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How do I recognise an abuse of dominance?

A two-step test is used to assess whether there is abuse of dominance:

Test 1: Whether the undertaking is dominant.  A market leader is likely to be dominant when one or more of these factors are satisfied:

  • It has a market share of 60% and above
  • There are few or no competitors that its customers can go to
  • Its customers do not have significant bargaining power
  • Newcomers find it difficult to enter the market for instance, because of high capital cost or technological barriers 

Test 2: If it is dominant, whether it is abusing that dominant position in a market. Being dominant is not against the law. But some dominant undertakings may either block rivals from competing against it or stop rivals from entering the market. Abusive tactics may include: 

  • Exclusive dealing: When the dominant undertaking binds other businesses into working exclusively with itself
  • Predatory pricing: When it sets extremely low prices to drive competitors out of the market
  • Discount schemes: When it ties its discounts with the purchase of other products and services
  • Refusal to supply: When it withholds key products or services essential to other businesses.

Updated Date

Last Updated on 31 March 2018