Thursday, December 18, 2014

Vertical Integration as a Source of Hold-up

Marie-Laure Allain (Ecole Polytechnique), Claire Chambolle (INRA) and Patrick Rey (Toulouse) discuss Vertical Integration as a Source of Hold-up.

ABSTRACT: While vertical integration is traditionally seen as a solution to the hold-up problem, this paper highlights instead that it can generate hold-up problems — for rivals. We first consider a successive duopoly where competition among suppliers eliminates any risk of hold-up; downstream firms thus obtain the full return from their investments. We then show that vertical integration creates hold-up concerns for the downstream rival, by affecting the integrated supplier’s incentives from both ex ante and ex post standpoints. We also provide illustrations in terms of standard industrial organization models and of antitrust cases, and discuss the robustness of the insights.

December 18, 2014 | Permalink | Comments (0) | TrackBack (0)

The Qantas/Emirates Decision: How the Competition Commission of Singapore Used the Net Economic Benefits Exclusion to Regulate the Air Passenger Market

Knut Fournier, City University of Hong Kong describes The Qantas/Emirates Decision: How the Competition Commission of Singapore Used the Net Economic Benefits Exclusion to Regulate the Air Passenger Market.

Abstract: The Competition Commission of Singapore (“CCS”) did not properly assess the Net Economic Benefits (“NEB”) created by the co-operation agreement between Qantas Airways Ltd and Emirates. In particular, the high market shares of the two companies should have excluded the NEB defence under the Competition Act (Cap 50B, 2006 Rev Ed), even more so as the remedies proposed by the parties are likely to increase their market share further. The CCS appears to have failed to follow the letter of the Competition Act and instead effectively regulated the airlines sector through the use of competition tools, undermining the enforcement of competition rules and restricting competition in the airlines sector. The more recent decision on the Qantas/Jetstar co-operation shows an improvement in the assessment of economic benefits. The CCS must continue to improve its competitive assessment, must restrict the use of the NEB defence and possibly adopt the more internationally accepted slot divestment remedy as a way of solving competition concerns in airline agreements, or it will hurt competition and consumers in Singapore.

December 18, 2014 | Permalink | Comments (0) | TrackBack (0)

Networks, Cartels, and Antitrust Policy

Miguel Cuerdo Mir, Universidad Rey Juan Carlos and Pilar Grau-Carles, Universidad Rey Juan Carlos de Madrid discusss Networks, Cartels, and Antitrust Policy.

ABSTRACT: Despite multiple applications of network theory in different fields of social and legal sciences in general, the possibility of applying this theory to the economic analysis of the antitrust law and, more specifically, to the study of cartels has not yet been considered. This paper develops a set of distances, clustering and centrality measures, taken from network theory, and applies them to the specific case of a cartel sanctioned as such by the European Commission. This approach has enabled us to quantify some characteristic elements of the cartel, such as, for instance, a remarkable asymmetry between operators (nodes in the network), its different degree of influence (study of links), as well as the critical importance of some operators versus other cartelized agents, such that their elimination from the organization would not enable them to create their own cartel. This leads the authors to reconsider the antitrust policy based on leniency programmes.

December 18, 2014 | Permalink | Comments (0) | TrackBack (0)

Standards: Competition and Innovation?

Justin Pierce, Lund University - Faculty of Law and Megi Medzmariashvili, Lund University ask Standards: Competition and Innovation?

ABSTRACT: In the European Union, the Commission has identified the use of standards as a mechanism of innovation sharing, European competitiveness and further economic integration within the Union. Additionally, the Union has developed and promoted a dynamic approach to research and development, largely supported by a robust intellectual property and antitrust exemption regime. The underlying purpose of which is to provide protection for inventions, facilitate cost recovery and enhance the exploitation of profits from the developed invention. Nonetheless, innovators face a continuous struggle not only to stay ahead of the pack but also to develop strategies to secure capital to continue research and development. The difficulties associated with technological advancement in standardised areas is exasperated given that the lack of guarantee the developed technology will be included within the standard, alongside other associated difficulties arising as a result of the existing standard. This paper explores whether driving standardisation in innovation markets is potentially counter effective and ultimately, an impediment to innovation and development.

