The Antitrust Review of the Americas 2016

US: Economics

Virtually all antitrust cases brought under ‘rule-of-reason’ in the United States require the plaintiff to show that the defendant has market power or, in the case of mergers, that the merger is likely to create or enhance the merging firms’ market power. In principle, market power is the ability of a firm (or a group of firms) to raise and sustain price above competitive levels. Historically, assessments of market power have been linked closely with and dependent on the determination of the ‘relevant market’ – delineated by a set of products and a geographic area – where effects of the firm’s (or group of firms’) ability to raise prices is likely to be felt. In practice, determination of the relevant market has been considered a necessary predicate to a market power analysis in most antitrust cases.1 Firms with a relatively high market share in the relevant market are thought to have market power.

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