Market Dominant Position Identification Of Internet Enterprise

As the rapid development of network economy, large Internet enterprises are more and more frequently become the subject of actual or rumored antitrust scrutiny conducting by different countries, regarding whether they have abused their market dominant position. However, due to the special characteristic of internet industry, for example,the virtual products, special profit model, two-sided market, network effect, and so on, traditional identification methods cannot be applied effectively.Generally, the procedure of dominate position identification is like this: Firstly, identify the relevant market; Secondly, calculate its market share; Thirdly, estimate whether the relevant enterprise has dominate position according to the market share and other factors.When define the relevant market, the main problems are set out as below: Firstly, the relevant product market is hard to define due to the highly dynamic products and the platform competition effect; Secondly, it is difficult to choose which side of the two-sided market is the relevant market of the disputed case. In addition, the relevant geographic market can’t be defined according to traditional method because the special acquisition, transportation and market entry of internet product. Moreover, traditional analysis method of demand substitution, supply substitution and hypothetical monopolist test can’t be successfully applied for Internet products.As for the identification of dominant position, there exists two main problems. The first one is the measurement and calculation of market share, and the second one is that market share cannot truly reflect the dominant power.To seek the appropriate solution, this paper use the definition in cases of Microsoft, Google and 3Q for reference, and give some suggestions based on the anti-trust theory and the industrial organization of internet enterprises.First of all, perusing into the economic reality of relevant case and analyzing the issues case by case is the general principle.Based on this foundation, when define relevant market, relevant product market should be defined mainly based on main function of the product; Which side is the relevant market could mainly be determined according to the victim. The geographic market can be added and subtracted based on the range of a country or region. When do substitution analysis, supply substitution should be taken into more consideration, and user experience should be the emphasis of demand substitution analysis, rather than price. In addition, weaken the role of market definition is feasible and hypothetical monopolist test method should be transformed.As for the identification of dominant position, the calculation method of market share should be reformed; Market share and lasting time requirement should be improved; Development cost, technology barrier and user lock-in effect should be taken into consideration.