December 18, 2014 | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 17, 2014

George Mason Law Review 18th Annual Antitrust Symposium: Perspectives on Global Competition Law

George Mason Law Review 18th Annual Antitrust Symposium: Perspectives on Global Competition Law

Thursday, February 19, 2015

  8:00 AM                                                           -   8:45 AM
Breakfast
Founders Hall Multipurpose Room
               
  8:45 AM                                                           -   9:15 AM
Opening Keynote Address
Founders Hall Auditorium
                             
  9:15 AM                                                           -  10:30 AM
Panel One: Class Actions and Private Actions
Founders Hall Auditorium
Panelist:                               
  • Michelle M. Burtis,                                    
  • Damien Geradin,                                    
  • Lauren Stiroh,                                    
  • John Taladay                                    
                             
10:45 AM                                                           -  12:00 PM
Panel Two: Economics and Economic Evidence across Regimes
Founders Hall Auditorium
Panelist:                               
  • Michael R. Baye,                                    
  • H. Stephen Harris, Jr.,                                    
  • Jorge Padilla,                                    
  • Elizabeth Wang                                    
                             
12:00 PM                                                           -   1:45 PM
Luncheon with Keynote Speaker
Founders Hall Multipurpose Room
                             
  2:00 PM                                                           -   3:15 PM
Panel Three: Non-competition Goals in Global Antitrust
Founders Hall Auditorium
Panelist:                               
  • William E. Kovacic,                                    
  • Andreas Mundt,                                    
  • James F. Rill,                                    
  • Daniel Sokol                                    
Moderator:                               
  • Timothy J. Muris                                    
                             
  3:30 PM                                                           -   4:45 PM
Panel Four: Remedies and Commitments across Regimes
Founders Hall Auditorium
Panelist:                               
  • Terry Calvani,                                    
  • George S. Cary,                                    
  • Michael Han,                                    
  • Joshua D. Wright                                    
Moderator:                               
                             
  4:45 PM                                                           -   5:30 PM
Reception
Founders Hall Multipurpose Room
                            

December 17, 2014 | Permalink | Comments (0) | TrackBack (0)

Bork's 'Legislative Intent' and the Courts

Douglas H. Ginsburg, U.S. Court of Appeals for the District of Columbia Circuit; George Mason University School of Law examines Bork's 'Legislative Intent' and the Courts.

ABSTRACT: Robert H. Bork’s influence upon modern antitrust law is difficult to overstate. One of his lasting legacies is his analysis of the legislative history, text, and structure of the Sherman Act, which led him to conclude the intent of the Congress passing it was to maximize consumer welfare and economic efficiency. That conclusion was adopted by the Supreme Court in 1979 and has formed the foundation for antitrust policy and enforcement ever since. This article explains the rationale for Bork’s “consumer welfare” thesis, recounts the history of its rise and the objections it engendered from other academics, and summarizes its salutary effect upon antitrust law and business practices.

December 17, 2014 | Permalink | Comments (0) | TrackBack (0)

Provider Competition and Over-Utilization in Health Care

Jan Boone, Tilburg University - Center for Economic Research (CentER); Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA); TILEC and Rudy Douven, CPB Netherlands Bureau for Economic Policy Analysis; CPB Netherlands Bureau for Economic Policy Analysis discuss Provider Competition and Over-Utilization in Health Care.

ABSTRACT: This paper compares the welfare effects of three ways in which health care can be organized: no competition (NC), competition for the market (CfM) and competition on the market (CoM) where the payer offers the optimal contract to providers in each case. We argue that each of these can be optimal depending on the contracting environment of a speciality. In particular, CfM is optimal in a clinical situation where the payer either has contractible information on provider quality or can enforce cost efficient protocols. If such contractible information is not available NC or CoM can be optimal depending on whether patients react to decentralized information on quality differences between providers and whether payer’s and patients’ preferences are aligned.

