Regulating regulators in transitionally competitive markets (original) (raw)
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Regulating competition: transition or travesty?
The Electricity Journal, 1996
The coming of competition in California and elsewhere iz Dill not mean less regulation but move-at least irl the short run. The acid test of the transition will be whether the responsible political oficials can define and impose a "competitive transition charge" on a basis that is fair to all parties, and then hold fast against customer pressures to avoid it.
Competition and the reform of incentive schemes in the regulated sector
Journal of Public Economics, 2003
Ce document est publié dans l'intention de rendre accessibles les résultats préliminaires de la recherche effectuée au CIRANO, afin de susciter des échanges et des suggestions. Les idées et les opinions émises sont sous l'unique responsabilité des auteurs, et ne représentent pas nécessairement les positions du CIRANO ou de ses partenaires. This paper presents preliminary research carried out at CIRANO and aims at encouraging discussion and comment. The observations and viewpoints expressed are the sole responsibility of the authors. They do not necessarily represent positions of CIRANO or its partners.
Edward Elgar Publishing eBooks, 1993
Tünde Gönczöl • Antitrust hipsters and their critics Gergely Csorba • Should European competition policy change in reaction to global challenges? Lessons from the Siemens-Alstom merger and its impact Pál Valentiny • Market and government failures. The changing relationship between industrial policy and competition policy interventions Borbála Tünde Dömötörfy-Barnabás Sándor Kiss-Judit Firniksz • Ostensible Dichotomy? By object and by effect restraints in EU competition law, with special regard to the Budapest Bank case Csongor István Nagy • Why is leniency policy less effective in Hungary: is there a regulatory answer? REGULATION Zombor Berezvai • The impact of retail regulation on consumer prices Zoltán Pápai-Péter Nagy • Dancing with hands and feet tied. The handling of zero-rating in net neutrality regulation as demonstrated by the Telenor Hungary vs NMHH case Vivien Csonka • An analysis of the integration of mobile network operators: efficiency gains and distortive effects on competition Surd Kováts-Gábor Szabó • Competition law interventions by the European Commission on energy markets Péter Kotek-Adrienn Selei-Borbála Takácsné Tóth • The impact of the construction of the Nord Stream 2 gas pipeline on gas prices and competition APPENDIX List of original Hungarian chapters List of Contributors • Tünde Gönczöl • ANTITRUST HIPSTERS AND THEIR CRITICS The renewal of competition law enforcement has become one of the focal points of political and professional debates in the United States. The main critics of the prevailing practice, the so-called antitrust hipsters campaign for bringing back the original goals of American competition law, and demand restrictions on the activities of huge corporations of the digital era, even by regulation if needed. This paper presents the ongoing and constantly evolving debate between the followers of the hipster antitrust approach and their critics. 42 It is not only Wu who claims that U.S. law enforcement should use the achievements of both the Harvard and Chicago Schools, and this is not even a completely original idea. See, for example, Piraino [2007]. On the comparison of schools of economic theory, see Atkinson-Audretch [2011]. 43 It seems that one of the important representatives of American competition law, the American Antitrust Institute (AAI; a non-profit organisation promoting the protection of competition and engaged in research, education and competition advocacy) also joined this approach which they deem to be progressive (Moss [2018]). Lessons from the Siemens-Alstom merger and its impact * The paper deals with the lessons from the European Commission's early 2019 prohibition of the Siemens-Alstom merger and the subsequent industrial policy debate. After reviewing the assessment principles in competition policy concerning mergers and describing the specific merger in detail, it discusses industrial policy's proposals for changes to practice and institutional reform in competition policy. Concerning policy proposals, while some principles and guidelines in competition policy need review, there is an ongoing professional discourse concerning these issues, and the fundamental assessment framework works well. Concerning institutions' suggestions, however, the proposed industrial policy reforms may restrict regulatory independence and erode the values of professional competition policy assessments, which are strong determinants of welfare in the long run. Among the public policy instruments, the study seeks to follow past changes in competition policy and industrial policy. In various periods, one was preferred over the other; the pendulum swung one way, then the other. One common trait of all the periods was that the changes clearly reflected ideological and political trends and various groups' ability to protect their own interests, and the end result of interventions was often not what was originally intended. The study briefly discusses the periods when monopolies emerged, the inception of competition regulation and the coexistence of competition and industrial policy in the last hundred years and its experiences. Hungarian leniency policy is generally considered to be less effective. Although, in regional comparison, it may appear to be successful, the statistical data shows that it falls behind the European average. This paper makes a comparative snapshot of Hungarian leniency policy in order to establish whether its relative ineffectiveness can be traced back to regulatory factors or to circumstances beyond regulation.
Competition Policy for Industry Standards
Compatibility standards create consumer benefits by enabling components to interoperate and allowing suppliers of compatible components to achieve efficiencies from scale and network effects. Quality and safety standards inform consumers and can prevent the sale of shoddy or potentially hazardous products. However, standards can impose costs in some situations by limiting consumer choice. Furthermore, the activity of standard setting often involves cooperation among competitors and may facilitate the exercise of market power. This chapter surveys competition issues raised by the development of industry standards, whether accomplished through a formal standard-setting committee structure or by the activities of a single sponsor. A particular focus is on the implications for competition and consumer welfare when products that implement a standard may infringe proprietary intellectual property rights.
