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      Question

      A pharmaceutical company with 60% market share in a

      particular drug category refused to supply to a distributor who was also selling competitors' products. The refusal had no legitimate justification. Under Section 4 of the Competition Act, which statements are correct? Statement 1: The company's refusal constitutes abuse of dominance under Section 4. Statement 2: Market share of 60% establishes dominance for Section 4 purposes. Statement 3: The refusal is justified if the distributor failed to meet payment obligations. Statement 4: Refusal to supply can be an abuse even by a dominant firm if it causes exclusionary effects. Which statements are correct?
      A Statements 1, 2, and 4 only Correct Answer Incorrect Answer
      B Statements 2 and 3 only Correct Answer Incorrect Answer
      C Statements 1 and 3 only Correct Answer Incorrect Answer
      D Statements 2, 3, and 4 only Correct Answer Incorrect Answer
      E All statements are correct Correct Answer Incorrect Answer

      Solution

      Refusal to supply by dominant firm is abuse—Statement 1 is correct. 60% market share indicates dominance—Statement 2 is correct. Failure of legitimate justification makes it abuse—Statement 3 is incorrect (could be justified). Refusal with exclusionary intent is abuse—Statement 4 is correct. Statements 1, 2, and 4 are correct.

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