Misuse Of Market Power Research Articles

Disruptive Innovation In Business Competition Law In The Online Transportation Sector: Legal Issues And Challenges

<em>Disruptive innovation is when new technologies or novel business models penetrate established markets and bring major changes to the industry. Disruptive innovation differs from incremental innovation by introducing completely new products or services or providing solutions that are more cost-effective, convenient, or effective. This research aims to examine how disruptive innovation in the internet transportation sector impacts the application and efficacy of Competition Law in Indonesia. Qualitative methodologies are utilized to investigate the intricate legal difficulties and challenges inside the realm of online transportation. The research findings indicate that the introduction of new technologies can lead to detrimental rivalry between conventional service providers and online platforms, potentially diminishing service quality and impacting regulatory efficacy. Market dominance of internet transportation platforms can lead to monopolistic or oligopolistic practices, which may result in collusion and the misuse of market power, negatively impacting consumers and competitors. Consumer protection is a crucial concern in this scenario, since it involves ensuring security, transparency, and data privacy in online transportation services.</em>

Price effects of calling out market power: A study of the COVID-19 oil price shock.

Governments often make public announcements that call into question firms' misuse of market power. Yet little is known about how firms respond to them. We study gasoline retailers' price responses to antitrust announcements shaming them for price gouging during the COVID‐19 pandemic. We identify price effects using a high‐frequency event‐study leveraging unique real‐time station‐level price data and well‐identified, discrete antitrust announcements. We find evidence of announcement effects that depend on firms' preannouncement margins and hence exposure to being publicly shamed. Public statements by antitrust questioning firms' misuse of market power can indeed contain signals that affect equilibrium outcomes.

Misuse of Market Power: Improving the Australian SLC Model

Misuse of market power in Australian competition law was reformed in 2017 by adopting a substantial lessening of competition model (SLC Model). The revised law is not based on a cogent underlying theory of exclusionary conduct. This has led to overreach, underreach and uncertainty. This commentary recommends that the law be improved by straight-forward legislative amendments based on the comparative analysis of exclusionary conduct laws in K Kemp’s work, Misuse of Market Power (2018).

Single till V. Dual till and the Paradox of Airport Competition

Airports’ regulatory till has been an issue of debate between airlines and airports for some time now. In 1most of the cases the type of till is set by legislation or it is part of concession agreements under which many airports operate now in Europe. As claimed by airlines and airlines associations the use of the single till, under which non aeronautical revenues are taken also into account when considering the level of airport charges, it rightfully reflects the indispensable link between aeronautical and nonaeronautical services provided at an airport, while the use of either the dual till concept where only aeronautical revenues are taken into account for setting airport charges or of the hybrid till mechanism under which only part of the non-aeronautical revenues are considered, is an evidence of lack of competition among airports and of misuse of their market power. Airports on the other hand indicate that the full costs of aeronautical charges and therefore the principle of cost relatedness is ensured under the dual till concept and the choice of regulatory till cannot be related to the competitiveness of the airport market or with abusive conduct. Recent evaluation assessments however carried out by the European Commission does not seem to accept as sufficient evidence of misuse of market power of airports the use of dual till, while airports have long before been subjected to the competition rules.

Book Review: Misuse of Market Power: Rationale and Reform, by Katharine Kemp. (Cambridge University Press. 2018)

Book Review: <i>Misuse of Market Power: Rationale and Reform</i>, by Katharine Kemp. (Cambridge University Press. 2018)

Misuse of Market Power in Australia and Abuse of Dominance in Canada: Two Legislated Effects Tests for Unilateral Conduct

The new Australian law against misuse of market power (as amended in 2017) shares a number of similarities with the Canadian law against abuse of dominance. This article makes a comparative analysis of these laws against unilateral anti-competitive conduct, highlighting their similarities, including their focus on whether the impugned conduct has the effect or likely effect of substantially lessening competition. It also identifies important differences, including the Australian requirement to prove “purpose or effect” in contrast to the Canadian requirement to prove “purpose and effect” and the respective methods of addressing “legitimate business purpose” claims. It illustrates some of these differences with reference to a recent digital economy case in which the Canadian Commissioner of Competition succeeded in proving that a firm abused its dominance by imposing restrictions on access to data it controlled, notwithstanding the firm’s attempted justifications on privacy grounds.

