CASE LAW RESEARCH ON THE CRITERIA TO IDENTIFY RELEVANT GEOGRAPHIC MARKET – CCI

S. No. Case Particulars Holding (Relevant Paras)

01. M/s Saint Gobain Glass India 7.3 The Commission notes that as per section 2(r) of the Act, „relevant market‟ means the
Limited v. M/s Gujarat Gas market which may be determined by the Commission with reference to the „relevant product
Company Limited. market‟ or the „relevant geographic market‟ or with reference to both the markets.

Case No. 20/2013 …

Competition Commission of India 7.5 Further, “relevant geographic market‟ has been defined in section 2(s) of the Act meaning
as a market comprising the area in which the conditions of competition for supply of goods or
provision of services or demand of goods or services are distinctly homogenous and can be
distinguished from the conditions prevailing in the neighbouring areas. To determine the
„relevant geographic market‟, the Commission shall have due regard to all or any of the
following factors viz., regulatory trade barriers, local specification requirements, national
procurement policies, adequate distribution facilities, transport costs, language, consumer
preferences and need for secure or regular supplies or rapid after-sales services, in terms of the
provisions contained in section 19(6) of the Act.

CASE LAW RESEARCH ON THE CRITERIA TO IDENTIFY RELEVANT PRODUCT/SERVICE MARKET – CCI

S. No. Case Particulars Holding (Relevant Paras)

01. M/s Saint Gobain Glass India 7.3 The Commission notes that as per section 2(r) of the Act, „relevant market‟ means the
Limited v. M/s Gujarat Gas market which may be determined by the Commission with reference to the „relevant product
Company Limited. market‟ or the „relevant geographic market‟ or with reference to both the markets.

Case No. 20/2013 7.4 The term “relevant product market‟ has been defined in section 2(t) of the Act as a market
comprising all those products or services which are regarded as interchangeable or
Competition Commission of India substitutable by the consumer by reason of characteristics of the products or services, their
 prices and intended use. To determine the „relevant product market‟, the Commission is to have
due regard to all or any of the following factors viz., physical characteristics or end-use of goods,
price of goods or service, consumer preferences, exclusion of in-house production, existence of
specialized producers and classification of industrial products, in terms of the provisions
contained in section 19(7) of the Act.

CASE LAW RESEARCH ON ABUSE OF DOMINANCE

S.No. Case Particulars Holding (Relevant Paras)

01. MCX Stock Exchange Ltd. v. 8.2.9 We now move to what is perhaps the most important characteristic of the definition of
National Stock Exchange of India dominance in Section 4, without at this stage linking it to the question of abuse, which would
Ltd. become relevant only after dominance is established. This key characteristic is captured in the
words " ........... ..in its favour" in the definition. In the present case, NSE started with a market of
2011 SCC OnLine CCI 41 100% share of CD segment in August, 2008 and retained this share till entry of MCX-SX in
October, 2008. By October, 2010 ie. within a period of two years (during which time USE also
Competition Commission of India entered the market)), NSE's market share had come down to 33.17%. This fact itself establishes
beyond doubt the NSE's inability to influence the market or its competitors in its favour. In fact,
NOTE: The market share of the very concept of dominance arises from the idea that a dominant enterprise will use its
allegedly dominant enterprises is dominance to either enjoy a stable high market share, or continuously increase it's market
required to be considered in share. We are not aware of any case in the history of competition jurisprudence globally,
conjunction with numerous where a firm's market share has been reduced drastically (to less than one third in this case)
factors given in section 19(4) of in a relatively short period (two years in this case), and yet it has been found to be dominant
the Act. by a competition regulator or a court.

8.4.3.8 Before a predatory pricing violation is found, it must be demonstrated that there has
been a specific incidence of under-pricing and that the scheme of predatory pricing makes
economic sense. The size of defendant's market share and the trend may be relevant in
 determining the ease with which he may drive out a competitor through alleged predatory
pricing scheme--but it does not, standing alone, allow a presumption that this can occur. To
achieve the recoupment requirement of a predatory pricing claim, a claimant must meet a
two prong test: first, a claimant must demonstrate that the scheme could actually drive the
competitor out of the market; second, there must be evidence that the surviving monopolist
could then raise prices to consumers long enough to recoup his costs without drawing new
entrants to the market.

02. Google LLC & Anr vs Competition 59. We may also notice that Article 102 of Treaty on the Functioning of the European Union
Commission Of India & Ors ("TFEU") contains provision of abuse of dominant position. Article 102 is as follows:

Competition Appeal(AT)/1/2023 "Article 102 - Any abuse by one or more undertaking of a dominant position within the
internal market or in a substantial part of it shall prohibited as incompatible with the
NCLAT internal market in so far as it may affect trade between Member States. Such abuse
may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or unfair trading
conditions;
(b) limiting production, markets or technical development to the prejudice of
consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties,
thereby placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which , by their nature or according to commercial usage,
have no connection with the subject of such contracts."

