Competition For-the-market

Some products have characteristics that lead firms to compete to be the supplier of a whole market of product or services, rather than for market share (whether it be a share of units, of contracts or of consumer relationships). These might for example include:

• natural monopolies (with large economies of scale)
• publicly-funded monopolies (that would not be provided by markets)
• legally-protected monopolies (e.g. products protected by intellectual property rights) and 
• platform monopolies (e.g. digital platforms with powerful direct or cross-platform network effects that generate increasing value from scale). 

In December 2019, the Global Forum on Competition held a roundtable on competition for-the-market which focused on the first of these categories, natural monopolies, and publicly-funded monopolies, particularly on the enforcement challenges that arise when concessions are offered on these services. 

This page contains all related documentation. 

• Competition in-the-market is more intense than competition for-the-market, however in the context of natural monopolies and publicly-funded monopolies, competition for-the-market may be the only option for creating a competitive incentive. Offering concessionary rights to serve such markets can help to strengthen these incentives. However, awarding concessionary rights present significant challenges including the risk of incomplete contracts, and the scope for opportunistic renegotiation.  
• Abuses of dominance, in particular through exclusionary conducts, can arise in concessionary markets. The ability to offer a concessionary contract may not protect the seller of the concessionary right (or the users) from the consequences of such abuse. There are some challenges to identifying bid-rigging in the cases of concessions, however the risks are lower due to the length of concessions and the possibility that concessionaires will also need to compete in-the-market once they have won the concession. 
• Challenges in reviewing concessionary mergers include the need to identify when there is a change of control. Bespoke concessions may often constitute markets in and of themselves. Remedies Merger control in concessionary markets takes into account the need to preserve long-term competition. 

OECD note | Note de l'OCDE

Detailed Summary of the discussion | Résumé détaillé de la discussion

Executive Summary with key findings

Paper by Elisabette Iossa

Paper by Rory Macmillan

Call for contributions | Appel à contributions