TRANSMISI HARGA KOPI ARABIKA GAYO DI PROVINSI ACEH

&lt;p align="center"&gt;&lt;strong&gt;&lt;em&gt;ABSTRACT&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;&lt;em&gt;The objective of this study is to analyze the price transmission of Gayo Arabica coffee from farmers to exporters. This study utilizesECM (error Correction Model) to investigate price transmission based on monthly price data in farmer and exporter level from Januari 2008 until December 2014. The result showed that price transmission test ECM-EG model showed that in short term, the price transmission is assymetric and symetric in long term.The symmetrical price transmission between farmers and exporters in the long term, showed that there was no misuse of market power, Therefore, price changes that occur at the farmer level in the long term were transmitted perfectly towards exporter. Asymmetric price transmission in the short term is commonly caused by cost adjustment factors and marketing agency behaviors in the pricing mechanism and the performance of each level / marketing agencies. Therefore, the need for setting prices of Gayo Arabica coffee, especially at the producers (farmers) level and the government's role in monitoring the price according to the quality of coffee, and inform the development of the market price (the local and the world) to the farmers.&lt;/em&gt;

Competition Law Dominant Position and Its Abuse: Meaning of Dominant Position

Competition in markets means rivalry between competitors to attract customers which results in enhanced consumer welfare by way of more choices, newer products and low prices. If there is no competition in markets, one or more firms seek to gain monopoly or oligopoly which allows them to disregard the competitive pressure exerted by the competitors, leading to loss of consumer welfare available in a competitive market. Thus, unfair conduct of a dominant enterprise or the conduct of an enterprise to seek dominance unfairly (monopolization) is under scrutiny under the competition laws. These concepts are variously called “abuse of dominant position” or “monopolization” or “misuse of market power,” or some similar term. Prohibition of ‘abuse of dominant position’ forms an important enforcement area for competition agencies around the world; the other areas usually being prohibition of anti-competitive agreements (horizontal agreements including cartels and vertical agreements) and the regulation of combinations (acquisition or mergers and amalgamations). In India, while the MRTP Act provided for control of monopolies and prohibited ‘Monopolistic Trade Practices (MTP)’, derived from the basic philosophy of prohibition ingrained in the Constitutional Directive of ‘prevention of concentration of economic power to the common detriment’; the Competition Act (hereinafter referred to as ‘the Act’) was enacted keeping in view the economic development of the country post liberalization and privatization era. The shift has been from ‘command-and-control’ triggered policies to an open market policy and thus now ‘monopoly’ itself is not per se bad, however an abuse of this ‘monopoly’ is. The practice of prohibiting ‘abuse of dominance’ is a challenging and complex task for the competition agencies around the world for two simple reasons, i.e. there are several practices which may amount to an abuse of dominant position (predatory pricing, offering rebates etc.) and there is a very thin line of difference between the legitimate practice of an enterprise to become dominant in market, which is perfectly justified from a business perspective, and using the dominant position unfairly to the detriment of the competition in markets. In Verizon , the US Supreme Court recognized this by saying “the opportunity to charge monopoly prices – at least for a short period – is what attracts “business acumen” in the first place, it induces risk- taking that produces innovation and economic growth”. This is what Schumpeter had said in his theory of economic development.

‘The Big Chill’? A Comparative Analysis of Effects-Based Tests for Misuse of Market Power

In March 2016, the Prime Minister made the controversial announcement that the Cabinet would move to amend the prohibition of misuse of market power in section 46(1) of the Competition and Consumer Act 2010 (Cth) (‘CCA’) to incorporate an ‘effects test’, consistent with the recommendations of the Competition Policy Review Panel (‘Harper Panel’).

The South African Example: A Legislated Effects-Based Test and Efficiency Defence for Misuse of Market Power

This paper summarises the legislation in respect of unilateral anticompetitive conduct in the Republic of South Africa and explains, in particular, its legislated 'effects test' and efficiency defence for abuse of dominance.

