Wednesday, April 23, 2008

Auctions, Exclusive Contracts and Competition for the Market

Posted by D. Daniel Sokol

Alexandra Merrett, Australian Competition & Consumer Commission and University of Melbourne, and Rhonda L. Smith, University of Melbourne - Department of Economics, have a new paper out titled Auctions, Exclusive Contracts and Competition for the Market.

ABSTRACT: In this article, we consider the distinction between competition in the market and competition for the market, with a view to identifying the conditions necessary to ensure that competition for the market does not (depending on the jurisdiction) create or increase dominance or substantially lessen competition. After providing a brief summary of some key cases as a framework for discussion, we examine the necessary pre-requisites if competition for the market is to avoid adverse competition effects: natural monopoly and limited contestability. Consideration then turns to the necessary factors for ensuring an auction process is an effective means of managing competition for the market. Finally, we analyse whether it is possible to structure remedies (in the form of commitments or undertakings) such that a proposed transaction, purportedly justified on the grounds of competition for the market, does not in fact create or increase dominance or substantially lessen competition.

https://lawprofessors.typepad.com/antitrustprof_blog/2008/04/auctions-exclus.html

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