dominant firm

dominant firm

a firm that accounts for a substantial proportion of the total supply of a particular product. Such a firm not only has a high absolute market share, but also often a (relative) market share which is considerably greater than its nearest rival. In consequence, a dominant firm may be in a position to exercise market (monopoly) power to the detriment of both consumers and rival suppliers. Under UK COMPETITION POLICY,a dominant firm is defined as a firm which supplies 40% or more of a specified GOOD or SERVICE. See COMPETITION POLICY (UK).

dominant firm

a firm that accounts for a significant proportion of the supply of a particular good or service. Such a firm exercises a considerable degree of power in determining the supply terms of the product (see PRICE LEADERSHIP) and may be tempted to further its own interests at the expense of consumers. A monopoly firm is one that controls the entire supply of a particular product (see MONOPOLY).

Under UK COMPETITION POLICY, a dominant firm is defined as a firm that supplies 40% or more of a specified good or service. See OFFICE OF FAIR TRADING, COMPETITION COMMISSION, COMPETITION POLICY (UK), COMPETITION POLICY (EU), MARKET DOMINANCE.

References in periodicals archive ?
To help governments and regulators as they struggle to address this market concentration, we must make economics itself more relevant to the digital age.Digital markets often become highly concentrated, with one dominant firm, because larger players enjoy significant returns to scale.
The consolidation positions Fresh Farms, LLC to become the dominant firm in this industry that is putting power back into the hands of consumers, comments Mitchell Olson, Director of Marketing for Fresh Farms, LLC.
What about a dominant firm's incentive to invest in period t, supposing that a smaller firm is in the market during the time and must decide whether to stay or to exit in period t + 7?
'Refunds, bonuses and loyalty programmes create a lock in effect and are anti-competitive as they force the customer to continue using the services of a dominant firm in order to benefit from these programs,' the telco said.
This implies that the dominant firm would be required by the regulator to adhere to strict reporting and conduct within the market in the quest to preserve competition.
The authors of "The Consolidation Curve" point out the threat of start-ups who seek to disrupt the dominant firm's business.
(5) Turning to dominant firm behavior and conduct having exclusionary effects, the students read case after case in which a dominant firm or group of firms successfully drives an aggressive competitor out of business by using predatory conduct.
(26) Conduct is therefore not absolved on the basis of the dominant firm's erroneous assessment of the likely impact of its conduct, or because the firm failed to turn its mind to the likely impact of its conduct.
And if dominant firm strategies squeeze newcomers from the market by the power and leverage of incumbency, that is not an antitrust violation unless the conduct is likely to result in monopolization of a market with attendant lessening of aggregate consumer surplus.
The question underling this study is this: what effect would transforming a market from a dominant firm oligopoly to a perfectly competitive market have on health insurance premiums?
Consequently, a dominant firm may harm competition by limiting the
The Court advised as follows, invoking the oft-cited duty of special responsibility of a dominant firm under EU law and liberally quoting from Deutsche Telekom: