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Do deep pockets have a place in competition analysis?

Rhonda L Smith and David Round
(2012) 40 Australian Business Law Review 348

 

Abstract

'The existence of market power is notoriously difficult to prove. Whether financial power, or deep pockets, is related to the possession of substantial market power, is inherently controversial. However, it is arguable that in a small number of cases an understanding of the role played in a firm's financial power is essential in order to determine whether it has used its market power for a proscribed purpose. The authors argue that financial power can indeed provide the ability or the means for a firm to engage in the conduct for which market power provides the incentive.'

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