Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Saturday, August 14, 2010

Global Competition Law Conference: Implementing Competition Law and Policy, Global Perspectives 18 & 19 November 2010, New Delhi, India

Posted by D. Daniel Sokol

 

I am co-organizing what promises to be one of the best conferences of the year (perhaps even the best conference of the year).  Registration is now open.

Global Competition Law Conference:
Implementing Competition Law and Policy, Global Perspectives
18 & 19 November 2010, New Delhi, India

About the conference

The recent adoption of competition law statutes in East and South Asia, culminating with the enactment of the Indian Competition Act and the Chinese Antimonopoly Law, mark a significant development to the global business community. Merger control, the application of competition law to unilateral conduct such as distribution agreements, competition issues in intellectual property rights, and state activities in the economy create important challenges in the enforcement of competition law in these crucial markets for policymakers, multinational corporations, law firms and economic consultancies. A number of panels and roundtables will examine these issues, composed by the international and local leaders of the competition/regulatory law and M&A practice.

The public conference held on 19 November will be preceded by an invitation only one-day workshop held on 18 November on the issue of economic development and competition law, a theme that is of particular importance to the global as well as to the local business community.

Major policy makers, academics and practitioners from around the world will analyze these topics and will share their unique expertise in the area of competition law and more specifically in merger control, evidence in competition law, joint ventures, distribution, cartels, and the interaction between competition and intellectual property.

Heads of competition authorities/international organizations participating :

  • Laura Carstensen (UK Competition Commission)
  • Brian Cassidy (Australian Competition and Consumer Commission) tbc
  • John Fingleton (Chief Executive at the UK Office of Fair Trading / Chair of the Steering Group, International Competition Network)
  • Alexander Italianer (European Commission) tbc
  • Frederic Jenny (Cour de Cassation (Judge of the French Supreme Court) and Chairman, OECD Competition Committee)
  • Salman Khurshid (Minister for Corporate Affairs, Indian Government)
  • William K Kovacic (Commissioner, Federal Trade Commission)
  • Dhanendra Kumar (Chairman, Competition Commission of India)
  • Shang Ming (MOFCOM) tbc
  • Damien Neven (Chief Economist, DG Competition, European Commission)
  • Shan Ramburuth (Competition Commission, South Africa) tbc
  • Christine Varney (US Department of Justice) tbc

The conference will be held at the Taj Mahal Hotel in New Delhi, India.

The Centre for Law and Economics (Public Policy section) at UCL acknowledges the support of our Exclusive Indian Legal Partner, Amarchand & Mangaldas & Suresh A Shroff & Co

About the Global Competition Law and Economics Series published by Stanford University Press

Ioannis Lianos and D. Daniel Sokol, series editors

Competition law and economics (known in the United States as antitrust) is an area of cutting-edge academic work with significant policy implications. Once confined to the United States and a few other countries, antitrust has taken off as an area of study in a relatively short period of time. More than 100 jurisdictions now have competition laws. Increasingly, enforcement activities abroad have far-reaching implications for any antitrust regime. Moreover, developments in economic thinking have helped to reformulate attitudes in both academic and policy circles. This book series will be at the forefront of the development of new ideas and approaches within the field.

See more information on the series

About the conference on 19 November 2010

The recent adoption of competition law statutes in East and South Asia, culminating with the enactment of the Indian Competition Act and the Chinese Antimonopoly Law, mark a significant development to the global business community. Merger control, the application of competition law to unilateral conduct such as distribution agreements, competition issues in intellectual property rights, and state activities in the economy create important challenges in the enforcement of competition law in these crucial markets for policymakers, multinational corporations, law firms and economic consultancies. A number of panels and roundtables will examine these issues, composed by the international and local leaders of the competition/regulatory law and M&A practice.

The public conference will be preceded by an invitation only one-day workshop on the issue of economic development and competition law, a theme that is of particular importance to the global as well as to the local business community.

Major policy makers, academics and practitioners from around the world will analyze these topics and will share their unique expertise in the area of competition law and more specifically in merger control, evidence in competition law, joint ventures, distribution, cartels, and the interaction between competition and intellectual property.

The conference will be held at the Taj Mahal Hotel in New Delhi, India.

The Centre for Law and Economics (Public Policy section) at UCL acknowledges the support of our Exclusive Indian Legal Partner, Amarchand & Mangaldas & Suresh A Shroff & Co

Conference Schedule

08:15 Registration
08:45 Welcome and Introduction
Ioannis Lianos (UCL) & Daniel Sokol (University of Florida)
09:00 Keynote Speakers:
His Excellency Mr. Salman Khurshid (Minister of State for Corporate Affairs of India)
Justice S. H. Kapadia (Chief Justice of India) (tbc)
09:30 Parallel Sessions
PANEL 1: Mergers

Moderator:
Laura Carstensen (UK Competition Commission)

Panelists:

  • Pallavi Shroff (Amarchand Mangaldas)
  • Dhanendra Kumar (Chairman CCI)
  • Shang Ming (MOFCOM) (tbc)
  • Simon Baxter (Skadden, Arps)
  • Paul Seabright (University of Toulouse, IDEI)
  • Vijaya Sampath (Bharti Airtel)
PANEL 2: Evidence in competition law proceedings (burden of proof, standard of proof, presumptions, economic evidence, admissibility and evaluation)

