Comparison of competition authorities’ approaches to entry barriers definition and analysis

Abstract

Studying the existence and type of barriers to entry is an integral part of competition analysis conducted by antitrust authorities in different countries. As a result, competition authorities in different countries have accumulated a lot of knowledge on this matter, which can be shared between regulators to define best practices and identify the weaknesses of the approaches used. This preprint compares the approaches to defining and measuring barriers to entry used by the antitrust authorities in Russia, USA, EU, Germany, Spain and Australia, which makes it possible to identify the shortcomings of the approach used by FAS of Russia and foreign antitrust regulators. Among the shortcomings of the studied approaches, the author highlights lack of consistency in identifying entry barriers, which is exceptionally noticeable in terms of barrier level analysis. Also, the cases reviewed by competition authorities lack quantitative assessment of entry barriers, which shows the gap between the ongoing academic research and law enforcement practice. The Federal Antimonopoly Service of Russia stands out in comparison to foreign competition authorities, because it often conducts only a formal definition of the entry barriers, limiting the description to a simple enumeration of market barriers or even completely skipping this part of the analysis. As a result, the Russian antitrust authority often draws unsubstantiated conclusions when assessing market entry barriers.

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