COMPETITION LAW SIBERGRAMME ISSUE 1 OF 2012

By Robert Legh Tuesday, April 17, 2012
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Decisions in the past decade concerning the activities of the Microsoft Corporation1 in the United States have generated considerable debate regarding the manner in which markets characterised by network effects should be regulated. In economies host to an increasing number of high-technology industries, it bears consideration whether competition authorities should proactively limit the extent to which a single firm may benefit from direct or indirect network effects, primarily by limiting the extent to which dominance may be achieved; alternatively, whether an incumbent firm should be allowed to capitalise positive network externalities to the exclusion of smaller, less efficient rivals.

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