BARRIERS TO ENTRY

This document comprises proceedings in the original languages of a Roundtable on Barriers to Entry which was held by the Competition Committee in October 2005. Barriers to entry are important because they are relevant in virtually every kind of competition case that does not involve a per se offence. It is necessary to consider entry barriers when assessing dominance, when determining whether unilateral conduct might deter new firms from participating in a market, and when analysing the likely competitive effects of mergers, to name a few examples. Most significantly, entry barriers may retard, dampen, or nullify the marketís usual mechanism for checking market power: the attraction and arrival of new competitors. If a merger will substantially increase concentration to the point where a competition agency is concerned about anticompetitive effects, for example, entry barriers matter because competition will not be reduced if new firms would enter easily, quickly and significantly. Consequently, agencies seeking to block a merger will usually need to show that entry barriers make quick, significant entry unlikely. Similarly, establishing the presence of substantial entry barriers is usually necessary to prove that a high market share translates into market power in monopolisation or abuse of dominance cases.