Determining Dominance — Relevant Market Analysis

No enterprise is dominant in the abstract. Dominance is always dominance within a market, and an abuse under Section 4 can only be tested once that market has boundaries. This is why every abuse-of-dominance inquiry, and many merger and agreement inquiries, begin with the most consequential analytical step in Indian competition law: delineating the relevant market. Defined too narrowly, almost any firm looks dominant; defined too widely, even a monopolist disappears into a sea of notional competitors. This chapter explains how the Competition Commission of India (CCI) maps the relevant product and geographic markets under the statutory scheme of Sections 2(r), 2(s), 2(t) and 19(5) to 19(7) of the Competition Act, 2002, the economic tools it borrows, and the case law that has shaped the exercise from Belaire to the Supreme Court's 2025 decision in Schott Glass.

Why the Relevant Market Is the Gateway

The relevant market is not an end in itself; it is the indispensable first step toward almost every substantive finding under the Act. Section 4 prohibits the abuse of a dominant position, and the Explanation to Section 4 defines dominance as a position of strength enjoyed by an enterprise in the relevant market in India which enables it to operate independently of competitive forces or to affect competitors, consumers or the market in its favour. Strip out the relevant market and the words "position of strength" become meaningless: strength relative to what, and over whom?

The same gateway function appears in merger control under Section 6, where the question is whether a combination causes an appreciable adverse effect on competition (AAEC) within a relevant market, and in the assessment of vertical agreements under Section 3(4), which our companion chapter on vertical agreements and the rule of reason takes up in detail. Even horizontal cartel analysis, which Section 3(3) treats as presumptively harmful, ultimately requires a relevant market to measure the appreciable adverse effect, a point the Supreme Court underscored in CCI v. Coordination Committee of Artists and Technicians of W.B. Film and Television, (2017) 5 SCC 17.

Because so much turns on it, market definition is frequently the real battleground of a case. A respondent rarely concedes the market the informant proposes; instead it argues for a wider market in which its share shrinks below the threshold of concern. The CCI's task is to resist both the informant's instinct to gerrymander a narrow market and the respondent's instinct to dissolve all boundaries.

The Statutory Architecture: Sections 2(r), 2(s), 2(t) and 19(5)-(7)

The Act builds market definition out of four interlocking provisions. Section 2(r) defines the "relevant market" as the market which may be determined by the Commission with reference to the relevant product market or the relevant geographic market, or with reference to both. The word "or" is significant: the Commission may, in an appropriate case, define a market by product alone or geography alone, though in practice it almost always does both.

Section 2(t) defines the "relevant product market" as a market comprising all those products or services which are regarded as interchangeable or substitutable by the consumer, by reason of the characteristics of the products or services, their prices and intended use. The touchstone is therefore consumer-side substitutability, the same idea the European Commission and the US agencies build their analysis around.

Section 2(s) defines the "relevant geographic market" as a market comprising the area in which the conditions of competition for the supply or demand of goods or services are distinctly homogenous and can be distinguished from the conditions prevailing in neighbouring areas. Homogeneity of competitive conditions, not mere physical proximity, is the test.

Finally, Section 19(5) directs that in determining whether a market is a relevant market the Commission shall have due regard to both the relevant geographic market and the relevant product market, while Sections 19(6) and 19(7) supply detailed, non-exhaustive checklists of factors for each. The phrase "all or any of the following factors" in both sub-sections confirms that the lists are menus, not mandatory tests; the Commission selects those factors that the facts make material. These definitions are taken up alongside the cognate concepts of enterprise and cartel in our chapter on key definitions.

Defining the Relevant Product Market: Section 19(7)

Section 19(7) lists the factors the Commission weighs when fixing the relevant product market: (a) physical characteristics or end-use of goods; (b) price of goods or service; (c) consumer preferences; (d) exclusion of in-house production; (e) existence of specialised producers; (f) classification of industrial products; (g) costs associated with switching demand or supply to other goods or services; and (h) any other factor the Commission considers relevant. Together these operationalise the Section 2(t) test of interchangeability.

