Research Handbook on International Competition Law
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Research Handbook on International Competition Law

Edited by Ariel Ezrachi

This comprehensive Handbook explores the dynamics of international cooperation and national enforcement. It identifies initiatives that led to the current state of collaboration and also highlights current and future challenges. The Handbook features 22 contributions on topical subjects including: competition in developed and developing economies, enforcement trends, advocacy and regional and multinational cooperation. In addition, selected areas of law are explored from a comparative perspective. These include intellectual property and competition law, the pharmaceutical industry, merger control worldwide and the application of competition law to agreements and dominant market position.
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Chapter 15: Market power – the root of all evil? A comparative analysis of the concepts of market power, dominance and monopolisation

Hedvig Schmidt


The concept of market power has traditionally been applied as a threshold requirement in unilateral conduct cases, acting as a screen to identify the companies whose conduct is most likely to create anticompetitive effects. It is a necessary but not sufficient condition of finding an abuse. However, with a change of focus towards a more economic-based approach to unilateral conduct, the requirement for substantial market power risks being regarded as less essential to the antitrust analysis. This chapter explores the concept of market power in unilateral conduct cases and how the concept has been interpreted in three jurisdictions’ competition rules: the EU, the US and Australia. It is argued that the market power analysis is closely related to the abuse under investigation and therefore should not be ignored, but rather looked upon anew. Furthermore, as more and more companies trade worldwide, competition law from a global perspective becomes ever more important and therefore a common understanding of what constitutes market power also becomes essential to ease cross-border enforcement and create legal certainty for companies. Whether a given company has market power depends of course on a multitude of factors: market shares of the alleged dominant company and its rivals; barriers to entry including economies of scale, technology advantages, intellectual property rights, product differentiation, vertical integration, financial strength etc; customers’ switching costs; barriers to expansion; and countervailing buyer power.

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