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Competition Law Reading Room

Market Definition in the age of the internet

Stephen Corones
(2010) 38 Australian Business Law Review 309-313

 

Introduction - overview

'The internet has added a new dimension to global trade and has spawned e-commerce - the buying and selling of goods over the internet'.

The author notes that '[W]here internet sellers compete with 'bricks and mortar' sellers, defining the geographic market becomes more complex'.

The author discusses the tests used in the TPA (now CCA) for defining markets. He provides an example of the application of the SSNIP test in the context of digital music. The author also discusses qualitative application of the SSNIP test, with reference to Seven Network Ltd v News Ltd (2009) 182 FCR 160; [2009] ATPR 42-301, cautioning that market definition 'is not an end in itself' - its purpose is to 'aid the identification of competitive constraints on market power'.

The author discusses the ACCC's current approach in relation to the internet by reference to its Public Competition Assessment of hte proposed acquisition by A&R Whitcoulls Group Holdings Pty Ltd of Borders in 2008.

The author then addresses the issue of whether global markets exist and refers to the 2008 Merger Guidelines [at 4.31] and the ACCC's Public Competition Assessment of BHP Billiton's proposed acquisition of Rio Tinto in 2008 which concluded that certain relevant markets were global.

In concluding, the author notes despite the definition of market in s 4E, courts and regulators are not precluded from analysing conduct in a broader market, including if appropriate, a global market.

 

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