Potential Competition

By Chris Pike (University of East Anglia) & Takuya Ohno (OECD)

This paper discusses the concept of potential competition as an important pro-competitive factor. While potential competition is inevitably subject to significant uncertainty, where it does exist, the paper suggests treating potential competition with a parity of esteem with respect to actual competition. The paper considers the benefits of extending the timeframe used to evaluate potential
competition and reviews the tools that are available to assess it. It suggests such tools may be helpfully placed within a specific framework to enable assessment under the different and greater uncertainty that exists over potential competitive constraints. These tools include many that are already widely used, such as the additional weight placed on credible contemporaneous internal documents, progress against regulatory checkpoints, understanding of business models and of competition to innovate.

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