RELEVANT MARKET WITHIN ANTITRUST LAW
The new telecommunications regulatory frame, approved in March 2002 by the European Council and Parliament, represents a change in the instruments used in the regulation of these markets. The object remains the openness and trust in competition and free enterprise for better service provisions and telecommunication networks in theEU. The proposed instruments are now focusing more on forcing conditions to accommodate and protect competition by imposing obligations on incumbents.
The difference is that now changes both the threshold for imposing the obligations (abandoning the criterion of 25% market share) as well as the target market, becoming all network markets and electronic communications services. It is fromnow on, to assess first whether or not there are competition works in a particular market, and if the answer is negative, that is when the sectoral authorities may impose regulatory mechanisms on the operators considered as dominant. The frame Directive in the new package is clearly based on the regulatory intervention to analyze the lack of effective competition in the markets.
With theimplementation of the new frame it should make explicit the need for any regulatory decision. This requires segmenting markets (product and geographic areas); analyze the degree of competition and where operators identify dominant positions in each of these markets. Only then it is possible to impose rules governing ex ante. 1
2. THE ECONOMIC MARKET AND THE ANTITRUST MARKET
The market,in a broad sense, is the area where prices tend to uniformity (taking into account transport costs and degree of differentiation). But in the sense of competition, as it is investigated, is whether there is abuse of a dominant position or not. The relevant market for antitrust purposes, in fact, involves more issues than this broad definition of the market.
The authorities ofcompetition when considering a possible abuse of a dominant position try to identify all products or services, in which a company, by its position in the market, can raise prices, restrict output or a placement of exclusion against rivals, such that resulting in the firm to earn higher profits. This is how it is defined the relevant market in the sense of antitrust: the economic area (which includesservices and locations) where a firm can exercise market power.
The market, in effects of the defence of competition is understood as the "commercial space within which you must evaluate the economic potential of the company related to its competitors", as endorsed by the Court of Justice in Luxembourg for the “AZKO” case. But this definition does not exactly match the one of the market ina broad sense.
The antitrust authority towards the report of a case should take the following steps of analysis:
1 antitrust definition of relevant market.
2. Determination of dominance operator.
3. Analysis of the concrete practice of which he is charged.
4. Analysis of the effects that this practice has had on consumers, competitors and social surplus.
These are thetypical phases to be taken in a case of competition. In the “Relojes Joya” case the Spanish Tribunal for the Defence of Competition (TDC, 379/96) clearly explained why the relevant market definition is a prerequisite, but related to the analysis of a possible predatory behaviour:
"When it comes to pursuing prohibited conduct, the relevant market definition is essential in the case of abusivebehaviour of a dominant position, since this dominant position has to occur in a given market that is firstly and necessarily been defined. But it is also true that such a definition is necessary when it is vertical restrictive practices [...] as for the corresponding competing trial is necessary to know the market power of the company that has introduced or plans to introduce certain vertical...
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