December 17, 2014 | Permalink | Comments (0) | TrackBack (0)

Marina Lao to FTC as Director of the Office of Policy Planning

Marina Lao of Seton Hall will join the FTC as the Director of the Office of Policy Planning.  See the press release here.  Marina is a smart and analytical sharp scholar.  She is also very easy to work with professionally (we served on the AALS Antitrust Section leadership together).  This is a brilliant move by the FTC.  Congrats to both Marina and the FTC.  She replaces Andy Gavil, who returns to Howard.  Any did a great job at OPP.  I also want to note that the OPP staff is really wonderful.

December 17, 2014 | Permalink | Comments (0) | TrackBack (0)

Is There a Vatican School for Competition Policy?

Tihamer Toth, Competition Law Research Centre, Hungary; Peter Pazmany Catholic University - Faculty of Law asks Is There a Vatican School for Competition Policy?

ABSTRACT: This paper examines whether the Catholic Church’s social teaching has something to tell to antitrust scholars and masters of competition policy. Although papal encyclical letters and other documents are not meant to provide an analytical framework giving clear answers to complex competition questions, this does not mean that these thoughts cannot benefit businessmen, scholars and policy makers. The Vatican teaching helps us remember that business and morality do not belong to two different worlds and that markets should serve the whole Man. It acknowledges the positive role of free markets, the exercise of economic freedom being an important part of human dignity, yet warns that competition can be preserved only if it is curbed both by moral and statutory rules. It is certainly not easy to find a balance between the commandments to ‘love your neighbor’ and ‘you shall not collect treasure on earth.’ I argue that market conduct that undermines business virtues should be prohibited, either by antitrust or other forms of self- or government-regulation.

December 17, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 16, 2014

Most SSRN downloaded tenure stream Antitrust Law Professors of 2014

The Most SSRN Downloaded Tenure Stream (i.e., full time) Antitrust Law Professors of 2014.

Let me provide some caveats: I am counting the total number of downloads for the past 12 months only, not lifetime downloads. This means that not only antitrust articles but rather all articles get included. For a number of professors, many of the articles downloaded are not specifically in antitrust.  Further, some of these professors write in antitrust but do not teach it.

 

  1. Mark Lemley (Stanford)                    14,831
  2. Tim Wu (Columbia)                            7,011
  3. Herb Hovenkamp (Iowa)                   6,610
  4. Katheryn Spier (Harvard)                 4,048
  5. Josh Wright (George Mason)           3,781
  6. Robin Feldman (Hastings)                2,993
  7. Christopher Yoo (Penn)                     2,983
  8. Michael Carrier (Rutgers Camden) 2,947
  9. Maurice Stucke (Tennessee)             2,771
  10. Daniel Sokol (Florida)                        2,556
  11. David Hyman (Illinois)                      2,510
  12. Jorge Contreras (Utah)                      2,492
  13. Scott Hemphill (Columbia)               1,973
  14. Robert Lande (Baltimore)                 1,931
  15. Doug Ginsburg (George Mason)      1,764
  16. Spencer Waller (Chicago Loyola)     1,673
  17. Keith Hylton (Boston University)     1,477
  18. Louis Kaplow (Harvard)                     1,389
  19. Jonathan Baker (American)               1,329
  20. Barak Orbach (Arizona)                      1,219
  21. Michael Trebilcock (Toronto)            1,1,98

12/16/14 10pm: This is my first attempt. Invariably in scrolling down the long list of names I accidentally miss someone.  I promise that it is really an accident.  Please email me with any oversights and I will update the list.

12/17/14 9:50am: caveats added to the beginning of the post and the list has been updated.

December 16, 2014 | Permalink | Comments (0) | TrackBack (0)

The Broader Implications of Merger Remedies in High Technology Markets

D. Daniel Sokol (University of Florida) explores The Broader Implications of Merger Remedies in High Technology Markets.

ABSTRACT:

Merger remedies are an area of increasing complexity around the world. They are also an area of increased focus by competition authorities both with regard to process (particularly coordination) and substance. Mergers in high technology (high tech) markets remain an area in which there seems to be unsettled law and policy in a number of jurisdictions and where remedies for the same behavior may lead to different outcomes. This essay examines what makes high tech mergers distinct relative to other mergers. It then examines the distinctive remedies (or lack thereof) that agencies may undertake to address competitive concerns in high tech markets. A number of cases suggest that competition authorities should undertake a more nuanced view of how high tech markets work in their merger remedies and, by implication, dominance cases—especially considering the dynamics of the particular case before them.

