PK Cement Ltd., incorporated in January, 2014, is engaged in the business of manufacturing cement. The company is facing stiff competition and with a plan to increase its market share, the Board has decided to reduce the

Section 4 of the Competition Act, 2002 prohibits abuse of dominant position. In particular, section 4 (2) (a) which provides that there shall be an abuse of dominant position, if an enterprise or a group, directly or indirectly, imposes unfair or discriminatory- condition in purchase or sale of goods or service; or price in purchase or sale (including predatory price) of goods or service. For the purpose of section 4, the expression "predatory price" means the sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors. In the given case PK Cement Ltd. has reduced the selling price of its cement bag from ₹245 to ₹210 per bag and the cost of production is ₹185 per bag. So, the selling price is above the cost of production. As per the provisions of the Section 4 (2) (a), the company can not be said to have indulged in the said practice with respect to Competition Act, 2002. Thus the concept of predatory pricing applies only when the sale price is below the cost of production. In this case, they have only reduced their profits and thus the provisions relating to predatory pricing will not apply.