SSNIP test may reveal a hidden monopoly in the Russian Internet

16 august 2018 | RBC

RBC journalists turned their attention to the FAS proposal about considering digital platforms that occupy at least 35% of substitutable services market as monopolies. This is a one of the points of the institution's 5th Antimonopoly Package.

Elena Kovaleva
Elena Kovaleva
Department for Competition Policy

Elena Kovaleva, Head of the Department for Competition Policy of the Analytical Center explained to RBC that consumers' willingness to "switch" between products is essential to assess the market boundaries and the share of the company owning the digital platform.

"The SSNIP test ("hypothetical monopolist test")  is one of the methods of such an assessment. It consists of a consumers survey asking whether an increase in price by 5–10% with all else being equal would provoke them to switch to another product", she noted. "In addition, since market players compete for consumers choice, the subjective consumers perception of goods as alternatives, even if in a number of parameters they are not equal, will be the key aspect."

In practice, such a test involves a detailed analysis of consumer behavior, as well as possible costs when switching from one product to another.  Usually companies that are subject to antitrust investigations incur expenses for such researches, she pointed out.

Source: RBC

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