December 16, 2014 | Permalink | Comments (0) | TrackBack (0)

CPI Antitrust Chronicle - Dec 16, 2014 Issue on Merger Remedies is now out

CPI Antitrust Chronicle - Dec 16, 2014 Issue on Merger Remedies

In this issue:

The subject of merger remedies dramatically demonstrates the increasing complexity of antitrust regulation. In this issue, organized by Danny Sokol, we look at problems with conditions imposed on proposed mergers, including dealing with ever-changing high tech markets, conflicts across multiple regimens, competition laws that deal with more than maintaining competitive markets, asking whether authorities or companies should design solutions, and minority ownership. Plus we have two Of Special Interest articles—defining relevant markets, and the new Greek method of identifying collusion. Happy holidays, everyone!

Merger Remedies
  1. Daniel Sokol, Dec 16, 2014

    The Broader Implications of Merger Remedies in High Technology Markets

     

    A number of cases suggest that competition authorities should undertake a more nuanced view of how technology markets work in their merger remedies. D. Daniel Sokol (Univ. of Florida)

  2. Scott Sher, Kellie Kemp, Dec 16, 2014

    A Comparative Analysis of the Use of Merger Remedies in Technology Industries

     

    Technology mergers present issues not often present in combinations occurring in more traditional industries, and jurisdictions around the globe are dealing with such challenges differently. Scott Sher & Kellie Kemp (Wilson Sonsini)

  3. Adam DiVincenzo, Dec 16, 2014

    The Real Threat Posed by Global Merger Enforcement Divergence

     

    So which divergence problems relating to remedies pose the greatest challenge to the international merger control system? Adam J. Di Vincenzo (Gibson, Dunn)

  4. Ana Paula Martinez, Mariana Tavares de Araujo, Dec 16, 2014

    Merger Remedies in Transnational Mergers: When Less is More

     

    In practice, creativity in devising merger remedies can very easily lead to conflicting decisions in global deals. Ana Paula Martinez & Mariana Tavares de Araujo (Levy & Salomão Advogados)

  5. Nicholas Levy, Dec 16, 2014

    Expanding EU Merger Control to Non-Controlling Minority Shareholdings: A Sledgehammer to Crack a Nut?

     

    Although there is theoretical support for the notion that structural links may in certain circumstances raise antitrust concerns, the available evidence is insufficient to justify the EUMR’s expansion. Nicholas Levy (Cleary Gottlieb)

  6. Christine Wilson, Keith Klovers, Dec 16, 2014

    Yes We Can, But Should We? Merger Remedies During the First Obama Administration

     

    Some agency remedies, such as compulsory innovation, compulsory licensing, and detailed conduct remedies that border on industrial engineering, risk exactly the kind of “costly government entanglement in the market” that the 2004 Policy Guide sought to avoid. Christine Wilson & Keith Klovers (Kirkland & Ellis)

Of Special Interest
  1. David Balto, Matthew Lane, Dec 16, 2014

    Finding the Right Lodestar for Defining Markets

     

    It is far from unreasonable to require that qualitative evidence of a separate market be supported by an accepted economic test when the data required to perform such a test is readily available. David Balto & Matthew Lane (Law Offices of David A. Balto)

  2. Lia Vitzilaiou, Dec 16, 2014

    The HCC Guide on the Detection and Prevention of Collusive Tendering

     

    The guide may be used by tenderers not only to self regulate, but also to scrutinize and denounce the behavior of other candidates and thus assist competition authorities in detecting cartel activity. Lia Vitzilaiou (Lambadarios Law Firm)

December 16, 2014 | Permalink | Comments (0) | TrackBack (0)

Nationalization as Credible Threat Against Tacit Collusion

Flavio Delbono, University of Bologna - School of Economics, Management, and Statistics and Luca Lambertini, University of Bologna - Department of Economics theorize on Nationalization as Credible Threat Against Tacit Collusion.

