Monopolisation, Moat building and Entrenchment Strategiesal Policy

Roundtable

Date: 11 June 2024
Location: OECD, Paris

About

Economic moats generally refer to key competitive advantages that allow a company to protect its core monopoly from rivals on a long-term basis. Conversely, entrenchment focuses on strategic actions adopted by a dominant firm to maintain its competitive advantages. Both may contribute to maintaining and increasing a firm’s market power. While these terms may overlap, they may be subject to different interpretations in the context of competition law.

In June 2024, the OECD held a roundtable on Monopolisation, Moat building and Entrenchment Strategies to discuss economic moats and entrenchment, their relationship with market power, and the importance of economic moats and entrenchment tactics to modern monopolisation strategies with a focus on potential challenges identified in the current legal framework.

This page contains all the related materials.

Key findings of the discussion

The relationship between moats, entrenchment, and market power is complex, notably in digital markets. Both economic moats and entrenchment may contribute to increasing and maintaining a firm’s market power.
Moats and entrenchment may blur further the lines between lawful and unlawful practices. In this context, it is important to distinguish the activities which are fair and part of a legitimate business model as opposed to those which may unduly hinder the competitive market conditions.
Internal documents and evidence play a crucial role for competition authorities to prove the strategy behind a firm’s behaviour related to structural competition issues.
Incentivising the use of investigative and regulatory tools as well as adjusting antitrust analysis (e.g. updating economic theories, adopting a more dynamic approach) may be relevant for competition authorities to address potential challenges related to moats and entrenchment.