CES Interior Competition Policy:ces
8/9/10
16:09
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European Competition Policy
4.1 Dealing with internal exclusion from the market What is internal exclusion? The issue of identification of the ‘main market’ In internal exclusion, an incumbent firm tries to discourage competitors from entering its main market, or to force them to exit it. In doing so the main purpose of the incumbent, as we pointed out in the description of Problem 1, is not to increase its profits, but to protect itself from competition by other firms in the market. The business practices that can serve this purpose are potentially all the exclusionary practices listed at the beginning of this section, such as predatory pricing, targeted rebates and other forms of price discrimination, market foreclosure, tying and bundling of products, exclusive dealing contracts, product and brand proliferation and so on. The definition of internal exclusion does not present conceptual difficulties per se, contrary to the cases of horizontal and vertical exclusion. Of course, assessing whether a certain practice is exclusionary or not does yield many conceptual and practical difficulties, the main of which being those that we stated previously as Problem 1 and Problem 2. However, these are problems related to the practices, not the notion, of exclusion itself. Perhaps a main issue in the definition of internal exclusion, and one with major practical implications for the concepts of horizontal and vertical exclusion, is the notion of a firm’s main market.
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