The Concepts of a Firm’s Economic Power or Dominant Position

This chapter analyzes the concepts of a firm’s (1) economic or market power or (2) dominance. U.S. courts’ dispositions of tie-in cases and monopolization and attempt-to-monopolize cases are substantially affected by whether the courts conclude that the State or a private plaintiff has proved that the defendant possessed “market power” over the tying product or possessed market power before or after it engaged in the conduct alleged to constitute monopolization or an attempt to monopolize. And Article 102 of the E.U. Treaty imposes special competition-law obligations on firms that are deemed to occupy a dominant position. This chapter calls into question the desirability (indeed, the coherence) of these positions by revealing (1) the complexity of the concept of a firm’s economic power and the inevitable arbitrariness of the choice of metrics for measuring such power and, relatedly, (2) the complexity of the notion of “a firm’s (undertaking’s) dominant position” and the inevitable arbitrariness of the choice of metrics for determining whether a firm occupies a dominant position.