Moderator:
Shan Ramburuth (Competition Commission, South Africa) (tbc)

Panelists:

  • Cristina Caffarra (Vice-President and Head of European Competition Practice, Charles River Associates)
  • Mike Yeh (Director of Competition Law, Microsoft Corporation)
  • Eleanor Fox (NYU Law School) (tbc)
  • John Kallaugher (UCL & Latham & Watkins LLP)
  • Ioannis Lianos (UCL)
  • Damien Neven (Chief Economist, DG Competition, European Commission)
  • Naval Satarawala Chopra (Amarchand Mangaldas)
11:00 COFFEE BREAK
11:15 Parallel Sessions
PANEL 3:  Competition Issues in Joint Ventures and Distribution Issues

Moderator:
Damien Neven (Chief Economist, DG Competition, European Commission)

Panelists:

  • Ashok Gupta  (Aditya Birla Group)
  • Bharat Vasani (Tata Group )
  • Anurag Goel (Member, Competition Commission of India)
  • Carles Esteva Mosso (DG Competition, European Commission) (tbc)
  • Kiran Desai (Mayer Brown International)
PANEL 4: 
Cartels

Moderator:
Scott D. Hammond (US Department of Justice Antitrust Division) (tbc)

Panelists:

  • Nadia Calvino (DG Competition, European Commission) (tbc)
    Scott D. Hammond (US Department of Justice Antitrust Division) (tbc)
  • P N Parashar (Member, Competition Commission of India)
  • Ariel Ezrachi (University of Oxford)
  • John Beyer (Nathan Associates)
  • Maarten Pieter Schinkel (University of Amsterdam)
13:00 LUNCH BREAK
13:30

Key note speakers:

  • John Fingleton (Chief Executive at the UK Office of Fair Trading / Chair of the Steering Group, International Competition Network)
14:00 Parallel Sessions
PANEL 5: Intersection between Antitrust and Intellectual Property law issues

Moderator:
Howard Shelanski (Deputy Director, Bureau of Economics, Federal Trade Commission)

Panelists:

  • Andrea Appela (Deputy General Counsel, European & Asia, News Corporation)
  • Harry First (NYU Law School)
  • Damien Neven (Chief Economist, DG Competition, European Commission)
  • Damien Geradin (Michigan Univ., Tilburg University, Howrey LLP)
  • Doug Melamed (General Counsel, Intel)
  • P N Parashar (Member, Competition Commission of India)
PANEL 6:
Government Barriers to Competition


Moderator:
Pradeep S. Mehta (Secretary General, Consumer Unity & Trust Society (CUTS))

Panelists:

  • Martha Licetti (Economist, World Bank)
  • Daniel Sokol (University of Florida)
  • Suzanne E Wachsstock (Chief Antitrust Counsel, America Express)
  • Shubhashis Gangopadhyay, (Director, India Development Forum)
  • Rahul Sarin (Member, Competition Appellate Tribunal)
15:30 COFFEE BREAK
16:00 Enforcers' Roundtable:
Limits to the discretion of competition authorities: a comparative perspective
(due process, judicial review, priorities setting, guidelines and reductive versus expansive interpretation of the law, comity principles)


Moderator:
Frederic Jenny (Cour de Cassation (Judge of the French Supreme Court) and Chairman, OECD Competition Committee)

Panelists:

  • Laura Carstensen (Deputy Chairman, UK Competition Commission)
  • John Fingleton (Chief Executive at the UK Office of Fair Trading / Chair of the Steering Group, International Competition Network)
  • Alexander Italianer (European Commission) (tbc)
  • Dhanendra Kumar (Chairman, Competition Commission of India)
  • Shang Ming (MOFCOM) (tbc)
  • Shan Ramburuth (Competition Commission, South Africa) (tbc)
  • Brian Cassidy (Australian Competition and Consumer Commission) (tbc)
  • Christine Varney (US DOJ) (tbc)
17:45 Closing remarks
Justice A Pasayat (retd), Chairman, Competition Appellate Tribunal
18:00 Close of Conference
20:30 Dinner (by invitation only)

Dinner keynote speakers:
Christine Varney (US DOJ)
Alexander Italianer (European Commission)

August 14, 2010 | Permalink | Comments (0) | TrackBack (0)

Friday, August 13, 2010

Price Discrimination in the Postal Sector and Competition Law

Posted by D. Daniel Sokol

Damien Geradin, Howrey LLP, Tilburg University - Tilburg Law and Economics Center (TILEC) has written on Price Discrimination in the Postal Sector and Competition Law.  Postal competition is a very important topic (and not merely because I have written about it).  It emcompasses a significant part of economic activity that because of its infrastructure, affectsgrowth and development in many different sectors.  Damien's paper is worth a read.

ABSTRACT:

Price discrimination is pervasive in all sectors of the economy. Businesses, including postal operators, use price discrimination to stimulate demand. Given the downward pressure on mail volumes due to electronic alternatives, postal operators have had to respond rapidly and effectively. Postal operators, for instance, adopt pricing strategies designed to stimulate demand by offering rebates and other forms of price incentives to their business counterparts. The present paper analyses the extent to which these price discrimination strategies raise competition law issues and, if so, how these issues have been dealt with by competition law authorities and courts.

