Economic Theory of Abuse of Dominance

The Economic Theory of Abuse of Dominance explains how companies with significant market power might unfairly limit competition or harm consumers. When a dominant firm engages in practices like setting unfair prices, restricting supplies, or blocking competitors, it can reduce choices and inflate prices, ultimately hurting the market and consumers. This theory helps regulators identify when a powerful company is misusing its position instead of competing fairly, ensuring healthy competition and fair prices in the marketplace.