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Discussion Draft Only

Federal Trade Commission and Department of Justice Hearings
on Section 2 of the Sherman Act:
Single-Firm Conduct as Related to Competition

Session on International Issues

Prepared Remarks of

James F. Rill*

September 12, 2006

  1. Introduction

This roundtable focuses on the approaches of several jurisdictions to dominant firm conduct and invites discussion on the ramifications of various approaches for trans-border commerce. With the increasing volume of international trade and growing number of multinational corporations, the actions of an agency in one jurisdiction can have an impact across the world.

Different enforcement agencies' analytical approaches coupled with increased regulatory complexity have clouded the ability of firms operating in global markets to plan business strategies with confidence that an antitrust challenge will be avoided. The resulting uncertainty can lead to excessive reticence to implement aggressive, efficient, and often pro-competitive activities, and can damage consumer welfare.

The complexity inherent in the analysis of single-firm conduct simultaneously endorses the need for caution and challenges the steady approach to convergence that has been in large measure achieved, for example, in the area of horizontal mergers.(1)

Nevertheless, there is a need for enhanced certainty and, ideally, at least, a framework for convergence in enforcement with regard to dominant firm behavior. At a minimum, traditional and other mechanisms could be employed to establish safe harbors for unilateral conduct. This would enable firms to plan pro-competitive business strategy with confidence, and promote consumer welfare. In the more complex and unsettled areas outside the safe harbors, agencies should focus on principles of certainty and transparency. Institutional mechanisms already exist to promote these ends, and parallel informal cooperation channels can augment them.

  1. Key Issues in The Application of Competition Policy to Unilateral Conduct of International Dimensions
    1. Caution in Enforcement Is Warranted

Even within a single jurisdiction, antitrust enforcement against single-firm conduct presents a significant analytical challenge. Enforcement activity that prohibits single-firm conduct has been inconsistent in application even within individual jurisdictions. It has created ambiguous results, leading, in some cases, to enforcement that can be seen, ex post facto, as unwarranted. The challenge and risk of over-enforcement in any single jurisdiction is exacerbated by the multiplicity of agencies throughout the world that are undertaking to address this conduct.

It is generally acknowledged that antitrust policy and enforcement against unilateral conduct requires extreme caution. Complaints about unilateral conduct often originate from competitors that seek competition agencies' assistance in eliminating competitors or, more often, in easing competitive, frequently efficiency promoting, pressures, rather than preserving competition in the market as a whole. As courts and enforcers continuously point out, antitrust policy is in fact intended for the protection of competition, rather than of individual competitors.(2)

However, when portrayed by competitors, the true effect of unilateral conduct is often clouded. Conduct that is in fact pro-competitive and beneficial to consumers is often attacked. Excessive enforcement risks the error of chilling and even prohibiting pro-competitive conduct. It is crucial, therefore, to ensure that pro-competitive activity is not curtailed by over-enforcement of antitrust rules. As BIAC recently noted,(3) the implications of misapplying the provisions on abusive conduct by dominant firms, in particular by finding dominance where there is none, are anything but trivial. By restricting or forcing firms to alter the way they license their intellectual property rights, distribute their products, price their products, or engage in other pro-competitive activities, enforcers could discourage companies from entering into welfare-enhancing activities and, more importantly, from undertaking innovative activities in the first place.

The consequences of false-positive errors are more serious in innovation markets, where over-enforcement may decrease incentives to develop new products and technologies, with a concomitant reduction in consumer welfare due to the non-introduction of valuable goods and technologies for which there is consumer demand. Moreover, the nature of intellectual property is such that curtailment of incentives by one jurisdiction can adversely affect consumer welfare across many borders.

The dangers of over-enforcement intensify with the proliferation of antitrust regimes across the world. Even apart from the "lowest common denominator" problem noted by former Deputy Assistant Attorney General Makan Delrahim,(4) the very multiplicity of enforcement overlaid on single-firm conduct can impede pro-competitive conduct, if for no other reason than by undermining certainty as to the proper approach to its conduct. Thus, in cases involving global markets and technology markets, there is little doubt that any jurisdiction seeking to curtail single-firm conduct risks impacting the welfare of consumers in other countries and should proceed with extreme caution.

