Antitrust & Competition Policy Blog

How Much Do Cartels Typically Overcharge?

Posted by D. Daniel Sokol

Marcel Boyer, University of Montreal - Department of Economics, Center for Interuniversity Research and Analysis on Organization (CIRANO) and Rachidi Kotchoni, University of Alberta - Economic Department ask How Much Do Cartels Typically Overcharge?

ABSTRACT: The estimation of cartel overcharges lie at the heart of antitrust policy on cartel prosecution as it constitutes a basic element in the determination of fines. Connor and Lande (2008) conducted a survey of cartels and found a mean overcharge estimates in the range of 31% to 49%. By examining more sources, Connor (2010) finds a mean of 50.4% for successful cartels. However, the data used in those studies are estimates obtained in different ways, sources and contexts rather direct observations. Therefore, these data are subject to model error, estimation error and publication bias. A quick glance at the Connor database reveals that the universe of overcharge estimates is asymmetric, heterogenous and contains a number of influential observations. Beside the fact that overcharge estimates are potentially biased, fitting a linear regression model to the data without providing a carefull treatment of the problems raised above may produce distorted results. We conduct a meta-analysis of cartel overcharge estimates in the spirit of Connor and Bolotova (2006) while providing a sound treatment of those matters. We find typical bias-corrected mean and median overcharge estimates of 13.62% and 13.63% for cartels with initial overcharge estimates lying between 0% and 50% and bias-corrected mean and median overcharges estimates of 17.52% and 14.05% for the whole sample. Clearly, our results have significant antitrust policy implications.

The Competitive Effects of Firm Exit - Evidence from the U.S. Airline Industry

Posted by D. Daniel Sokol

Kai Huschelrath, Centre for European Economic Research (ZEW) and Kathrin Mueller, Centre for European Economic Research (ZEW) discuss The Competitive Effects of Firm Exit - Evidence from the U.S. Airline Industry.

ABSTRACT: We study the competitive effects of five liquidations and six mergers in the domestic U.S. airline industry between 1995 and 2010. Applying fixed effects regression models we find that route exits due to liquidation lead to substantially larger price increases than merger-related exits. Within the merger category, our analysis reveals significant price increases on all affected routes immediately after the exit events. In the medium and long-run, however, realized merger efficiencies and entry-inducing effects are found to be strong enough to drive prices down to pre-exit levels.

Quality Competition and a Demand Spillover Effect: A Case of Product Differentiated Duopoly

Posted by D. Daniel Sokol

Tsuyoshi Toshimitsu (School of Economics, Kwansei Gakuin University) explores Quality Competition and a Demand Spillover Effect: A Case of Product Differentiated Duopoly.

ABSTRACT: Employing the price-quality competition model in a horizontally differentiated products market, we analyze how a demand spillover effect associated with upgrading the quality level of a product affects the strategic relationship between firms and the property of a subgame perfect Nash equilibrium. In particular, we show that the strategic relationship depends on the degree of a demand spillover effect. Then, we consider the cases of second-best policy and cooperative quality choice. Furthermore, we illustrate that there exists a natural Stackelberg equilibrium under asymmetric demand spillover effects that is Pareto superior to other equilibria. Finally, we examine an optimal policy with international R&D rivalry.

Identity, Invention, and the Culture of Personalized Medicine Patenting

Posted by D. Daniel Sokol

Shubha Ghosh (Wisconsin) has a new book on Identity, Invention, and the Culture of Personalized Medicine Patenting.

BOOK ABSTRACT: What are the normative implications of patenting in the area of personalized medicine? As patents on genes and medical diagnoses have increased over the past decade, this question lies at the intersection of intellectual property theory, identity politics, biomedical ethics, and constitutional law. These patents are part of the personalized medicine industry, which develops medical treatments tailored to individuals based on race and other characteristics. This book provides an overview of developments in personalized medicine patenting and suggests policies to best regulate such patents.

Download GhoshCUPflyer

vGUPPI: Scoring Unilateral Pricing Incentives in Vertical Mergers

Posted by D. Daniel Sokol

Serge Moresi, Charles River Associates (CRA) and Steven C. Salop, Georgetown University Law Center explain vGUPPI: Scoring Unilateral Pricing Incentives in Vertical Mergers.

