When Does Price Differentiation Become Discrimination? A Comparative Study Of Article 102(C) TFEU And Section 4(2)(A)(II) Of The Competition Act, 2002
- IJLLR Journal
- 44 minutes ago
- 1 min read
Aditya Pathak, National Law Institute University, Bhopal
Aditya Nigam, National Law Institute University, Bhopal
ABSTRACT
This paper explores the critical legal distinction between legitimate price differentiation and prohibited discriminatory pricing under Article 102(c) TFEU and Section 4(2)(a)(ii) of the Indian Competition Act, 2002. While price differentiation is often an economically rational business strategy, it triggers regulatory scrutiny when implemented by a dominant undertaking due to the special responsibility doctrine. The study analyses the jurisprudential evolution in both jurisdictions. In the EU, the focus has shifted from a formalistic assessment of unequal treatment (as seen in United Brands) to a substantive, effects based inquiry into whether conduct is capable of producing a competitive disadvantage, a transition crystallized in the British Airways and MEO rulings. Conversely, while the Indian statutory framework is more textually minimalist, the Competition Commission of India has increasingly adopted a substance over-form approach, particularly in Business-to-Business or B2B contexts, which requires evidence of market distortion or downstream foreclosure in cases such as Grasim Industries and Kapoor Glass. Through a comparative lens, this paper examines key elements such as the equivalence of transactions, the threshold for competitive harm, and objective justifications like meeting competition. It concludes by proposing a six-stage unified analytical framework, which encompasses dominance, equivalence, and market distortion; to distinguish benign differentiation from abusive discrimination. The paper argues that both regimes must prioritize the protection of the competitive process over individual competitors to avoid Type 1 errors that could chill pro-competitive pricing and harm long term consumer welfare.