One of the difficulties for competition lawyers and economists is that price discrimination is a polymorphic concept that covers a variety of practices, which are not necessarily apprehended by the same competition rules and principles. For competition lawyers, price discrimination typically covers pricing conduct falling within the scope of Article 102(c) of the Treaty on the Functioning of the European Union (hereafter, the “TFEU”), which considers as an abuse the fact for one or several firms holding a dominant position of “applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage.” By giving a better price to Customer A than customer B, dominant firm X may thus place Customer B at a competitive disadvantage. When selling at different prices is objectively justified by the fact that customers are “differently situated” (which is often the case), the practice in question does not fall within the scope of Article 102(c). This practice may, however, fall within other sections of Article 102, when they have exclusionary effects. Rebates may have such effects when they are set in such a way that they exclude “as efficient competitors.”

Price discrimination schemes are common in the postal sector and some such schemes have come under the scrutiny of the European Commission (hereafter, the “Commission”) and the national competition authorities. More recently, the adoption of preferential tariffs by a number of postal operators to the benefit of large mail senders has been a source of controversy, especially when the benefit of such schemes is not extended to mail intermediaries, such as “mail preparers” and “aggregators.” In this respect, an Opinion rendered by the French Competition Council (the Conseil) on 20 December 2007 in relation to the institution of a rebate scheme envisaged by La Poste, and the French court decisions rendered on such scheme, have generated a lot of attention. This paper will thus devote significant space to this Opinion and these decisions. It will also discuss the judgment of the Court of Justice of March 2008 in the Dedat Deniz case concerning the interpretation to be given to Article 12(5) of Directive 97/67, which is of direct relevance to the issues addressed in the French Opinion and court decisions.

This paper is organized as follows. It first discusses the concept of price discrimination from an economic and an EU competition law perspective (Parts II and III). The paper then examines price discrimination in the postal sector by reviewing a number of postal cases in which price discrimination claims were made. This section will focus almost exclusively on rebate pricing schemes and how they are treated under EU competition law (Part IV). Price discrimination in France – where the postal incumbent La Poste has often been under antitrust scrutiny – will then be looked at. In particular, this paper will discuss the Opinion rendered by the Conseil on 20 December 2007 in relation to the institution of a rebates regime envisaged by La Poste. It will also look at judgments adopted by the French civil courts on this subject, as well as the judgment of the CJ in Dedat Deniz (Part V). Finally, a brief conclusion is provided (Part VI).


August 13, 2010 | Permalink | Comments (0) | TrackBack (0)

When the Going Gets Tight: Institutional Solutions When Antitrust Enforcement Resources are Scarce

Posted by D. Daniel Sokol

Michal Gal (University of Haifa) has posted When the Going Gets Tight: Institutional Solutions When Antitrust Enforcement Resources are Scarce.

ABSTRACT: This article seeks to explore whether institutional solutions to antitrust enforcement problems can be transported from one jurisdiction to another. It does so by focusing on the effects of scarce enforcement resources (both financial and human) on optimal institutional design. The prevalence of this characteristic in small, developing and transition economies makes it an interesting and important subject to study. Accordingly, the following question is raised: if a country has a small institutional endowment, can it transplant the institutional structure of another jurisdiction with a large resource endowment and simply shrink it to fit its budget - like the shrinking of the house in Alice in Wonderland - or should it apply a different institutional structure? To answer this question, the article first analyzes the effects of a limited institutional endowment on the effective enforcement of antitrust law. It then analyzes the tools which have been employed or that can be employed to limit such negative effects, such as prioritizing and sharing. One of the more interesting solutions relates to the interplay between substantive rules and institutional structures: a combination of poorly equipped institutions with limited economic expertise and antitrust laws which require complex analysis of market conditions and their effect on welfare are apt to create erroneous decisions; thus, as this article argues, designing an efficient antitrust regime also involves the creation of a delicate balance between institutional conditions and substantive rules.

August 13, 2010 | Permalink | Comments (0) | TrackBack (0)

Refusal to Deal within EU Competition Law

Posted by D. Daniel Sokol

Liyang Hou, ICRI-KULeuven-IBBT has a new paper on Refusal to Deal within EU Competition Law.

ABSTRACT: Refusal to deal is in principle not prohibited under the EU competition law. Only in exceptional circumstances dominant undertaking would be charged with an obligation to deal with a client. In order to approach the analytical framework for refusal to deal in the EU, this article investigates in total 21 cases of refusal to deal taking place at the European level, from the earliest Case Commercial Solvents to the latest Case Microsoft. Those cases are first divided into five groups: (1) refusal to deal with non-competitors while serving others; (2) refusal to deal with competitors while serving others; (3) discontinuing the supply to all third parties; (4) refusal to deal a product/service that is always reserved for own use; and (4) refusal to grant IP licenses. With the examination of every cases in each group, it is found that, first, the approaches remain the same for the first and the second group of cases; secondly, the analyses are also equivalent for the third and fourth group of cases, though a difference may exist with regard to market definition; and thirdly, the last group cases are dealt with under a different framework which nevertheless contains much legal uncertainties. In the end, a general approach to analysing refusal-to-deal cases is provided.