Physical characteristics and end-use are usually the starting point. In Belaire Owners' Association v. DLF Ltd., the CCI distinguished high-end residential apartments from plots, commercial space and low-cost housing because their characteristics, intended use and the class of consumers who buy them differ, defining the relevant product market as "services of a developer/builder in respect of high-end residential apartments." The narrowness of that product market was decisive: within it DLF held the largest share with no effective competitive constraint.

Price and switching costs introduce the economic dimension. Two products with similar physical features may still belong to different markets if a consumer cannot or will not switch between them when relative prices change. Conversely, products that look different may share a market if buyers treat them as substitutes, as the Director General reasoned in Fast Track Call Cab v. ANI Technologies (Ola), where asset-based and aggregator-based radio-taxi models were treated as functionally substitutable and placed in the same product market. The factor of "exclusion of in-house production" reminds the Commission that captive output a firm makes for itself is not always part of the merchant market that outside buyers face.

Defining the Relevant Geographic Market: Section 19(6)

Section 19(6) lists the geographic factors: regulatory trade barriers; local specification requirements; national procurement policies; adequate distribution facilities; transport costs; language; consumer preferences; the need for secure or regular supplies or rapid after-sales services; the characteristics of goods or nature of services; and costs associated with switching supply or demand to other areas. The unifying inquiry is the Section 2(s) test of distinctly homogenous competitive conditions.

Transport cost is often pivotal for bulky, low-value goods such as cement or glass, where the economics of carriage confine competition to a region. In CCI v. Schott Glass India, by contrast, the Supreme Court accepted India as a single geographic market for neutral borosilicate glass tubing because transport costs and quality standards were uniform across the country. Regulatory barriers and language matter most for services. In the radio-taxi cases the CCI initially treated regulatory differences and CNG requirements as reasons to confine the market to Delhi rather than the wider National Capital Region, a delineation the appellate forum questioned.

The geographic market can be local, regional, national or even wider. In Belaire the Commission held the relevant geographic market to be Gurgaon alone, reasoning that a buyer seeking a high-end apartment in Gurgaon would not regard apartments in other cities as substitutes because of locational preference, employment and the distinct competitive conditions of the Gurgaon real-estate market. The lesson is that geography, like product, is defined from the buyer's perspective, not the seller's logistics.

The Economic Toolkit: SSNIP and Substitutability

Behind the statutory factors lies a body of competition economics. The central organising idea is substitutability, of which there are two kinds. Demand-side substitutability asks whether consumers would switch to other products or areas in response to a price rise. Supply-side substitutability asks whether other producers could quickly and cheaply redirect their production or distribution to the candidate products, thereby disciplining the incumbent's pricing.

The formal tool that captures demand-side substitution is the SSNIP test, the "small but significant and non-transitory increase in price" or hypothetical-monopolist test. One imagines a hypothetical monopolist of the candidate products imposing a price increase of, typically, five to ten per cent sustained for around a year. If enough customers would switch away to make the increase unprofitable, the candidate market is too narrow and the next-best substitute must be added; the process repeats until one reaches the smallest set of products over which the hypothetical monopolist could profitably raise prices. That set is the relevant market.

Indian forums invoke the SSNIP test as a conceptual guide rather than a rigid arithmetical exercise, partly because reliable price-elasticity data is often unavailable in Indian markets. The CCI therefore tends to apply the Section 19(6) and 19(7) factors qualitatively, treating the SSNIP framework as the economic intuition that the factors are meant to capture. The hub chapter at Competition Act notes situates this toolkit within the broader scheme of the Act.

Belaire v. DLF: The Template Case

The CCI's order in Belaire Owners' Association v. DLF Ltd. is the foundational Indian decision on relevant market in an abuse-of-dominance setting. The Belaire Owners' Association complained that DLF had imposed grossly one-sided terms on buyers of apartments in its Belaire complex in Gurgaon, abusing its dominant position contrary to Section 4.

To test dominance the Commission first fixed the relevant market. On the product side it isolated "high-end residential apartments" as a market distinct from plots, independent houses, commercial property and affordable housing, relying on the Section 19(7) factors of physical characteristics, end-use and consumer preference. On the geographic side it confined the market to Gurgaon under Section 19(6), citing distinct competitive conditions and buyer preference for location. Within that market DLF held roughly forty-five per cent share, far ahead of its nearest rival, leading the Commission to find dominance and, ultimately, abuse through unfair terms.

