“The successful determination of an alleged dominant player’s domination in the relevant market is mandatory, before one can successfully proceed under S. 4 of the Competition Act, 2002”- Do you agree? Explain

 Below is a point-wise explanation discussing whether the successful determination of an alleged dominant player’s position in the relevant market is mandatory under Section 4 of the Competition Act, 2002.

"The successful determination of an alleged dominant player’s domination in the relevant market is mandatory, before one can successfully proceed under Section 4 of the Competition Act, 2002" – Explained

✅ 1. Introduction to Section 4 of the Competition Act, 2002

• Section 4 prohibits the abuse of dominant position by any enterprise or group.

• It does not penalize dominance itself, but only the abuse of such dominance.

• Hence, a clear determination of dominance in a defined relevant market is a prerequisite to applying this section.

✅ 2. Definition of Dominant Position [Explanation (a) to Section 4]

• Dominance refers to a position of strength enjoyed by an enterprise that enables it to:

  • Operate independently of competitive forces.

  • Affect competitors, consumers, or the relevant market in its favour.

• Dominance must be objectively determined by factors like market share, size, resources, etc.

✅ 3. Role of “Relevant Market” [Section 2(r)]

• The relevant market is the starting point of assessment under Section 4.

• It includes:

  • Relevant product market: Products considered interchangeable or substitutable.

  • Relevant geographic market: Region where conditions of competition are similar.

• Without defining the relevant market, the existence of dominance cannot be evaluated.

✅ 4. Legal Position: Dominance is Not Illegal, Abuse is

• The Act recognizes that dominance can arise naturally or through innovation.

• It only prohibits abuse of that position (e.g., unfair pricing, limiting production, denial of market access).

• Thus, abuse is punishable only after dominance is established.

✅ 5. Judicial Precedents Emphasizing Mandatory Determination

• In MCX Stock Exchange Ltd. v. NSE (2011): CCI first determined NSE’s dominance in the relevant market before analyzing abuse.

• In Google Inc. Case (2018): The CCI defined the relevant market as “Online General Web Search Services” and then analyzed Google’s dominance.

• These cases confirm that no finding under Section 4 can proceed without first determining dominance.

✅ 6. Methodology Followed by CCI

• CCI evaluates dominance using Section 19(4), which includes:

  • Market share.

  • Size and resources.

  • Economic power.

  • Vertical integration.

  • Countervailing buyer power.

• This is only meaningful after the relevant market is defined.

✅ 7. International Practice Aligns

• In EU competition law and US antitrust law, establishing dominance/market power is essential before analyzing abuse or monopolistic conduct.

• Indian law follows a similar pattern, consistent with global practices.

✅ 8. Procedural Requirements

• The Director General (DG) must submit an investigation report to CCI showing:

  • Defined relevant market.

  • Evidence of dominance.

  • Nature of abuse.

• Without these steps, the case is procedurally and legally incomplete under Section 4.

✅ 9. Importance in Ensuring Natural Justice

• It protects enterprises from arbitrary allegations.

• Ensures that market leaders are not penalized merely for being successful.

• Focuses only on unfair or exploitative practices.

✅ 10. Conclusion

• ✔️ Yes, the determination of dominance in the relevant market is absolutely mandatory.

• Without such finding, Section 4 proceedings lack legal foundation.

• It protects the integrity of competition law and ensures fairness in enforcement.