August 13, 2010 | Permalink | Comments (0) | TrackBack (0)

Thursday, August 12, 2010

University of Melbourne’s Law School launches the Competition Law & Economics Network

Posted by D. Daniel Sokol

On 13 August Associate Professor Caron Beaton-Wells of the University of Melbourne’s Law School launched the Competition Law & Economics Network – a network of academics from faculties across the University researching and teaching in competition law and economics.  More information about the Network is available at http://www.clen.law.unimelb.edu.au.  The Network was launched at the Inaugural Baxt Lecture in Competition Law, given at the Melbourne Law School by Prof William Kovacic on the topic: “Competition Agencies for the 21st Century”.  

August 12, 2010 | Permalink | Comments (0) | TrackBack (0)

Soft Law and the Private Enforcement of the EU Competition Rules

Posted by D. Daniel Sokol

Albert Sánchez Graells, Pontifical University Comillas of Madrid explores Soft Law and the Private Enforcement of the EU Competition Rules.

ABSTRACT: The use of soft law instruments is pervasive in the field of EU competition policy. This poses significant legal challenges derived from the progressive ‘hardening’ of these regulatory tools by the European Courts as a result of the application of the general principles of EU law. The preponderance of soft law instruments might even have expanded after the modernisation and decentralisation of the enforcement of EU competition rules, giving rise to yet more complicated legal puzzles. One of them is the impact that soft law can have on undertakings as a result of its enforcement (or lack of) by national courts of the Member States in the framework of private actions. This paper stresses that soft law instruments have asymmetrical legal effects when they are enforced by the Commission and by national courts. Hence, they create a significant risk for the consistency in the interpretation and enforcement of EU competition law that seems to claim for a revision of current rules before further promoting private actions.

August 12, 2010 | Permalink | Comments (0) | TrackBack (0)

New Insights into Price-Setting Behaviour in the United Kingdom

Posted by D. Daniel Sokol

Jennifer V. Greenslade, Bank of England - External MPC Unit and Miles Parker, Bank of England - Structural Economic Analysis Division provide New Insights into Price-Setting Behaviour in the United Kingdom.

ABSTRACT: It is important to understand how companies set prices, since price-setting behaviour plays a key role in the monetary policy transmission mechanism. Many surveys have been conducted in a range of countries to shed light on this issue by asking companies directly about how they set prices. This paper reviews the results of a new survey of the price-setting behaviour by the Bank of England of around 700 UK firms. In terms of how companies set prices, the survey evidence supported the use of the mark-up over costs form of pricing. Firms reviewed prices more frequently than actually changing them, with the median firm changing price only once per year, but the frequency with which companies changed their prices varied considerably across sectors. Over the past decade a significant number of firms had increased the frequency of price changes. Different factors influenced price rises and price falls. Higher costs – in particular, labour costs and raw materials – were the most important driver behind price rises, whereas lower demand and competitors’ prices were the main factor resulting in price falls. Nearly half of firms changed their prices within three months of an increase in costs or a fall in demand.

August 12, 2010 | Permalink | Comments (0) | TrackBack (0)

Discretion and Judicial Review in Merger Control (Some Lessons Learned from the Risk Management Administrative Procedures)

Posted by D. Daniel Sokol

Juan C. Hernandez H., University of Navarra discusses Discretion and Judicial Review in Merger Control (Some Lessons Learned from the Risk Management Administrative Procedures).

ABSTRACT: EU merger regulations rely on the “significant impediment to effective competition” substantive test. However, the clause that incorporates these tests is not clear regarding implementation criteria. As a result, in many cases assessment and decisions about Mergers and Acquisitions are adopted in an uncertain legal context.

Often this situation is justified for two reasons: first, the need to incorporate the economic complexity into the decision; and second, the prospective nature of merger assessment.

Nevertheless, from the perspective of Law many questions arise. Prospective decisions are unsuitable to deal with classic theories of regulation and judicial review. As we explain in this paper, the European Commission adopts its decision based on the foreseeable behaviour of an undertaking. European Courts recognize the Commission’s ample discretion to assess merger on a case-by-case basis and limit the scope of judicial review. As a result, commentators have criticized the EC merger regulation.

In this paper these issues are considered. In the first part, we study the clause that incorporates the substantive test in EC merger regulation. In the second we deal with the scope of judicial review of prospective decisions and appropriate standard of proof. Next, we argue that reform of EC merger administrative procedures will reduce the scope of discretionary authority to reasonable levels and improve the decision-making process. Finally, we suggest tools developed in the risk regulation literature to improve legitimacy and ensure rationality of the European Commission’s decisions.

August 12, 2010 | Permalink | Comments (0) | TrackBack (0)

What has Competition Policy ever done for me?

Posted by D. Daniel Sokol

CCP has announced it is hosting a seminar ‘What has Competition Policy ever done for me?’ to discuss how action in competition policy has benefitted citizens.

The seminar, which launches a series of SSF talks, held throughout the autumn, to promote the faculty’s research strengths, will take place at UEA London on 22nd September.

