Investors understand the implications of these paradigm shifts much better than
economists do,recognizing that competition in such industries is often much more
intense than in mature industries.Such intense competition generates high risk and
requires higher than average returns to compensate.Yet high risk for the investor
should translate to lower risk for the antitrust authorities,as incumbent positions
may be fragile even in the short-to medium-term and,frequently,competitive
forces are sufficiently powerful to undo monopoly power,should it arise.
3.Limitations of traditional indicia used to evaluate market definition and
market power
The fundamental underpinning of all(non-collusive)competition policy issues is
the analysis of market/monopoly power.In traditional antitrust economics and
jurisprudence,the starting point for competitive assessment is the concept of a
(relevant)market.The presumption is that if a firm has a‘high market share’
coupled with high entry barriers,it has‘monopoly’power.Thus,its conduct can
be injurious to competition,and ought to be scrutinized most carefully.
Absent monopoly power,non-collusive business conduct never raises antitrust
issues.In the presence of monopoly power,business conduct that would otherwise
be unobjectionable may become problematic.This has traditionally been de-
termined by defining the market in which a firm competes and then assessing the
degree of control that a particular firm has over that market.
In US antitrust jurisprudence,there are two main categories of traditional indicia
commonly used to define markets and derive measures of market power.These are
(1)the methods contained in the Horizontal Merger Guidelines and(2)indicia
7
that roughly correspond to those identified in Brown Shoe.These have been
utilized by the courts as if they are universally applicable,without regard to
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Henderson and Clark(1990).