P/L/67. Legal issues of market power

The paper discusses the market power provision of the Trade Practices Act (TPA) arguing that the legitimate and illegitimate uses of market power are sometimes hard to distinguish. Definitions of 'substantial market power' are quoted focusing on the problem of predatory pricing, and comparing Australian and American competition environment. Cases of predation by firms without sufficient market power are analysed. Interpretations of provisions for a legitimate business defence are suggested.