5.3. Manifestations of monopolistic activity and its limitation
5.3.1. Determination of the dominant position of the enterprise in the commodity market
The monopolistic activity of an enterprise that occupies a dominant position in the market of a particular product manifests itself primarily in the abuse of its dominant position.
The dominant position is the position of the business entity (group of persons) or of several economic entities (groups of persons) in the market of a particular product, which gives such an economic entity (group of persons) or such economic entities (groups of persons) the ability to exert a decisive influence on the general conditions of circulation of goods on the relevant commodity market, and (or) remove other economic entities from this commodity market and (or) impede access to this commodity market to other economic entities. >
Abuse of a dominant position means all forms of use by an economic entity or a group of economic entities that control each other's property, dominant position, restricting competition and (or) infringing the interests of other economic entities or citizens.
Maintaining a dominant position is not anticompetitive in itself.
Here one of the main paradoxes of the market economy manifests itself: on the one hand, competition encourages commodity producers to integrate into large structures (corporations, companies, associations), thereby concentrating capital to accelerate the pace of production development, increase its efficiency and increase the competitiveness of the company as a whole ; on the other hand, it is the large production and economic structures that are objectively able to occupy a dominant position in the market, one way or another limiting the intensity of competition and thereby reducing the effectiveness of this basic mechanism of a market economy.
The fundamental criterion for determining the presence of a dominant position of an economic entity in the market of a certain commodity is the share of the commodity market owned by the business entity.
Antimonopoly bodies recognize (qualify) the position of an economic entity, whose share in the market of a certain product exceeds 50%, as dominant , except when the business entity proves, that, despite exceeding this value, its position in the market is not dominant. The position of an economic entity, whose share in the market of a certain commodity does not exceed 35%, can not be recognized as dominant. However, the Law on Protection of Competition provides that federal laws may establish cases of recognition of the position of an economic entity, whose share in the commodity market is less than 35%, dominant.
The position of each business entity is also dominant among several, with the following conditions applied to it:
1) the aggregate share of no more than three economic entities, the share of each of which is larger than the shares of other economic entities in the relevant commodity market, exceeds 50%, or the aggregate share of no more than five economic entities, each of which is larger than the shares of other economic entities subjects on the relevant commodity market exceeds 70% (this provision does not apply if the share of at least one of these economic entities is less than 8%);2) for a long period (not less than one year, or if such period is less than one year, during the life of the relevant commodity market), the relative sizes of the shares of economic entities are unchanged or subject to minor changes, and access to the relevant commodity market new competitors are difficult; 3) the goods sold or purchased by business entities can not be replaced by another commodity when consumed (including consumption for production purposes), the increase in the price of the goods does not determine the corresponding decrease in demand for this product, information about the price, conditions realization or acquisition of this product in the relevant product market is available to an indefinite circle of persons.
The share of the commodity market, which is within the limits of 35-50%, belonging at a certain point in time to the economic entity, itself can not serve as a sufficient condition for recognizing the presence of a dominant position. The lower limit of the share of the commodity market in 35% established by the Law on the Protection of Competition serves as a screen for screening out economic entities with smaller shares that can not (if not proved otherwise) be dominant, and identify economic entities with large shares market, which may be subject to further analysis.
In assessing the market structure for qualifying as the dominant position of an economic entity, the share of which in the market for a particular product is within the range of 35-50% inclusive:
o the number of actual competitors and the relative size of market shares belonging to the nearest competitors;
o Stability in time of market shares belonging to both the studied economic entity and its closest competitors
o stability in time of the market itself (static or dynamic market);
o the presence of potential competition in conjunction with an assessment of the presence and magnitude of obstacles to entry of competitors to the market (barriers to entry of competitors into the market in question);
o an estimation of factors or potentialities of the studied economic subject to act as a "price leader".
Depending on the situation, this list of parameters can be used incompletely or supplemented with other parameters.
Price leadership - a market situation inherent in the oligopoly, in which the increase or decrease in prices of the studied business entity is supported by all or most companies on the market (i.e., the economic entity operates on the market regardless of competitors).
The size of the market share is influenced by the choice of the way of measuring the indicators underlying its definition (i.e., the method of measuring the quantity of goods realized by a specific economic entity, and market volume).
The above indicators can be measured:
o in natural expression (in natural or conditional terms);
o in value terms - in accordance with the value of the goods sold by the economic entity (sales volume) and the value expression of the market volume.
In the absence of direct data on the volume of products sold to consumers, these indicators are determined respectively by the volume of supply of products by the economic entity to the relevant commodity market (while the excess production stocks in the warehouse, products destined for the internal needs of the business entity, and products exported by them for sale outside the relevant goods market) and the total volume of deliveries of the goods to the relevant commodity market (ie. a. the volume of deliveries of goods to the market by local producers, including import volumes for the relevant product market).
For qualification as the dominant position of an economic entity, the share of which in the market of a particular product is within the limits of 35-50%, the following parameters are determined and analyzed:
For economic entities - competitors, which actually function in the commodity market, for which product and geographical boundaries are defined:
a) the presence of specific economic entities - competitors (sellers, producers);(b) their production capabilities (available capacity and existing capacity utilization) for the production and sale of the product in question (works, services) and its substitutes in combination with deliveries to a specific commodity market;
c) the size of market shares belonging to the nearest competitors of the economic entity under study, in comparison with its market share;
d) the stability in time of market shares belonging to both the economic entity being studied and its closest competitors (in retrospect - in the last 2-3 years, in the future - 1 year);
e) stability in time of the market itself (static or dynamic market);
e) possible reactions of competitors to the anticompetitive behavior of the business entity;
g) the possible reaction of an economic entity to the pressure of competitors.
If there are competitors (that is, enterprises that supply or are able to supply homogeneous or interchangeable goods to the market) and they can respond quickly (usually up to one year), tangibly (ie their ability to produce ( works, services) are comparable with the capabilities of the economic entity under study) and without large expenditures on the anticompetitive behavior of the economic entity in question, it is most likely that it will not be able to retain the dominant position and act on the market under consideration, nourients.
Existing competitors will be able to react quickly to the anticompetitive behavior of the economic entity in question if:
o they have significant reserves (unloaded capacities) that are comparable to the capacities of the economic entity in question, capable of leading to the loss of a significant part of the sale;
o their capacity can be quickly, without significant costs and sufficiently expanded;
o their capacity (or part of their capacity), working for another commodity market, can be quickly converted to supply the studied product (works, services) or its substitutes; these capacities are comparable in magnitude to the capacities of the economic entity in question in such a way as to lead to the loss of a significant part of the sales.
For business entities-potential competitors who can enter the commodity market, for which product and geographical boundaries are defined, are taken into account:
a) the presence of potential (possible) competitors;
b) barriers to entry of potential competitors into the market in question and the magnitude of possible costs of entry;
c) the impact of dynamic changes in the market itself on the position of the business entity.
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