Law Journal, 75(3), 887–932.

    Google Scholar 

  • Albaek, S. (2011). The effects based approach, an overview. In Paper presentenced at St. Martin conference, Brno.

  • Arezzo, E. (2008). Is there a role for market definition and dominance in an effects-based approach? In M.-O. Mackenrodt, B. Conde Gallego, & S. Enchelmaier (Eds.), Abuse of dominant position: New interpretation, new enforcement mechanisms? (pp. 21–54). Germany: Springer.

    Chapter  Google Scholar 

  • Behrens, P. (2015). The ordoliberal concept of “abuse” of a dominant position and its impact on Article 102 TFEU. Nihoul/Takahashi, Abuse Regulation in Competition Law. In Proceedings of the 10th ASCOLA Conference Tokyo 2015.

  • Bhattacharjea, A. (2003). India’s competition policy: An assessment. Economic and Political Weekly, 38(34), 3561–3574.

    Google Scholar 

  • Bolton, P., Brodley, J. F., & Riordan, M. H. (2000). Predatory pricing: Strategic theory and legal policy. Georgetown Law Review, 88, 2239–2330.

    Google Scholar 

  • Colomo, P. I. (2016). Beyond the ‘more economics-based approach’: A legal perspective on Article 102 TFEU Case Law. Common Market Law Review 53(3). pp. 709–739. Kluwer Law International.

  • Competition Act 2002.

  • Competition Commission of India Case No. 08 of 2014.

  • Competition Commission of India Case No. 09 of 2013.

  • Competition Commission of India Case No. 47 and 56 of 2016.

  • Competition Commission of India Case No. 68 of 2013.

  • Competition Commission of India Case No. 70 of 2012.

  • Competition Commission of India Case No. 71 of 2012.

  • Competition Commission of India Case No. 73 of 2011.

  • Competition Commission of India Case No. 80 of 2012.

  • Court of Justice of the European Union. Press Release No. 90/17. Luxembourg, 6 September 2017, Judgment in Case C-413/14 P Intel Corporation Inc. v Commission.

  • Crane, D., Davis, R., & Friedman, S. Response of members of the Unilateral Conduct Committee of the ABA Section of Antitrust Law. http://www.internationalcompetitionnetwork.org/uploads/questionnaires/uc%20pp/nga%20crane_davis_friedman%20predatory%20pricing.pd.

  • DG Competition, European Commission. (2005). DG Competition discussion paper on the application of Article 82 of the Treaty to exclusionary abuses.

  • Edlin, A. S. (2012). Predatory pricing. In E. Elhauge (Ed.), Research handbook on the economics of antitrust law. London: Edward Elgar Publishing Limited.

    Google Scholar 

  • European E&M Consultants. Competition competence report. More economics based approach. In Article 102 TEFU: New Test Procedures. https://www.ee-mc.com/publications/ccr/archive.html.

  • Evans, D. S. (2003). The antitrust economics of multi-sided platform markets. Yale Journal of Regulation, 20(2), Article 4.

  • Felice, F., & Vatiero, M. (2014). Ordo and European competition law. Research in the history of economic thought and methodology (Vol. 32). Bingley: Emerald Publishing Ltd.

    Google Scholar 

  • Franczyk, N. J. (2016). Jurisprudence development (abuse of dominance): Issues & implications. In Paper presented at the third international conference on competition regulation & competitiveness.

  • Frot, E. (2016). Practical approaches in dealing with rebates by dominant suppliers, Effects-based analysis of rebates. Microeconomix.

  • Gerber, D. J. (1995). Competition law and international trade: The European Union and the neo-liberal factor. Pacific Rim Law & Policy Journal, 4(1), 43–44.

    Google Scholar 

  • Gesmer, L. (1978). Sylvania and vertical restraints on distribution. Boston College Review, 19(4), 751–771.

    Google Scholar 

  • Gohari, R. S. (2016). Margin squeeze in the telecommunications sector: A more economics-based approach. World Competition: Law and Economics Review, 35(2), 205–232.

    Google Scholar 

  • Gormsen, L. L. (2013). Exclusionary pricing abuses. Presentation at London.

  • Gual, J., Hellwig, M., Perrot, A., Polo, M., Rey, P. (coordinator), Schmidt, K., & Stenbacka, R. (2005). Report by the EAGCP. An economic approach to Article 82.

