The Covid-19 pandemic shifted the physical world into virtual world, where the physical retail market was closed, the online retail market took its pace. With the growing pace of online market, the risk of unfair trade practices increased. It has become a common practice for companies to rely upon aggressive pricing to meet competitive needs in the market. In near future, the foreign companies will be attracted toward India and strong anti-competitive laws are required to keep them in check. The recent dispute alleging Shopee for using predatory pricing strategy and abuse of dominance highlighted the need for a proper framework governing the e-commerce market. In this blog, the author analyses the concept of predatory pricing and dominant position and highlights the loophole in the present pricing system.


Predatory pricing is a strategy involving sellers to impose a price so low to remove or eliminate the competition from the market. Generally, it is adopted by companies to increase their market power. It is determined by two factors, the market structure and the position of the player in the market.[i] This concept has been implied under Section 4 of the Competition Act, 2002, as a part of “abuse of dominance”. As per Section 4, Explanation (b), 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. This again must be followed a sustainable amount of time. However, the Act does not explicitly mention the term “recoupment of loss” to sustain a predatory pricing claim. But in the case of Transparent Energy Systems Pvt Ltd v TECPRO Systems Ltd.[ii], the Competition Commission of India (“CCI”) observed that there must be a planning to recover the losses incurred, after the market rises again and the competitors have already been forced out. In this very case the four factors to determine the predatory pricing policy was laid down which included, a) prices are below the cost price, b) recoupment of loss, after market rises again, c) sole purpose to drive out competition and d) existing competition is driven out. Thus, to allege an entity of using predatory pricing strategy, the dominant position in the market and reasonable amount of time needs to be proved. It was stated in In Re: Johnson and Johnson Ltd.[iii], “The essence of predatory pricing is pricing below one’s cost to eliminate a rival”. But as stated earlier, misuse of the dominant position need to be established.

For a company or a group to attain dominant position, the control and influence over the market which has a significantly negative impact on the rival competitors who holds less share in the market. Thus, it is clear that the dominant position is determined my factors such as market share, size, resources, structure, vertical integration, entry barrier and dependence of consumer.[iv]

The Section 4(2)(a)(ii) of the Competition Act, 2002, states that:

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.

Thus, these factors to determine the dominant position was established in the case of Fast Track Call Cab Pvt. Ltd. vs. ANI Technologies Pvt. Ltd.[v], where the CCI held that an entity needs to have a market share for a reasonable period of time for it to be considered as “dominant”. Moreover, the CCI in Jio Case[vi], due to the presence of several players having same financial capabilities, did not hold Jio to possess a dominant position. It was also observed that Jio held not more than seven per cent of shares in twenty-two telecommunication sectors in India. Thus, it is a technical process to determine the dominant position of an entity. However, in Uber India Systems Pvt. Ltd v CCI[vii] (popularly known as “Uber” case), the predatory pricing policy was taken into account to establish the dominant position and subsequently, Uber was held under Section 4(2)(a)(ii) of the Act.[viii]


The CCI in the case of Vaibhav Mishra vs. Sppin India Pvt. Ltd.[ix], held that Shopee does not possess significant power in the market and has less dominant position at the current stage, for which there exist no prima facie case of violation of Section 4 of the Competition Act, 2002. In this present case, Sppin India Pvt. Ltd. was incorporated in July 2021 and operates an e-commerce platform by the name Shopee. Vaibhav Mishra (the informant), under Section 19(1)(a), alleged Shopee violating Sections 3 and 4 of the Competition Act. It was alleged that Shopee was using discriminatory pricing strategy, such as products like kurtis, mugs and wallets were sold at Rs. 9/- and hampers the small players and have adverse effect in the market. Here, the discriminatory pricing strategy referred to predatory pricing which anti-competitive under Section 4(2)(a)(ii) of the Act. Shopee responded to these allegations by saying that it “has commitment to supporting and empowering India’s SMEs” and have helped thousands of local businesses to connect with the customers.[x] Even though the fact, CCI analyses and stated that the “modus operandi” is similar to Flipkart and Amazon, that is, following similar discounting practice but the allegations were dismissed under Section 26(2) of the Act on the grounds that Shopee does not possess a dominant position which is an essential condition as laid down in Section 4(2) of the Act. The CCI also remarked that Shopee was launched in India in 2021 while players like Amazon, Nykaa, Flipkart and so on have been operating for a reasonable amount of time. Earlier, CCI in In Re: All India Vendors Association[xi], considered to hold online marketplace as a separate marketplace and thereby held Flipkart not to be in a dominant position. This decision was a wake-up call for the e-commerce platform as their shares will be evaluated only in online marketplace and not overall which included online and offline marketplace. The Commission, in the case of Shopee, went with the lateral interpretation as laid down in the Section. It is clear that the observation of CCI is similar to the decision of the cases of Fast Track Call Cab Pvt. Ltd. and Jio.  


It is evident that CCI relied on the basic ingredients of the Section 3 and 4 of the Act while deciding the Shopee case. It is evident, the lack of ‘abuse to dominate approach’ under the Act is taken as advantage by some of the enterprises. Even though the Shopee does not have significant market power but the predatory pricing strategy can affect the rest of the competitors in market. It is true, not every discounting policy falls under predatory pricing, but if the deep discounting is done in the entrant level, then the rest of the start-ups, offline retails and small enterprises who wants to enter the market may suffer. Therefore, a strict provision relating to predatory pricing is required which should address possible future instances it should address.

[i] Guest, Gauging the Scheme of Predatory Pricing: The Case of Shopee Pvt. Ltd., IndiaCorpLaw (2022), .

[ii] (2013) 115 CLA 575.

[iii] (1988) 64 Comp Cas 394 NULL.

[iv] Definition of Dominant Position and the Board’s Approach, (last visited May 20, 2022).

[v] 2015 SCC OnLine CCI 139.

[vi] Bharti Airtel Ltd. v. Reliance Industries Ltd. & Anr., CCI Case No. 03/2017.

[vii] 2016 SCC OnLine Comp AT 451.

[viii] Guest, supra note 1.

[ix] 2016 SCC OnLine Comp AT 451.

[x] Predatory Pricing Row: CCI Throws Out CAIT’s Plea Against Shopee, Inc42 Media (2022), (last visited May 20, 2022).

[xi] All India Online Vendors Association v Flipkart India Private Limited and Another, CCI, Case No. 20 of 2018.

About the Author: This post is prepared by Ritesh Roshan Samartha, Law student at KIIT School of Law, Bhubaneswar, Odisha. He can be reached at

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