India’s Increasingly Practical Outlook on Grounding Abuse Contraventions in Commercial Realities

[Akash is a student at Dr Ram Manohar Lohiya National Law University.]

Section 4 of the Competition Act 2002 (Act) prohibits dominant firms from abusing their market power through practices like discriminatory pricing or denying market access. Historically, the Competition Commission of India (CCI) applied a rigid presumption-based approach, penalizing conduct listed in Section 4(2) without always analyzing effects or proving harm to competition. Recent judicial rulings, however, emphasize a mandatory reason-based approach, requiring evidence of competitive harm and consideration of legitimate business justifications.

Effects-Based Analysis: The Prevailing Standard

Indian courts have decisively adopted an effects-based approach for assessing abuse of dominance under Section 4. In two of the National Company Law Appellate Tribunal's (NCLAT) decisions in Google LLC and Another v. CCI and Others (Google 2023) and Alphabet Inc. and Other v. CCI and Others (Google 2025), the NCLAT opined that an effects-based analysis is mandatory for assessing abuse under Section 4 of the Act, wherein actual or likely effects have to be analyzed. This approach has been further endorsed by the Supreme Court of India in CCI v. Schott Glass India Private Limited (Schott Glass). Not only that, but conduct that has objective commercial justifications must also be weighed while assessing abuse. Notably, no contravention can be proved against a likely conduct. While the CCI discretionarily did undertake such analysis before, wherein it weighed proportionality and legitimate interests, such an approach is mandatory now.

This approach is in line with the European Union's (EU) standards. In RENV Intel Corporation v. Commission (Intel), the European Court of Justice interpreted abuse of dominance under Article 102 to necessarily include an assessment of net harm to competition whenever a defence of commercial justifications is brought up by a firm. Intel was also taken note of in Schott Glass, stating that exclusionary conduct may be condemned only after the decision-maker has balanced its likely anti-competitive impact against any demonstrated efficiencies.

Legislative Intent and Policy Framework

The Act's legislative intent supports a rule of reason analysis, requiring an effects-based test for assessing abuse. The Raghavan Committee Report 2000, which shaped the Act, emphasized assessing harm to competition and consumer benefits when evaluating abuse. Section 19(4)(1) of the Act directs the CСІ, in analyzing dominance, to consider a firm's "relative advantage" through contributions to economic development, further supporting this intent.

The Report of Competition Law Review Committee 2019 (CLRC) examined the applicability of the rule of reason for assessing abuse. It saw the provision as resting on a per se rule while acknowledging some of the effects-based limbs (such as denial of market access). It assessed CCI's decisional practice to note that effects analysis is undertaken wherever necessary. The CLRC ultimately concluded that no legislative amendment was required. However, a dissent was recorded by Dr Aditya Bhattacharjea in favor of a mandatory effects analysis to ensure that "only egregious conduct is caught and pro-consumer conduct is not chilled".

The Nexus Between Abuse, Evidence, and Commercial Justifications

A rule of reason approach rightly demands a robust theory of harm, supported by hard evidence, before contraventions can be established and remedies are imposed. The Supreme Court in Schott Glass has stressed the need for "hard evidence" to justify intervention for anti-competitive harm, whether actual or likely. Appellate forums are also increasingly setting aside contraventions and remedies which are not connected directly to proven or likely harm, or not weighed against legitimate conduct. 

For example, in Google 2023, the NCLAT upheld the contraventions found by the CCI but set aside several remedies for lacking nexus and neglecting justified commercial interests. A remedy that mandated the distribution of competing app stores through the Play Store was not backed by a corresponding abuse that restricted competing app stores. This remedy was set aside as the NCLAT accepted Google's objective justification that it already allows app distribution on its terms and conditions. Similarly, remedies related to malware warnings and access to Google Play's Application Programming Interfaces were struck down after the NCLAT weighed proportionality and justified commercial interests, such as incentives for innovation.

