Oligopoly markets

Oligopoly markets are markets dominated by a small number of suppliers. They can be found in all countries and across a broad range of sectors. Some oligopoly markets are competitive, while others are significantly less so, or can at least appear that way. Competition authorities are often called upon to investigate concerns of co-ordinated actions or lack of vigorous competition.

However, detecting the root cause of sub-competitive performance in oligopolies can be challenging, and the manner in which it occurs (e.g. whether through an explicit agreement among the firms to restrain competition, or something less) may greatly affect the analysis and available tools/remedies under competition law. This can potentially lead to enforcement gaps whereby welfare-reducing conduct is not addressed. But how significant of a problem is this in practice, and is there anything we can do about it?

In June 2015, the OECD gathered several experts for a hearing which discussed the approaches that competition authorities can take to address issues in oligopoly markets. Delegates discussed the relative strengths and weaknesses of various enforcement and non-enforcement tools, including those related to: cartels, abuse of (collective/joint) dominance, merger control, market investigations and competition advocacy. An issues paper by the Secretariat and notes by participating experts set up the background of this debate. Read the Executive summary with key findings and the Detailed summary of the discussion. Lire la Synthèse et le Compte rendu de la discussion.