Competition Act: Abuse of Dominant Position
The question requires identifying the specific section of the Competition Act, 2002, that prohibits enterprises from abusing their dominant market position.
Section 4 of the Competition Act, 2002, explicitly states that 'No enterprise shall abuse its dominant position'. This section is central to preventing monopolistic or dominant firms from engaging in anti-competitive practices.
The other options, such as Section 9 (related to regulation of combinations), Section 8 (also related to combinations), and Section 6 (regulation of acquisitions), address different aspects of the Act and do not specifically prohibit the abuse of a dominant position.
Important Questions from Business Competition
- The remedies for the violation of Sections 3 and 4 of the Competition Act have been laid down under
Select the correct code of the following statements being correct or incorrect.
Statement (I) : The ‘law of one price’ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.
Statement (II) : An ‘Efficient market’ has no impediments to the free flow of goods and services, such as trade barriers.
- Consider the following statements :
(a) The stage of industry's development (life cycle) cannot influence the nature of competitive rivalry.
(b) As the industry starts to mature in terms of life cycle, rules are rejected, consumer expectations about quality and performance are blurred and industry standards are put for modification.
(c) A major feature of maturing industries is the tendency for competition based on product pricing becoming similar.
(d) In declining industries, only the most efficient firms can earn reasonable profits.
In the light of Industry Life Cycle, which of the above statements are true ?
Codes : The market share data for an industry, comprising five companies, is given below :
Company Market Share (%) A 35 B 25 C 18 D 12 E 10 This industry’s three-firms Herfindahl-Hirschman index shall be :
Match the items of List-I with the items of List-II and find the correct combination:
List - I
(Market Structure)List - II
(Nature of industry where prevalent)(a) Perfect competition (i) Aluminium and passenger cars (b) Oligopoly (ii) Public utilities like Telephones and Electricity (c) Monopoly (iii) Manufacturing : T.V. Sets, Refrigerators (d) Monopolistic competition (iv) Farm Products : Grains