Moreover, in Google 2025, the NCLAT overturned a finding of discriminatory pricing. CCI contended that Google did not levy a fee on YouTube but did so on other app developers. NCLAT disagreed since YouTube and Google are one single economic entity (although the NCLAT did not explicitly mention application of the ‘SEE’ doctrine), no concept of sale is involved, and hence, there was no unequal treatment of likes. Furthermore, in setting aside the denial of market access finding the NCLAT noted the minuscule share of Google Play (1%) in the market for apps facilitating payments through UPI and a lack of proven anti-competitive effects.

Another case in point is Matrimony.com Limited and Another v Google LLC and Others, wherein the CCI found that Google imposed an unfair condition on consumers by displaying its Flights unit on a prominent space in the search engine results page, misleading consumers. Google's justifications were that it enhanced user experience and was labelled as "sponsored", negating any claims of misleading users. Moreover, it argued that neither did the CCI demonstrate any effects of such conduct (in terms of traffic diversion). nor did it rebut Google's claim that such integration was necessary to sustain its two-sided business model. Interestingly, the order was dissented by two members, accepting Google's rationale and its right to generate revenue through legitimate means. The dissent also flagged a lack of empirical support for the impugned harm. Importantly, arguing for consumers being misled by the prominent display of Flights unit corresponding evidence in the form of user surveys would have provided weight to such a finding; alas, no such attempt was made. While a final adjudication by NCLAT is pending, the remedy for the Flights unit to display an additional disclaimer was stayed in an interim order inclining towards the insufficiency of harm proved by the CCI.

In a more recent case, CCI ruled on WhatsApp's updated privacy policy of 2021. Apart from restricting WhatsApp from imposing its privacy policy as a condition to use WhatsApp, it also held that data integration by a dominant firm, even in the presence of consumer consent, violates Section 4. While the former has weight to it and was demonstrated by evidence on how users were coerced, the latter seems inconsistent. The arguments for the denial of market access mainly involve the improvements in efficiency that data integration causes. To many, it might sound like restricting the efficiency of a player to protect competitors and not the competition. Consequently, in an interim order, NCLAT acknowledged that WhatsApp's entire business model rests on facilitating advertising through the data it collects. Naturally, it stayed the restraint imposed on WhatsApp's ability to share data for advertising purposes for 5 years. Further, it is to be seen how the merits will be tested on whether the efficiency gains deny market access to the extent of unjustly ousting contestability or not.

In an interesting retrospective comparison, the Supreme Court in CCI v. Fastway (Fastway) upheld a violation of market access denial but did away with the penalty as the reasons for the impugned conduct were "justifiable". The conduct in question referred to the removal of a channel from cable for having extremely low ratings compared to its peers. This view on justifiable conduct still amounting to abuse now seems overruled. Moreover, Fastway was also relied on by the CCI in Schott Glass to argue that Section 4(2) is a "deeming provision ipso facto condemning the listed practices". The Supreme Court rejected such reliance as Fastway never considered such a question. An effects test that weighs the anti-competitive harm, manifested or likely, against the gained efficiencies and objective commercial justifications will give decisions more substance and certainty. For robust findings of contraventions and imposing remedies, a strong correlation is required along with proving effects.

Conclusion

The shift to an effects-based approach under Section 4, solidified by Schott Glass and Google 2023 and Google 2025, aligns India with the EU's standards, ensuring only actual conduct with proven or likely competitive harm is penalized. This requires the CCI to build robust harm theories backed by hard evidence and weigh business justifications like efficiency or innovation.

Practical Implications:

• Businesses should document legitimate justifications (e.g., quality assurance, cost savings, business models) to defend practices, as courts increasingly protect proportionate conduct. 

• Regulators must prioritize empirical evidence, to avoid overturned decisions. The CCI could adopt formal inclusive guidelines, addressing legal uncertainty on how such analysis will be undertaken. 

By grounding contraventions in commercial realities, India's competition law can achieve a balanced ecosystem where dominant firms innovate responsibly, and regulators enforce with precision.