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2021 | Buch

Introduction Kapitel lesen Erstes Kapitel lesen

Market Entry and Competition Law in Latin America

The Role of Economic Development in Antitrust Analysis

verfasst von: Francisco Eduardo Beneke Avila

Verlag: Springer Berlin Heidelberg

Buchreihe : Munich Studies on Innovation and Competition

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book explores the relationship between market entry analysis in competition law and the study of the determinants of aggregate investment. Macroeconomic and social characteristics, such as widespread corruption, political instability, and low levels of education are associated with lower investment rates. Progress on these indicators on the other hand is also strongly associated with sustained growth and higher investment rates. This book analyzes the interaction between these macro variables and the market-specific analysis typical in antitrust cases. Against this background, representative decisions of four Latin American competition authorities – México, El Salvador, Colombia, and Chile – on unilateral conduct are analyzed, focusing on market power assessment. The analysis shows that there is little to no explicit or implicit consideration of the impact of the macroeconomic environment on market dynamism and therefore on market power. This book also explores the influence that EU and US competition law have in the standards to prove ease of market entry developed by the Latin American authorities. Although most of the Latin American authorities share a lack of reliance on market forces, which is characteristic of EU competition law, this book argues that market entry analysis still needs to be adjusted to fit the socio-economic context that affects investment within the country and the degree to which each particular market is affected. Finally, the book proposes a framework on how the macro characteristics covered can be incorporated into competition law enforcement.

Inhaltsverzeichnis

Frontmatter
Chapter 1. Introduction
Abstract
Should the analytical framework of antitrust law in developing countries be adjusted to their specific characteristics? In general terms, the substantive object of the law is economic activity in specific markets, the dynamics of which may be affected by traits that are only present or more pervasive in developing economies. The present work focuses on how a selected group of characteristics in such jurisdictions affect the dynamics of market entry. The characteristics covered are weak public institutions (corruption, political instability, policy uncertainty, and political favoritism of dominant firms), underdeveloped financial system, and low levels of human capital. On the other hand, progress on these and other structural conditions often put countries on a fast-growth trajectory, which increases the dynamism of its markets. One of the purposes of this research is to build a bridge between the insights of development economics regarding the determinants of the investment rate and the study of entry impediments in other areas of the economics discipline commonly used in antitrust analysis, e.g., industrial organization and price theory.
Francisco Eduardo Beneke Avila

An Antitrust Theory of Entry in Developing Economies

Frontmatter
Chapter 2. Market Power and Its Measurement: The Relevance of Entry Analysis
Abstract
Market power is the most central concept in antitrust analysis. It is what justifies intervention in a merger or business conduct that harms or could harm consumers. Even in the case of per-se offenses, where establishing liability does not require proof of power over price, the concept is still crucial in determining the extent of the harm and, therefore, damages (or the administrative/criminal fine). As a consequence, it is common to see a substantial part of the litigation efforts to focus on elements that show a firm’s ability to earn economic profits. One such element is the prospect of entry of new competitors. A brief review of the concept of market power can help to put in context the relevance of entry analysis.
Francisco Eduardo Beneke Avila
Chapter 3. The Long Run Market Equilibrium and Barriers to Entry
Abstract
Since Bain’s emblematic work appeared in 1956, the term barriers to entry gained great importance in the field of industrial organization. The purpose of his work was to search for market characteristics that allowed entrants to earn supra-competitive profits in the long run. The concept of barriers to entry has been highly debated ever since.
Francisco Eduardo Beneke Avila
Chapter 4. Dynamic Aspects of Entry
Abstract
This chapter deals with the theoretical foundations of dynamic aspects of market entry—adjustment costs and real options—in order to provide a structured framework for the analysis of country characteristics covered in the next chapter.
Francisco Eduardo Beneke Avila