ABSTRACT: One key concern in vertical merger cases is input foreclosure. Input foreclosure involves raising the costs of competitors in the downstream market, which could in turn increase the sales and profits of the downstream merger partner. In this article, we explain how the upward pricing pressure resulting from unilateral incentives following a vertical merger can be scored with vertical Gross Upward Pricing Pressure Indices (“vGUPPIs”). These vGUPPIs are derived from an economic model where upstream firms sell differentiated inputs to downstream firms which in turn sell differentiated products. There are separate vGUPPIs for the upstream and downstream merging firms and, in addition, vGUPPIs for the rivals of the downstream firm whose costs are raised. Our model also explains how the vGUPPIs can account for potential input substitution and merger-specific elimination of double marginalization. These vGUPPIs are analogous to the horizontal GUPPIs commonly used for the evaluation of unilateral effects in horizontal mergers. Like the horizontal GUPPIs, the vGUPPIs provide more direct evidence on unilateral pricing incentives than other metrics commonly carried out in vertical merger cases, such as concentration indices and vertical arithmetic. They also are simpler to implement and require less data than merger simulation models.

Estimating Damages from Price-Fixing - The Value of Transaction Data

Posted by D. Daniel Sokol

Kai Huschelrath, Centre for European Economic Research (ZEW), Kathrin Mueller, Centre for European Economic Research (ZEW) and Tobias Veith, Centre for European Economic Research (ZEW) offer thoughts on Estimating Damages from Price-Fixing - The Value of Transaction Data.

ABSTRACT: We use a unique private data set of about 340,000 invoice positions from 36 smaller and larger customers of German cement producers to study the value of such transaction data for an estimation of cartel damages. In particular, we investigate, first, how structural break analysis can be used to identify the exact end of the cartel agreement and, second, how an application of before-and-after approaches to estimate the price overcharge can benefit from such rich data sets. We conclude that transaction data allows such a detailed assessment of the cartel and its impact on direct customers that its regular application in private antitrust cases is desired as long as data collection and preparation procedures are not prohibitively expensive.

IPR, Competition Law and Dynamic Development - IPR's Constitutionalisation and Expansion: Can the 'Common Goals' Description Cope?

Posted by D. Daniel Sokol

Jens Schovsbo, University of Copenhagen Centre for Information and Innovation Law asks IPR, Competition Law and Dynamic Development - IPR's Constitutionalisation and Expansion: Can the 'Common Goals' Description Cope?

ABSTRACT: The article opens by reminding that in most countries it is generally accepted that competition law has come to serve as a “second tier” of balancing norms to control specific cases of misuse where right holders exercise their rights to restrict competition excessively and in ways not anticipated by intellectual property law (IPR). Next, the article identifies and discusses two issues: The “constitutionalising” of IPR and the ban on compulsory licenses for trade marks in TRIPS Article 21. Regarding the first issues it pointed out that even though both competition law intervention and a “constitutional” approach to IPR may both aim to “rebalance” (i.e. limit protection) protection tensions may occur since competition law is based on an economic rational whereas the constitutional approach included no-economic interests. Interestingly, it is then pointed out that the EU's Charter on Fundamental Rights and the Lisbon Treaty have blurred the boundaries by injecting non-economic values into the basis for the competition law analysis and economic ones into the fundamental rights analysis. As far as the second issue is concerned, it is pointed out that there is a tension between the expansion of trade mark law which would be assumed to be accompanied by increased focus on competition law issues and TRIPS Article 21. On that basis it is recommended that the prohibition in TRIPS Article 21 should be construed narrowly and that one shouldn’t rule out the use of compulsory licenses in situations of misuse involving trade marks where the origin-function isn’t jeopardised but where the normal criteria for compulsory licenses are met.

Dynamic Analysis and the Limits of Antitrust Institutions

Posted by D. Daniel Sokol

Douglas H. Ginsburg, U.S. Court of Appeals for the District of Columbia and Joshua D. Wright, George Mason University School of Law discuss Dynamic Analysis and the Limits of Antitrust Institutions.

