Date: 28 October, 2020
by Varun Litoriya, NLU Odisha
WHAT IS COLLECTIVE DOMAIN
Collective dominance refers to an arrangement where two or more independent enterprises, linked to economic associations, occupy a dominant place in the relevant market than other players while remaining an independent entity. In vertical and horizontal markets, collective domination can be traced. Therefore, entities that are collectively in the dominant position need not be considered in an anti-competitive agreement or cartelization.
STATUS QUO IN INDIA
The Section 4 of the Competition Act, 2002 prohibits abuse of dominance by enterprises holding a dominant position in a relevant market and defines the term ‘dominant position’ as a position of strength which enables an enterprise in the relevant market. Consequently, Section 4 specifies the "dominant position" can be held only by one entity and not by a group of enterprises. This shows that in this section there is no definition of collective dominance.
THE COMPETITION LAW REVIEW COMMITTEE
The Committee has argued that the cases of collective dominance that had surfaced in the past in the countries that have recognized the concept are found to be cases involving an anti-competitive agreement amongst the players. It suggested that the principle of collective domination at this point cannot be considered, as cases can be dealt in compliance with the requirements set out in section 3 of the Competition Act. Many cases appeared where adequate action against the violation of collective domination was refused because of this hiatus.
The CCI in Deutsche Post Bank Home Finance case and the Apple, Vodafone and Airtel case failed to give recognition to the abuse of dominance done collectively by the players. The need of recognition of collective dominance was once again felt in the case of Meru-Ola-Uber and recently in the Telugu film industry case, the CCI observed that the act does not provide for the concept of collective dominance.
While it is a well-known concept in the European Union and even before the Canadian competition tribunal. In the case of the Italian flat glass, the Court of First Instance was the first to recognise the idea of collective dominance. The advocates of collective dominance argued that the term entails entities that may not be self-dominant but can be collectively dominant. Article 102 of the European Union's Treaties refers "to the abuse of a dominant position by one or more undertakings"
NEED OF THE HOUR
For market players, who may not be dominant in themselves but are dominant in a collective way, the question of collective dominance can be raised. Cases of collective dominance, including horizontal and vertical markets, may occur. Consequently, there is no need for the existence of an anti-competitive agreement or cartelization between the parties. The section 3 of the Act necessarily requires the existence of an agreement amongst the parties which may not always be the case. Therefore the requirement of recognizing the concept of collective dominance is the need of the hour.
Article 102, The Treaty on the Functioning of the European Union < https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E102&from=ES>
Siv v. Commission, The Court (First Chamber) 10 March 1992
Ashok Kumar Vallabhaneni v. Geetha SP Entertainment LLP, Competition Commission of India, Case No. 17 of 2019
Niraj Malhotra v. Deutsche Post Bank Home Finance, Competition Commission of India, Case No. 5 of 2009
Shri Sonam Sharma v. Apple, Vodafone and Airtel. Competition Commission of India [Case No: 24/2011]
Meru Travel Solutions Pvt. Ltd. v. M/s Uber India Systems Pvt. Ltd. and others, Competition Commission of India Case no. 25-28 of 2017