Criteria for Dominant Position

Criterion for ascertaining of Dominance  : Sec 19, Competition Act: 

The Commission shall, while inquiring whether an enterprise enjoys a dominant position  or not under section 4, have due regard to all or any of the following factors, namely:— 

1. Market share of the enterprise; 
2. Size and resources of the enterprise; 
3. Size and importance of the competitors;  
4. Economic power of the enterprise including commercial advantages over competitors;
5. Vertical integration of the enterprises or sale or service network of such enterprises; 
6. Dependence of consumers on the enterprise;
7. Monopoly or dominant position whether acquired as a result of any statute or by virtue  of being a Government company or a public sector undertaking or otherwise; 
8. entry barriers including barriers such as regulatory barriers, financial risk, high capital  cost of entry, marketing entry barriers, technical entry barriers, economies of scale, high  cost of substitutable goods or service for consumers; 
9. Countervailing buying power;  
10. Market structure and size of market;
11. Social obligations and social costs; 
12. relative advantage, by way of the contribution to the economic development, by the  enterprise enjoying a dominant position having or likely to have an appreciable adverse  effect on competition; 
13. any other factor which the Commission may consider relevant for the inquiry. 

COMPREHENSION OF IMPORTANT CRITERION WITH EXAMPLES 

CRITERIA 1 :MARKET SHARE OF THE ENTERPRISE. 

• Consider the example of Jio. During advent of jio, airtel claimed jio is anti-competitive  in nature, CCI rejected the argument saying as of then, jio was not a market dominant
• Dominant Position is however dependent on how the market is scattered. If  the market is fully scattered, and all companies own 0.5% or less of market and just one company owns 5%, then it will be a dominant position.  Dominance is proportional to the size of market, competitors hold. 
• Abuse of dominant position also comes in form of withdrawal. If one is a  key funder and withdraws to control market, then it is market abuse 

CRITERIA 2: SIZE AND RESOURCES OF THE ENTERPRISE 

• If on company has a large network / is deeply embedded in the vertical  segment or integration, and if the company abuses the existing structure for  his benefit or to the disadvantage of other companies then it is abuse of  dominant position.
  Example: if Jio says that its dealers wont deal with Airtel until Airtel cuts jio a  slack, then it is abuse of dominant position 

CRITERIA 3:SIZE AND IMPORTANCE OF THE COMPETITORS 

• Ex: Coal India Ltd was a sole dominant player.