Immaterialgüter- und Wettbewerbsrecht

Entry Analysis in Latin American Competition Law Enforcement – Why Development Matters

Developing countries have unique economic and social characteristics that affect entry decisions of new firms. These traits are not taken into account by antitrust authorities in such countries, which can lead to error costs when analysing entry conditions.

Letzte Änderung: 10.11.17

The research first identifies the basic theoretical concepts that will be used to analyse the factors in developing countries that affect entry: Entry Barriers, Adjustment Costs, and Real Options. Then, a group of characteristics are selected based on existent theoretical and empirical research that establishes the connection between characteristics associated with developing countries on the one hand and investment and entry rates on the other. These characteristics are: weak institutions, political influence of large corporations, education, and financial development. All of these factors have been widely studied and tested as determinants of investment, entry rates, and economic growth. Convergence theory provides the other side of the coin, because under certain circumstances entry in a market can be likelier in a developing country vis-à-vis a developed one. This is the case of developing economies with strong structural conditions that allow them to grow fast for a long period of time.

The research then presents data that provides a broad picture of the extent to which Latin American countries differ from the EU and the US regarding the aforementioned characteristics. The purpose is to justify the need for taking into account different factors in entry analysis that may not be an issue in developed countries but may play a role in developing ones. In other words, if certain characteristics are associated with higher or lower entry rates or investment and there are important differences between the regions under study, then a different analysis is warranted in antitrust cases.

Then, the countries on which the research will focus are selected. The next part of the research is to determine whether authorities in the selected Latin American countries take into account these development traits when analysing the likelihood of entry by new firms. The next step is to assess the degree to which these authorities rely on traditional entry analysis to set the standards for outlawing exclusionary behaviour and blocking or imposing conditions on a merger.

The next step in the analysis is to determine how high or low are these standards compared to the ones set in the US and the EU and to determine the influence of these jurisdictions on Latin American decisions. Based on all the prior analysis, the research will attempt to establish whether this influence is justified after comparing the different economic and social characteristics that affect the ease of entry.

For example, in the United States, it is virtually impossible for a plaintiff to succeed in a predatory price case. One reason for this is the debate concerning the relevant measure of cost, but the decisions have also been heavily influenced by the courts’ scepticism about how likely it will be for the predator to recoup his losses without inducing entry. This rationale could be less valid in a developing and less dynamic economy.



Francisco Beneke


Prof. Dr. Thomas Ackermann


Ökonomisierung des Kartellrechts