Predatory pricing and

Cartelisation under
Competition Act
Presented By: Group 1
Vibhor Aggarwal D001
Bhavya Garg D020
Rahul Jaswal D029
Avantika Mehta D038
Omkar Rane D046
Neha Ayushi Taneja D055
Cartelisation
Competition Act, 2002 defines cartels as, “An association of producers, sellers,
distributors, traders or service providers who, by agreement themselves, limit,
control or attempt to control the production, distribution, sale or price of, or,
trade in goods or provision of the services.”

Abuse Of Dominance : Predatory Pricing

 Abuse of dominance means :-
 when an enterprise or group of enterprise
 uses its dominant position
 in the relevant market
 in an exploitative manner or exclusionary manner.
 Actions Considered As Abusive Actions:
 Predatory Pricing: The sale of goods or provision of services, at a price which is
below the cost of production of the goods or provision of services, with a view to
reduce or eliminate the competitors and hereby reap higher profits in the long run.
Fast Track Call Cab And Meru Travel
Solutions Vs. ANI Technologies (Ola)
Facts
Informants Opposite Party/OP
Fast Track Call Cab And Meru ANI Technologies Pvt. Ltd.- Ola
Travel Solutions (Cab Aggregator- connects the
(Radio taxi Services) drivers with the consumers)

 Allegations : OP has abused its dominant position in the relevant market by offering heavy discounts to the
passengers and incentives to the cab drivers associated with them which amounts to predatory pricing.

 Issues:

 Whether OP held a dominant position in the relevant market or not.

 If yes, whether its conduct would amount to abusive practice (predatory pricing) within the meaning of
Section 4(2)(a)(ii) of the Act.

Relevant Market: Radio Taxi Services Geographic Market: Bengaluru

Fast Track Call Cab And Meru Travel
Solutions Vs. ANI Technologies (Ola)
Case Analysis
Informants:
• OP is dominant in the market
DG: For issue 1, found • OPs create high entry barriers for potential entrants.
that though OP led the • The agreement that OP enters into with its drivers
market in terms of its contains an exclusivity clause and thus, locks in a lot
market share several of drivers.
times • OP charged prices below average variable cost (AVC)-
indulged in an anti-competitive conduct.

OP: Market share of OP not

sufficient enough to Commission: Market share cannot be sole parameter for
exercise market power and assessing dominance
affect competitors or • No significant costs preventing consumers from
consumers in the relevant switching between different radio taxi apps.
market. OP also relied • Based on DG analysis: OP did not initiate the strategy of
upon the DG’s observation aggressive pricing strategy.
of Uber being an effective • Further, OP’s response to the aggressive pricing strategy
competitor to OP, with of Uber in the relevant market since June 2014 is
greater economic power, in indicative of the competitive constraint put by Uber to OP
the relevant market. in the relevant market.
Suo Moto Case:
Cartelisation in Dry Cell Battery Market in India
 Panasonic Energy India Co.
Limited had filed a leniency Against
application stating that • Eveready Industries India Limited (Eveready)
Panasonic along with its • Indo National Limited (Nippo)
competitors, Eveready • Panasonic Energy India Co. Ltd
Industries India Limited • Geep Industries (India) Pvt. Ltd.
(Eveready), Indo National • Association of Indian Dry Cell Manufacturers
Limited and Geep Industries
(India) Private Limited had
participated in a cartel
facilitated by the Association
of Indian Dry Cell
Manufacturers.
 The cartel was established for
the exchange of information
pertaining to "the sale and
production of dry cell
batteries" in India.
Suo Moto Case:
Cartelisation in Dry Cell Battery Market in India
 CCI found definitive evidence to show that there was any
increase in the prices of dry cell batteries due to the alleged
cartel.
 CCI waivered 100% penalty imposed on Panasonic based on
significant value addition, 30% for Eveready for corroborating
the evidence and 20% for Nippo for cooperation.
 Case of a classic hard-core cartel busted due to the leniency
application filed by one of the three members of the cartel
marks the beginning of the success of the leniency regime in
India.
 The case also illustrates the role of the trade association in
facilitating price coordination between cartel members.
International Case: Seamless Steel Tube Cartel
 8 companies (4 European and 4 Japanese) were fined by EC
in 1999 for an illegal market sharing cartel.
 European Commission found it to be a very serious
infringement of Art 81 (1) of EU Treaty.
 The fines imposed were totaling €99 million.
 Four companies appealed this decision. In January 2007 the
European Court of Justice confirmed the existence of cartel
and participation of the appealing parties therein
 The court also confirmed that in the case of cartels there is
no need to prove the actual existence of harm to intra-
Community trade, since it is sufficient to prove that an
agreement is potentially capable of producing such an
effect.