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Regular version of the site

Article

Whether Market Definition Should Be Abandoned in Estimating Market Power: An Affirmative Answer from Qihoo v. Tencent

China Legal Science. 2017. Vol. 5. No. 1. P. 133-156.

Prof. Louis Kaplow’s proposal to abandonmarket definition in estimating
market power has been criticised by a number of scholars. Both the proposal and
its criticism were analysed theoretically. The recent Chinese case of Qihoo v.
Tencent provides an empirical examination of the proposal and its criticisms,
because the courts deciding the case applied market definition analysis to identify
market dominance. The facts and analysis in the decision provide support for
Kaplow’s proposal because, despite clear facts proving a direct relationship
between a firm’s unilateral conduct and competitive harm, neither the so-called
relevant market nor the dominant firm were successfully identified. By examining
the facts and analysis of the decision, this article concludes that the market
definition approach to identify market power is misleading and
counterproductive, supporting the position of Prof. Kaplow. This conclusion
further supports an argument that the market definition methodology
provisions of article 19 of China’s Anti-Monopoly Law of 2008 (AML) and
of the Anti-Monopoly Committee of the State Council Guidelines for the
Definition of the Relevant Market (Guidelines) should be repealed or modified.