![]() Some of the most common effects of abuse of dominant position include:ġ. The abuse of dominant position can have significant negative effects on both competition and consumers. A company that is able to adapt quickly to changing market conditions is more likely to maintain or increase its market power. Market trends: The trends in the market, including changes in consumer preferences and technological advancements, can also be relevant in determining the dominant position. A company that has a dominant position in one sub-market may be able to extend that dominance to other sub-markets.ġ2. Market segmentation: The extent to which a market is segmented, i.e., the extent to which there are different sub-markets within the market, can also be relevant in determining the dominant position. For example, a company that controls a key input in the production process may have a dominant position in the market for that input.ġ1. Vertical integration: The degree of vertical integration of a company, i.e., the extent to which it controls different stages of the production and distribution of a product, can also be relevant in determining the dominant position. If a company’s products or services are essential for the operation of other companies in the market, this can increase the company’s market power and make it more likely to have a dominant position.ġ0. Market dependence: The dependence of other companies on a dominant player can also be relevant in determining the dominant position. A company with significant financial resources may be able to engage in practices that restrict competition, such as acquiring its competitors or investing in technologies that make it difficult for new entrants to compete.ĩ. Economic power: The financial resources and economic strength of a company are relevant in determining its dominant position. For example, a company that engages in anti-competitive practices, such as exclusionary practices or discriminatory treatment of competitors, may be considered to have a dominant position in the market.Ĩ. Business practices: The business practices of a company can also be relevant in determining its dominant position. If buyers have a significant degree of bargaining power, they may be able to negotiate favourable terms with suppliers and prevent a company from exercising dominant power in the market.ħ. Buyer power: The power of buyers in the market is relevant in determining the dominant position. The market is defined as the area of competition in which the products or services of a company compete with each other.Ħ. Market definition: The definition of the relevant market is critical in determining the extent of a company’s market power. Entry barriers: High barriers to entry, such as high start-up costs or complex regulations, can make it difficult for new entrants to compete in the market and can allow dominant players to maintain their position.ĥ. A market with a few large players and high barriers to entry is more likely to have a dominant player.Ĥ. Market structure: The structure of the market, including the number of competitors and barriers to entry, is relevant in determining the dominant position. ![]() ![]() A company with significant market power is more likely to have a dominant position in the market.ģ. Market power: Market power is a measure of a company’s ability to affect market prices and conditions. ![]() However, it is important to note that a high market share alone is not sufficient to determine a dominant position.Ģ. A market share of 50% or more is often considered indicative of a dominant position. Market share: A company with a high market share is more likely to have a dominant position in the market. There are several factors that are relevant in determining whether a company holds a dominant position in a market:ġ. Relevant factors determining Dominant Position The criteria for determining a dominant position may vary across jurisdictions, but factors such as market share, barriers to entry, and the ability to exercise market power are typically considered. Competition laws aim to prevent firms from engaging in practices that restrict competition, harm consumers, or stifle innovation.Įxamples of abusive behaviour include unfair pricing, predatory practices, exclusive dealing, and discrimination against competitors. While market dominance itself is not illegal, abusing a dominant position is prohibited in many jurisdictions. ![]() It means having the ability to independently control prices, exclude competitors, or influence market conditions. What is Dominant Position? Relevant factors determining Dominant Position and Effect of Abuse of Dominant Position under Competition Act, 2002Ī dominant position refers to a significant level of market power held by a company or group of companies. ![]()
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