ABSTRACT: Within a simple model of differentiated oligopoly, we show that tacit collusion may be prevented by the threat of nationalising a private firm coupled with the appropriate choice of the weight given to private profits in the maximand of the nationalised company. We characterise the properties of such a threat and prove that it may allow to credibly deter tacit collusion.

December 16, 2014 | Permalink | Comments (0) | TrackBack (0)

All-Units Discounts as a Partial Foreclosure Device

Yong Chao University of Louisville - College of Business - Department of Economics and Guofu Tan University of Southern California - Department of Economics have an interesting paper on All-Units Discounts as a Partial Foreclosure Device.

ABSTRACT: We investigate the strategic effects of volume-threshold based all-units discounts (AUDs) used by a dominant firm in the presence of a capacity-constrained rival. As compared to linear pricing, AUDs adopted by a dominant firm are shown to lead to “partial foreclosure” of an equally or more efficient rival, in the sense that the rival’s profits, sales volume, and market share are strictly reduced. When the rival’s capacity level is in the range of low values relative to the demand size, AUDs reduce the buyer’s surplus and increase total surplus. When the rival becomes more efficient, AUDs may reduce total surplus.

The intuition for our findings is that, due to the limited capacity of the rival, the dominant firm that has a “captive” portion of the buyer’s demand for a single product is able to use the AUD to leverage its market power from the “captive” portion to the “competitive” portion of the demand, much like the tied-in selling strategy in the context of multiple products. Our analysis applies to other similar settings, in which the dominant firm has some captive market when it offers “must-carry” brands or a wider range of products.

December 16, 2014 | Permalink | Comments (0) | TrackBack (0)

Institutions and Mechanisms to Facilitate Competition Law Private Enforcement Across the EU: Specialist Courts and Follow-on Actions

Barry Rodger, University of Strathclyde has a new paper on Institutions and Mechanisms to Facilitate Competition Law Private Enforcement Across the EU: Specialist Courts and Follow-on Actions.

ABSTRACT: This article outlines a key aspect of a recent AHRC funded project concerning the application of competition law in the national courts of the European Union Member States. This was an empirical project with rapporteurs for 27 Member States entrusted with the task of identifying competition case-law judgments in their national courts in the period between 1 May 1999 and 1 May 2012. Each national report also outlined key aspects of the wider legal context within which private enforcement of competition law operates in that jurisdiction. The general hypothesis that underlies the dual approach to the project is that private enforcement practice across the legal systems of the EU Member States may at least partly be explained by the existence or availability of particular institutions, mechanisms and cultural factors in relation to the particular legal system. In this article we considered two particular institutions or mechanisms: the specialist court/tribunal and the competition litigation follow-on action mechanism.

The picture presented by the data together with the national reports is one of evolving national stories and contexts - which appear to be affected to a greater or lesser extent in different Member States by a combination of national cultures, competition law architecture and civil procedural rules. It is not claimed that there are any direct causal relationships between the insights provided by the empirical data and the national narratives on institutional mechanisms, but the analysis indicates ways and contexts in which competition litigation cultures may develop in the wake of specific institutional mechanisms. The article concludes that it is inevitable that patterns of competition litigation will continue to vary considerably across the EU for the foreseeable future, reflecting, to a great extent, the variable landscape of legal and institutional provision for private enforcement in the EU Member States.

December 16, 2014 | Permalink | Comments (0) | TrackBack (0)

Role of Competition in Financial Consumer Protection

The OECD has published its proceedings on the Role of Competition in Financial Consumer Protection.

Nationally and internationally competitive markets should be promoted in order to provide consumers with greater choice amongst financial services. Competitive pressure is needed to encourage providers to offer competitive products, enhance innovation, and maintain high service quality.

Consumers should be able to search, compare and, where appropriate, switch between products and providers easily and at reasonable and disclosed costs.