  • Gurkaynak, G., Inanılır, O., Diniz, S., & Yasar, A. G. (2016). Multisided markets and the challenge of incorporating multisided considerations into competition law analysis. Journal of Antitrust Enforcement, 5, 1–30.

    Google Scholar 

  • Gustafsson, D. (2007). Tying under EC competition law. The Tetra Pak II Case.

  • Hildebrand, D. (2009). The role of economic analysis in the EC competition rules (3rd ed.). Alphen aan den Rijn: Kluwer Law International.

    Google Scholar 

  • Jhaku, G., & Malik, P. (2017). Dilemma in antitrust enforcement: How use of economics can guide enforcement rules in multi sided markets. Journal of Antitrust Enforcement, 5, 260–275.

    Article  Google Scholar 

  • Jones, A., & Townley, C. (2014). Competition law. In C. Barnard & S. Peers (Eds.), European Union law. Oxford: Oxford University Press.

    Google Scholar 

  • Judgment of the Court (Fifth Chamber) of 11 November 1986. British Leyland Public Limited Company v Commission of the European Communities. Retrieved from http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A61984CJ0226.

  • Judgment of the Court (First Chamber) of 17 February 2011. Konkurrensverket v TeliaSonera Sverige AB. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62009CJ0052.

  • Judgment of the Court (Third Chamber) of 15 March 2007, British Airways plc v Commission of the European Communities. Case C-95/04 P. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62004CJ0095.

  • Judgment of the Court of 13 February 1979 - Hoffmann-La Roche & Co. AG v Commission of the European Communities - Dominant position - Case 85/76. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?isOldUri=true&uri=CELEX:61976CJ0085.

  • Katsoulacos, Y. (2016). Judicial review, economic evidence and the choice of legal standards by utility maximizing competition authorities.

  • Këllezi, P. (2009). Rhetoric or reform: Does the law of tying and bundling reflect the economic theory? In A. Ezrachi (Ed.), Article 82 EC: reflections on its recent evolution (pp. 147–168). Oxford: Hart Publishing.

    Google Scholar 

  • Malik, P. (2016). Competition law in India: Perspectives. Vikalpa, The Journal for Decision Makers, 41(2), 168–193.

    Article  Google Scholar 

  • Mandorf, M., & Sahl, J. (2013). The role of the ‘equally efficient competitor’ in the assessment of abuse of dominance. Konkurrensverket Working Paper Series in Law and Economics.

  • Marty, F. (2015). Towards an economics of convention-based approach of the European competition policy. Historical Social Research, 40(1), 94–111.

    Google Scholar 

  • Neven, D., & Mano, M. (2006). Further steps towards an effects-based approach. Presented at Economic Developments in European Competition Policy, CRA Conference, Brussels.

  • OECD. (2005). Policy roundtables, competition on merits. https://www.oecd.org/competition/abuse/35911017.pdf.

  • OECD. (2006). Policy brief. What is competition on the merits? http://www.oecd.org/competition/mergers/37082099.pdf.

  • OECD. (2009). Policy roundtables. Two-sided markets. https://www.oecd.org/daf/competition/44445730.pdf.

  • Osterud, E. (2010). Identifying exclusionary abuses by dominant undertakings under EU competition law. The Spectrum of Tests. Alphen aan den Rijn: Kluwer Law International.

    Google Scholar 

  • Oxera. (2015). The post Danmark II judgment: Effects analysis in abuse of dominance cases. Oxera. Retrieved from http://www.oxera.com/Latest-Thinking/Agenda/2015/The-Post-Danmark-II-judgment-effects-analysis-in-a.aspx.

  • Papandropoulos, P. (2007). How should price discrimination be dealt with by competition authorities? Droit & Économie Concurrences N, 3, 34–38.

    Google Scholar 

  • Patil, S., Chatterjee, P., Gautam, S., Ananth, M. S., Jha, A., Reis, S., et al. (2013). Competition law in India. Jurisprudential trends and the way forward. Bangalore: Nishith Desai Associates.

    Google Scholar 

  • Pera, A. (2008). Changing Views of competition, economic analysis and EC antitrust law. In Paper originally prepared for the 2008 Macerata Lecture on European Economic Policies at the University of Macerata, Italy.

