Predatory Pricing means that the prices of the goods or services have been reduced with the intention to drive away the competitors in the market. In India, recoupment is not an essential feature of predatory pricing. However, in U.S.A. to amount to predation, recoupment is essential. However, in U.S.A. to amount to predation, recoupment is essential. In U.S.A., it is not believed that any firm will be able to recoup its losses, thus, it is very rare where predation can occur.
Further, throughout all legislations, dominance is a pre-requisite for predation that the enterprise must enjoy in the relevant market. This in itself is problematic for the reason that there are instances where an entity is not dominant, however, uses predation to become a dominant entity. The enterprises are evading the law by using predatory pricing as a mechanism to gain dominance. This pricing strategy, further, gives rise to oligopoly and monopoly market structure as opposed to a competitive market.
An entity might not be dominant in a particular relevant market; however, the consumers might be experiencing the anti-competitive practices of the firm leaving them helpless and with no resolve. Similarly, in shopping centres wherein after buying the shops if discriminatory prices or any other anti-competitive practices is adopted then due to the lack of dominance, the consumer will not be able to resolve their grievances. Further, this dominance has to be in the relevant market which implies that an entity with vast resources can cause predation in the market where they are not dominant. Thus, while determining the effect of predation, the ignorance of the means & methods used to acquire market share obstructs the effectiveness of the legislation. The legislations all around the countries focusses on the exercise of the market power through pricing, ignoring the fact that the power might have been acquired by distorting the competition.
Furthermore, the current understanding of the competition law is inclined towards consumer welfare. However, as opposed to the present trend, consumer welfare cannot be achieved only through cost reduction but it includes quality, variety and innovation simultaneously. Moreover, the very purpose of the enactment of competition law is that it has to protect the competition in the market which seems to have faded away in the recent developments.
Another issue involved in the two-sided market is the price discrimination which increases with the situation heterogeneity and accordingly prices are manipulated for the participants. The discrimination leads to increase in the value extracted from one side of the market thereby the prices on the other side of the market decrease. This can be observed in the payment market wherein the supermarkets were reluctant in using their services, however, due to the transaction volumes of these supermarkets, the payment card entities started offering their services to them at a reduced cost. This discrimination keeps on widening depending on the situation. Further, the tests of calculating the marginal cost and demand that has been adopted by far is ambiguous for the two—sided markets as it is not clear that whether the costs and demands of both the sides have to be taken together or individually.
Moreover, the tests propounded by various theorists lack the proper assessment of welfare as even by pricing above the costs, one can lower the welfare by weakening the rivals, and in cases, the below-cost pricing can bring welfare. Competition may be hampered by weakening the competitors as well without eliminating them. However, the law does not take care of such situations.
Jurisprudential Trends Throughout Legislations
In US, Ohio v. American Express has been the first case to deal with the predatory pricing in two-sided market. However, other anti-competitive issues in the two-sided markets have been dealt by the courts before. The major ruling has been Ohio v. American Express where the issue in question was related to the credit card network where on one side of the market is the cardholders and merchants are on the other side of the market. Amex model is particularly a different model compared to Visa and Mastercard, as Amex focusses on cardholder spending rather than cardholder lending. Amex charges higher fees from the merchants and has entered in an anti-steering contract with them which prevents the merchant from dissuading the people from using Amex card. This arrangement was in issue to be anti-competitive. The Supreme Court held that the courts must take both the sides of the market into consideration and define it as a single market i.e., to satisfy prima facie burden, the harm on the overall competition has be shown. Further it was held that only the other two-sided transaction platforms can compete against two-sided transaction platform. The dissenting opinion, however, held that in a multi-sided market, all the sides have to be evaluated separately and the plaintiff can discharge his burden of proof by indicating any harm to any side of the market being caused.
One of the reasonings behind this approach may be that the online markets act as a market maker thereby affecting the consumer demand and the supply of the sellers which results in the general demand functions for the transaction volumes. Therefore, all the participants need to be considered for the demand is decided by all the participants and thus, while defining the relevant market both the sides of the markets are to be considered.
However, in EU, there has been different rulings pertaining to this issue. In the case of Napp Pharmaceuticals case where the distribution of medicines in the hospitals and outside the hospitals was in question, it was held that the both the sides of the markets have to be assessed separately for the reason that one side of the market might be charging low but the other side of the market that is charging higher prices might be a way of recoupment which is being omitted by the courts. Similarly, in the case of Aberdeen Journals, it was held that zero amounts to be below the costs and the free distribution of newspaper were termed to be predatory in nature. However, in the case of Bottin Cartographes v. Google, the commission held that the free services of maps provided by Google cannot be termed as predatory because both the sides of the markets have to be considered together. One of the most important ruling has been the Tetra Pak case where it was held that there is no need to prove recoupment for predatory pricing.
In India, the case of Meru cabs v. ANI technologies was concerning to the multi-sided market, however, uber was found collectively dominant with Ola, thus, no dominance was proved. Hence, the issue related to analysis of the two-sided market was left open. Further, in the case of Google v. Matrimony.com, the commission observed that it is very usual to reduce the prices in one side of the market of multi-sided markets. It can even be zero. This indicates that a single side of the market is not to be evaluated separately but the overall impact has to be assessed. If the opposite was the case then the commission would not have cited with no objection about the zero pricing in one side of the market.
The most relevant case pertaining to the issue of predatory pricing in a two-sided market is the MCX Stock Exchange v. National Stock Exchange. This case has been decided by the Appellate Tribunal wherein the order of CCI has been upheld. The stock market is involved in the aforesaid case. MCX was a company that was present in the CD Segment market, wherein NSE adopted the zero-pricing strategy and restrictive access to the NOW terminal to eliminate its competitors from the market was termed to be violation of Section 4(2)(a)(ii). It can be concluded from this judgment that the third requirement is not focussed upon and thus India does not require the necessity to prove the ability of recoupment to amount to be a predatory pricing. However, the predation must make an economic sense.
In the case of Bharti Airtel v. Reliance Jio, it was held that where no one entity is dominant and a player provides free services, it cannot be termed as anti-competitive.
The cases throughout the other jurisdiction, in the recent years, proves that both sides of the markets have to be taken together to form a single market and the impact needs to be on the overall competition irrespective of the effects in one side of the market. However, in India there is still no precise decision on the consideration of the various sides of the market.
Suggestions and Conclusions
Predatory Pricing has been condemned by every jurisdiction for it eliminates the competitors to create a monopoly. With the growth of e-commerce in the country, the issues related to the two-sided markets have been revealed. Two-sided markets have existed even before the internet age, however, our attention has turned to these types of market after the commencement of e-commerce. There were various cases that dealt with the predatory pricing in the two-sided market. The decisions were based on the assessment of the relevant market for the first step. Defining a relevant market is important to know where the effect of the anti-competitive practices is being felt. As studied, the parameters defining relevant market is not sufficient for the reasons that substitutability shall not be restrictive in nature. In India, substitutability is majorly seen in terms of characteristics, however, there are other factors to be considered which at present are taken to be just ancillary factors. The factors provided under section 19 for the relevant market are not listed according to their importance, thus, even if one of the factors is satisfied, along with the satisfaction to the commission as a whole, it shall be considered to be substitutable. Thus, a liberal approach must be adopted while defining a relevant market.
Th next step while assessing predatory pricing is to prove that the firm is dominant. Dominance has been defined under the Indian act to be the ability of the firm to operate independently of its competitor to influence the consumers in its favour. It is presumed that only a dominant entity can cause effect in the market. It does not take into account that the non-dominant entities can use anti-competitive behaviour to gain dominance and then further, achieve its goals. Checks must be conducted by the Competition Commission of India on the smaller entities, with regards to the market share, as well who indulge in any anti-competitive behaviour. The rationale behind punishing a dominant firm is that it adversely affects the competition in the market. However, the mere anti-competitive act shall be targeted to be eliminated and the distinction in terms of market power should be avoided. Further, the emergence of collective dominance is another issue that has become the justification for abusing their market power. Furthermore, the dominance must be seen in the economy and not be restricted to only the relevant market in question. Dominance in other sectors might be used for entering a new sector, thus, the narrow approach of dominance must be done away at this hour. This dominance shall be seen in terms of the effects rather than the conservative relevant market approach.
Predatory pricing particularly in the two-sided market faces another problem that the competition authorities have been inclined towards consumer welfare while their main function is to promote competition. It is to be considered that consumer welfare cannot only be measured in terms of price but there are many other factors that benefits the consumers and thus any such pricing strategy must be scrutinized closely by the competition authorities.
In the two-sided market, according to the author, must follow the reasoning of the case of Napp Pharmaceuticals and Aberdeen Journals as the case of MCX v. NSE has reflected the inclination of Indian laws towards European laws for the reason that the test of recoupment is not necessary to be satisfied. Furthermore, prices of both the sides of the market, individually, shall be above the AVC, so that deep pockets are not used to eliminate the competition from the market for the matter that each shall get an equal opportunity to work which is the right recognized by the Constitution of India. Thus, deep pockets must not be used to indulge in predatory pricing.
The law has to be updated according to the growing digital economy and e-commerce, and the commission must be vigilant enough to scrutinize the new methods of predations like cashbacks and deep-discounts, in the time being before adverse effects has already been caused to the economy.
 Brooke Group Ltd v Brown & Williamson Tobacco Corporation 509 U.S. 209 (1993); Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corporation, 475 U.S. 574,1986.
 Sandeep Vaheesan, Reconsidering Brooke Group: Predatory Pricing in Light of the Empirical Learning, 12 BERKEY Bus. L.J. 81, 82 (2015); see also, Richard Zerbe Jr. & Michael T. Mumford, Does Predatory Pricing Exist? Economic Theory and the Courts After Brooke Group, 41 Antitrust Bill, 949, 957-64 (1996).
 Michael E. Porter, The Five Competitive Forces that Shape Strategy, 86 Harvard Business Review (1979).
 Lina M. Khan, Amazon's Antitrust Paradox, 126 Yale L.J. (2016),
 Maurice E. Stucke & Ailen P. Grunes, Big Data And Competition Policy 107 (2016).
 Supra note at 6.
 United States v. Columbia Steel Co., 334 U.S. 495, 536 (1948).
 Supra note at 6.
 Organisation for Economic Co-operation and Development, Exclusionary Conduct in Multi-Sided Markets DAF/COMP/WD(2017)28/FINAL, https://one.oecd.org/document/DAF/COMP/WD(2017)28/FINAL/en/pdf pg. 12.
 Ohio v. American Express, 838 F. 3d 179.
 Alexei Alexandrov, George Deltas, Daniel F. Spulber, Antitrust and Competition in Two-Sided Markets, 7 J. Comp. L. & Econ. 775-812 (2011).
 Napp Pharmaceutical Holdings Ltd. v. The Director General Fair Trading,  C.A.T. 1 (U.K.).
 Aberdeen Journals Ltd v. Office of Fair Trading  C.A.T. 11 (U.K.).
 Bottin Cartographes v. Google,
 Tetra Pak International v. Commission of the European Communities (C333/94)  E.C.R. I-5951.
 Meru cabs v. ANI technologies, case no. 25-28 of 2017 (C.C.I.).
 Google v. Matrimony.com, case nos. 07 and 30 of 2012 (C.C.I.).
 MCX Stock Exchange v. National Stock Exchange, case no. 13 of 2009 (C.C.I.).
 Shrijita Bhattacharya And Gargi Bohra, Is Zero Pricing Predatory Unfair: Mcx Stock Exchange Ltd. V. National Stock Exchange, Http://Www.Rslr.In/Uploads/3/2/0/5/32050109/Is_Zero_Pricing_Predatory_Unfair.Pdf.
 In re: Bharti Airtel Limited v. Reliance Industries Limited & Anr., case no. 03 of 2017 (C.C.I.).