EU ANTITRUST: HOT TOPICS & NEXT STEPS

Prague, Czechia

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Third, seven respondents confirmed that they collect data on all prices since their establishment or at least in last two years, while six of them collect data on quantities. Seven of eight respondents have previously changed prices. Hence, these respondents would be able to calculate a product specific price elasticity of demand (in its simplest form). The pre-research may be interpreted in a way that it does not hold the theoretical hypothesis presented above about applicability of a product specific price elasticity of demand as unlikely. With the important reservation about the insufficient number of respondents to generalize, the pre-research shows that the legal certainty argument in support of market definition and market shares approach may not be convincing. A product specific price elasticity of demand is not incalculable. 6. Conclusion and further research The above general analysis suggests that there could be scope for a wider use of a product specific price elasticity of demand in market power analysis. However, these theoretical assumptions should be confirmed by more extensive research, concerning the comparison of ability to self-assess through the current approach (i.e., in particular the definition of a relevant market and market share analysis) and through a product specific price elasticity of demand. If such research were to confirm the applicability, and possibly greater predictability, of a product specific price elasticity of demand compared to the market shares analysis, it would be necessary to set a basic threshold for a product specific price elasticity of demand, which should distinguish between the existence and the non-existence of a dominant position. This is, of course, a very delicate question. If there is a consensus that current decision-making practice and case law is a good guide for the future, it would be ideal to analyse previous borderline cases and, if possible, to set a product specific price elasticity of demand value in these cases, according to which that basic threshold could be set. This contribution is not intended to be a complete rejection of the current approach to market power analysis. However, digitalisation suggests that the time is right to reconsider the applicability of a product specific price elasticity of demand. The conclusions above show that this is at least a direction that should be further explored and verified. Further necessary steps are indicated in the previous paragraphs. For the product specific price elasticity of demand being workable in reality, it needs to be simple enough to be applicable not only in a negligible number of cases, but in a wide variety of cases that are likely to include incomplete data. The results would, of course, be more accurate if large datasets of historical prices and quantities were available and if regression analyses were applied to mitigate external impacts to the demand. However, the basic requirements for

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