Market power

Market power in the European Union Law

Concept of Market power provided by the “Glossary of terms used in EU competition policy” (Antitrust and control of concentrations, published in 2002): Strength of a firm in a particular market. In basic economic terms, market power is the ability of firms to price above marginal cost and for this to be profitable. In competition analysis, market power is determined with the help of a structural analysis of the market, notably the calculation of () market shares, which necessitates an examination of the availability of other producers of the same or of substitutable products ( Substitutability). An assessment of market power also needs to include an assessment of barriers to entry or growth ( Entry barriers) and of the rate of innovation. Furthermore, it may involve qualitative criteria, such as the financial resources, the vertical integration or the product range of the undertaking concerned.