At the CCP seminar, Centre member Hussein Kassim (PSI) will discuss ‘Air Transport and the European Union: How Brussels freed the skies’, Michael Harker (Law) will present ‘Content is King: BSkyB, Ofcom and the FA Premier League’ and Andreas Stephan (Law) will talk on antitrust regulation, ‘Theft by Well Dressed Thieves?’

The event will take place at 6-7.30pm. For more information on UEA London click here

August 12, 2010 | Permalink | Comments (0) | TrackBack (0)

Coming Next Week: Book Review Symposium on Global Competition: Law, Markets, and Globalization

Posted by D. Daniel Sokol

I am happy to announce that next week we will have an online blog symposium on what I think has been the best book thus far of 2010 on competition/antitrust - David Gerber's Global Competition: Law, Markets, and Globalization (Oxford University Press).

I have assembled an international all star cast of academics to review the work:

Spencer Waller (Chicago Loyola)
Michal Gal (Haifa)
Damien Gerard (Louvain)
Dave Lewis (Pretoria)
Ruohong Chen (Beijing Foreign Studies University)
M. Elina Cruz (Catholic University of Chile)
Enrico Camilleri (Palermo)

August 12, 2010 | Permalink | Comments (0) | TrackBack (0)

Measuring the effect of virtual mergers on banks’ efficiency levels:A non parametric analysis

Posted by D. Daniel Sokol

George Halkos and Nickolaos Tzeremes, University of Thessaly, Department of Economics discuss Measuring the effect of virtual mergers on banks’ efficiency levels:A non parametric analysis.

ABSTRACT: This study illustrates how the recent developments in efficiency analysis and statistical inference can be applied when evaluating banks’ performance issues from a potential merger. By using a sample of 29 Greek commercial banks the paper provides a six step procedure in order to evaluate whether a potential bank merger can exhibit economies of scale and characterized as favorable.

August 12, 2010 | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 11, 2010

Competition Law in Latin America Thursday 23 September from 5 – 7pm at the UCL Faculty of Laws

Posted by D. Daniel Sokol

The UCL Centre for Law and Economics (Public Policy Section) is pleased to announce a forthcoming event in its Competition Law in a Global Context series:

Competition Law in Latin America

Thursday 23 September from 5 – 7pm
at the UCL Faculty of Laws

Chair: Ioannis Lianos (UCL)

Speakers include:
- Paulo Montt (University of Santiago, Partner: Ferrada Nehme)
- Javier Tapia (University College London, OFGEM)
- Julian Pena (University of Buenos Aires, Partner: Allende & Brea)
- Juan David Gutierrez (Universidad Javeriana (Bogotá, Colombia))
- Pablo Marquez (Universidad Javeriana (Bogotá, Colombia))

The event is accredited with 2 CPD hours by the SRA and BSB.

To book your place please visit our website at:
http://latin-america.eventbrite.com/

About the event:
This event will be divided in two parts. Part one will provide a critical assessment of the enforcement of competition law in some key jurisdictions in Spanish-speaking Latin America focusing on cartel enforcement (in particular leniency policy), abuse of dominance, the intersection of competition law and regulation, merger control, private enforcement (including private actions for antitrust damages).

The second part will discuss horizontal approaches, including convergence and harmonisation of competition laws across Latin America, the influence of European and US models of Competition law (substance and enforcement) and the development of specific Latin American models.

The event will also discuss the following issues:

  • The scope of competition law in Latin America: has it expanded? What are the areas that are still exempted from the application of competition law (the ones that tend to be different than in the EU or the US)?
  • How are competition law principles integrated in all areas of public action?
  • What would competition advocacy achieve in these jurisdictions?
  • Is the judicial and regulatory system (institutions) adequate for a sophisticated and economically oriented competition law?
  • What is the degree of discretion that is recognized to competition authorities? How due process is preserved? In particular for foreign firms. Suggestions for reforms.
  • How does the level of economic development and broader culture affect the application of competition law?



Fees:
£25 - Early bird tickets  (available until 31 August)
£35 – Standard tickets
£20 – NGOs, public sector, and UCL Alumni
Free for academics and students

To book your place please see our website at:
http://latin-america.eventbrite.com/

August 11, 2010 | Permalink | Comments (0) | TrackBack (0)

DOES UNBUNDLING REALLY MATTER? THE TELECOMMUNICATIONS AND ELECTRICITY CASES

Posted by D. Daniel Sokol

Isabel Soares (CEF.UP, Faculdade de Economia, Universidade do Porto, Portugal) and Paula Sarmento (CEF.UP, Faculdade de Economia, Universidade do Porto, Portugal) ask, DOES UNBUNDLING REALLY MATTER? THE TELECOMMUNICATIONS AND ELECTRICITY CASES.

ABSTRACT: In this paper we discuss the European regulation policy regarding vertical separation in communications and electricity industries. In the electricity sector the discussion concerns ownership unbundling while in communications the regulatory debate is about functional separation. We conclude that for electricity, ownership unbundling seems to be the best option to achieve competition in wholesale markets although there is still some risks concerning investment. Instead, for the communication sector the regulatory options are deeply dependent on the intensity of network competition between operators that combine different technological platforms. Technology also seems to be a key driver for diverse regulatory approaches concerning the unbundling requirement.

