Ec law abuse of dominance indian law concentration of

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EC law: Abuse of dominance Indian law: Concentration of economic power (MRTP Act, 1969); abuse of dominant position (Competition Act, 2002) Famous cases: Microsoft (EU and US): Interoperability, Tying (IE, WMP) National Stock Exchange, India: Predatory pricing; DLF: Unfair and discriminatory pricing strategy by a dominant undertaking.
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PGP I Term I
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Discrimination is ‘Not’ a negative word here. Firms with market power can charge different prices to different consumers or for different quantities purchased. Producer surplus increases by capturing consumer surplus. Social cost of monopoly may also reduce with price discrimination.
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P m Q* MC P (=AR) MR Quantity Price P c A B P 1 P 2 Requirements: 1.Market power 2.No Arbitrage 3.Identifying different groups of consumers
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First degree: Perfect price discrimination, hard to find in real world Second-degree price discrimination: Discrimination by self-selection, quantity related price discrimination (quantity discounts, block pricing) Third-degree price discrimination: Customer specific price discrimination (based on observed characteristics). Two part tariff, inter-temporal price discrimination, peak-load pricing.
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1 2 2 1 2 2 2 1 1 1 2 1 2 1 T 2 2 1 1 1 1 1 1 P P be, will price Relative 1 1 P MR and 1 1 P MR , Since MC MR MR , or 0 Q Q : conditions maximizing Profit ) Q ( C Q P Q P
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MC T MR T D 2 D 1 MR 2 MR 1 Q 1 Q 2 Q T P 2 P 1 quantity price
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AC MC D MR P M P 2 P 1 Q M P 3 Q 1 Q 2 Q 3 quantity price
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Two-part pricing: A firm charges the consumers a fixed fee (entry fee) and a variable fee which depends on the units of consumption. Examples: Retail electricity, landline and post-paid phone connections, amusement parks, cricket club memberships. Works well for bundled products like razor and blades, camera and films etc.
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price price quantity quantity D D 1 D 2 MC MC a a b c Usage fee: P=MC Entry fee= Δ abc D total f e d c b g h i
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Service provider Fixed Fee (Rs) Per unit charge (p) Total Units of consum ption Total Bills (Rs) Airtel (Tariff plan 1) 20 15 200 50 Airtel (Tariff plan 2) 30 10 200 50 Units consumed Airtel (T1) Airtel (T2) 1 20.15 30.10 2 10.15 15.10 3 6.82 10.10 4 5.15 7.60 5 4.15 6.10 6 3.48 5.10 7 3.01 4.39 8 2.65 3.85 9 2.37 3.43 10 2.15 3.10
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Quantity Price D 2 D 1 MR 1 MR 2 AC=MC P 1 P 2 Q 1 Q 2 AC=MC Quantity Price T=0 T=1
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Quantity Price D 1 D 2 MR 2 MR 1 MC P 1 P 2 Q 2 Q 1 Quantity Price Night Daytime MC
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quantity price p 6 p 5 p 4 p 3 p 2 p 1 D=AR MR MC
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A monopolist is deciding how to allocate output between two geographically separated markets.
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