ABSTRACT: The static model of competition, which dominates modern antitrust analysis, has served antitrust law well. Nonetheless, as commentators have observed, the static model ignores the impact that competitive (or anti-competitive) activities undertaken today will have upon future market conditions. An increased focus upon dynamic competition surely has the potential to improve antitrust analysis and, thus, to benefit consumers. The practical value of proposals to increase the use of dynamic analysis must, however, be evaluated with an eye to the institutional limitations that antitrust agencies and courts face when engaged in predictive fact-finding. We explain and evaluate both the current state of dynamic antitrust analysis and some recent proposals that agencies and courts incorporate dynamic considerations more deeply into their analyses. We show antitrust analysis is not willfully ignorant of the limitations of static analysis; on the contrary, when reasonably confident predictions can be made, they are readily incorporated into the analysis. We also argue agencies and courts should view current proposals for a more dynamic approach with caution because the theories underpinning those proposals lie outside the agencies’ expertise in industrial organization economics, do not consistently yield determinate results, and would place significant demands upon reviewing courts to question predictions based upon those theories. Considering the current state of economic theory and empirical knowledge, we conclude that competition agencies and courts have appropriately refrained from incorporating dynamic features into antitrust analysis to make predictions beyond what can be supported by a fact-intensive analysis.

Unilateral Effects in Technology Markets: Oracle, H&R Block, and What It All Means

Posted by D. Daniel Sokol

Scott Sher and Andrea Agathoklis Murino (Wilson Sonsini) have a new article out on Unilateral Effects in Technology Markets: Oracle, H&R Block, and What It All Means.

Concrete Shoes for Competition - The Effect of the German Cement Cartel on Market Price

Posted by D. Daniel Sokol

Kai Huschelrath, Centre for European Economic Research (ZEW), Kathrin Mueller, Centre for European Economic Research (ZEW) and Tobias Veith, Centre for European Economic Research (ZEW) describe Concrete Shoes for Competition - The Effect of the German Cement Cartel on Market Price.

ABSTRACT: We use publicly available price data from the German cement industry to estimate the cartel-induced price increase. We apply two different comparator-based approaches – the ‘before-and-after’ approach and the ‘difference-in-differences’ approach – and especially study the impact of various assumptions on the transition period from the cartel period to the non-cartel period on the overcharge estimate. We find that the cement cartel led to price overcharges in a range from 20.3 to 26.5 percent depending on model approach and model assumptions.

Correcting the OECD's Erroneous Assessment of Telecommunications Competition in Mexico

Posted by D. Daniel Sokol Jerry Hausman (MIT) & Agustin Ros (NERA) are Correcting the OECD's Erroneous Assessment of Telecommunications Competition in Mexico.

ABSTRACT: America Movil has asked us to review and comment on the study that the Organization for Economic Cooperation and Development (OECD) published in January 2012 entitled, "Estimation of Loss in Consumer Surplus Resulting from Excessive Pricing of Telecommunication Services in Mexico" ("OECD Study"). The OECD Study concludes that high pricing of Mexico's telecommunications services caused a loss in consumer surplus estimated at $129.2 billion (USD) from 2005 to 2009, or 1.8 percent of Mexico's annual GDP. The OECD attributes this loss to lack of competition in Mexico's telecommunications sector. The OECD then used this calculated consumer-surplus loss to justify the release of another consulting report (written at Cofetel's request) recommending extensive changes to telecommunications regulations in Mexico.

There has been no loss of consumer surplus in Mexico. Rather, Mexican consumers have benefitted from consumer welfare gains. The OECD's conclusions to the contrary are incorrect and implausible. When we correct the OECD's errors and unreasonable assumptions, we find that Mexico's mobile and fixed-line prices are low and consumers are receiving billions of dollars of benefits. The mobile and fixed-line sectors perform much better than a comparable sample of its peers. The OECD's conclusion that Mexican consumers have suffered welfare losses from a lack of telecommunications competition has no basis in reality.

In Part I of this report, we explain how the OECD's refusal to provide its data to us violates the accepted practice in academic research and regulatory proceedings around the world. Such conduct would preclude publication of the OECD's results in reputable academic journals. That the OECD made its results public without even the possibility of an independent professional review borders on the unethical. In Part II, we explain how the OECD's calculation of $129.2 billion (USD) in lost consumer surplus results from mistakes, the improper use of data and seriously flawed economic analysis. The OECD's calculation relies on incorrect assumptions and commits elementary mistakes in econometric methodology. In particular, the OECD used an unrepresentative sample of rich countries to claim-falsely-that Mexican consumers are overpaying for telecommunications services. Additionally, the OECD misused price data and ignored actual market prices to create the illusion of an increase in prices and harm to consumers in Mexico that did not in fact occur. Mobile prices used in the study were not the lowest prices available to consumers in Mexico and the price changes referenced in the OECD study were not real price changes; but rather a product of the OECD's flawed pricing methodology. The OECD's flawed approach to calculating prices leads to results that are contrary to reality. The fact is that Mexican consumers are benefiting from low prices - among the lowest in Latin America - and have experienced significant gains in consumer surplus. In Part III, we select a sample of "peer" countries that are similar to Mexico in terms of GDP per capita. We review the mobile and fixed-line sectors in Mexico and find that, by proper international comparisons, Mexico's prices are low. We show that prices have declined considerably causing significant increases in purchases and benefits to consumers. The empirical evidence further refutes the OECD's conclusion that Mexico has suffered from a lack of competition in its telecommunications sectors.