August 11, 2010 | Permalink | Comments (0) | TrackBack (0)

Margins and Market Shares:Pharmacy Incentives for Generic Substitution

Posted by D. Daniel Sokol

Kurt R. Brekke (Department of Economics and Helth Economics Bergen, Norwegian School of Economics and Business Administration), Tor Helge Holmås (Health Economics Bergen (HEB), University of Bergen), and Odd Rune Straume (Universidade do Minho - NIPE) explain Margins and Market Shares:Pharmacy Incentives for Generic Substitution.

ABSTRACT: We study the impact of product margins on pharmacies. incentive to promote generics instead of brand-names. First, we construct a theoretical model where phar-macies can persuade patients with a brand-name prescription to purchase a generic version instead. We show that pharmacies.substitution incentives are determined by relative margins and relative patient copayments. Second, we exploit a unique product level panel data set, which contains information on sales and prices at both producer and retail level. In the empirical analysis, we .nd a strong relationship between the margins of brand-names and generics and their market shares. In terms of policy implications, our results suggest that pharmacy incentives are crucial for promoting generic sales.

August 11, 2010 | Permalink | Comments (0) | TrackBack (0)

Hospital competition when patients have different willingness to pay for quality

Posted by D. Daniel Sokol

Mario Pezzino (University of Manchester, School of Social Sciences) discusses Hospital competition when patients have different willingness to pay for quality.

ABSTRACT: Two identical hospitals compete for patients choosing qualities and prices. We study the effect of the introduction of preferential provider agreement. If no hospital is preferred by the regulator, patients may pay a portion of the price no matter the provider selected. Otherwise patients may receive a reimbursement only if choosing the hospital preferred by the regulator. We show that quality and patient surplus are always higher when hospitals are equally treated although total payments and coverage might be respectively higher and lower when one provider is preferred. A minimum quality standard has unambiguously positive effects: it increases patient surplus, welfare and market coverage, and it decreases total payment to hospitals.

August 11, 2010 | Permalink | Comments (0) | TrackBack (0)

The role of central banks and competition policies in the rescue and recapitalisation of financial institutions during (and in the aftermath of) the Financial Crisis

Posted by D. Daniel Sokol

Marianne Ojo, Center for European Law and Politics, University of Bremen, Oxford Brookes University explores The role of central banks and competition policies in the rescue and recapitalisation of financial institutions during (and in the aftermath of) the Financial Crisis.

ABSTRACT: Recent years have witnessed a change in focus from considerations of factors which could impede competition, for example over-regulation, to the need to strike a balance between over-regulation and insufficient regulation – in order to provide the right level of safety for consumers (such that they are protected from risky investments). A driving force behind the need for deregulation over the past two decades has been the objective and desire to foster competition. Re-regulation thereafter assumed centre stage in some jurisdictions in response to the need to manage cross sector services' risks more efficiently. Rescue cases involving guarantees (contrasted with restructuring cases) during the recent Financial Crisis, have illustrated the prominent position which the goal of promoting financial stability has assumed over that of the prevention or limitation of possible distortions of competition which may arise when gr! anting State aid. The importance attached to maintaining and promoting financial stability - as well as the need to facilitate rescue and restructuring measures aimed at preventing systemically relevant financial institutions from failure, demonstrate how far authorities are willing to overlook certain competition policies. However increased government and central bank intervention also simultaneously trigger the usual concerns – which include moral hazard and the danger of serving as long term substitutes for market discipline. An interesting observation derives from the relationship between State aid grants, competition, and the potential to induce higher risk taking levels. Whilst the need to promote and maintain financial stability is paramount, safeguards need to be implemented and enforced to ensure that measures geared towards the aim of sustaining system stability (measures such as lender of last resort arrangements and State rescues) do not unduly distort competi! tion as well as induce higher risk taking levels. This paper will draw attention to safeguards which have been provided by the Commission where approval is considered for the grant of State aid to financial institutions whose problems are attributable to inefficiencies, poor asset liability management or risky strategies. Whether the distinction drawn by the Commission – with regards to the preferential grant of recapitalisation packages to fundamentally sound banks (which require less restructuring measures)is justified, will also be considered. How far central banks and governments should intervene and how far distortions of competition should be permitted ultimately depends on how systemically relevant a financial institution is.

August 11, 2010 | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 10, 2010

Muris Op-Ed in the Wall Street Journal on Antitrust in a High-Tech World

Posted by D. Daniel Sokol

Tim Muris (George Mason Law) has an op-ed in today's WSJ on Antitrust in a High-Tech World

Highly recommended.

August 10, 2010 | Permalink | Comments (0) | TrackBack (0)

Competition and innovation: does the distance to the technology frontier matter?

Posted by D. Daniel Sokol

Simon Adler (University of Zurich, Institute for Empirical Research in Economics) asks Competition and innovation: does the distance to the technology frontier matter?