    1. Illegal Conduct is Difficult to Identify

Much of the pro-competitive conduct by a firm excludes rivals from some share of the market, just as superior efficiency inherently forecloses competitors.(5) The challenge is to identify which exclusions result from harm to the competitive process and which are a legitimate result of more efficient production or other business acumen. This problem is difficult with respect to unilateral conduct, which, unlike price or output restriction among competitors, does not necessarily harm consumers or the competitive process.

As a result of this complexity, the analysis of unilateral conduct is a fact-driven rule-of-reason endeavor. Even within a single antitrust jurisdiction, it is often not easy to predict or even determine whether specific conduct will be found to violate antitrust laws, and the challenge is far greater at the international level. This very complexity and necessarily case-specific analysis makes substantive convergence of analysis among jurisdictions especially difficult. What can be achieved, nevertheless, is greater certainty about enforcement methodology and some base-line agreement in the fundamental approach.

    1. Transparency is Essential in Today's Multinational Business Climate

The difficulty in achieving transparency and worldwide convergence presents a challenge to today's multinational businesses. The decision of one agency can and does affect the behavior of business entities in other parts of the world. Businesses need certainty upon which they can plan their strategy and behavior.(6) A thriving industry inherently benefits consumers, society as a whole, and the competitive process itself since a vibrant business climate creates the competitive pressures that stimulate efficiency and innovation by competitors, in a constant effort to outdo their rivals by producing what consumers want for the lowest price. As a result, there is a pressing and recognized need for, at least, a trend toward convergence based upon application of sound antitrust principles firmly grounded in economic learning.(7)

In the absence of convergence, transparency is essential. A failure to fully explain, and indeed justify, an enforcement action can be viewed as selective action by an agency, reflecting the potential for political, national or commercial bias. Enforcement activity must possess every indicia of due process, even-handedness and non-discrimination. The agency decision must be fully explained and should be subject to appropriate judicial review. Investigative tools should be in-line with typical procedures and should not place undue burdens on the firm being investigated. Ultimately, each agency should recognize that its investigation will impact the many firms that try to discern the policy implications of the investigation, not just the firm that is the subject of the investigation. Transparency is, therefore, a fundamental requirement of enforcement of improper single-firm conduct.

  1. Absent Convergence, Safe Harbors for Dominant Firm Behavior Should be Established

Adoption of safe harbors would contribute substantially to certainty and remove, to some extent, the unwarranted frustration of pro-competitive conduct. Such adoption can also spare businesses the enormous expense of being forced to defend single-firm conduct where there is little likelihood that such conduct could result in harm to consumers.(8) The inquiry should therefore concentrate first and foremost on the firm's ability to maintain or enhance monopoly power because, by definition, only where such ability is demonstrated may "abusive" effects take place.

    1. Though Incomplete and Arguably Flawed as a Comprehensive Tool, Structural Analysis Can Provide a Basis for Safe Harbor Analysis

Antitrust monopoly power, or dominance, which is a crucial element in any unilateral conduct case, is not measured in a vacuum. Rather, it is evaluated within the context of a carefully defined product and geographical market. While it is generally recognize that market definition is only a proxy step toward the evaluation of market power, the exercise can nonetheless provide a critical check on antitrust enforcement in unilateral conduct cases. Antitrust enforcers and practitioners recognize that market definition is a daunting task, which involves unavoidable approximations and proxies for competition analysis. Hence, the U.S. Supreme Court has acknowledged that there is "some artificiality" in any boundaries, and that "such fuzziness" is inherent in bounding any market.(9)

As many industries are increasingly characterized by innovation and shorter product lifecycles, assessing market definition and dominance is becoming even more unreliable as a basis for thorough antitrust analysis. In particular, with new and innovative products appearing regularly, often taking away market share ­ or entire markets ­ from older generation products, relying on existing historical data may convey an inaccurate market picture.

Nonetheless, these paradigmatic shifts remain rare and market structure, including market share, remains an informative fact as to the potential for a firm to exercise unilateral market power, at least in the short term. Although a large market share is insufficient, of itself, to establish dominance, dominance should rarely be inferred on the basis of conduct alone, without reference to market structure. For example, should not necessarily imply market power absent evidence that a corporation possesses monopoly power in the tying product. Preservation of such a minimal degree of analysis of both market power and exclusionary conduct is important because, again, it contributes to certainty and does not facilitate analysis which characterizes a wide range of potentially efficient conduct as per se unlawful. Also, as will be explained, inquiry into defendants' position in the relevant market provides a basis for a safe harbor zone.

