Super-Dominance

Super-dominance describes a position so strong that the enterprise approaches monopoly: a very high share held over a long period, no rival of comparable size, and entry effectively foreclosed. The concept has no statutory basis in India. Section 4 is binary, and an enterprise either is or is not dominant. The argument for recognising degrees is that the standard of conduct expected should rise with the strength of the position, and Indian orders have in substance accepted that proposition even while the statute remains silent.

1. The Origin of the Concept

European jurisprudence developed two related ideas. The first is that a dominant undertaking has a special responsibility not to allow its conduct to impair genuine undistorted competition, a responsibility that other firms do not bear; the same conduct may therefore be lawful for a small firm and unlawful for a dominant one. The second is that where the dominance is quasi-monopolistic, the scope of that special responsibility is correspondingly wider, so that conduct which a merely dominant firm might lawfully adopt, such as selective price cutting, may be abusive when adopted by an undertaking in a near-monopoly position.

2. The Indian Position

The Act creates no gradation. Explanation (a) to Section 4 defines a single concept of a dominant position, and Section 4(2) lists forms of conduct that constitute abuse without reference to the degree of dominance. There is accordingly no doctrine of super-dominance in Indian law in the sense of a separate legal category attracting separate rules.

The degree of dominance nevertheless operates at three points, and this is the accurate way to state the position.

1. In establishing dominance. The factors in Section 19(4) are applied to produce a conclusion, and the strength of the finding depends on how many of them point the same way. An enterprise with an overwhelming share, no comparable rival and high entry barriers is found dominant more readily and on a wider view of the market than one whose position rests on share alone.
2. In assessing whether conduct is abusive. Whether a rebate forecloses, whether an exclusive contract denies market access, and whether a refusal to supply is objectively justified all depend on how much of the market the enterprise controls and what alternatives remain. The stronger the position, the smaller the conduct needed to produce an exclusionary effect, which is the practical content of the European idea of heightened responsibility.
3. In fixing the penalty. Section 27(b) permits a penalty of up to ten per cent of turnover, and the Commission's penalty guidelines take account of the nature and gravity of the contravention. The degree of market power, the duration of the conduct and the harm caused all bear on the figure.

3. Where the Argument Arises

The concept is invoked most often in digital markets, where a platform may hold a share approaching the whole of a market sustained by network effects and data, and where the conventional constraints of entry and substitution are weak. In such cases the informant argues that conduct which would be ordinary commercial behaviour elsewhere, such as preferring one's own service in a ranking or bundling an application with an operating system, is exclusionary precisely because the enterprise controls the route by which users reach the market at all. The enterprise answers that the Act contains no special category and that its conduct must be judged by the same provisions as any other dominant firm.

4. Related Topics and Provisions