ABSTRACT: This paper provides new evidence on the relationship between innovation, competition and distance to the technology frontier, using enterprise surveys from 40 developing and transition countries. Different from previous empirical studies, the distance to frontier is measured by a firm's technology level relative to its main competitor. This self-reported comparison allows to capture a crucial determinant of a firm's business strategy and its response to competition. The findings from the empirical analysis are as follows. Firstly, firms with more advanced technology compared to their main competitors have more product innovations. Secondly, there is evidence that innovation and competition are more positively correlated at low levels of competition than at high levels. With some measures of competition, the correlation is highest at intermediate levels of competition, which suggests an inverted-U relationship. Thirdly, i! n certain specifications, competition is most positively correlated with product innovation when a firm is more advanced than its main competitor. In other cases, this correlation is strongest for firms that are at the same technology level as their competitors. However, the differences in the correlations between more and less advanced firms are not always significant.

August 10, 2010 | Permalink | Comments (0) | TrackBack (0)

Innovation, competition and incentives for R&D

Posted by D. Daniel Sokol

Martin Wörter (ETH Zurich, Swiss Economic Institute KOF), Christian Rammer (Centre for European Economic Research (ZEW), Department of Industrial Economics and International Management), and Spyros Arvanitis (ETH Zurich, Swiss Economic Institute KOF) address Innovation, competition and incentives for R&D.

ABSTRACT: This paper analyses the relationship between past innovation output, competition, and future innovation input in a dynamic econometric setting. We distinguish two dimensions of competition that correspond to the concepts of product substitutability and entry barriers due to fixed costs. Based on firm-level panel data for Germany and Switzerland we obtain consistent results for both countries. Innovation output in t-1 as measured by the sales share of innovative products is positively related to the degree of product obsolescence in t, and negatively to the degree of substitutability in t in both countries. Further, we find that rapid product obsolescence provides positive incentives for higher - primarily product-oriented - R&D investments in t+1, while high substitutability exerts negative incentives for future R&D investment.

August 10, 2010 | Permalink | Comments (0) | TrackBack (0)

Register Now for An Early Bird Special - Global Competition Law Conference: Implementing Competition Law and Policy - A global perspective

Posted by D. Daniel Sokol

University College London (UCL), Law Faculty Events
Global Competition Conference: Implementing Competition Law...
Global Competition Law Conference: Implementing Competition Law and Policy - A global perspective

Friday, November 19, 2010 from 8:45 AM - 6:00 PM (GMT+0530)

New Delhi, India


Ticket Information

Ticket Type Sales End Price Fee Quantity
Early Bird Ticket: Global Competition Law Conference Sep 17, 2010 £130.00 £3.90
Standard Ticket: Global Competition Law Conference Not Started £170.00 £4.90 N/A
UCL Alumni / Staff / Student Ticket: Global Competition Law Conference Nov 17, 2010 £130.00 £3.90
Group Booking Ticket: Global Competition Law Conference Nov 17, 2010 £153.00 £4.48

Event Details

Global Competition Law Conference:
Implementing Competition Law and Policy, Global Perspectives
19 November 2010, New Delhi, India

The recent adoption of competition law statutes in East and South Asia, culminating with the enactment of the Indian Competition Act and the Chinese Antimonopoly Law, mark a significant development to the global business community. Merger control, the application of competition law to unilateral conduct such as distribution agreements, competition issues in intellectual property rights, and state activities in the economy create important challenges in the enforcement of competition law in these crucial markets for policymakers, multinational corporations, law firms and economic consultancies. A number of panels and roundtables will examine these issues, composed by the international and local leaders of the competition/regulatory law and M&A practice.

The public conference will be preceded by an invitation only one-day workshop on the issue of economic development and competition law, a theme that is of particular importance to the global as well as to the local business community.

Major policy makers, academics and practitioners from around the world will analyze these topics and will share their unique expertise in the area of competition law and more specifically in merger control, evidence in competition law, joint ventures, distribution, cartels, and the interaction between competition and intellectual property.

The Centre for Law and Economics (Public Policy section) at UCL acknowledges the support of our Exclusive Indian Legal Partner, Amarchand & Mangaldas & Suresh A Shroff & Co.

Registration Fees:
£170 standard ticket
£130 UCL alumni / Staff / Students ticket
£153 early bird ticket, available until 5pm on 17 September 2010
Group discount of 10% discount on the standard ticket price is available for groups (3 or more delegates from the same organization)

The registration fee includes:
- Conference lunch and all other refreshments during the conference on 19 November
- Delegate pack with the conference materials
- Certificate of Participation from the UCL Faculty of Laws


View the conference website


Conference Schedule

08:15 Registration
08:45 Welcome and Introduction
Ioannis Lianos (UCL) & Daniel Sokol (University of Florida)
09:00 Keynote Speakers:
His Excellency Mr. Salman Khurshid (Minister of State for Corporate Affairs of India)
Justice S. H. Kapadia (Chief Justice of India) (tbc)
09:30 Parallel Sessions
PANEL 1: Mergers

Moderator:
Laura Carstensen (UK Competition Commission)

Panelists:

  • Pallavi Shroff (Amarchand Mangaldas)
  • Dhanendra Kumar (Chairman CCI)
  • Shang Ming (MOFCOM) (tbc)
  • Simon Baxter (Skadden, Arps)
  • Paul Seabright (University of Toulouse, IDEI)
  • Vijaya Sampath (Bharti Airtel)
PANEL 2: Evidence in competition law proceedings (burden of proof, standard of proof, presumptions, economic evidence, admissibility and evaluation)

