Thursday, March 20, 2008
The Use of Customer Surveys For Market Definition and the Competitive Assessment of Horizontal Mergers
Posted by D. Daniel Sokol
Graeme Reynolds (Economic Adviser, U.K. Competition Commission) and Chris Walters (Assistant Director, Mergers, Office of Fair Trading) have written on The Use of Customer Surveys For Market Definition and the Competitive Assessment of Horizontal Mergers in a forthcoming issue of the Journal of Competition Law and Economics.
ABSTRACT: In this paper, we discuss the U.K. Competition Commission's (CC) extensive use of customer surveys in merger control. We point out how the U.K.'s "phase two" merger regime compels the CC to decide upon, design, and commission a customer survey almost as soon as its merger investigation begins. We highlight the effect that this has on two areas of the CC's merger control process that use customer surveys—definition of the relevant market, and assessment of the competitive effects of a merger in the relevant market. We illustrate how to avoid seven consequential pitfalls in using customer surveys with case-study examples from two recent CC horizontal merger inquiries. We suggest that customer surveys, carefully done, have provided useful insights for the CC, but the complications of doing them have meant that they always have been considered in the context of other evidence.