ABSTRACT
The chapter begins with an overview of the notion of dominance and discusses certain measurement issues, and explores how an economics-based approach, inspired by Hoffmann-La Roche, might influence the appraisal of certain indicators of dominance in the future, in particular market share, barriers to entry or expansion and commercial advantages. The Commission's analysis of dominance is often exclusively focused on a finding of high market shares combined with a finding of alleged unique competitive advantages. Two classic measurement problems are considered: the Cellophane Fallacy and the inappropriateness of profitability as a proxy of market power. The task of competition authorities is to distinguish problematic market power from market power that is not only commonplace but also a necessary feature of competitive markets. Profitability can be compared over time or between different geographical markets. The use of market shares under European Commission competition law is uncontroversial if such shares only provide the starting point of the Commission's analysis.