      1. Different National Standards in Defining Dominance

The definition or identification of market dominance also differs markedly across national boundaries. The differences have been widely recognized and described and a detailed exposition is beyond the scope of this session. Nevertheless, a few different approaches demonstrate the divergent antitrust policy terrain.

  • The U.S. defines monopoly power as "the power to control prices or exclude competition" in a relevant market.(10)
  • The European Commission (EC) views single dominance as a scenario in which an undertaking "has the power to behave to an appreciable extent independently of its competitors, its customers and ultimately of the consumers."(11)

  • The Japanese Antimonopoly Act prohibits "private monopolization" by which a market player excludes or controls the business activities of other entrepreneurs, thereby causing, contrary to the public interest, a substantial restraint of competition in a particular field of trade.(12) The Act also prohibits "unfair trade practices" defined as conduct which tends to impede competition but which falls short of the "substantial restraint of competition" criterion of Private Monopolization. Whether a firm is influential or not is one determining factor in that analysis.(13)
  • In Mexico, Article 13 of the Federal Law of Economic Competition defines the criterion as whether the party can "unilaterally set the prices or restrict the supply in the relevant market without the competitive agents being able to act or to potentially counteract that power."(14)
  • In Canada, the dominance element set out in Section 79 of the Competition Act focuses on whether "one or more persons substantially or completely control[s], throughout Canada or any area thereof, a class or species of business."(15)
In addition to the analytical divergence among the various antitrust jurisdictions, there are great differences in the evidentiary that criteria agencies use to determine whether a firm satisfies the standard of dominance. Most jurisdictions no longer accept static market share as sole proxy for monopoly power.(16) Instead, there is a growing consensus among competition agencies that market share is merely the starting point for defining or establishing dominance.(17) In recent years, the traditional market power inquiry underlying many jurisdictions' analysis, to some extent, has moved away from historic methods of market definition and market power analysis based largely on market share data. Instead, they now consider much more searching methodologies, such as cross-elasticities, diversion ratios, cost and profitability data, and market share volatility.(18) As a result, instead of the old "market share" rule of thumb, the practical criteria employed by agencies today greatly varies among the different agencies.

At the same time, the reduced role that market share continues to play in the evaluation of dominance varies from one jurisdiction to another in at least two respects, namely, the threshold at which market shares will be considered as relevant evidence of monopoly power, and the strength of the inference that can be drawn on the basis of a market share which exceeds the threshold.

Examples of the first aspect, namely, the variance in the market share thresholds that suggest dominance, include the following.

  • A U.S. court has found a ninety percent market share to be "enough to constitute a monopoly" but noted that "it is doubtful whether sixty or sixty-four percent would be enough; and certainly thirty-three percent is not."(19)
  • Canadian courts have found market shares exceeding eighty percent to be prima facie indicators of market power,(20) while market shares below fifty percent were not found to give rise to such a finding.(21)
  • Under European Union law, market shares exceeding seventy percent raise a strong presumption of dominance, while market shares in the fifty to seventy percent range may in themselves raise a similar presumption under certain circumstances.(22)
  • In Israel, a monopoly is statutorily defined as the vesting of more than half of the supply or purchase of goods or services within one entity.(23)

  • Korean law presumes dominance where the market share is over fifty percent or the combined share of the top three competitors exceeds seventy-five percent.(24)
  • Additional jurisdictions embrace different presumptions of market power above certain market share thresholds.(25)
The second aspect, namely, the differences in the evidentiary weight awarded to market share data, has been described by other commentators.(26) This disparity can raise significant issues for transparency as well as consistency of enforcement.

The result of this theoretical and practical divergence is a serious problem for antitrust practitioners and the enterprises they advise.(27) The absence of a single standard requires either a multitude of approaches or a default to a single standardized approach. A standardized approach has practical adverse effects. It often causes companies to "play it safe" through abiding by the most restrictive national antitrust rule all over the world. Such behavior, which is a recognizable side effect of a single jurisdiction's over-enforcement, reduces consumer welfare on an international level by chilling out pro-competitive conduct. In addition, the cost of assessment and compliance has accelerated with the proliferation of agencies and the need to be familiar with diverse standards.

