In many cases, high-tech, rapidly changing markets involve networks. It's important to keep in mind some key points about network industries that will inform our analysis. Consumers are reluctant to buy a technology they believe will fail. Thus, attractive networks tend to get larger. Second, compatibility with other products in the network affects that product's attractiveness to consumers.
Incompatibility can constitute a significant entry barrier.
Third, cooperation among producers is necessary to facilitate the ability of consumers to attach to the network. For example, vertical cooperation between hardware and software producers is essential to the computer industry. Even cooperation between direct rivals is often beneficial, say, where standards are needed to achieve compatibility. These points all suggests that rapid technological progress does not necessarily equate to low entry barriers in circumstances where users find it costly to switch to new brands that are incompatible in some way with established technology. Thus, the modalities of competition in network industries involve practices that may seem problematic from a traditional antitrust perspective.