Competition Agencies Research Articles

Subsidies, Spillovers and Multilateral Cooperation

Negative international spillovers created by nontariff policies are a rising source of trade tensions and conflicts. The WTO does not include rules for subsidies for services industries, state-owned enterprises or investment incentives. Existing disciplines on industrial policies are increasingly seen to be inadequate by many WTO members. Efforts to revisit and expand rules for contested policies must recognize the changing nature of international production. A first step in addressing trade conflicts associated with industrial policies is to determine where negative international competition spillovers are both large and systemic in nature. Doing so requires going beyond trade ministries and bringing in finance and line ministries, as well as competition agencies and international organizations with expertise in collecting information on subsidies and analyzing their effects.

ТЕОРЕТИЧЕСКИЕ АСПЕКТЫ ФОРМИРОВАНИЯ БАРЬЕРОВ ВХОДА В УСЛОВИЯХ ИНФОРМАЦИОННОЙ ДИФФЕРЕНЦИАЦИИ

The economic effects of information differentiation attracted much scholarly attention in the second half of the 20th century. These studies mostly dealt with the impact of differentiation strategies on market structure and the competitive environment. In recent years, however, despite the rapid development of modern technologies used for promotion and communication with consumers and the emergence of new opportunities for using differentiation strategies in competition, there has been a decline in interest in this issue. This article discusses how information advantages of firms are formed and analyzes the influence of differentiation tools on restraints of competition and limitations on entry. The article assesses the influence of information, reputation, and consumer loyalty asymmetry factors on entry barriers and shows the relationship between the level of strategic investment in advertising and market concentration parameters. These factors should be analyzed in order to improve antitrust policies. At the same time, alternative views on the potential of information differentiation as an entry barrier are presented such as the positive impact of the information contained in advertising on the elasticity of demand, consumer awareness, and competition. It is shown that competition agencies should be especially careful when intervening in the advertising strategies of firms. The article also discusses the impact of digitalization processes on modern tools and methods of information differentiation as well as the corresponding entry barriers.

The International Competition Network (ICN) and the Framework on Competition Agency Procedures (CAP): Strengthening Fairness in Competition Law Enforcement

The International Competition Network (ICN) and the Framework on Competition Agency Procedures (CAP): Strengthening Fairness in Competition Law Enforcement

Abuse of dominance in the electronic communications markets: overview of Croatian efforts with a report on recent developments

On 6 November 2019, the Croatian Competition Agency brought one of its latest decisions concerning dominance abuse on Croatian electronic communication market. When asked to assess the behaviour of the dominant incumbent, Agency had to deal not only with incumbent’s position in the electronic communications markets, but also with spillover of its power to electronic media market. In its ruling, the Agency concluded that exclusivity licencing terms regarding premium football content do not qualify as the abuse of dominant position. While the decision in itself might represent only an interesting read, if considered in the context of Agency’s previous practice, powers and influence of other Croatian regulatory authorities, it might also represent the long-awaited evidence of the need to shift perspective and invoke improved rules for antitrust cases concerning electronic communication operators in Croatia.

Scrambled Eggs and Paralyzed Policy: Breaking Up Consummated Mergers and Dominant Firms

Entrenched dominant firms and anticompetitive consummated mergers pose growing problems for antitrust agencies throughout the world. A lot of thought is being given as to how to address these situations but perhaps the most obvious idea—breaking up such firms—is generally dismissed as impractical, the equivalent of trying to unscramble eggs. We disagree. We show that there have been a substantial number of successful breakups of firms, some in antitrust, more in regulated industries, and even more in the private sectors of the U.S. and U.K. as firms initiate their own restructuring. We believe that a policy of breakups can have a much greater chance at success compared to efforts to regulate such firms through rule-making conduct remedies. And we argue that breaking up such firms is facilitated by the fault lines that reveal the natural break points of these heavily merged firms We recommend that breakups be on the policy menu for competition agencies.