The Harper Review: Qualified Hope for Australian Competition Law

This article discusses the key recommendations of the Final Report of the Competition Policy Review Panel relating to the competition provisions of the Competition and Consumer Act 2010 (Cwlth)—specifically, with regard to substantive rules, recommendations concerning the prohibitions on misuse of market power and cartel prohibitions and, with regard to form, recommendations concerning simplification of the law. It also critiques the Review Panel's failure to articulate a position on the statutory objects of the competition provisions. The article concludes that the recommendations in question should be accepted by government. However, the extent to which they achieve beneficial outcomes in practice will turn on the manner in which the new rules are drafted and the approach taken to their enforcement.

The Northern Territory Power Generation Case: Government Owned Businesses Required to Comply with Trade Practices Act Standards of Competition Behaviour

Section 2B Trade Practices Act - When applies to a Governmental authority so that s 46, dealing with misuse of market power, will apply to the activities of that authority - Proprietary rights no shield to breach of s 46 determined by abuse of market power - Derivative (Bradken) Crown immunity not available to a non-Crown body where being bound by statute would impact to financial prejudice of Crown but would not impact on Crown legal or proprietary interests. The High Court handed down its decision in NT Power Generation Pty Ltd v Power and Water Authority on 6 October 2004, the majority (McHugh ACJ, Gummow, Callinan and Heydon JJ) upholding the appeal, Kirby J alone dissenting. The decisions of Mansfield J at first instance and of the Full Federal Court3 dismissing an appeal, were overturned, with important repercussions for those who contract with Governmental bodies, and in the determination of who must comply with the Trade Practices Act 1974 (Cth) (the TPA).

Product Bundling: The Implications of the Recent Australian Full Federal Court Decision in ACCC v. Baxter Healthcare

The Australian Full Federal Court has recently issued its decision in ACCC v. Baxter Healthcare. This decision is the first time that bundling has been found to be a misuse of market power under section 46 of the Trade Practices Act 1974 (Cth). The decision therefore has significant implications for any firms that are considering bundling products. The judgments of the Federal Court and Full Federal Court also show the reluctance of Australian judges to apply detailed economic tests to assess bundling, but they indicate that Australian judges instead tend to apply informal tests that have a similar effect.

Market Power in Power Markets: Evidence from Forward Prices of Electricity

We examine the forward market for electricity for indications of misuse of market power, using a unique data set on OTC price indications posted by Elsam A/S, the dominant producer in Western Denmark, which is one of the price areas under the Nordic power exchange Nord Pool. The Danish Competition Council (the regulatory government agency) has ruled that Elsam has used its dominant position to obtain excessive spot prices over a period from July 2003 through December 2006. We show that significant forward premia exist, and that they are related both to spot market volatility and misuse of market power in the spot market, indicating that misuse of market power in the forward market accompanied that which took place in the spot market, according to this ruling. This is consistent with the hypothesis that Elsam used the forward market to disguise its spot market manipulation. The findings are consistent across forward premium regressions and structural forward pricing models.

Of Brands and Barriers: Branding in Competition Law Merger Analysis

Brands have long been recognised as a form of property that is worth protecting both at common law and in trademark legislation. The economic effect of brands is said to help consumers identify quality goods when there would otherwise be information problems in markets. It is apparent too that brands can have enormous value to companies that own them. Yet the use of brands has articulate detractors some of whom have spawned veritable political movements. Some degree of suspicion about brands also seems to be reflected in the practice of competition regulators. The questions that this paper seeks an answer to are, firstly, what role might brands play in a competition agency’s or a court’s approach to a merger under competition law? The second, and naturally arising, question asks: is this approach right? The concern is whether competition law enforcers adequately appreciate the nature of the underlying policy and economic tensions between the form and effect of intellectual property inhering in brands and the policy behind competition law. Failure to do so may have harmful consequences for markets. Recourse will be had to the literature in both economics and law in an endeavour to cast light on these and on intermediate questions of brands’ purported market power, how brands compete in markets, and the interaction between competition law and trademark law. It is outside the scope of the paper to consider how brands would affect the analysis of cases involving the misuse of market power. However to the degree that the analysis is similar to that for mergers, this paper may also cast some light on such analyses.