The OECD Competition Committee discussed the Role of competition in financial consumer protection in February 2014 with the aim to feed into the survey initiated by the G20/OECD Task Force on Financial consumer protection, which is developing a set of principles, one of which concerns competition.

The discussion, based on the contributions of 15 countries, covered the set of issues which are covered in the G20/OECD Task Force survey, focusing on the importance of switching costs. The issue of structural separation in banks from a competition perspective was also discussed. 

MEETING DOCUMENTS

Detailed summary of the discussion  |  Compte rendu de la discussion

Issues Paper by the Secretariat  |  Note de reflexion du Secretariat

Full set of country contributions 

December 16, 2014 | Permalink | Comments (0) | TrackBack (0)

Monday, December 15, 2014

Competition issues in the distribution of pharmaceuticals

The OECD has published Competition issues in the distribution of pharmaceuticals.

2014 GLOBAL FORUM ON COMPETITION LOOKS AT PHARMACEUTICALS DISTRIBUTION MARKET 

Pharmaceuticals are very special products, because of the peculiar characteristics of their demand and supply. Hence their distribution from the manufacturers till the final consumer is heavily regulated to ensure that drugs are accessible, affordable, and safely consumed. Despite this need for regulatory constraints, competition can and should play a role in ensuring that the market for the distribution of pharmaceuticals works well for consumers, so that these can benefit from higher quality, greater choice and variety, more innovation and lower prices.

The 2014 Global Forum on Competition (27-28 February) debated competition issues in the distribution of pharmaceuticals during its second day of discussions.

The full-day session provided an overview of how competition works in this market, to identify the main problems that can arise at different levels of the distribution chain and to better understand the interplay between competition and regulation.

Participants were encouraged to discuss competition cases, and the way regulations (or other forms of government intervention) interact with competition throughout the supply chain, and any advocacy efforts arising from such analysis.

Six experts lived up the discussion and delegations had the opportunity to further discuss the topic during breakout sessions in the afternoon.

See below the key findings from this discussion and all related documentation

‌ 

SUMMARY DOCUMENTS

Executive Summary with key findings | Synthèse

Detailed summary of the discussion | Compte rendu 

Full set of documents

SEE ALSO

Generic pharmaceuticals and competition (2014)

Generic Pharmaceuticals (2009)

Competition Issues in the Pharmaceutical Industry (2000)

Competition in Hospital Services (2012)

Competition, Patents and Innovation (2009)

All Competition Policy Roundtables

Competition Home Page 

Key findings from the discussion include:

  1. Policy-makers and enforcers need to understand the distinctive economic features of the pharmaceuticals sector thoroughly to be able to intervene in this sector.
  2. Better enforcement of regulation and of competition law, more consumer information, and greater control over the incentives provided by manufacturers to doctors could improve outcomes in the distribution of pharmaceuticals in less developed countries.
  3. Mechanisms used to regulate drug prices can have varying effects on competition. Competition authorities are well placed to help guide the choice of the most appropriate ones.
  4. Drug price regulation and limited patent length are not sufficient to ensure vigorous competition between originators and generics. Competition, public cost-efficiency and private affordability can be further fostered by measures to promote generics.
  5. Forward integration by manufacturers and backward integration by pharmacy chains are changing the traditional structure of the pharmaceutical supply chain and are raising new competition issues.
  6. The extensive historic regulation of the retail pharmacy sector in many countries should be assessed considering its impact on consumer welfare.
 

GLOBAL FORUM SESSION DOCUMENTATION

Full Global Forum Programme | Forum Pictures

Panellists, related papers and presentations

 

Background Note | Note de Référence

 

  • Farasat BOKHARI (Senior Lecturer in Economics, University East Anglia) presenting Evaluating wholesale and retail mergers in pharmaceuticals English | Français | PPT
  • Aidan HOLLIS (Professor, University of Calgary, Canada)  PPT
  • Panos KANAVOS (Reader in International Health Policy, London School of Economics) presenting Competition issues in the distribution of pharmaceuticals EnglishFrançaisPPT
  • Adrian MAJUMDAR (Partner, RBB Economics) presenting A UK retail perspective PPT
  • Pradeep S MEHTA (Secretary General, CUTS) presenting Competition issues in marketing in the Indian pharmaceutical sector  PPT
  • Valérie PARIS (Senior Health Policy Analyst, OECD Health Division) presenting A core set of indicators to characterise and assess the distribution chain in the pharmaceutical sector PPT
  • Sabine VOGLER (Head of the Pharma Team, Austrian Health Institute and Head of the WHO Collaborating Centre) presenting Liberalization in the pharmacy sector English | Français | PPT
 