Country Characteristics Covered in the Present Work

Frontmatter
Chapter 5. Determinants of the Investment Rate in the Economy and Their Relevance in Entry Analysis
Abstract
The issue of economic growth has been the focus of great attention in the economics literature for a long period of time. Based on the model developed by Solow, neoclassical growth theory predicts differences in growth rates based on, among other factors, a country’s propensity to invest. Levine and Renelt find empirical support for this prediction. As a result, there have been numerous works that seek to identify the determinants of investment rates. From the myriad of variables that have been studied, there have been efforts to identify the ones that are more robustly associated with economic performance. This literature has a special value for antitrust law and economics because the factors that influence a firm’s decision to invest are directly related to the decision of entering a market. Not taking them into account can lead to error costs in enforcement interventions.
Francisco Eduardo Beneke Avila
Chapter 6. How Different Are Latin American Countries from the EU and the US Regarding the Socio-Economic Variables Under Study?
Abstract
The following part of the present work will assess the degree of influence of EU and US antitrust law on selected Latin American countries. The focus will be on exclusionary conduct by a firm with a sufficient degree of market power. The comparison will look into how much ease (difficulty) of entry the defendant (plaintiff) has to prove in order to dissipate (warrant) concerns regarding monopoly power/dominant position. In order to evaluate the justification of EU and US influence in Latin America, it is necessary as a first step to present the degree to which countries in the latter region differ with respect to the EU and the US concerning the characteristics presented in the previous chapter. This chapter presents a summary of publicly available data that measure these differences.
Francisco Eduardo Beneke Avila

Analysis of Selected Competition Authorities’ Decisions

Frontmatter
Chapter 7. Choosing the Countries
Abstract
The present chapter presents the criteria applied in choosing the Latin American countries on which the legal comparative analysis will focus. The factors considered are the economic and social characteristics depicted in the previous chapter, economic performance, characteristics of the national antitrust policy, geographic diversity, and availability of the antitrust authorities’ decisions. First, the countries will be grouped based on each of these criteria and, second, after the distinctions are made, the group of countries will be chosen with the aim of diversity so that both fast-growing and stagnant developing economies with various competition policy settings in North, Central, and South America can be analyzed.
Francisco Eduardo Beneke Avila
Chapter 8. Entry Analysis in Abuse of Dominance Cases
Abstract
This chapter presents the analysis of recent representative abuse of dominance cases in the selected Latin American countries. The present work will focus on the Latin American administrative authorities’ decisions rather than on their judicial review. Since the present work is concerned with highly specific factors regarding entry analysis, the antitrust agencies’ criteria provide a richer source of reasoning on specific barriers to entry. Higher courts usually rule on more general matters of law and, therefore, it is less likely to come across passages with reasoning that is of interest to the present research.
Francisco Eduardo Beneke Avila
Chapter 9. Comparative Analysis: Do Latin American Countries Follow the EU or US Standards for Entry Analysis?
Abstract
In this chapter, the standards of entry analysis between the sample of Latin American countries, on one hand, and the EU and the US, on the other, will be compared. The analysis will be both positive and normative. First, the similarities and differences between the jurisdictions have to be established before one can make a conclusion of whether the relative points of view suit the different social and economic circumstances of the countries. Specifically, as will be seen, US courts seem to be more prone to dismiss cases on the basis of low entry barriers than the European Commission and the EU judiciary. Therefore, the comparative analysis will establish which rules of entry analysis have influenced the selected group of Latin American authorities and to which degree this influence is justified.
Francisco Eduardo Beneke Avila
Chapter 10. How to Incorporate the Country Characteristics Studied in the Present Research Into Entry Analysis
Abstract
Throughout the present work, some consideration has already been made regarding the relevant factors that antitrust authorities can take into account when incorporating into entry analysis the country characteristics under study. In this chapter, these considerations will be presented in a more in-depth and systematic way in order to provide a guideline on how the assessment can be performed.
Francisco Eduardo Beneke Avila
Chapter 11. Conclusions
Francisco Eduardo Beneke Avila
Backmatter
Metadaten
Titel
Market Entry and Competition Law in Latin America
verfasst von
Francisco Eduardo Beneke Avila
Copyright-Jahr
2021
Verlag
Springer Berlin Heidelberg
Electronic ISBN
978-3-662-62347-3
Print ISBN
978-3-662-62346-6
DOI
https://doi.org/10.1007/978-3-662-62347-3

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