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Discuss the Abuse of Dominant Market Position Giving Examples.

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Introduction

´╗┐PROGRAM : MMS BATCH : 2012- 13 Comment Form for Assignments Section One: Data on the Course and Assignment Subject : Title of Assignment: Abuse of dominance and inappropriate agreement between enterprises Date of Submission : 01-03-2013 Student Details : Group no 09 Semester: IV Div. Roll No. Name Div. Roll No. Name A 018 Bipin Mishra A 019 Burzin Saher A 032 Govind Prasad Asopa A 045 Kushal Jivrajka A 047 Mansi Rawte Section Two: Evaluation Please note below the comments on the assignment in accordance with your objectives and evaluation criteria. Professor????????????????????????..????????.. Signature ????????????????????????????????? GRADE Date returned to Examination Office : ???????????.. Monitoring abuse of Abuse of dominance and inappropriate agreement between enterprises Index Sr no Topic 1 Introduction 2 Stages involved in determining abuse of dominance 3 Monitoring abuse of dominance 5 Examples 6 Inappropriate agreement between enterprises 7 Conclusion 8 References Introduction Definition- Abuse of a dominant position occurs when a dominant firm in a market, or a dominant group of firms, engages in conduct that is intended to eliminate or discipline a competitor or to deter future entry by new competitors, with the result that competition is prevented or lessened substantially. Meaning- Abuse of dominance is a widely known term and has been explicitly incorporated in competition legislation of various countries. It refers to an anticompetitive business practice in which a dominant firm may engage in order to maintain or strengthen its position in the market. ...read more.

Middle

However, the market share is not the sole or decisive factor in finding a dominant position, and a specific market share limit cannot be imposed on the creation of a dominant position. 3. The market power that manifests itself on specific relevant markets and the assessment of potential dominance is frequently based on the examination of several factors. 4. It is possible to draw conclusions on the degree of concentration of the market from differences in the undertakings? market shares, however. 5. The wider the difference in market shares between the two biggest undertakings and the more dispersed the market shares of other competitors, the more likely the possibility that the one having the higher market share possesses significant market power. Identification of specific harmful conduct After existence of dominant position is analyzed and determined specific harmful conduct has to be identified, i.e. which company is dominating the market and what harmful conducts it is doing and then accordingly corrective actions has to be taken to monitor and control the dominance and reduce the problems effectively. Monitoring abuse of dominance The regulatory framework for monitoring abuse of dominance is as follows:- According to the Central Government Act Section 4 in The Competition Act, 2002 Abuse of dominance.- (1) No enterprise shall abuse its dominant position. (2) There shall be an abuse of dominance under sub- section (1), if an enterprise- (a) ...read more.

Conclusion

The company fount its dominant position in the marketing of personal computer operating system. The European Commission has imposed fine of US$612 millions. Microsoft has abused its monopoly power, which was created by dominant market shares in several markets and substantial barriers to effective entry. The concerns are that Microsoft has abused its dominance to gain competitive advantages over competitors in other (downstream or adjacent) markets, blocking innovation and exploiting customers. In the US case, in the market for Intel-compatible PC OS, its strategy is to protect the applications barrier by expanding Internet explorer. Share of browser usage, meanwhile depressing shares of competitors like Netscape and Sun Microsystems that may enable Microsoft?s monopolisation of the browser market. In the EU case, Microsoft was accused of abuse of dominance by denying interoperability with its competitors in the market for workgroup server operating systems and foreclosure against incompatible product developers, which enabled it to exercise monopoly power in the downstream market. Not only competitors but also consumers had to suffer from Microsoft?s monopoly. MacDonald?s Corporation The Pizza Giant has entered into franchises agreement with 28 Brazilian parties from whom it collects 24% of gross sales by way of rents in respect of premises and use of its recipes. It has acquired all most all locations and premises around its restaurant so as to restrict the entry of rival brands. The formal administrative proceedings have been opened after preliminary investigation and the case is under adjudication by CADE. ...read more.

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