Journal of Economics <html_ent glyph="@amp;" ascii="&"/> Management Strategy, 1992
This pnper analyzes, within the frarnezuork of the new regulutory economics that emphasizes asymmetries of information, the optimal structure of an industry. The duplication of fixed costs incurred in a duopoly structure may be socially justified in a static model by three effects: the sampling ejfecf, the yardstick competition eflect, and the increasing inurginal cost effect. We show that in general, asyinnietric information favovs duopoly when the rriarkef sfrucfure is decided before firms discozw tlieir cost characteristics (a coininoil situatioiz in dual sourcing for procuremenf), and favors rnonopoly zuhen fhe market structure is decided after firms discover their cost characteristics (the case of splifaward auctions). 1. [NTRODUCTION The organization of sectors, once claimed to be natural monopolies, in the form of duopolistic structures is becoming frequent: MCI and ATT in long-distance telecommunications in the United States; British Telecom and Mercury, until recently, for fixed-linked public telecommunications; Telecom Securitor and Racal-Vodaphone for cellular networks in England; France Telecom and SFR for mobile phone in France. A trade-off appears to exist between the economies of scale that would arise from a monopoly structure and various costs of such a structure. As the director general of Telecommunications in England puts it: "If efficiency of operation were surely guaranteed, the existence of economies of scale would mean that it would be cheaper to provide a given increase of service by expanding an existing network rather than establishing a new one;. .. However, in the world as we find it, some competition between networks is likely to be desirable because monopoly suppliers do not normally operate at the greatest level of efficiency. " This research was supported in part by the MIT Telecommunications Business Economic Research Program and by the Commissariat Gknkral du Plan. We thank J. Hausman for his hospitality and J. Tirole and two referees of this journal for their comments.
Competition law, competition policy, and deregulation
Swedish Economic Policy Review, 2002
A number of Swedish industries were deregulated in the early 1990s, most of which were network industries, where there exists a critical bottleneck (infrastructure) stage. Since a firm controlling the bottleneck has significant market power, it is often necessary to implement a competition policy limiting the exercise of this power. The two traditional methods for controlling market power in this context are price regulation and public control over the entire industry (e.g., through a public utility). Deregulation amounts to abandoning these methods and, in many cases, access regulation is introduced instead. In addition, structural measures, such as vertical and horizontal separation, are often used. This article argues that access regulation (sector-specific regulation), structural measures and competition law are complementary policy tools. Access regulation gives the entrant access to the essential infrastructure, thus making it possible for the entrant to produce. Arguably, the most important effect of the structural measures is to facilitate regulation. In practice, the most important effect of competition law is to prevent customer lock-ins. The latter conclusion is supported by an analysis of Swedish competition law cases in recently deregulated industries. The analysis shows that the most important cases concern attempts by the incumbent to lock in customers, e.g., through fidelity rebates or tying. Furthermore, it shows that in the Competition Authority's cases, recently deregulated industries are over-represented, relative to the GDP weight of the industries, by approximately a factor of three.
What Has Competition Done for Consumers in Liberalised
This paper reviews current regulatory approaches designed to correct market failures and distribute the benefits of liberalization to consumers in recently liberalised network industries. Present evaluations of the liberalisation process show that opening up markets to more competition has not yet resulted in either expected levels of competitiveness or in envisaged consumer benefits. Many consumer related failures were little anticipated; legislation to protect and assist consumers was either late coming or inadequate and often lacked effective enforcement. The paper examines market failures primarily related to the demand side; such as information asymmetries, unfair trade practices, unfair standard contract terms, high search and switching costs, and imperfect decision-making processes. It, however, discusses these imperfections in the broader context of market failures related to incoherent regulation and ineffective competition law enforcement and shows how poor coordination between these regulatory fields leads to suboptimal outcomes. The interplay between general consumer protection and specific consumer issues of sector regulation is discussed and elaborates on specific market deficiencies that draw attention to the intersection between consumer protection and competition law. The discussion incorporates theoretical insights from neoclassical and behavioural economics to consumer problems. The paper focuses on what the liberalization process, so far, has done for consumers by looking at and evaluating both the legislative and policy developments and recent proposals at European level as well as actual implementation and enforcement of these legislations at national level. More specifically, it deals with the energy and the telecommunications markets and their recent developments in the EU. Two case studies provide insight on national regulatory approaches: a case study of the liberalization of the Hungarian telecommunications market and a case study of the liberalization of the Dutch electricity market. The paper proposes a new mode of regulation as well as a new mode of coordination among different layers and fields of regulation and enforcement in order to remedy consumer problems and to achieve competitive markets.
The role of technological and market structure in regulatory reform
Journal of Financial Services Research, 1989
This article considers the role of technological and market structure in determining whether regulatory reform is desirable, and the nature of reform that might be undertaken to improve resource allocation. The article discusses the basis for government intervention in an industry, the role of "natural monopoly," and alternative approaches that might be employed to introduce competition for a market even if competition within a market is not possible (e.g., through competitive auctions, contestability, or monopolistic competition). It suggests the nature of the economic basis for regulatory reform in a number of American industries in recent years. The author would like to thank George Kaufman, George Benston, and Randy Eberts for their helpful comments.