      1. Market Share Thresholds Could Function as Safe Harbors

While it is agreed that a high market share is not an adequate indicator of monopoly power, low market shares can serve as a useful tool for, at a minimum, vitiating any presumption of dominance. A realistic minimum threshold would increase the much-needed certainty for the business community. A threshold analysis of market power at an early stage can also be useful for antitrust enforcers by helping to eliminate cases where anticompetitive effects are highly unlikely, and thus save agency time and focus budget and efforts on cases that pose significant competitive threats.(28)

Many competition agencies already employ such a safe harbor. More specifically:

  • U.S. antitrust officials have expressed the view that they will not pursue allegations of unlawful monopolization where the market share of the subject company does not exceed fifty percent.(29)
  • Under Japan's unfair trade practices rule, set out in Article 19 of its Antimonopoly Act, the acceptable thinking is that where a firm holds a low market share or is a newly entrant to the market, the conduct usually would not result in reducing the competitor's business opportunities or making it difficult for them to find alternative trading partners. Whether a firm is "influential in a market" is determined, among other things, by its market share, that is, whether it holds no less than ten percent of the market or its position is among the top three in the market.(30)
  • The EC has expressed the view that "undertakings with market shares of no more than 25% are not likely to enjoy a (single) dominant position on the market concerned."(31)
  • Canada's Competition Bureau has expressed the view that "[f]or the purpose of enforcing Section 79, the Bureau generally considers that a firm with a market share below 35% is not dominant."(32)

Selection of the appropriate structural level for safe-harbor treatment will undoubtedly require further dialog. The trend is toward higher thresholds, approaching the standard applied in the U.S. Certainly, a threshold as low as ten or twenty percent, will provide little comfort in today's economic climate, especially when applied through a snap-shot lens. Effective, useful, safe harbors must take account of realistic, modern market considerations and not be unduly low out of excessive caution.

    1. Safe Harbors Should be Established for Specific Conduct

Consideration should be accorded not only to the development of structural safe harbors but to conduct-based safe harbors as well. Some conduct is so patently pro-competitive that it should be categorically declared legitimate, even if undertaken by a dominant firm. One obvious case of such conduct is vigorous price competition. Since the lowering of prices generally benefits consumers, such practice should never be considered as predation as long as the set price remains above some identified cost-based threshold.(33) The chilling effect of any other approach is significant and counter-productive to the goal of competition enforcement.

Consumer welfare could also be promoted through appropriate safe harbors applicable to some non-price conduct. The following conduct patterns have been proposed as candidates in this context:

  • New product introduction;
  • Improved product quality;
  • Cost-reducing innovation;
  • Energetic market penetration; and
  • Successful research and development.(34)
  1. Cooperation is Essential for Promoting Consistency and Transparency
    1. Robust Informal Cooperation

In the event that certain conduct does not meet the criteria for safe harbors, evaluation of that conduct should then be subject to a fact-driven analysis, predicated on sound economic principles. Since there are multiple criteria for the analysis, and the possible combination of cases' factual circumstances are virtually infinite, the results of any individual factual analysis become very hard to predict ex ante.

Competition agencies should employ all available mechanisms for addressing the problems of divergence through informal cooperation mechanisms. Just as enforcement transparency is essential for multinational business planning, transparency is also useful for antitrust agencies allowing agencies to benefit from aggregate wisdom and experience accumulated around the world.

    1. Formal Cooperation Mechanisms
      1. Case-by-Case Cooperation

Antitrust agencies have made considerable progress in cooperation in specific cases and investigations. This process can be expanded and assisted by cooperation from parties through waivers of confidentiality and similar undertakings. Some understanding by each agency of another's enforcement perspective and enhanced, continuing dialog should contribute to consistency and, it is hoped, results more consistent with consumer welfare. Business can facilitate this cooperation through various means, including the provision of appropriate waivers of confidentiality.