In Part IV, we demonstrate that not only has there been no consumer loss in Mexico but there have, in fact, been significant gains in consumer surplus, much more than expected when compared to peer countries. We use publicly available data to estimate econometric demand and price models for Mexico's mobile and fixed-line sectors (based on a sample of peer countries). We then use these models to assess the actual performance of the Mexican telecommunications markets. Based on this analysis we find that telecommunications prices in Mexico are low. Specifically, we find that Mexico's actual mobile and fixed-line prices are below the predicted prices. In other words, Mexican consumers are paying lower prices than what one would expect based on comparisons of comparable countries. Also, and contrary to the OECD's calculation of consumer loss, we calculate that in 2011 Mexican consumers have received at least $4 to $5 billion (USD) in consumer surplus from these lower mobile prices and in 2010 they received over $1 billion (USD) in consumer surplus

Tying Having No Impact on Competition as Abuse of Market Dominance: A Comparative Analysis of Korean and American Tying Laws

Posted by D. Daniel Sokol

Nam Woo Kim, Yonsei Institute of Legal Studies discusses Tying Having No Impact on Competition as Abuse of Market Dominance: A Comparative Analysis of Korean and American Tying Laws.

ABSTRACT: A recent decision of the U.S. Court of Appeals for the Ninth Circuit on tying, Brantley v. NBC Universal, Inc. (2012), moved tying doctrine in the direction to reduce error costs by bringing an overly prohibitory liability rule, which was established by the U.S. Supreme Court in Jefferson Parish Hosp. Dist. v. Hyde (1984), reflecting economic learning. The Ninth Circuit, affirming the district court, held that plaintiffs’ claims of ‘higher prices’ and ‘reducing choice’ were not enough to establish anticompetitive harm and thus there should be no tying liability without substantial tied market foreclosure or exclusion.

In contrast, the Monopoly Regulation and Fair Trade Act (MRFTA) of Korea, a counterpart of the Sherman Act, prohibits exploitative abuse of monopolists. ‘Substantial’ injury to consumers through higher prices and reduced choices even without an impact on competition might still be able to trigger the MRFTA. As a result, certain types of tying, which are not subject to the Sherman Act violation, could still conflict with the MRFTA.

This article, juxtaposing two jurisdictions, suggests in the conclusion that it be a better competition policy to tolerate monopolists’ tying having no impact on competition in order to protect competitive process. Monopoly is generally blamed for charging higher prices or reducing outputs but monopoly profits can be regarded as rewards for an entrepreneur who achieved success in markets through competition. It is also rational conduct in the economic sense for a monopolist to charge monopoly price, which maximizes its profits. Therefore, condemning monopolists’ tying having no injury to competition, should be held back because it could hurt competitive process in the long term.

Healthcare Reform and Antitrust Enforcement: Provide Consolidation Encouraged, Scrutinized

Posted by D. Daniel Sokol

Jane Willis, Melissa Davenport, & Ryan McManus (Ropes & Gray) analyze Healthcare Reform and Antitrust Enforcement: Provide Consolidation Encouraged, Scrutinized.

ABSTRACT: The Patient Protection and Affordable Care Act ("ACA") withstood constitutional challenge in June 2012 and will define the shape of the U.S. healthcare system for years to come. Provisions within the ACA address the dual policy goals of controlling healthcare costs and ensuring high quality care, and often do so through incentivizing providers to work together and share the responsibility for delivering high-quality care (and the risk for failing to do so). Through provisions encouraging the creation of accountable care organizations ("ACOs") and other measures that reward providers who demonstrate quality and efficiency, providers are encouraged to achieve scale and ensure a continuum of care. However, this activity may confront a number of potential existing roadblocks, not the least of which is antitrust concern about market power and related price-fixing issues. This article will address this tension, and discuss how organizations looking to consolidate may proceed.

