Chapter II - Prohibition of Certain Agreements, Abuse of Dominant Position and Regulation of Combinations
Section 4
Section 4: abuse of dominant position
Section 4 prohibits the abuse of a dominant position by an enterprise or group. It identifies conduct that may constitute abuse and defines the concepts of dominance and predatory price.
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This article is for general information. Refer to the Competition Act, 2002 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) No enterprise or group shall abuse its dominant position.
(2) There shall be an abuse of dominant position under sub-section (1), if an enterprise or a group,— (a) directly or indirectly, imposes unfair or discriminatory— (i) condition in purchase or sale of goods or service; or (ii) price in purchase or sale (including predatory price) of goods or service. Explanation.—For the purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause (ii) shall not include such condition or price which may be adopted to meet the competition; or (b) limits or restricts— (i) production of goods or provision of services or market therefor; or (ii) technical or scientific development relating to goods or services to the prejudice of consumers; or (c) indulges in practice or practices resulting in denial of market access in any manner; or (d) makes conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or (e) uses its dominant position in one relevant market to enter into, or protect, other relevant market.
Explanation.—For the purposes of this section, the expression— (a) ‘dominant position’ means a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to— (i) operate independently of competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant market in its favour; (b) ‘predatory price’ means the sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors; (c) ‘group’ shall have the same meaning as assigned to it in clause (b) of the Explanation to section 5.
Introduction
Dominance by itself is not the stated prohibition. The statutory question is whether an enterprise or group holds the defined position of strength in a relevant market in India and engages in one of the abusive forms of conduct listed in subsection (2).
Key takeaways
First establish dominance
The section applies to an enterprise or group that can operate independently of market forces or affect the market in its favour in the relevant Indian market.
Then assess the conduct
Unfair conditions or prices, output restriction, denial of access, unrelated contract obligations and use of dominance to enter or protect another market are specified categories.
Pricing requires care
The provision excludes a condition or price adopted to meet competition from clause (a); the statutory predatory-price definition additionally requires below-cost pricing with an exclusionary aim.
Define the relevant market
A dominance assessment begins with the product or service and geographic market in India. The section's definition focuses on market strength, independence from competitive forces and ability to affect the market.
Map the alleged conduct to subsection (2)
Identify the exact term, price, supply restriction, access denial, supplementary obligation or neighbouring-market use at issue. General size or high market share alone does not identify the conduct prohibited by this section.
Examine price and cost evidence
If predatory pricing is alleged, preserve the relevant price and cost records and assess whether pricing was below the cost determined under applicable regulations and aimed at reducing competition or eliminating competitors. Check whether a condition or price was adopted to meet competition.
Practical checklist
Do
- Document the relevant product/service and geographic market before analysing dominance.
- Keep contract, pricing, access and cost evidence tied to the specific conduct alleged.
Avoid
- Do not equate being a leading business with abuse without identifying a statutory form of conduct.
- Do not label every low price predatory without the section's cost and competitive-purpose elements.
Glossary
- Dominant position
- The position of strength in a relevant market in India defined in the section's Explanation.
- Predatory price
- Below-cost pricing, measured under regulations, with a view to reduce competition or eliminate competitors.
- Denial of market access
- A statutory category of abuse under section 4(2)(c), stated to apply in any manner.
Frequently asked questions
Is holding a dominant position itself prohibited?
Section 4(1) prohibits abuse of a dominant position. The conduct must be assessed against subsection (2).
Does every low price amount to predatory pricing?
No. The section's definition requires a price below the cost determined under regulations and an aim to reduce competition or eliminate competitors.
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Contact BizeneedLast updated 9 October 2026