Moderator:
Shan Ramburuth (Competition Commission, South Africa) (tbc)

Panelists:

  • Cristina Caffarra (Vice-President and Head of European Competition Practice, Charles River Associates)
  • Mike Yeh (Director of Competition Law - Asia, Microsoft)
  • Eleanor Fox (NYU Law School) (tbc)
  • John Kallaugher (UCL & Latham & Watkins LLP)
  • Ioannis Lianos (UCL)
  • Damien Neven (Chief Economist, DG Competition, European Commission)
  • Naval Satarawala Chopra (Amarchand Mangaldas)
11:00 COFFEE BREAK
11:15 Parallel Sessions
PANEL 3:  Competition Issues in Joint Ventures and Distribution Issues

Moderator:
Damien Neven (Chief Economist, DG Competition, European Commission)

Panelists:

  • Ashok Gupta  (Aditya Birla Group)
  • Bharat Vasani (Tata Group )
  • Anurag Goel (Member, Competition Commission of India)
  • Carles Esteva Mosso (DG Competition, European Commission) (tbc)
  • Kiran Desai (Mayer Brown International)
PANEL 4: 
Cartels

Moderator:
Scott D. Hammond (US Department of Justice Antitrust Division) (tbc)

Panelists:

  • Nadia Calvino (DG Competition, European Commission) (tbc)
    Scott D. Hammond (US Department of Justice Antitrust Division) (tbc)
  • P N Parashar (Member, Competition Commission of India)
  • Ariel Ezrachi (University of Oxford)
  • John Beyer (Nathan Associates)
  • Maarten Pieter Schinkel (University of Amsterdam)
13:00 LUNCH BREAK
13:30

Key note speakers:

  • John Fingleton (Chief Executive at the UK Office of Fair Trading / Chair of the Steering Group, International Competition Network)
14:00 Parallel Sessions
PANEL 5: Intersection between Antitrust and Intellectual Property law issues

Moderator:
Howard Shelanski (Deputy Director, Bureau of Economics, Federal Trade Commission)

Panelists:

  • Andrea Appela (Deputy General Counsel, European & Asia, News Corporation)
  • Harry First (NYU Law School)
  • Damien Neven (Chief Economist, DG Competition, European Commission)
  • Damien Geradin (Michigan Univ., Tilburg University, Howrey LLP)
  • Doug Melamed (General Counsel, Intel)
  • P N Parashar (Member, Competition Commission of India)
PANEL 6:
Government Barriers to Competition


Moderator:
Pradeep S. Mehta (Secretary General, Consumer Unity & Trust Society (CUTS))

Panelists:

  • Martha Licetti (Head of Competition Policy, World Bank)
  • Daniel Sokol (University of Florida)
  • Suzanne E Wachsstock (Chief Antitrust Counsel, American Express)
  • Shubhashis Gangopadhyay, (Director, India Development Forum)
  • Rahul Sarin (Member, Competition Appellate Tribunal)
15:30 COFFEE BREAK
16:00 Enforcers' Roundtable:
Limits to the discretion of competition authorities: a comparative perspective
(due process, judicial review, priorities setting, guidelines and reductive versus expansive interpretation of the law, comity principles)


Moderator:
Frederic Jenny (Cour de Cassation (Judge of the French Supreme Court) and Chairman, OECD Competition Committee)

Panelists:

  • Laura Carstensen (Deputy Chairman, UK Competition Commission)
  • John Fingleton (Chief Executive at the UK Office of Fair Trading / Chair of the Steering Group, International Competition Network)
  • Alexander Italianer (European Commission) (tbc)
  • Dhanendra Kumar (Chairman, Competition Commission of India)
  • Shang Ming (MOFCOM) (tbc)
  • Shan Ramburuth (Competition Commission, South Africa) (tbc)
  • Brian Cassidy (Australian Competition and Consumer Commission) (tbc)
  • Christine Varney (US DOJ) (tbc)
17:45 Closing remarks
Justice A Pasayat (retd), Chairman, Competition Appellate Tribunal
18:00 Close of Conference
20:30 Dinner (by invitation only)

Dinner keynote speakers:
Christine Varney (US DOJ)
Alexander Italianer (European Commission)

The public conference on 19 November is preceded by an invitation only workshop on the issue of economic development and competition law, a theme that is of particular importance to the global as well as to the local business community.

Additional speakers at this workshop include:

  • William Kovacic (Commissioner, Federal Trade Commission)
  • Tom Arthur - Emory Univ. Law School
  • Aditya Bhattacharjea - Delhi School of Economics
  • Thomas Cheng - University of Hong Kong, Law
  • Vivek Ghosal - Georgia Tech
  • Giorgio Monti - European University Institute (tbc)
  • Abel Mateus - New University of Lisbon
  • George Priest - Yale Law School
  • Patrick Rey - IDEI, Toulouse (tbc)
  • Barak Richman - Duke University
  • Paul Seabright - IDEI, Toulouse
  • Rahul Singh - National University of India, Bangalore

August 10, 2010 | Permalink | Comments (0) | TrackBack (0)