The Long Shadow of Standard Oil: Policy, Petroleum, and Politics at the Federal Trade Commission

Posted by D. Daniel Sokol

Bilal Sayyed, George Mason University School of Law and Timothy J. Muris, George Mason University School of Law have posted The Long Shadow of Standard Oil: Policy, Petroleum, and Politics at the Federal Trade Commission. Download it now!

ABSTRACT: The Federal Trade Commission has investigated the structure and competitiveness of the petroleum industry many times over the past 100 years. Some of the Commission’s most intensive investigations were initiated in response to Congressional inquiries, most notably the enormously expensive and ultimately fruitless attempt to dismember the industry vertically in the 1970s. Since that case ended in 1981, the FTC has attempted to limit the influence of “political antitrust” on the petroleum industry despite intense political interest in the price of gasoline. Although the agency has conducted several substantial investigations of the industry without finding evidence of illegal conduct, and appears to apply strict standards in its review of petroleum industry mergers (suggesting the continued influence of political considerations), on balance, the FTC has succeeded in limiting the influence of politics on its antitrust enforcement decisions.

We seek both to acknowledge and to begin to explain the FTC’s recent success, drawing primarily from incidents over the last fifteen years. We focus on three areas of intense political interest in which the FTC has avoided implementing what we think are extreme and unnecessary suggestions from congressional and local enforcement officials: (1) merger enforcement; (2) scrutiny of certain business practices, such as zone pricing; and (3) retail prices. The FTC has largely succeeded in recent years in avoiding Congressional control over its petroleum industry agenda through five steps: (1) continuity across administrations in the standards used to challenge mergers and identify problematic conduct; (2) a commitment to transparency; (3) engaging its critics and a willingness to subject itself to self-criticism through the use of retrospective reviews of its enforcement decisions; (4) a robust research agenda conducted by the FTC’s Bureau of Economics; and (5) an affirmative, pro-competition program, illustrated by the FTC Office of Policy Planning’s comments on state proposals that would limit or restrict competition in the petroleum industry.

Liberalizing the Gas Industry: Take‐Or‐Pay Contracts, Retail Competition and Wholesale Trade

Posted by D. Daniel Sokol

Michele Polo, Bocconi University - Department of Economics and Carlo Scarpa, University of Brescia , Fondazione Eni Enrico Mattei (FEEM), Milan have written on Liberalizing the Gas Industry: Take‐Or‐Pay Contracts, Retail Competition and Wholesale Trade.

ABSTRACT: This paper examines retail competition in a liberalized gas market. Vertically integrated firms run both wholesale activities (buying gas from the producers under take-or-pay obligations) and retail activities (selling gas to final customers). The market is decentralized and the firms decide which customers to serve, competing then in prices. We show that TOP clauses limit the incentives to face-to-face competition and determine segmentation and monopoly pricing even when entry of new competitors occurs. The development of wholesale trade, instead, may induce generalized entry and retail competition. This equilibrium outcome is obtained if a compulsory wholesale market is introduced, even when firms are vertically integrated, or under vertical separation of wholesale and retail activites when firms can use only linear bilateral contracts.

Exclusivity in High-Tech Industries: Evidence from the French Case

Posted by D. Daniel Sokol

Patrice Bougette, University of Nice-Sophia Antipolis - Law, Economics, and Management Research Group (GREDEG CNRS), LAMETA CNRS, Frederic M Marty, Research Group on Law, Economics and Management (UMR CNRS 7321 GREDEG), Julien Pillot, Université de Nice Sophia Antipolis - Groupe de Recherche en Droit, Economie et Gestion (GREDEG) and Patrice Reis, Law, Economics, and Management Research Group discuss Exclusivity in High-Tech Industries: Evidence from the French Case.

ABSTRACT: The iPhone exclusivity deal illustrates the complex issue of exclusive arrangements in high-tech industries. Previous law cases on broadcasting right restrictions also highlighted the risk of anticompetitive foreclosure through such contractual clauses. This paper questions the French competition authorities’ decisions in the light of economic analysis. If such exclusive agreements foster incentives to invest and innovate, they may also be considered as exclusionary practices.

