Modular Market Definition
52 Pages Posted: 12 Jan 2021
Date Written: November 25, 2020
Recent interest in curbing the apparent market dominance of companies like Amazon, Facebook, Apple, and Microsoft is exposing the public to a difficulty long known to the antitrust community: the challenge of deciding in what markets a company operates. If the same company that dominates a narrowly defined market would fade into the crowd in a more broadly defined market, then is antitrust intervention really warranted? Antitrust law has a long history with this question, but it is a history punctuated as much by setback as by success. Even today, antitrust litigation stumbles at market definition with shocking regularity.
This Article introduces modular market definition—a tool for more systematically and reliably defining markets in antitrust cases. Decoupling the purpose of market definition from the process of the exercise, modular market definition turns conflicting tests of market definition into a series of complementary modules, each appropriate for scoping markets in a particular context. This streamlines market definition by providing a principled guide to defining markets, even in complex situations. It also reveals defects in how antitrust tries to use market definition today.
Keywords: market definition; relevant market
JEL Classification: K21, L40
Suggested Citation: Suggested Citation