Competition law was formed to seek and promote competition in the market by curbing the Anticompetitive practices in the market. The competition law generally promotes fairness and controls monopolistic practice and restrictive trade practice by creating a competitive market. The competitive practices tend to promote efficiency to maximize customer and social welfare in the society that helps in creating and attaining of the competitive market based on fairness, efficiently allocating of the resources so that the resources of the society are properly utilised and seeks in curbing the monopolistic practice & abuse of dominant position in the market.
The need for competition law was felt in the society as the previous law that was prevailing was the MRTP Act mainly focused on curbing the monopolistic market rather than promoting the competition in society. So the need for promoting competition was felt and that was the reason why the MRTP Act was obsoleted as it was not promoting competition in the areas for economic development. Before the competition law, there was the MRTP Act which was prevailing in India. later MRTP Act was repealed by the Raghavan committee which was constituted. The committee was recommendation was to constitute Competition law in India for promoting competition and to reduce the anti-competitive practices and it was formed by comparing the other competitive laws of any country.
Abuse of dominant position
The word ‘dominant position’ refers to the position of strength where the enterprise has gained structure position in the market by big market share or otherwise. So that he can play independently in the market and with the market forces it refers to the position where the player can manipulate the market and create a monopolistic market which leads to the curbing of competition in the market and the right of the consumers or the competitors or relevant market in its favour.
Initially, the definition of abuse of dominant position was defined under article 82 of the European Community treaty. Section 4 of competition Act 2002. Generally, the abuse of dominant position tends to the reduction of competition in the market.
Section 4 of the Competition Act 2002 defines abuse of a dominant position which states that the dominant position means a position of strength enjoyed by an enterprise in the relevant market in India. And such a position enables the form to operate independently of competitive forces prevailing in the relevant market affect its competitor or consumer or the relevant market in its favour
Section 4 of competition Act 2002 no enterprise or group shall be permitted to abuse the dominant position in the relevant market.
There are certain situation where directly or indirectly enterprise or group imposes an unfair or discriminatory condition
• In purchasing or selling of goods or services
• In respect of the price in purchase or sale of the goods and services
The price imposed to meet out the competition would not be considered illegal or Anti- Competitive in nature. But such imposition rather fixation of the price shall be remitted in the view of competition.
The abuse of a dominant position can be determined by three factors
• Relevant market
• Product market
• Geographical market