The choice of time intervals for the product market analysis

V. Brodsky ()

Journal of Modern Competition, 2014, issue 5, 27-47

Abstract: The article discusses the problem of choosing time interval for the product market analysis for the purposes of antitrust investigations.Decisions of the Antimonopoly body in cases concerning violations of the Antimonopoly legislation in some cases depend significantly on time frame choice for the analysis of the product market. The current Antimonopoly legislation clauses concerning the issue have two drawbacks.The first drawback is ambiguity of the wording “insignificance of the market participants share change within the interval analysis". The second is the requirement that all parameters of the market correspond with the same time interval The objective of this article is to propose and explain an algorithm of selecting multiple time intervals for the product market analysis, which would allow to eleminate regulatory drawbacks. The main idea of the proposed algorithm is as follows. Product market analysis, which is the object of antitrust investigation, may span multiple time intervals, if within each of these intervals parameters that allow for distinguishing the given market from all other markets remain unchanged.Implementation of this idea is based on the conceptual model of the product market that embraces several key parameters of the market. This conceptual model enables comparison of the market that existed in a particular time interval and was an object of the antitrust investigation with another market, which also existed in past, but at a different time period.If the conceptual models of the two markets coincide it is suggested the market analysis should include both time intervals. In theory, there may be several such time intervals.Based on the conceptual model of the market a fundamentally new method to assess stability of participants’ market shares over time was elaborated.This method eliminates inherent ambiguity of “insignificance of the market participants share change within the interval analysis" clause.The final part of the article discusses a number of interrelated issues: necessity to include several time intervals in the base market analysis, different interpretations of the»optimal duration of the market analysis period»,conceptual model advantages as opposed to the verbal market model, practical applicability of the proposed method to assess stability of participants’ market shares.

Keywords: antitrust investigation; commodity market; time interval for competition analysis; market share stability; conceptual models (search for similar items in EconPapers)
Date: 2014
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