SECTION 46: WHERE WE HAVE BEEN AND WHERE WE ARE GOING: A REVIEW OF THE RECENT DEBATE

Two recent reviews of Part IV of the Trade Practices Act (Commonwealth) (1974) have looked specifically at the operation of Section 46 of this Act and have come to very different conclusions concerning its efficacy. The Dawson review (2003) argued that no change to S 46 was required as the courts were providing sufficient guidance in the application of the legislation in this respect. The Senate Committee review (2004) came to different conclusions arguing that the Act needed clarification in regard to certain sections. These reports highlight the controversy that has surrounded this section of the Trade Practices Act for the past thirty years. The aim of this paper is to consider these reviews and evaluate the extent to which the High Court has been able to provide guidance in the application of legislation that prohibits the misuse of market power.

Wie viel und welche (De-)Regulierung braucht die Energiewirtschaft in Deutschland?

Abstract Gerhard Jochum and Wolfgang Pfaffenberger state that regulation sometimes is used as an euphemism for ad hoc interventions into the free play of the market. In the network based energy industries only the network should be regulated as far as it constitutes a bottleneck. The idea should be to promote competition rather than to determine (short term) results of the market. To create a specific regulatory body for Germany based on a detailed regulatory framework in the longer run may prove to result in less rather than more competition in the industry if we look at the dynamic aspects of competition. It would be much better to rely on the long and general experience with the concept of misuse of market power rather than to create a specific system of regulation for the energy industries. Regarding environmental regulation the present multiregulation based on taxation, special feed in tariffs plus the new CO2 certificate trading scheme needs to be reorganised in order to avoid inconsistencies. Werner Brinker points out that to ensure reliable network operation in spite of increasing input of renewables-based electricity, mainly due to the increased construction of new wind energy plants, large-scale network development measures requiring high economic costs will be necessary during the next years. At the same time, the amendment of the German Energy Industry Act provides for a regulation of network access. Discussions on the details of this regulation are still going on. The author requires that the government concentrates on setting up a calculable legal framework which guarantees fair network access and economically efficient network operation. This is the only possible way to enable long-term investment decisions in order to guarantee a reliable supply in the future. Dieter Schmitt contributes that five years after the liberalisation of its electricity and gas markets Germany now has no choice but also to substitute the hitherto preferred negotiated by regulated third party access. This requires a profound amendment of the German energy law, last not least because finally it was decided to introduce a sector specific regulatory authority with own rules and procedures. The proposed regulation of the electricity and gas grids - meanwhile presented to the Parliament - has fundamentally been criticised regarding not only the procedure but also specific details of the planned “ex post” - cost- as well as “price cap” - regulation and the authorities to be involved. The author analyses the arguments in detail, finally resulting that neither “cost”- nor “price cap”-regulation could be recommended with respect to huge problems remaining open and that only the immediate development and introduction of incentive regulation, i.e. the explicit use of market forces for regulatory purposes will ensure permanent efficiency gains in this field. Finally the paper argues that sector specific regulation of access to the grid in any case has to be supplemented by misuse of market power regulation, but which continuously has to be adjusted to the profoundly changing environment of the electricity and gas sectors.

Antitrust, Innovation, Entrepreneurship and Small Business

The purpose of this article is to discuss a few aspects of antitrust enforcement that are directly related to small businesses. The first point concerns how the antitrust laws work as an economic "charter of freedom" by protecting our economy from the misuse of market power by dominant firms, or from anticompetitive collusion by groups of firms, or from anticompetitive mergers, all of which can blunt the mainspring of our economic success – competitive markets. Second is an expansion on the first theme which focuses on how antitrust enforcement helps preserve two freedoms that I think small businesses care about very much: the freedom to engage in entrepreneurship, and the freedom to innovate. A final discussion involves a few recent cases recently seen at the Antitrust Division that illustrate the many ways in which antitrust enforcement has helped the small business marketplace.