Compliance and Regulation Law bilingual Dictionnary

New comer

by Marie-Anne Frison-Roche


The expression "new comer" designates an operator outside the sector or the market but who is going or has just entered it. On a fully competitive market, this entry is made for him without difficulty, without "transaction cost", and it is naturally encouraged to do so by his entrepreneurial taste or because he has innovated (Schumpeterian temperament), thus being able to seduce applicants in place, potential customers who will then turn away from their usual supplier.

But, when there is liberalization of a monopoly sector, the incumbent operators are powerful enough to establish barriers to entry, because they notably hold the know-how and the confidence of the customers ("stickiness" of the market).

It is therefore necessary to institute transitional regulators, most often in the form of Independent Administrative Authorities (IAA) to build competition, which can only occur through asymmetric regulation, notably in the form of systematic favors for the benefit of new comers. Thus, for example, the British telecommunications regulator forced British Telecom to open its entire telecommunications network free of charge to newcomer Mercury.

This asymmetrical exercise of power is nevertheless neutral since it is applied mechanically to the detriment of incumbent operators to make room for new entrants, only applying to the benefit of new entrants in a blind manner, so that competition can arise. The European Commission wants the same to be true in the pharmaceutical field, generic drug laboratories being assimilated to new comers compared to originator laboratory drugs on the same active ingredient, but this is undoubtedly confusing the liberalization process and exclusive right arising from an intellectual property right.

comments are disabled for this article