Legal Definitions - market share

Market share refers to the proportion of total sales or revenue within a specific industry or market that a particular company or product controls. It is typically calculated by taking a company's sales or output for a product or service and dividing it by the total sales or output for that same product or service across the entire market. In legal contexts, especially antitrust law, market share is a key indicator used to assess a company's influence or "market power." A very high market share can sometimes suggest that a company might have enough control to potentially engage in anti-competitive practices, which could lead to accusations of monopolization.

Here are some examples illustrating market share:

• Example 1: Global Smartphone Sales

  Imagine "Mobile Innovations Inc." sells 150 million smartphones worldwide in a year. During that same year, the total number of smartphones sold globally by all manufacturers combined is 600 million. Mobile Innovations Inc.'s market share would be 25% (150 million / 600 million). This figure indicates that one out of every four smartphones sold globally was produced by Mobile Innovations Inc., giving regulators an idea of its presence and influence in the international smartphone industry.

• Example 2: Local Ride-Sharing Service

  Consider "CityRide," a ride-sharing company operating in a specific metropolitan area. In a given month, CityRide completes 2 million rides. All ride-sharing services combined in that city complete a total of 5 million rides during the same period. CityRide holds a 40% market share (2 million / 5 million) of the ride-sharing market in that particular city. This percentage helps to understand its competitive standing relative to other local transportation providers.

• Example 3: Streaming Video Platform

  Suppose "StreamFlix" has 75 million subscribers in a particular country. The total number of subscribers across all streaming video platforms in that country is 100 million. StreamFlix has a 75% market share (75 million / 100 million) of the streaming video market in that nation. This high percentage would likely attract scrutiny from antitrust authorities to determine if StreamFlix possesses significant market power that could potentially harm competition or limit consumer choices in the digital entertainment sector.