MAHARASHTRA NATIONAL LAW UNIVERSITY, MUMBAI

COMPETION LAW

Synopsis Submitted

On

RECOUPMENT, PENETRATIVE PRICING, AND PREDATORY PRICING

Ninth Semester, B.A., LL.B, (Hons.)

Submitted to: Submitted by:

Prof. (Dr.) Anand Raut

Vidit H

Roll No.: 2015-021

Introduction

On 5th September, 2016 Reliance Jio Infocomm Limited(RJIL) (hereinafter referred as ‘Jio’)
released its free data and voice scheme ‘Jio welcome offer’ which was further extended till
December. Next, it introduced ‘Happy new year offer’ which extended the previous plan till
31 March, 2017. Even in 2018 and now in 2019, it is charging nominal rates to provide high
speed data and voice which instigated the Indian digital revolution. For the first time in India,
humongous investments were done and a new entrant penetrated the telecommunication
market which was held tightly by few incumbents. Predatory pricing poses a dilemma that
has perplexed and intrigued the antitrust community for many years. On the one hand, history
and economic theory teach that predatory pricing can be an instrument of abuse, but on the
other side, price reductions are the hallmark of competition, and the tangible benefit that
consumers perhaps most desire from the economic system. Recoupment inquiries play an
important role in predatory pricing cases. Nevertheless, their place in antitrust analysis is
unclear and potentially problematic in ways that are not fully appreciated. Does a recoupment
requirement define, augment, or replace the pre-existing monopoly power requirement that
involves similar analysis? How can a recoupment test be inserted in sequential assessments of
alleged predatory pricing when all of the steps are intertwined with the others, including
those deemed to come later? Why is a plaintiff permitted to show either that recoupment was
ex ante plausible or that sufficient ex post profit recovery occurred, rather than requiring one
in particular, or both? This paper will look to address these questions by examining the
underlying purposes of recoupment assessments and predatory pricing inquiries more
broadly. As will become evident, much of the analysis is relevant not just to predatory pricing
but to other forms of anticompetitive conduct as well.

PRINCIPLES DISCUSSED

1. Role of Recoupment into enquiry of predatory pricing

2. Does a recoupment requirement define, augment, or replace the pre-existing monopoly

power requirement that involves similar analysis?

3. How can a recoupment test be inserted in sequential assessments of alleged predatory

pricing when all of the steps are intertwined with the others, including those deemed to come
later? (Penetrative Pricing)
AIM AND OBJECTIVE

The aim of this research is:-

- To analyse the legislative framework governing Penetrative pricing in India.

- To trace the development of judicial pronouncements and various tests laid down by the

Courts for determining predatory pricing.

- To compare the predatory pricing concept laid down in international regime and tests
adopted by the courts in India.

- To conclude whether these tests sufficiently remove external errors like hindsight bias

RESEARCH METHODOLOGY

“DESCRIPTIVE” Method of Research” has been relied upon for conducting the research
given the availability of resources and time. The researcher has relied mainly upon secondary
sources, including books available in Library, Databases, Journals, Articles and Newspapers.