      1. OECD Roundtable Discussions

The Organization for Economic Co-operation and Development (OECD) roundtable discussions are a highly useful tool for exchanging views and facilitating convergence. Recognizing the importance of international cooperation on anticompetitive practices which bear a direct effect on international trade, the OECD Council adopted in 1995 a recommendation aimed at promoting cooperation between Member Countries on anticompetitive practices.(35) Under OECD auspices, the decade that followed has seen significant practical contributions that were developed as part of the coordination and cooperation by competition agencies of OECD Member Countries together with business along with competition agencies. The participation of business in OECD roundtable discussions has been commended by the OECD Secretariat and national authorities as adding substantial value to the debates.

One example of such practical contribution is the OECD Council's recommendation on merger review of last year which seeks to promote international coordination and cooperation in the area of merger law.(36) This recommendation is part of an ongoing broad effort in the merger area that has brought about a number of additional significant contributions.(37) The hard core cartel area is another area which has greatly benefited from the OECD's activism on international convergence.(38)

The OECD also conducts the Global Forum on Competition, which brings together high-level competition officials from seventy competition agencies around the world. With broad participation by both OECD members and non-members, the program provides an excellent opportunity for direct dialogue between national competition agencies. Such dialogue is highly beneficial for debating complex competition issues, and ultimately increasing international convergence. National agency papers in connection with these OECD programs are increasingly providing improved transparency. Further depth to these papers would be helpful. A continued focus by the OECD on unilateral conduct will also benefit convergence and inter-agency cooperation.

      1. The International Competition Network (ICN)

The ICN announced this summer that it is establishing a new Unilateral Conduct Working Group, to be headed by Germany's Bundeskartellamt and the U.S. Federal Trade Commission.(39) The proposed mandate of the group acknowledges the inconsistency in the way national agencies apply unilateral conduct policy. Hence, its immediate objective is to "launch a dialogue, share experience, and exchange views on general principles and methodological issues regarding dominance/market power and abusive practices."(40) The new working group has already made further progress by drafting a proposed work plan that was presented to the ICN Steering Group for approval last week. This active new working group is indeed promising to be highly beneficial in spearheading the efforts to promote international cooperation and convergence on these issues.

  1. Conclusion

Businesses need as much certainty as possible in order to thrive. Divergence among different national antitrust jurisdictions imposes a great deal of uncertainty in today's global economy. Therefore, transparency and gradual convergence is highly desirable for business entities, and, in turn, benefits consumers. These remarks suggest some areas whereby realization of these goals may be enhanced.


FOOTNOTES

* James F. Rill is a Partner with Howrey LLP in Washington, DC and was Assistant Attorney General for Antitrust at the Department of Justice from 1989 ­ 1992. Mr. Rill gratefully acknowledges the assistance of John Taladay, Partner, Damien Geradin, Of Counsel, Dina Kallay and Thomas Dillickrath, Associates, and Jane Antonio, Research Analyst, all of Howrey LLP in the preparation of these remarks.

1. Detailed analysis of various approaches and recommendations have been covered in earlier roundtables and are beyond the scope of this paper.

2. The notion that antitrust laws were enacted for the protection of competition, not competitors has been embraced in numerous U.S. Court cases, including Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 768 n.14 (1984); Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488 (1977); Brown Shoe Co. v. United States, 370 U.S. 294, 320 (1962); Tennessean Truckstop, Inc. v. NTS, Inc., 875 F.2d 86, 88(6th Cir. 1989); F. & M. Schaefer Corp. v. C. Schmidt & Sons, Inc., 597 F.2d 814, 817(2nd Cir. 1979); Mullis v. Arco Petroleum Corp., 502 F.2d 290, 298(7th Cir. 1974);Glen Holly Entm't, Inc. v. Tektronix Inc., 352 F.3d 367, 372(9th Cir. 2003); Bright v. Moss Ambulance Service, Inc., 824 F.2d 819, 824(10th Cir. 1987);SmithKline Beecham Corp. v. Apotex Corp., 383 F. Supp. 2d 686, 696(E.D. Pa. 2004); Ansell, Inc. v. Schmid Laboratories, Inc., 757 F. Supp. 467, 479(D.N. J. 1991); and Yangtze Optical Fibre v. Ganda, LLC, 2006 U.S. Dist. LEXIS 38510, 2006-1 Trade Cas. (CCH) ¶ 75,322 (D.R. I. 2006).

See also, Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 109-10 (1986) for the related notion that it is "inimical to [the antitrust] laws to award damages for losses stemming from continued competition" (quoting Brunswick Corp., 429 U.S. at 488).