Case Referrals under the European Union (EU) Merger Regime

The case referral system under the EU Merger regime is an exception to the general rule that, mergers that meet the EU community dimension test should exclusively be handled by the EU Commission and those that do not should be handled by the national competition agencies (NCAs) of the Member States. Under the EU merger regime, the NCAs and the Commission do not have concurrent jurisdiction. The introduction of the case referrals sought to ensure that the most appropriate institution would review the merger, and in the end ensure legal certainty and efficiency. Yet, in practice this is not the case and the Commission has to take into consideration additional factors in deciding whether to accept or refuse a case referral request from the NCAs or the merging parties. This paper seeks to examine the application of the case referrals of mergers at the Commission and how it works in practice to achieve the objectives that informed its adoption. At the core of this paper, is the principle that, the Commission has the sole discretion to determine whether case referral is appropriate or not. In some instances, as it will be seen in this paper, the Commission may seek to retain the decision-making power in key policy areas such as telecommunications even when the criterion for case referral from the Commission to the NCAs is met on the argument that it is the most appropriate agency to review the merger. This paper will show that, the Commission has relied on the principal of the ‘most appropriate authority’ as provided for under Sections 9 and 10 of the Commission Notice on Case Referral in Respect of Concentrations (Referral Notice) in refusing to refer certain mergers from the Commission to the NCAs.

A Few Reflections on the Recent Caselaw on Algorithmic Collusion

The article discusses the limited number of cases where the use of algorithms was found to be a factor that contributed to collusion. We discuss the difficulties that competition agencies face in addressing such conducts, with particular focus where there is no direct communication between competitors but collusion is derived through the use of a third party algorithm. We offer some reflections on the current enforcement approach and we argue that with the current development in enforcement, there is a need for the competition authority to show some type of communication between the members of the cartel in order to substantiate the anticompetitive conduct.

DETECTING BID-RIGGING CARTELS WITH DESCRIPTIVE STATISTICS

Abstract The paper shows that descriptive statistics, used as screens, capture the effect of bid rigging in the distribution of the bids. The bid-rigging cartel studied in this paper negatively affected the variance of the bids as illustrated by the coefficient of variance and the kurtosis statistic. Furthermore, it cleverly manipulated the differences between bids to secure that the designated bidder from the cartel won the contract. Such cover-bidding mechanism produced asymmetry in the distribution of the bids illustrated by the relative distance, the skewness statistic, and the percentage difference between the first and second lowest bids. The descriptive statistics capture the change in the statistical pattern of the distribution of the bids between periods of collusion and competition. Moreover, the bid rotation screen shows that the behavior of firms changed radically between the cartel and post-cartel periods. Finally, the paper discusses policy implications for competition agencies wishing to set up a detection method for screening procurement markets.

Exploitative Conducts in Digital Markets: Time for a Discussion after the Facebook Decision

- The recent interim ruling of the Dusseldorf Higher Regional Court in the Facebook case shows the difficulties that a competition authority might face when it comes to sanctioning exploitative abuses in digital markets. - Rather than adopting infringement decisions, competition agencies should conclude behavioural commitments with the dominant online platform. - Competition authorities may borrow from the European data protection regime a number of behavioural remedies to tackle forms of privacy degradation unilaterally imposed by online platforms.

РЕФОРМУВАННЯ СИСТЕМИ ОРГАНІВ АНТИМОНОПОЛЬНОГО КОМІТЕТУ УКРАЇНИ ЗА ЄВРОПЕЙСЬКИМИ СТАНДАРТАМИ ЗАХИСТУ ЕКОНОМІЧНОЇ КОНКУРЕНЦІЇ


 
 
 The competition is flexible and needs to be controlled by competing agencies on the commodity markets. The competition control quality and decision-making speed depends on the competence and professionalism of the competition agencies, which eliminates the control of other state bodies and business structures. The competing agencies independence has also the preventing effect of such agencies use in the fight against competitors, and putting pressure on business. The proposed scientific study analyses the legal status of the Antimonopoly Committee of Ukraine as a competition authority, identifies aspects of improving the efficiency of its activity and proposes ways to reform the system of bodies of the Antimonopoly Committee of Ukraine in accordance with European standards of economic competition protection. The interaction mechanisms between the central apparatus and territorial divisions of the Antimonopoly Committee of Ukraine are identified and decentralization ways of control and supervisory functions of the Antimonopoly Committee of Ukraine through the antitrust authorities system are proposed. The research focuses on both law making and competition enforcement in relation to the activities of the Antimonopoly Committee of Ukraine.
 