The European Commission's Closer Look on the Pharmaceutical Sector - New Development on the Interface between IP and Antitrust Law

Posted by D. Daniel Sokol

Simon Baier, Hankuk University of Foreign Studies examines The European Commission's Closer Look on the Pharmaceutical Sector - New Development on the Interface between IP and Antitrust Law.

ABSTRACT: A recent investigation of the EU's pharmaceutical market carried out by the European Commission has been shedding new light on the question of abuse of a dominant position pursuant to Article 102 TFEU by holding, acquisition or exploitation of IP rights. This so-called 'sector inquiry' identified practices and strategies which 'originator companies' exert on a large scale in order to target competitors, and found that such behavior results in significantly higher costs for buyers and competitors, in delay in the entry of generic medicine as well as in the access to innovative medicine, and in obstruction of innovation. This article investigates recent antitrust proceedings by the Commission and the decision practice of the European Courts - within and beyond the pharmaceutical sector - and argues that the practices revealed by the sector inquiry can be predominantly assumed to lack objective justification, lead to foreclosure of competitors and therefore constitute infringements of Article 102 TFEU. Towards the end, the article shows that the Commission's proactive policy in IP-related antitrust matters and its sensitivity to issues of abusive acquisition of intellectual property and abuse of public procedures by misleading representations establish a new quality in the application of European antitrust law, and serve as a guidance how to draw the line between IP protection, lawful business strategies and anti-competitive behavior under EU law.

Metcash, Market Power and Counterfactuals - The Standard of Proof in Australian and New Zealand Competition Laws

Posted by D. Daniel Sokol

Cento Veljanovski, Case Associates, Institute of Economic Affairs, Centre for Regulation and Market Analysis (CRMA) discusses Metcash, Market Power and Counterfactuals - The Standard of Proof in Australian and New Zealand Competition Laws.

ABSTRACT: The standard of proof required in merger cases has become the centre of considerable controversies and confusion following the Australian Federal Court’s decision in Metcash. This paper reviews the use of counterfactuals and the inherent contradictions in adopting the real chance standard of proof. It also critically examines the different approaches of the judgments in Metcash, and the more formal approach by the New Zealand High Court in the Warehouse decision. This is assessed using probability theory. The discussion points to the adoption of the balance of probabilities as the requisite standard of proof, and a watering down of the counterfactual in preference to a more direct approach to merger assessments. The discussion also critically assesses the use of counterfactuals in monopolisation and anticompetitive practices cases under Australian and New Zealand competition laws.

Comparative Antitrust Federalism: Review of Cengiz, Antitrust Federalism in the EU and the US

Posted by D. Daniel Sokol

Herb Hovenkamp (Iowa) offers a review of Comparative Antitrust Federalism: Review of Cengiz, Antitrust Federalism in the EU and the US.

ABSTRACT: This brief essay reviews Firat Cengiz’s book “Federalism in the EU and the US” (2012), which compares the role of federalism in the competition law of the European Union and the United States. Both of these systems are “federal,” of course, because both have individual nation-states (Europe) or states (US) with their own individual competition provisions, but also an overarching competition law that applies to the entire group. This requires a certain amount of cooperation with respect to both territorial reach and substantive coverage.

Payment Card Interchange Fees: Assessing the Effectiveness of Antitrust Investigations and Regulation in Europe

Posted by D. Daniel Sokol

Santiago Carbo-Valverde, Universidad de Granada and Jose Manuel Linares-Zegarra, University of St. Andrews - School of Management describe Payment Card Interchange Fees: Assessing the Effectiveness of Antitrust Investigations and Regulation in Europe.

ABSTRACT: This article provides empirical evidence on the impact of different interventions by public authorities on interchange fees (IFs) and cross-border multilateral interchange fees (MIFs) on both adoption and usage of payment cards in the EU-27. Controlling for social and financial characteristics across countries, we find no statistically significant effects on payment card adoption. However, we find mixed results on payment card usage after specific regulatory events: IFs regulation and investigations seem to have increased the number of transactions per card, mandatory reductions in IFs seem to have a negative impact on the value of transactions per card, and antitrust and regulatory scrutiny related to MIFs is found to increase the number of transactions per card but to reduce the value of transactions per POS. Additionally, the results show that specific regulatory and antitrust investigations related to both IFs and MIFs have statistically significant effects on card transactions as a proportion of all transactions made in a specific country.