On the Relevance of Market Power

84 Pages Posted: 22 Oct 2016

See all articles by Louis Kaplow

Louis Kaplow

Harvard Law School; National Bureau of Economic Research (NBER)

Date Written: October 2016

Abstract

Market power is the most important determinant of liability in competition law cases throughout the world. Yet fundamental questions on the relevance of market power are underanalyzed, if examined at all: When and why should we inquire into market power? How much should we require? Should market power be viewed as one thing, regardless of the practice under scrutiny and independent of the pertinent anticompetitive and procompetitive explanations for its use? Does each component of market power have the same probative force? Or even influence optimal liability determinations in the same direction? This Article’s ground-up investigation of market power finds that the answers often differ from what is generally believed and sometimes are surprising — notably, higher levels of certain market power measures or particular market power components sometimes disfavor liability. This gulf between conventional wisdom and correct understanding suggests the need to redirect research agendas, agency guidance, and competition law doctrine.

Keywords: Market power, dominance, monopolization, abuse, antitrust, competition policy

JEL Classification: D42, K21, L12, L40

Suggested Citation

Kaplow, Louis, On the Relevance of Market Power (October 2016). Harvard Law Review (March 2017), Forthcoming. Available at SSRN: https://ssrn.com/abstract=2855669

Louis Kaplow (Contact Author)

Harvard Law School ( email )

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HOME PAGE: http://www.law.harvard.edu/faculty/directory/facdir.php?id=32&show=bibliography

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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