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Finding Collective Dominance in an ex ante Environment

• Draft European Electronics Communications Code places more emphasis on collective dominance. • Ex post conditions well known, but how should an NRA find collective dominance ex ante? • Guidance is needed to ensure focus on structural market conditions

One of the many competition problems being considered in the draft European Electronic Communications Code (EECC) is Collective (or Joint) Dominance: a situation where two or more firms constitute a collective entity vis-à-vis their competitors, trading partners and suppliers. The situation is of concern to the European Union now because of what it sees as a risk of oligopoly markets, particularly in relation to wholesale local access where a cable operator competes with the fixed line incumbent. This edition of Hexagon examines the economic conditions that may need to be considered for a finding of Collective Dominance ex ante.

 

The structural conditions in which a single firm may be found to have SMP ex ante are well known. They start with the firm’s market share and include factors such as countervailing buyer power, barriers to entry and so forth. Crucially, all these factors concern the structure of the market and not the behaviour of the firm that may have SMP.