BL has not used its dominance in the relevant market by leveraging its position to enter into
another market
§4(1) of the Act states that no enterprise or group shall abuse its dominant position. 1 The DG has
found that BL has not violated Section 4(2)(e) of the Act. 2 It is submitted that the findings of DG
are correct and there is no such violation because
[2.1] The DG has correctly identified the relevant market
[2.2] BL does not hold any dominant position in the identified relevant market,
[2.3] In Arguendo, BL holds a dominant position in the market, it has not abused its dominant
position.
……………………………………………………………………………………
[2.2] BL does not hold any dominant position in the identified relevant market
It is most humbly submitted before this Hon’ble Commission that DG has correctly rejected the
dominance of BL in the market.3
Dominance means a position of strength, enjoyed by an enterprise, in the relevant market, which
enables it to,4 operate independently of competitive forces prevailing in that market; or affect its
competitors or consumers or the market in its favor.5
[2.2.1] BL does not operate independently of competitive forces prevailing in the relevant market
and does not affect its competitors or consumers or the market in its favor.
It is an established principle that a firm would be able to behave independently of competitive
forces, if it has acquired a position of economic strength.6 In the present case, the Beaut-Box
subscription service was launched by BL on May 2018. The subscription service was first of its
kind in Kanto, and therefore to widen its customer base, BL offered incentives like providing
products worth KNR 1500+ for the price of just KNR 799 under the Beaut-Box subscription. BL
1
§4(1), Competition Act, 2002, No. 12, Acts of Parliament, 2002 (India).
2
8.9, PAGE 9, ANNEXURE-1, 9 TH INSTITUTE OF LAW NATIONAL MOOT COURT COMPETITION 2019
3
7.23, PAGE 9, ANNEXURE-1, 9 TH INSTITUTE OF LAW NATIONAL MOOT COURT COMPETITION 2019
4
Competition Act, 2000, section 19(4), No 12, Acts of Parliament, 2002 (India).
5
135 LENNART RITTER, W. DAVID BRAUN, EUROPEAN COMPETITION LAW: A PRACTITIONER’S
GUIDE 18 (3d ed. 2005).
6
Brands Co. v. Commission, 1978 E.C.R. 207.
has been there in the market for just 3 months in Kanto. Since the subscription service provided
by the company has been there in the market for a short period and BL has provided incentives to
add to it’s customer base. Therefore, it can be inferred from the facts that BL could not have
possessed economic strength.
Since it is clear from the fact that after gold pass came into the market, BL pass was unable to
affect the competitors/consumers/ relevant market in its favor, BL was not dominant. In the case
of BB subscription also there was mere absence of competitors in the market, BL can’t be said to
be dominant.
[2.3] In Arguendo, BL has not abused its dominant power
It is most humbly submitted before the Hon’ble Tribunal that Gollum has not abused its
dominant position under §4(2)(e) because (i) BL is not in a position to cross subsidized its profit,
and (ii) BL did not adopt predatory pricing
[2.3.1] BL is not in a position to cross subsidized its profit
From an economic point of view cross-subsidization occurs where the earnings from a given
service do not suffice to cover the incremental costs of providing that service and where there is
another service or bundle of services the earnings from which exceed the stand-alone costs. The
service for which revenue exceeds stand-alone cost is the source of the cross subsidy and the
service in which revenue does not cover the incremental costs is its destination. 7 For any market,
the first few months can be said to be nascent stage.8
In the present case, the Beaut-Box subscription was a nascent market because it was launched in
May 2018 and when the case was filed Beaut-Box has been there in the market for 3 months
only.
Further, the revenue generated from the Beaut-Box subscription could not be enough to sustain
Beauty Pass subscription. The revenue generated from BL is low is evident from the fact that BL
increased the price for availing certain high-end brands by KNR 125.
Therefore, it is most humbly submitted to the honorable commission that BL is not in a position
to cross subsidized its profit.
7
Para 6, Deutsche Post AG, 2001/354/EC
8
Para 10.56, NSE decision
[2.3.2] BL did not adopt predatory pricing
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. 9 Predatory price is considered as
a sub-set of “unfair price”.10 In the present case, BL had no competitors in the market. It was first
of its kind to offer subscription services in the relevant market11. The price of the Beaut-Box
subscription was kept low by the BL to build its customer base as the services offered by BL
were new in Kanto. Therefore, it is most humbly submitted to the honorable commission that BL
has not adopted to predatory pricing in the relevant market.
9
Competition Act, 2000, section 19(4), No 12, Acts of Parliament, 2002 (India).
10
Competition Act, 2000, section 19(4), No 12, Acts of Parliament, 2002 (India).
11
7.23, PAGE 9, ANNEXURE-1, 9 TH INSTITUTE OF LAW NATIONAL MOOT COURT COMPETITION 2019