  • Perrot, A. (2005). Towards an effects based approach to price discrimination. In The Pros and Cons of Price Discrimination, Swedish Competition Authority.

  • Petit, N. (2009). From formalism to effects? The Commission’s communication on enforcement priorities in applying article 82 EC, World Competition: Law and Economics Review, Vol 32, 485–504. Kluwer Law International.

  • Pollina, B. (2014). False negatives under a discount attribution test for bundled discounts. CommLaw Conspectus, 22, 74–107.

    Google Scholar 

  • Reckon (2007). British Airways v. Commission [2007] EUECJ C-95/04. Retrieved from http://www.reckon.co.uk/item/a9cb4c25.

  • Report of the High Level Committee on Competition Policy & Law, SVS Raghavan Committee (2000).

  • Rokita, K. (2015). Abuse of dominance by granting rebates in EU competition law. In Ascola Tokyo conference 2015.

  • Rosenblatt, H., Armengod, H., & Scordamaglia-Tousis, A. (2013). Latham & Watkins. Post Danmark: Predatory pricing in the European Union. The European Antitrust Review.

  • Sandicchi, G. B. (2005). American and European perspectives on monopolization and abuse of dominant position: A comparative law and economics analysis of single firm conduct. http://people.stern.nyu.edu/lwhite/al&e.spring2005/TermPapers/sandicchi.pdf.

  • Sidak, J. G., & Willig, R. D. (2016). Two-sided market definition and competitive effects for credit cards after United States v. American Express. The Criterion Journal on Innovation, 1, 1301–1311.

    Google Scholar 

  • Skadden. (2010). Margin squeeze in regulated markets. Judgment of the Court of Justice of the European Union in Deutsche Telekom AG vs. Commission. Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates.

  • The Unilateral Conduct Working Group. (2010). Report on the analysis of refusal to deal with a rival under unilateral conduct laws. In Paper presented at the 9th annual conference of the international competition network (ICN), Istanbul, Turkey.

  • Verizon Communications Inc. V. Law Offices of Curtis V. Trinko, LLP (02-682) 540 U.S. 398 (2004). 305 F.3d 89, reversed and remanded. Cornell University Law School. Retrieved from https://www.law.cornell.edu/supct/html/02-682.ZO.html.

  • Walckiers, A. (2012). An economic approach to exclusionary rebates? In Paper presented at the St. Martin conference, Brno.

  • Weyl, E. G. (2010). A price theory of multi-sided platforms. American Economic Review, 100(4), 1642–1672.

    Article  Google Scholar 

  • Wheeler, L. (2017). Supreme Court agrees to hear American Express case. The Hill. Retrieved from http://thehill.com/regulation/court-battles/355721-supreme-court-agrees-to-hear-american-express-case.

  • Zenger, H., & Walker, M. (2012). Theories of harm in European competition law: A progress report. In J. Bourgeois & D. Waelbroeck (Eds.), Ten years of effects-based approach in EU competition law (pp. 185–209). Brussels: Bruylant.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Competition Commission of India, New Delhi, India

    Payal Malik

  2. PGDAV College, University of Delhi, Nehru Nagar, New Delhi, 110065, India

    Payal Malik

  3. Nathan Economic Consulting India Private Limited, No. 45, G-C, Ground Floor, George Ponnaiya Building, TTK Road, Alwarpet, Chennai, 600 018, India

    Neha Malhotra & Ramji Tamarappoo

  4. Nathan Associates Inc., 1777 N. Kent St., Suite 1400, Arlington, VA, 22209, USA

    Ramji Tamarappoo

  5. Competition Law Practice, Trilegal, 311 B, DLF South Court, Saket, New Delhi, 110017, India

    Nisha Kaur Uberoi

Authors
  1. Payal Malik
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Neha Malhotra
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Ramji Tamarappoo
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Nisha Kaur Uberoi
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Neha Malhotra.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Malik, P., Malhotra, N., Tamarappoo, R. et al. Legal Treatment of Abuse of Dominance in Indian Competition Law: Adopting an Effects-Based Approach. Rev Ind Organ 54, 435–464 (2019). https://doi.org/10.1007/s11151-018-9651-y

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11151-018-9651-y

Keywords

Search

Navigation