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Geroski, Paul; Griffith, Rachel --- "Identifying Antitrust Markets" [2004] ELECD 184; in Neumann, Manfred; Weigand, Jürgen (eds), "The International Handbook of Competition" (Edward Elgar Publishing, 2004)

Book Title: The International Handbook of Competition

Editor(s): Neumann, Manfred; Weigand, Jürgen

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843760542

Section: Chapter 8

Section Title: Identifying Antitrust Markets

Author(s): Geroski, Paul; Griffith, Rachel

Number of pages: 16

Extract:

8 Identifying antitrust markets
Paul Geroski and Rachel Griffith*



1 Why define markets?
The identification of markets is a standard feature of antitrust investigations,
and the substantive decision in many cases stands or falls on the precise
market definition selected. Market identification is important because the
computation of market shares matters in antitrust cases, and this is so for
at least two reasons. First, market shares are often used to help establish
jurisdiction or, more generally, to sort out priorities for antitrust agencies.
Merger regulations usually specify a threshold level of market share which
triggers an investigation for mergers above a given size; investigations into
various monopolistic abuses are usually centered on the leading firms in a
market and, in most cases, the ability of an antitrust agency to initiate an
investigation, or impose penalties at the end of it, depends on whether the
(alleged) offending firm enjoys a position of market `dominance'; that is
enjoys a large market share. Second, market shares are sometimes used as
an observable measure of market power, meaning that the fact of finding
high market shares is sometimes taken to be tantamount to uncovering
the existence of market power. Since, in practice, the important step in
computing market shares is ascertaining the boundaries of the market,
this practice tends to make the determination of market boundaries the
substantively important decision in any attempt to identify pockets of
market power.
The use of market shares to establish jurisdiction is a well established
procedure. It is ...