Summary documents

Executive Summary with key findings | Synthèse

Detailed summary of the discussion | Compte rendu 

 

Contributions from participants

Call for contributions | Appel à contributions

Bulgaria

Canada

Chile

China

Estonia

European Union

Finland

France Français | English

Germany

Hungary

India

Indonesia

Japan

Kazakhstan

Latvia

Lithuania

Mexico

Morocco (CC) Français | English

Norway

Pakistan

Peru

Poland

Romania

Russian Federation

Senegal Français | English

Spain

Switzerland Français | English

Chinese Taipei

Turkey

Ukraine

United Kingdom PPT

United States

CUTS

BIAC

 

 

December 15, 2014 | Permalink | Comments (0) | TrackBack (0)

Tirole Nobel lecture slides are up (but alas, not the speech itself)

You can access the slides from Jean Tirole's talk MARKET FAILURES AND PUBLIC POLICY delivered on December 8, 2014 from the Nobel website.

HT: Paul McGeown

December 15, 2014 | Permalink | Comments (0) | TrackBack (0)

Hub-and-Spoke Conspiracies: The Vertical Expression of a Horizontal Desire?

Nicolas Sahuguet, HEC Montreal - Institute of Applied Economics and Alexis Walckiers, Universite Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ask Hub-and-Spoke Conspiracies: The Vertical Expression of a Horizontal Desire?

ABSTRACT: An increasing number of horizontal agreements involve both competitors and their common suppliers (or retailers). As vertical agreements, indirect horizontal agreements can help reduce coordination failures, but they also have the capacity to dampen competition. The negative welfare effect of these agreements generally dominates when undertakings try and raise prices. Competition authorities generally distinguish alleged infringements between competitors active on the same relevant market (horizontal information exchanges or agreements) and those between undertakings and their suppliers or their customers (vertical agreements). A rising number of infringements mix elements of vertical and horizontal concerted practices, because they are horizontal in nature, but involve competitors and their suppliers (or retailers). They are referred to as hub-and-spoke exchanges (or A-B-C exchanges), where the spokes are active on the same product market and interact indirectly through the hub. From an economics perspective, there is not always an indisputable motive to classify hub-and-spoke agreements as mainly vertical with an horizontal effect, or mainly horizontal with the involvement of a supplier. In the European Union, the legal standards for horizontal and vertical infringements differ significantly. While the Commission’s Guidelines on Vertical Restraints characterize vertical minimum resale price maintenance agreements as hardcore restrictions, relying on the presumption that such agreements have an anticompetitive effect, the legal test for indirect horizontal concerted practices developed by the UK Courts is more demanding. It requires that competition authorities prove that the spokes and the hub transmit the information with an anticompetitive intent.

December 15, 2014 | Permalink | Comments (0) | TrackBack (0)

Promoting Efficient Retail Payments in Europe

Iftekhar Hasan, Fordham University; Bank of Finland, Emmi Martikainen, Finnish Competition and Consumer Authority, and Tuomas Takalo, Bank of Finland, Monetary Policy and Research Department are Promoting Efficient Retail Payments in Europe.

ABSTRACT: ​In this article we first document the evidence showing how an efficient retail payment infrastructure enhances economic performance. We then review the policy tools available to promote efficient retail payments in Europe. We argue that while SEPA is an important policy initiative that harmonizes payment methods across the EU, it alone is not enough. Vigorous competition and consumer protection policies as well as direct interventions discouraging large value cash payments would be particularly attractive policy tools as they would put no strain on stretched government budgets.

December 15, 2014 | Permalink | Comments (0) | TrackBack (0)