 

Exploitative Conducts in Digital Markets: Time for a Discussion after the Facebook Decision

- The recent interim ruling of the Dusseldorf Higher Regional Court in the Facebook case shows the difficulties that a competition authority might face when it comes to sanctioning exploitative abuses in digital markets. - Rather than adopting infringement decisions, competition agencies should conclude behavioural commitments with the dominant online platform. - Competition authorities may borrow from the European data protection regime a number of behavioural remedies to tackle forms of privacy degradation unilaterally imposed by online platforms.

Designing Publicly Funded Healthcare Markets

Governments around the world provide public funding for healthcare to address the failures that arise when healthcare markets are left to their own devices. However, public funding alone, does not incentivise high quality efficient healthcare. Most OECD countries have therefore moved away from command-and-control systems, separated their role as buyer from the role of providing services, and sought to incentivise providers, using regulation to ensure a minimum acceptable level of quality, while using choice and competition to incentivise providers to become more efficient and to invest savings in improving the quality of care. However, variations in indicators of clinical quality and patient centred care (the provision of care that focuses on the needs of the patient) suggest these incentives are often too weak. Moreover, the role of choice and competition can become marginalised, particularly when budgets are tight and patient-centred care comes to be perceived as an expensive luxury. This paper therefore argues that there is a need for competition agencies to become more active and effective advocates for the use of choice and competition in publicly funded healthcare markets. It suggests that the need for strong regulation will not shrink or disappear, as it might do in a utility, and so advocacy should not focus simply on deregulating, but instead on designing smarter regulations that create markets that incentivise competition on aspects of the service that patients and payers care about most. Drawing on the literature and different examples of pro-competitive reforms that have been undertaken in different countries, it identifies 10 key policy decisions that make a difference when introducing or reforming competitive forces in healthcare markets.

DIGITAL TOOLS IN ANTIMONOPOLY REGULATION

Digital economy affects the interests of all mankind, and under such conditions competitive agency should play the main role in formation of the control of the new sphere without any loss of progress [1].

Geoblocking and geopricing

Purpose – This study aims to demonstrate that companies are not free to operate in the e-commerce field, notably with regard to geoblocking and geopricing practices, since they must duly respect constitutional economic order principles.
 Methodology/approach/design – The methodology of the paper is based on Mike Feintuck’s public interest theory, according to which there are values beyond those of market economics that should be preserved, often to the detriment of private interests. Furthermore, the Decolar.com case is used as an empirical case study.
 Findings – It has been identified that geoblocking and geopricing practices can effectively violate constitutional principles and that consumer and antitrust microsystems can suppress those conducts, shaping the performance of economic agents to the public interest.
 Practical implications – The results of this article indicate that consumer and competition agencies can act more actively to curb the harmful geoblocking and geopricing practices.

Digital Economy, Big Data and Competition Law

Big data has a very important role in the digital economy, because firms have accurate tools to collect, store, analyse, treat, monetise and disseminate voluminous amounts of data. Companies have been improving their revenues with information about the behaviour, preferences, needs, expectations, desires and evaluations of their consumers. In this sense, data could be considered as a productive input. The article focuses on the current discussion regarding the possible use of competition law and policy to address privacy concerns related to big data companies. The most traditional and powerful tool to deal with privacy concerns is personal data protection law. Notwithstanding, the article examines whether competition law should play an important role in data-driven markets where privacy is a key factor. The article suggests a new approach to the following antitrust concepts in cases related to big data platforms: assessment of market power, merger notification thresholds, measurement of merger effects on consumer privacy, and investigation of abuse of dominant position. In this context, the article analyses decisions of competition agencies which reviewed mergers in big data-driven markets, such as Google/DoubleClick, Facebook/WhatsApp and Microsoft/LinkedIn. It also reviews investigations of alleged abuse of dominant position associated with big data, in particular the proceeding opened by the Bundeskartellamt against Facebook, in which the German antitrust authority prohibited the data processing policy imposed by Facebook on its users.

