licensed technologies to manufacture and distribute the drug; thus, the market for drug manufacturing and distribution is competitive.
Discussion: To evaluate the competitive effects and delineate a relevant market, the Agencies will identify a technology’s close substitutes. The Agencies will, if the data permit, identify a group of technologies and goods over which a hypothetical monopolist of those technologies and goods likely would exercise market power—for example, by imposing a small but significant and nontransitory price increase.[1] The Agencies recognize that technology often is licensed in ways that are not readily quantifiable in monetary terms.[2] In such circumstances, the Agencies will delineate the relevant market by identifying other technologies and goods that are reasonable substitutes for the licensed technology.
In assessing the competitive significance of current and potential participants in a technology market, the Agencies will take into account all relevant evidence. When market share data are available and accurately reflect the competitive significance of market participants, the Agencies will include market share data in this assessment. The Agencies also will seek evidence of buyers’ and market participants’ assessments of the competitive significance of technology market participants. Such evidence is particularly important when market share data are unavailable, or do not accurately represent the competitive significance of market participants. When market share data or other indicia of market power are not available, and it appears that competing technologies are comparably efficient,[3] the Agencies will assign each technology the same market share.
In this example, the structural effect of the joint venture in the relevant goods market for the manufacture and distribution of the drug is unlikely to be significant, because many firms in addition to the joint venture compete in that market.[4] The joint venture might increase the
- ↑ This is conceptually analogous to the analytical approach to goods markets under section 4.1.1 of the 2010 Horizontal Merger Guidelines, supra note 31. Of course, market power also can be exercised in other dimensions, such as quality, and these dimensions also may be relevant to the definition and analysis of technology markets.
- ↑ For example, technology may be licensed royalty-free in exchange for the right to use other technology, or it may be licensed as part of a package license.
- ↑ The Agencies will regard two technologies as “comparably efficient” if they can be used to produce close substitutes at comparable costs.
- ↑ See Example 3 for a discussion of the Agencies’ approach to joint venture analysis.
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