Predatory Pricing

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Abuse of dominance: Predatory Pricing

Submitted by:
Radhika Sahay
(Intern; May 2012 – June 2012)
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DISCLAIMER4
ACKNOWLEDGEMENT5
CASES6
LIST OF BOOKS, JOURNAL ARTICLES, REPORTS8
LIST OF STATUTES REFFERED11
CHAPTER1: BACKGROUND12
CHAPTER 2: ABUSE OF DOMINANCE15
2.1 Relevant Market:16
2.2 Dominant Position:20
a. Indian Position on indentifying “dominance”20
DEFINITION OF DOMINANCE AND KEY ELEMENTS:22
IMPORTANCE OF MARKET SHARE IN DETERMINING DOMINANCE:23
ECONOMIC FEASABILITY25
2.3ABUSE OF DOMINANT POSITION26
CHAPTER 3: PREDATORY PRICING – Introduction30
CHAPTER 4: FEATURES OF PREDATORY PRICING34
4.1USP’S OF PREDATORY PRICING; WHY WOULD FIRMS RESORT TO PREDATION.34
4.2PRECONDITIONS TO PREDATORY PRICING35
4.3WORKING MECHANISM OF PREDATORY PRICING38
CHAPTER 5: TESTS TO DETERMINE PREDATORY PRICING42
GENERAL COST PARAMETERS:43
TERMS RELEVANT FOR DETERMINATION OF PREDATION44
BELOW COST TESTS:45
I.AREEDA TURNER RULE45
PRICING BELOW AVERAGE TOTAL COST47
INDIAN STANDARD51
CHAPTER 6: RECOUPMENT52
Case laws supporting the recoupment requirement56
ECONOMIC CONSIDERATIONS57
CONCLUSION63
SUGGESTIONS63
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DISCLAIMER

This project report/dissertation has been prepared by the author as an intern under the Internship Programme of the Competition Commission of India. The views expressed in the report are only of the intern and do not necessarily reflect the view of the Commission or any of its staff or personnel and do not bind the Commission in any manner. This report is the intellectual property of the Competition Commission of India and the same or any part thereof may not be used in any manner whatsoever, without express permission of the Competition Commission of India in writing.

ACKNOWLEDGEMENT

The author sincerely thanks all officials responsible for providing this valuable internship at the Hon’ble Competition Commission of India (CCI). The author takes this opportunity to express his sincere thanks to my mentor, Mr. Manoj Pandey, for his timely suggestions and guidance throughout the study. Additionally the author would also like to thank Mr. Alok Tripathi for his guidance during the internship period. The author expresses his sincere thanks to the library staff at CCI for their assistance in getting relevant materials. The author is highly grateful to CCI for having made my stay pleasant all along the internship. The author is also thankful to the staff of CCI for providing continuous support and encouragement throughout the internship.

CASES
1. -------------------------------------------------
Aerospatiale-Alenia/de Havilland Decision 91/619 [1992] 1 CEC 2,03413 2. -------------------------------------------------
Australian Competition & Consumer Commission v Australian Safeway Stores Pty Limited [2003] FCAFC 149 (30 June 2003)18 3. -------------------------------------------------
Berkey Photo Inc v. Eastman Kodak Co, 444 US 1093 (1980)9
4. -------------------------------------------------
Brooke Group Ltd. v. Brown &Williamson Tobacco Corp., 509 U.S. 209 (199328 5. -------------------------------------------------
Case 27/76 United Brands Company and United Brands Continental BV v. Commission of the European Communities [1978] ECR 20716 6. -------------------------------------------------
Case C-62/86, AKZO v. Comm’n, 1991 E.C.R. I-3359, 5 C.M.L.R. 215( 1993)18 7. -------------------------------------------------
Case T-30/89, Hilti v. Comm’n, 1991 E.C.R. II- 14, 4 C.M.L.R. 16 (1992)18 8....
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