For a reflection of this notion by competition enforcers, see, e.g., Neelie Kroes, Preliminary Thoughts on Policy Review of Article 82, Address Before the Fordham Corporate Law Institute (Sept. 23, 2005), available at http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/05/537&format=PDF&aged=1&language=EN&guiLanguage=en at 3 ("[m]y own philosophy on this is fairly simple. First, it is competition, and not competitors, that is to be protected").

3. BIAC, Discussion Points Presented by the Business and Industry Advisory Committee (BIAC) to the OECD Working Party No. 3 on Cooperation and Enforcement, Roundtable Discussion on Proof of Dominance/Monopoly Power, ¶ I-3 (June 7, 2006).

4. See, Makan Delrahim, Facing The Challenge of Globalization: Coordination and Cooperation Between Antitrust Enforcement Agencies The U.S. and E.U., Address Before the ABA Administrative Law Section Fall Meeting (Oct. 22, 2004), available at http://www.usdoj.gov/atr/public/speeches/206429.pdf at 3 ("[w]hen half of the world's antitrust agencies are only ten years young or less, and there is still much discrepancy between agencies on antitrust enforcement principles, we believe that a forced path to uniformity would result in enforcement at the level of the lowest common denominator").

5. See also, Robert H. Bork, The Antitrust Paradox 137 (1993).

6. See also, Laurence Popofsky's testimony in front of the Antitrust Modernization Commission's September 29, 2005 hearing on "Exclusionary Conduct: Refusals to Deal and Bundling and Loyalty Discounts" where he stated, "From a practitioner's point of view, we need rules. Not economic theory, but rules ­ something akin to the per se rule under Section 1." Transcript of Public Hearing at 12, Antitrust Modernization Commission (Sept. 29, 2005), available at http://www.amc.gov/commission_hearings/pdf/050929_Exclus_Conduct_Transcript_reform.pdf (emphasis added).

7. See also, Randolph W. Tritell, Regulatory Harmonization, 21st Century Challenges for Competition and Antitrust in the Trans-Atlantic Area, available at http://ftc.gov/bc/international/docs/tritell_regharmonization.pdf (reviewing the reasons for a growing need for harmonization).

8. See, USCIB, Statement of the United States Council for International Business, Submission to the Directorate-General for Competition on the Application of Article 82 of the Treaty to Exclusionary Abuses (Mar. 30, 2006), available at http://www.uscib.org/docs/Final_USCIB_Article82.pdf at 16.

9. See, United States v. Philadelphia Natl. Bank, 374 U.S. 321, 360 n.37 (1963); United States v. Connecticut Nat'l Bank, 418 U.S. 656 (1974); and 2A Phillip Areeda & Herbert Hovenkamp, Antitrust Law ¶ 530d (2nd ed. 1998-2006).

10. United States v. E. I. Du Pont de Nemours & Co., 351 U.S. 377, 391 (1956); United States v. Grinnell Corp., 384 U.S. 563, 571 (1966). See also, AD/SAT v. Associated Press, 181 F.3d 216, 227 (2nd Cir. 1999) (defining monopoly power as “the ability to price substantially above the competitive level and to persist in doing so for a significant period without erosion by new entry or expansion”).

11. DG Competition Discussion Paper on the Application of Article 82 of the Treaty to Exclusionary Abuses (Dec. 2005), ¶ 28, available at http://ec.europa.eu/comm/competition/antitrust/others/discpaper2005.pdf, (citing Case 85/76, Hoffmann-La Roche & Co. AG v. Commission, 1979 E.C.R. 461, ¶ 39).

12. Act Concerning Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of 14 April 1947, rev. 2005) § 3, available at http://www.jftc.go.jp/e-page/legislation/ama/amended_ama.pdf (hereinafter AMA). Significant jurisprudence has developed around the Act, such as Hokkaido Shimbun (Consent decision issued on Feb. 28, 2000) and the Intel Kabushiki Kaisha Ltd. (Recommendation decision issued on Apr. 13, 2005), to name two recent examples.

