UNILATERAL CONDUCT WORKBOOK CHAPTER 3: ASSESSMENT OF DOMINANCE

This Chapter of the Workbook seeks to complement the two existing ICN work products on dominance by discussing how to apply the concept of “dominance” in practice, and, in particular, how to use various types of evidence to determine whether or not a firm is “dominant.” The first section will briefly discuss the concept of dominance and its relationship to the notion of market power, including basic approaches ICN members use to define dominance. The following sections discuss in greater detail the analytical frameworks and evidentiary requirements to determine whether a firm can be considered dominant, including defining the relevant product and geographic market, the assessment of entry, and the evaluation of countervailing buyer power. Unilateral conduct laws aim to ensure an effective competitive process. An effective competitive process can promote such goals as consumer welfare and economic efficiency, among others. Conduct that may constitute an abuse when performed by a dominant firm can be procompetitive, or competitively neutral, when performed by firms that are not dominant. Alternatively, firms that are not dominant are not likely to succeed in harming the competitive process using that conduct. The requirement for dominance thus serves as a “filter” that allows the laws, and the agencies enforcing them, to focus on conduct that may possibly harm competition.