The Commission imposed a penalty of about Rs 630 crore, calculated at seven per cent of DLF's average relevant turnover, and the Competition Appellate Tribunal (COMPAT) upheld the order in 2014. Belaire remains the textbook illustration of how a carefully narrowed product-and-geographic market can convert a large but not overwhelming national developer into a dominant local player. It also shows the stakes of market definition: had the market been defined as all residential real estate across the NCR, DLF's share, and the finding of dominance, might not have survived.

Coordination Committee: The Supreme Court on Market Definition

In CCI v. Coordination Committee of Artists and Technicians of W.B. Film and Television, (2017) 5 SCC 17, decided on 7 March 2017, the Supreme Court delivered its first substantive ruling on the Competition Act and, in doing so, addressed relevant-market analysis directly. The dispute arose when trade bodies in the West Bengal film and television industry threatened non-cooperation against channels telecasting a Bengali-dubbed version of the serial Mahabharat, allegedly to protect local artists and technicians.

The CCI had found a contravention of Section 3(3) and, in measuring the appreciable adverse effect, treated the relevant market as the broadcasting of dubbed serials on television in West Bengal. COMPAT set this aside, holding the market should have been the entire film and television industry of West Bengal. The Supreme Court reversed COMPAT and restored the CCI's view, but its reasoning is what matters for students.

The Court explained that for a Section 3 inquiry the relevant market must be drawn so as to capture all the actual competitors whose conduct could be constrained by the impugned agreement, and that even though Section 19(3) does not in terms require a relevant-market finding for Section 3(3) cartels, identifying the affected market is necessary to assess the adverse effect. The judgment confirms that relevant-market analysis is not confined to Section 4 dominance cases but pervades the assessment of anti-competitive agreements as well.

Uber and Ola: Market Definition in Platform Markets

The radio-taxi litigation produced two instructive decisions that turned on market definition. In Fast Track Call Cab Pvt. Ltd. and Meru Travel Solutions v. ANI Technologies (Ola), the CCI by its order of 19 July 2017 defined the relevant market as "radio-taxi services in Bengaluru," accepting the Director General's view that asset-based and aggregator-based models were functionally substitutable. On that market the Commission found that Ola could not act independently of competitors such as Uber and so was not dominant, closing the predatory-pricing allegations; the appellate forum agreed that Ola did not enjoy a dominant position.

The companion matter concerned Uber. In Uber India Systems Pvt. Ltd. v. CCI, decided by the Supreme Court on 3 September 2019, the question was whether the CCI was right to refuse, at the prima facie stage, to order an investigation. The relevant geographic market had been contested as either Delhi or the wider National Capital Region. The Supreme Court declined to disturb the appellate direction for investigation, observing that on the material, particularly the allegation that Uber was losing about Rs 204 per trip, it was difficult to say there was no prima facie case under Section 26(1) of infringement of Section 4, since such losses pointed to an intent to eliminate competition rather than ordinary commercial discounting.

Read together, the cases show how contested market definition becomes in two-sided platform markets, where the "product" is a matching service and the geographic boundary turns on regulatory and infrastructural differences between adjacent cities. They also illustrate that at the prima facie stage the Commission need not conclusively fix the market, a theme our chapter on the abuse of dominant position develops further.

MCX-SX v. NSE: Defining a Financial-Services Market

MCX Stock Exchange Ltd. v. National Stock Exchange of India Ltd., decided by the CCI on 23 June 2011, was an early and influential application of relevant-market analysis to financial services. MCX-SX alleged that NSE had abused its dominance in the currency-derivatives (CD) segment by waiving transaction fees and adopting a zero-price policy to foreclose the new entrant.

The crux was whether the CD segment was a distinct relevant product market or merely part of a broader market embracing equity, futures and options on a single exchange. The Commission held the currency-derivatives segment to be a separate relevant product market, reasoning that the product had distinct characteristics, a distinct class of participants and was not substitutable with other exchange-traded products from the user's standpoint. Within that narrowly drawn market NSE was found dominant, and its sustained zero-pricing was held to be an abuse.

