What is exploitative abuse in competition law?

What is exploitative abuse in competition law?

Conduct constitutes an exploitative abuse if a dominant firm uses its dominant position to reap economic benefits ‘which it would not have reaped if there had been normal and sufficiently effective competition’.

Can abusive conduct by a dominant firm ever be justified?

Dominant firms that are accused of abusive behaviour may try to invoke an objective justification. If an objective justification is successfully invoked, the Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibition does not apply.

How do you establish abuse of dominance?

Section 4(2) of the Act provides that there shall be an abuse of a dominant position if an enterprise or a group:

1. directly or indirectly imposes unfair or discriminatory conditions or prices in the purchase or sale of goods or services;
2. restricts or limits production of goods or services in the market; etc.

What are exclusionary abuses?

Exclusionary abuses comprise all practices that a dominant undertaking may use to obstruct others, restrict their options, establish entry barriers and therefore remove or weaken the potential competition.

What is predatory pricing?

Predatory pricing is the illegal act of setting prices low to attempt to eliminate the competition. Predatory pricing violates antitrust laws, as it makes markets more vulnerable to a monopoly.

What is dominance competition law?

4054 (“Competition Law”) defines dominance as follows: “Dominant Position is the power of one or more undertakings in a particular market to determine economic parameters such as price, supply, the amount of production and distribution, by acting independently of their competitors and customers.”

What is predatory pricing in competition law?

Predatory pricing is a strategy that entails a temporary price below the cost of production in order to injure competition and thereby reap higher profits in the long run[i]. Thus majority of the jurisdictions view predatory pricing as a form of abuse of dominance.

What is destroyer pricing?

Destroyer pricing is used to eliminate competition. It involves a business setting a very low price in order to attract customers away from competitors, who will struggle to match the low price and may go bust.

What is the financial penalty for abuse of dominance?

Thus the available remedies are, when the abuse of dominant position has been built up, the competition specialists can take certain measures for the same: A restraining order. The penalty which might be 10% of yearly turnover. Direct the enterprise to make a move which the authority regards fit.