Joint Dominance

In general, joint dominance in markets can be assumed to occur when a small number of large companies is able to coordinate its behaviour in the market and thereby manage to charge supra-competitive prices. Such a coordination has not to be explicit.

The Gencor/Lonrho and the Airtours/First Choice judgments of the General Court are landmark cases in European merger control concerning joint dominance. The Court stated that joint dominance occurs when the market structure is such that anti-competitive parallel conduct would have constituted economically a more rational strategy than competing with each other, thereby, adversely affecting the prospect of maximising combined profits.

The following market factors are the entry point for the examination:

  • high concentration levels
  • homogenous products
  • stable and symmetric market shares
  • stagnant demand
  • inelastic demand
  • similarity of cost structures
  • low levels of technological change and
  • high barriers to entry

EE&MC has empirically proven competition in many markets that meet these criteria.