The CCI imposed a penalty of about Rs 55.5 crore, and COMPAT upheld the finding of abuse of dominance on 5 August 2014. The case demonstrates that even in highly regulated, technologically sophisticated markets the same Section 19(7) inquiry, focused on substitutability and the characteristics of the service, governs the definition of the product market.

Google Android: Layered Markets in the Digital Economy

The CCI's October 2022 Android decision shows relevant-market analysis adapting to digital ecosystems. Investigating Google's conduct in the Android mobile-device ecosystem, the Commission did not define a single sprawling market but several distinct, layered relevant markets, including the market for licensable operating systems for smart mobile devices in India and the market for app stores for the Android smart-mobile OS in India.

The reasoning illustrates the Section 19(7) factors at work in technology markets. Licensable operating systems (such as Android, which device makers can license and adapt) were held to form a market distinct from non-licensable systems (such as Apple's iOS, which Apple does not license to third parties), because original equipment manufacturers cannot substitute one for the other; an Android device maker simply cannot switch to iOS. Within the licensable-OS market Google's share approached ninety-five per cent on a durable basis, supporting a finding of dominance. The Commission imposed a penalty of about Rs 1,337.76 crore for abuses in the Android ecosystem and a separate penalty in the Play Store matter.

The case is a leading example of how the CCI defines several interconnected relevant markets to capture conduct that leverages dominance in one layer (the OS) to protect or extend power in adjacent layers (app distribution, search). It confirms that the substitutability test in Section 2(t) is applied from the perspective of the relevant customer at each layer, here device makers for the OS market and users or developers for the app-store market.

Schott Glass: The Supreme Court Tightens the Discipline

The most recent and arguably most important appellate guidance comes from CCI v. Schott Glass India Pvt. Ltd., 2025 INSC 668, decided by the Supreme Court on 13 May 2025. The matter concerned Schott India, a manufacturer of neutral USP-I borosilicate glass tubing used to make pharmaceutical ampoules and vials, accused of abusing dominance through discriminatory discounts and tying of clear and amber tubing.

On market definition the Court accepted that there were two distinct upstream relevant product markets, neutral glass clear (NGC) and neutral glass amber (NGA), because their physicochemical properties make them non-interchangeable, and that India formed a single geographic market given uniform transport costs and quality standards. Schott was found to hold a high share, in the range of sixty-one to eighty per cent over 2008 to 2010, and was dominant under the Section 19(4) factors.

What makes the decision significant is not the market definition but what the Court demanded next. It held that a finding of dominance, even on a correctly defined market, does not by itself establish abuse; the Commission must conduct an effects-based analysis demonstrating actual or likely appreciable adverse effect on competition, and on the evidence the CCI had failed to do so. The Court accordingly dismissed the CCI's appeal. Schott Glass thus reframes relevant-market analysis as the first, necessary but not sufficient step: getting the market right opens the door to a dominance finding, but liability requires proof of competitive harm within that market.

Common Errors and the Art of Boundary-Drawing

Two systematic errors recur in market-definition disputes. The first is the narrow-market fallacy, sometimes called the "cellophane trap" after the US case in which a monopolist's market was defined so widely that its monopoly disappeared, and its inverse, in which an informant draws the market so narrowly that an ordinary firm appears dominant. The CCI guards against both by insisting that the market be drawn from the consumer's perspective and tested against real substitution possibilities rather than litigation convenience.

The second error is treating the Section 19(6) and 19(7) checklists as cumulative mandatory tests. The statutory language, "all or any of the following factors," makes clear that the Commission selects the factors the facts make relevant. In a bulk-goods case transport cost may decide the geographic market; in a services case language and regulation may dominate; in a digital case the licensable-or-not distinction may be decisive. There is no single algorithm.

Finally, students should remember that the relevant market is defined afresh for each inquiry and may differ even for the same firm depending on the conduct alleged. A correct definition is contextual, evidence-led and economically literate. As Schott Glass now makes plain, it is also only the beginning: once the market's edges are drawn and dominance established, the harder question of whether the conduct actually harmed competition still remains. For the wider statutory scheme see our introduction to the Competition Act.