13. AMA, id., § 19.

14. Federal Law of Economic Competition (1993), Art. 13, available at http://sp.cfc.gob.mx:8080/cfc01/Documentos/ing/Legislation/Federal%20Law/Index.htm (hereinafter FLEC). For an application of this standard, see, e.g., Files AD-41-97 and RA-36-2001 Teléfonos de México, SA de CV (Telmex) which focused on Telmex's capacity to unilaterally set prices.

15. Competition Act, R.S.C. 1985, c.19 (2nd Supp.), s.79. For a recent application of the standard, see, Commissioner of Competition v. Canada Pipe Co., Ltd., 2005 Comp. Trib. 3.

16. See, Statement by the United States Before the OECD Competition Committee, Working Party No. 3 on Co-operation and Enforcement, Roundtable Discussion on Techniques and Evidentiary Issues in Proving Dominance/Monopoly Power, DAF/COMP/WP3/WD(2006)35 (May 29, 2006), available at http://www.ftc.gov/bc/international/docs/DiscussionDominance-MonopolyPowerUnitedStates.pdf; and DG Competition Discussion Paper, supra note , ¶¶ 23, 28-32 (demonstrating that market share alone is inconclusive of dominance).

17. See, e.g., Statement by the European Commission Before the OECD Competition Committee, Working Party No. 3 on Co-operation and Enforcement, Roundtable Discussion on Techniques and Evidentiary Issues in Proving Dominance/Monopoly Power, DAF/COMP/WP3/WD(2006)30 (May 24, 2006), ¶32 ("[q]uantitative analysis should never determine on its own the existence of dominance but it can be very useful to lend additional credibility to a qualitative assessment").

The Canadian position states that "[m]arket power is generally accepted to mean an ability to set prices above competitive levels for a considerable period.one must ordinarily look to indicators of market power such as market power and entry barriers. The specific factors that need to be considered in evaluating control or market power will vary from case to case." Canada v. NutraSweet Co., [1990] 32 C.P.R. (3d), 47; [1990] C.C.T.D. No 17. (emphasis added).

For the U.S. position, see, American Council of Certified Podiatric & Surgeons v. American Bd. of Podiatric Surgery, Inc., 185 F.3d 606, 623 (6th Cir. 1999) ("market share is only a starting point for determining whether monopoly power exists, and the inference of monopoly power does not automatically follow from the possession of a commanding market share").

Under the Mexican competition rules, a high market share is insufficient for concluding that an agent possesses substantial market power. Rather, market share is just one element among many that determine market power. FLEC, supra note , Art. 13; and Code of Regulations to the Federal Law on Economic Competition, Art.12, available at http://www.cfc.gob.mx/DirResults.asp?txtDir=http://xeon2/cfc01/Documentos/ing/Legislation/Code%20of%20Regulations .

In Japan, in determining whether a conduct constitutes private monopolization, the AMA provides no specific criteria on the market share of a company. Rather, the existence of market power is decided comprehensively, taking various circumstances into account. See, Statement by Japan Before the OECD Competition Committee, Working Party No. 3 on Co-operation and Enforcement, Roundtable Discussion on Techniques and Evidentiary Issues in Proving Dominance/Monopoly Power, DAF/COMP/WP3/WD(2006)26 (May 30, 2006), ¶14.

18. See, BIAC, supra note , ¶ I-5.

19. United States v. Aluminum Co. of Am., 148 F.2d 416, 424 (2nd Cir. 1945).

20. Canada v. Tele-Direct Publications, Inc. [1997] C.C.T.D. No. 8.

21. Canada v. Laidlaw Waste Systems Ltd. (1991) 40 C.P.R. 3d 289, [1992] C.C.T.D. No. 1 (Comp. Trib.).

22. See, DG Competition Discussion Paper, supra note 11, ¶31 (citing Case 85/76, Hoffmann-La Roche, supra note 11 ¶41; Case C-62/86 AKZO Chemie BV v. Commission [1991] ECR I-3359, ¶60; and Case T-395/94 Atlantic Container Line AB and others v. Commission, [2002] ECR II-875 ¶328). See also, ROBERT O’DONOGHUE & A. JORGE PADILLA, THE LAW AND ECONOMICS OF ARTICLE 82 EC 113 (Hart Pub. 2006).

23. Restrictive Trade Practices Act, 5748-1988, § 26(A), available at http://www.antitrust.gov.il/NR/rdonlyres/9076F39E-6326-4EB3-8396-FC9191B1E4DA/0/Restrictive_Trade_Practices_Law_5748.doc.

