The U.S. Department of Justice seal, The United States Department of Justice
Search Antitrust


Market Definition and Market Power in Payment Card Networks

Erich Emch and T. Scott Thompson, EAG 06-9, March 2006
Published in The Review of Network Economics (2006).
Link to published version

We discuss competition among payment card networks, and in particular how antitrust practitioners might approach questions or market definition and market power in these markets. Application of the hypothetical monopolist test to define markets, and the use of traditional metrics to measure market power, may be less straightforward for card networks than for many markets. The interrelationships between network pricing to merchants, to bank issuers of payment cards and indirectly, to final consumers, complicates the analysis. The "two-sidedness" of the market does not, however, overturn the basic logic of the hypothetical monopolist test or traditional measurements of market power. We demonstrate some practical ways to apply these antitrust principles to competition among payment card networks.

Get Antitrust Division Updates

Sign up for E-Mail Updates

Subscribe to News Feeds

Follow us @JusticeATR

To view PDF files on this website you need the free Adobe Reader.