Publishers of Textbooks and Competition. Resolution of Spain Agency (CNMC) 05/30/2019

The final resolution of the Competition Agency of Spain (Expte. S/DC/0594/16 ANELE), fines several editorials over the infraction of the market about final pricing in the non-university books. The companies arranged the price of digital licenses. The majority of the undertakings investigated are members of one association (80% of the sales). Until 2012, most publishers included as part of their commercial policies certain commercial instruments that allowed them to compete with each other.

Influence in the International Competition Network (Icn): Who Seeks It, How Do They Do This and Why?

Influence in the International Competition Network (Icn): Who Seeks It, How Do They Do This and Why?

Challenges and Prospects for Merger Control in China in the Digital Economy

Internet brings not only efficiency and convenience, but also challenges to competition authorities all over the world. In obvious contrast to vibrant concentrations in the digital economy in China, the Chinese competition authority has only officially reviewed few cases, due to the variable interest entity structure, incompetence of the turnover-based notification threshold, and lack of experiences in solving new competition concerns brought by access to certain data set, privacy protection, innovation competition and leveraging effect. With establishment of the State Administration for Market Regulation, due attention has been and will continue to be paid to specific characteristics of digital economy from perspectives of both legislation and enforcement. Whether the SAMR would keep open to behavioral remedies deserves further observations. In order to facilitate the SAMR applying anti-monopoly laws and regulations to concentrations in the digital economy more properly and efficiently, the authors of this paper would suggest empowering qualified local competition agencies to review certain concentrations, amending anti-monopoly rules, strengthening knowledge management, establishing independent technical expert group and maintaining international communications.

Implementing a competition law system—Three Decades of Polish Experience

Abstract This article critically analyses the introduction and development of a system of competition law in Poland prior to 2016, a period when the country underwent two fundamental transitions: from a centrally planned economy to free markets and from communism to democracy. In particular, the study focuses on the competition agency’s setup, advocacy and enforcement efforts. It also examines the position and input of the judiciary, practitioners and the broader epistemic community. The study uniquely benefits from in-depth interviews with individuals who shaped the Polish system over nearly 30 years of its existence (inclusive of all former heads of the agency, judges, leading practitioners, and agency advisors) and from analysis of newly gathered data and statistics. It also draws on broader scholarship on new competition regimes. The findings are aimed to inform refinements in Poland and other countries establishing or developing competition law systems. This study will be particularly salient in countries that are undergoing or have undergone similar economic and/or political transitions.

10 years of the French Autorité de la concurrence: looking back and looking ahead

The competition community comprises of a diverse assembly of experts—passionate about their job. Among them, consumer organizations, in-house counsels, attorneys, academics, judges, competition agencies, sector regulators, government departments, and international organizations. The debate they engage in, directly influences competition policy, and enables the adjustment of existing enforcement tools to address ever more varied issues, such as the digital economy and platforms. Indeed, competition law—nowadays—has become a central policy tool affecting consumer welfare. Similarly, it affects compliance and a key element of a firm’s strategy. At times, however, the goals of this policy instrument—the goals of competition law—are inaccurately characterized as mechanical and dogmatic. Statements such as ‘you only look at price effects for consumers’, ‘competition is about the survival of the fittest’, ‘because of competition policy there can be no European champions and Europe is at a disadvantage compared to other regions of the world’ can be heard quite often. These statements reflect some misconceptions as to the role of competition agencies and competition law enforcement in an ever-changing economic landscape. Furthermore, at times, they challenge the legitimacy and accountability of competition agencies.