CS Executive · Economic, Commercial and Intellectual Property Laws · Competition Law
Zenith Retail, a dominant enterprise, lowers its price on a product to the same level as a rival's offer purely to meet competition. A complainant alleges unfair pricing under section 4. Which statement is correct under the Act?
The price is not treated as unfair or discriminatory if adopted to meet the competition. The Explanation to section 4(2)(a) expressly excludes such conditions or prices, so matching a rival's price to meet competition is not abuse of dominant position under that clause.
- AIt is always abuse because any price cut by a dominant enterprise is unfair
- BThe unfair or discriminatory price or condition does not include one adopted to meet the competitionCorrect
- CIt is abuse unless the Central Government approves the price
- DIt is abuse only if the product is sold outside India
Explanation
The Explanation to section 4(2)(a) says unfair or discriminatory condition or price, including predatory price, shall not include a condition or price adopted to meet the competition. So matching a rival's price to meet competition is outside that clause. Predatory pricing requires sale below cost with a view to reduce competition or eliminate competitors.
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