60. In earlier cases, the EU Court applied per se rule, but there has been shift in the opinion of
the EU Courts, which has been captured by Richard Whish & David Bailey in Tenth Edition of
"Competition Law" under Section 5 dealing with Article 102. While dealing with general
principles of abuse, following has been stated under the heading '
(ii) Legal formalism: are there any per se rules under Article 102?' in following words:

"(ii) Legal formalism: are there any per se rules under Article 102?
One of the most common complaints about Article 102 has been that the Commission
and the EU Courts has been that the Commission and the EU Courts apply it in too
formalistic a manner. In particular, some practices appear to have been regarded as
unlawful 'per se', that is to say, irrespective of whether they produced, or were capable
of producing, adverse effects on the market. Historically thee did appear to be a
tendency on the part of the EU Courts and Commission to apply per se rules, at least to
some abuses. This was exemplified by the law on loyalty rebates. The Court of justice in
Hoffmann-Law Roche v Commission had formulated a rule on exclusive dealing and
loyalty rebates by a dominant undertaking in per se terms. In paragraph 89 of its
judgment, after saying that it would be unlawful for a dominant firm to enter into
exclusive dealing agreements which customers, it continued that the same would be true
where that firm:

Applies, either under the terms of agreement concluded with these purchasers or
unilaterally, a system of loyalty rebates, that is to say, discounts conditional on
the customer's obtaining all or most of its requirements--whether the quantity of
its purchases be large or small--from the undertaking in a dominant position.

This formalistic approach was followed in several cases on rebates.

In Intel v Commission the General Court continued to adopt a strict approach to

exclusivity rebates, which it said were illegal unless the dominant firm could show an
objective justification for granting them. However, there was an increasing intellectual
consensus against the application of per se rules to unilateral behaviour, and the
judgment of the General Court in Intel attracted particular hostility because of its
formalistic approach. On appeal the Court of Justice, in paragraph 137 of its judgment,
 cited paragraph 89 of the judgment in Hoffmann-Law Roche; however, in paragraph 138
the Court added an important qualification to what appeared to be a per se prohibition:

However, that case-law must be further clarified in the case where the
undertaking concerned submits, during the administrative procedure, on the
basis of supporting evidence, that it conduct was not capable of restricting
competition and, in particular, of producing the alleged foreclosure effects
(emphasis added).

The 'clarification' of the law means that if a dominant firm, in response to an allegation
of abuse, argues that the practice in question could not have a foreclosure effect, the
Commission is obliged to address that argument. It is hard to imagine that a dominant
firm that is convinced that its behaviour is not anti-competitive would not submit such
evidence. It follows that the Court's qualification would seem, de facto, to mean that
exclusionary conduct can be abusive only where it can be shown to be capable of
having anti-competitive effects on as-efficient competitors. To put the point another
way, there is no per se illegality under Article 102. The Court of Justice has recently re-
affirmed the position: in Paroxetine it stressed that, having regard to all relevant facts,
conduct may be characterised as abusive only if it is capable of restricting competition
and, in particular, producing exclusionary effects."

66. We, thus, answer Issue No.1 in following words:

For proving abuse of dominance under Section 4, effect analysis is required to be done
and the test to be employed in the effect analysis is whether the abusive conduct is
anti-competitive or not.

…
 84…..The learned ASG has referred to judgment of Commission in "Tata Power Delhi Distribution
Ltd. vs. NHPC Ltd., Case No. 20 of 2017", where the Commission has held that in terms of
competition law, in cases of abuse of dominant position, the seminal issue is what harm is
caused to the end consumer due to the behaviour of the dominant player. We, thus, conclude
that what is said by OEMs who have Revenue Sharing Agreement with Google is not the final
word on the dominant abuse by Appellant. There were other statements by various competitors
showing the harm caused to them. OEM's statement thus has to be viewed in context of their
total dependency on Google….

133. All the above questions relate to abuse of dominant position in the relevant market to
enter or protect or to gain in any other relevant market. The criteria for determining abuse can
be summed in following manner:

(i) A dominant company leverages its dominance in one market to benefit from any
secondary market. This leveraging results in foreclosure of competition in the
secondary market.
(ii) The behaviour of the dominant firm is not objectively justified.

03. Excel Crop Care Limited v. 11…..In light of the above discussion a two step calculation has to be followed while imposing
Competition Commission of India the penalty under Section 27 of the Act.
and Another
STEP 1: DETERMINATION OF RELEVANT TURNOVER.
CIVIL APPEAL NO. 2480 of 2014
12. At this point of time it needs to be clarified that relevant turnover is the entity’s turnover
Supreme Court of India pertaining to products and services that have been affected by such contravention. The
aforesaid definition is not exhaustive. The authority should have regard to the entity’s audited
NOTE: Section 27 of the financial statements. Where audited financial statements are not available, the Commission
Competition Act, 2002 may consider any other reliable records reflecting the entity’s relevant turnover or estimate the
(Competition Act) empowers the relevant turnover based on available information. However the Tribunal is free to consider facts
Competition Commission of India and circumstances of a particular case to calculate relevant turnover as and when it is seized
(CCI) to levy a penalty on with such matter.
enterprises involved in any anti-
competitive agreement or found STEP 2: DETERMINATION OF APPROPRIATE PERCENTAGE OF PENALTY BASED ON
to be abusing their dominant AGGRAVATING AND MITIGATING CIRCUMSTANCES.
position.
13. After such initial determination of relevant turnover, commission may consider appropriate
percentage, as the case may be, by taking into consideration nature, gravity, extent of the
contravention, role played by the infringer (ringleader? Follower?), the duration of participation,
the intensity of participation, loss or damage suffered as a result of such contravention, market
circumstances in which the contravention took place, nature of the product, market share of the
entity, barriers to entry in the market, nature of involvement of the company, bona fides of the
company, profit derived from the contravention etc. These factors are only illustrative for the
tribunal to take into consideration while imposing appropriate percentage of penalty.