24. Monopoly Regulation and Fair Trade Act 1980, Art. 4.

25. Examples include Austria (Kartellgesetz 1988), Estonia (Konkurentsisadus), Germany (Gesetz gegen Wettbewerbsbeschankungen), Latvia (Competition Law 2002), Lithuania (Law on Competition 1999), Poland (Competition Act 2000), Russia (Law on Competition 1991), and South Africa (Competition Act 1998).

26. See, e.g., Brian A. Facey & Dany H. Assaf, Monopolization and Abuse of Dominance in Canada, The United States and the European Union: A Survey, 70 Antitrust L.J. 513, 537-38 (2002) (suggesting that in the European Union market shares carry more evidentiary weight and create a stronger dominance presumption than in Canada).

27. See, Gregory J. Werden, Assigning Market Shares, 70 Antitrust L.J. 67 (2002) (describing the difficulties in assessing market shares); and Statement by the European Commission, supra note , ¶¶ 35-40 (discussing the many practical problems posed by the process of establishing relevant antitrust markets and market shares).

28. See, Frank E. Easterbrook, The Limits of Antitrust, 63 Tex. L. Rev. 1, 14-16 (1984).

29. See, Gerald F. Massoudi, Key Issues Regarding China’s Antimonopoly Legislation, Address Before the International Seminar on Review of Antimonopoly Law (May 19, 2006), available at http://www.usdoj.gov/atr/public/speeches/217612.pdf.

30. See, Statement by Japan, supra note 17.

31. See, DG Competition Discussion Paper, supra note 11, ¶31 (citing Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (The EC Merger Regulation), 2004 O.J. (L 24) 1, Rec. 32 which reads, “Concentrations which, by reason of the limited market share of the undertakings concerned, are not liable to impede effective competition may be presumed to be compatible with the common market. Without prejudice to Articles 81 and 82 of the Treaty, an indication to this effect exists, in particular, where the market share of the undertakings concerned does not exceed 25 % either in the common market or in a substantial part of it.” )

32. See, Canada Competition Bureau, Report on the Chatham Gasoline Market (Dec. 29, 1999), available at http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=1610&lg=e. See also, the Bureau's Predatory Pricing Enforcement Guidelines which state that "[a]t the outset of an examination the Director often uses as a rough proxy a market share of 35 percent, below which it is unlikely an alleged predator possesses market power." Predatory Pricing Enforcement Guidelines, available at http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=1746&lg=e#part2.

33. See, Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 223 (1993) (citing Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 340 (1990) ("Low prices benefit consumers regardless of how those prices are set, and so long as they are above predatory levels, they do not threaten competition. . . . We have adhered to this principle regardless of the type of antitrust claim involved.")).

34. See, 3 PHILLIP AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW ¶ 651b (2nd Ed. 1998-2006). See also, Werden, supra note 27 discussing types of conduct that could be considered presumably lawful.

35. Revised Recommendation of the Council Concerning Co-operation Between Member Countries on Anticompetitive Practices Affecting International Trade, C(95)130/FINAL (Sept. 1995), available at http://www.oecd.org/dataoecd/60/42/21570317.pdf.

36. Recommendation of the Council on Merger Review, C(2005)34 (Mar. 23, 2005), available at http://webdomino1.oecd.org/horizontal/oecdacts.nsf/linkto/c(2005)34.

37. See, e.g., Guiding Principles For Merger Notification and Review Procedures, available at http://www.internationalcompetitionnetwork.org/icnnpguidingprin.htm; and Recommended Practices for Merger Notification and Review Procedures, available at http://www.internationalcompetitionnetwork.org/mnprecpractices.pdf.

38. See, Best Practices for the Formal Exchange of Information Between Competition Authorities in Hard Core Cartel Investigations, available at http://www.oecd.org/dataoecd/1/33/35590548.pdf.

39. See, Discussion Paper, available at http://www.internationalcompetitionnetwork.org/capetown2006/UCWGDiscussionPaper.pdf and Draft Mandate, available at http://www.internationalcompetitionnetwork.org/capetown2006/UnilateralConductWorkingGroupDraftMandate.pdf.

40. Draft Mandate, id. at 1.