Challenges of Competition in Telecommunication Sector and Critical Legal Analysis of Predatory Pricing in India

Abstract

The Competition Act,2002 mainly focuses to re-establish competition and defend Indian markets against anti-competitive commercial practises. No company has to be in a dominant position (i.e., there shouldn't likely be a market share of 40% or more). The act's and its regulations' primary goals are to influence market outcomes in ways that will affect pricing, output, deliver greater service quality, service innovation, and healthy competition. Starting a balance between encouraging competitiveness and preventing anti-competitive behaviour is necessary. The protection of consumer interests is a common objective shared by sectoral regulations and the Competition Commission.However, as specified by various statutes, they are governed by various procedures. The primary distinction is that sectoral regulators work to promote competition by bringing about structural changes, whereas competition legislation works to stop anti-competitive practises in the market. There is always a conflict of decision when there is such a disparity in the two regulators' perspectives. Their exposure to potential liability may rise as a result of such a finding, in addition to creating market uncertainty. The Competition Act of 2002 recognises the responsibility of the Competition Commission of India (CCI) to stop anti-competitive practises in all economic sectors; these overlap issues call for mutual but voluntary interaction with the sector regulator on matters pertaining to competition. However, the Telecom Regulatory Authority of India (TRAI) Act, 1997 acknowledges the authority of the competition body over matters of competition. Predatory pricing is an anti-competitive act as it contains an express provision under section 4(2)(a)(ii) which states that Under section 4(1) of the Act, predatory pricing is considered an abuse of a dominant position. The definition of predatory pricing under this lawis defined as “ 2 the sale of goods or provision of services, in order to restrict competition or remove competitors, at a price that is less than the cost of producing the goods or providing the services, as assessed by regulations.”3 . Predatory pricing is also known as destroyer pricing, it is the method of selling goods at a very low cost in mandate to eliminate business competitors as of market and also to create barriers for new competitors to enter into the market. It aims at not allowing new entrants in the market and forcing the existing players to exit the market by attracting all their customers.Consumers can profit from cheaper costs initially under such conditions, although in a long run it will lead to higher costs, less quality and lesser choice due to diminished competition. This technique is used in large firm with large capitals sells its goods and services at lower costs that none of the competitors could play with them. The factors which are establishing predatory pricing are: