NAVIGATING PREDATORY PRICING IN THE MCX V. NSE CASE: A COMPREHENSIVE CASE COMMENT

Abstract

ABSTRACT:

This paper examines the contrasting approaches to predatory pricing between the United States and the European Union and applies these principles to the MCX Stock Exchange Limited Vs. National Stock Exchange of India Limited case. In the United States, predatory pricing cases are rarely successful due to the high standard of proving recoupment. In contrast, the European Union allows for a lower threshold, deeming prices below average variable costs abusive without requiring proof of recoupment.

The case of MCX v. NSE highlights significant resource disparities, with the National Stock Exchange's (NSE) zero pricing policy in the Currency Derivatives segment challenging the sustainability of MCX-SX. The Competition Commission of India (CCI) found NSE's selective fee waivers and resource allocation indicative of anti-competitive intent. However, the minority opinion disagreed, arguing the absence of predatory intent and noting that competitors, including USE, have thrived despite NSE's zero pricing.

The dissent emphasizes the non-adversarial nature of the Competition Act, focusing on market conditions rather than individual complaints. It highlights that National Stock Exchange's market share decline, despite zero pricing, indicates a competitive market. Additionally, the dissent argues that zero pricing benefits consumers and that forcing NSE to charge could lead to higher prices across competitors, harming consumer interests.

The paper concludes that NSE's pricing strategy does not violate the Competition Act, as it has not deterred competition or harmed consumer welfare. The case underscores the complexity of distinguishing between aggressive competition and predatory practices, emphasizing the need for a nuanced analysis that considers market dynamics and consumer impact.