Beruflich Dokumente
Kultur Dokumente
Presentation to Study Tour for Russian Member Universities of the Virtual Institute Network 26 March 2009
Main topics
What do Competition Authorities do? What is Abuse of Dominance? A Case Study
Advocate for government policies that are more pro-competitive Some also enforce consumer protection laws, and advocate for more pro-consumer government policies
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Objectives
Often unclear Vary from jurisdiction to jurisdiction Consumer welfare v. total welfare Static efficiency v. dynamic efficiency Distribution, eg SMEs, price discrimination, historically disadvantaged persons
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Economics Review
(Competition law is composed of economics concepts adjusted to be administrable) Markets Market power Substantial & durable market power Barriers to entry & barriers to expansion Coordination & collusion Principal - agent problems (hidden action, hidden knowledge)
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Quantity
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Demand
Quantity
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Demand
Quantity
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Demand
Quantity
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Retailer
Retailer
Retailer
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Main topics
What do Competition Authorities do? What is Abuse of Dominance? A Case Study
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Abuse of dominance
Is the firm dominant? Is the conduct an abuse? Is there a remedy?
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Three standards
Russian Federation Art. 5 & Art. 10 European Union Art. 82 US Sherman Act 2 Of course, there are other standards
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Russian Federation
Federal Law 135-FZ of July 26, 2006 On Protection of Competition Article 5 defines dominant position One or more economic entities can "have a decisive impact on the general conditions" of the market, or can exclude or prevent the entry of other economic entities onto the market. Market share presumptions Article 10 defines and prohibits abuses of dominance
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Russia Dominance
Presumed dominant if market share > 50% (but rebuttable) Presumed not dominant if market share < 50% (but FAS can show dominance using stability of market shares, barriers to entry, or other characteristics specific to the commodity market) Cannot be found dominant if market share < 35% (with exceptions related to financial firms and collective dominance).
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Russia - Abuses
Actions or inaction of an economic entity occupying a dominant position, which result or can result in prevention, restriction or elimination of competition and (or) infringement of the interests of other persons are prohibited, including:
establish and maintain a monopolistically high or monopolistically low price for a commodity {COMMENT: " monopolistically low price" is defined in Art. 7 and seems to be intended to be an analog to "predatory pricing," but is much broader than usual} withdrawal of a commodity from circulation, if it causes price to rise
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EU
Dominance not defined in Treaty, but in case law. Dominance must be in reference to a market. Market share is the most important indicator but not determinative. Therefore market definition is essential.
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EU
Market shares:
Unlikely dominant Dominant
0%
30%
5070%
100%
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EU (recent guidelines)
Dominance means substantial market power over a period of time. If can profitably maintain prices above the competitive level for a significant period of time, then generally dominant. Indicators: market shares (firm & rivals), entry and expansion by rivals, countervailing buyer power.
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US
A common law system, so law is court decisions. Good reference: American Bar Association, Antitrust Law Developments. Monopolization abuse of dominance"
Monopolization requires more market power than dominance requires. The conduct focus is on exclusion. Exploitation is not illegal.
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US
Market share is a starting point for determining if monopoly power
>70% almost always supports inference, but rebuttable <50% almost never find monopoly
Main topics
What do Competition Authorities do? What is Abuse of Dominance? A Case Study
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