Models of Market Behaviour and Competition Law: Exclusive Dealing (original) (raw)
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2011
This thesis focuses on di¤erent aspects of Competition Policy and analyses questions related to market power, collusion and the European Commissions ning policy. The rst chapter provides a theoretical setting to study a particular abuse of dominant position, known as margin (or price) squeeze. It explores the conditions under which margin squeeze arises as an equilibrium outcome and discusses policy implications of introducing price squeeze testing. In the eld of cartel detection, the leniency program has been instrumental in competition authorities ght against cartels. This is the topic of the second paper, which examines the deterrence e¤ect of the leniency program in a setup where all cartels are failing cartels. The third chapter provides an overview of the ning decisions of the European Commission in the eld of antitrust. It analyses the incentives of rms to appeal Commission infringement decisions and examines whether the ning Guidelines have led to lower appeal rates...
ON OPTIMAL LEGAL STANDARDS FOR COMPETITION POLICY: A GENERAL WELFARE-BASED ANALYSIS a
J Ind Econ, 2009
We present a formal model for the optimal choice of legal standards which takes into account decision-theoretic considerations and relates them to the underlying quality (in terms of discriminating between benign and harmful actions undertaken by firms) of economic models and information available to regulatory authorities. The model also accounts for the Indirect Effects (or deterrence effects) caused by alternative legal standards (Joskow, 2002) as well as for Systemic Effectsdelays in reaching decisions and (imperfect) detection by regulators of the actions taking place. After deriving necessary and sufficient conditions for adopting discriminating rules (such as Rule of Reason) we then apply our framework to two recent landmark competition cases-Microsoft vs. EU Commission and Leegn Vs. PSKS-in which a change in legal standards has been proposed. * We would like to thank for their useful comments the participants of seminars at CERGE-EI (Prague), Cyprus University, the University of St. Andrews and at the Conference on "Innovation and Competition in the New Economy", University of Milan, Bicocca (May 4-5 2007). Of course all errors, ambiguities and inaccuracies remain our responsibility. Some of the research in producing this paper was undertaken when both authors were visiting the ESRC Centre for Economic Learning and Social Evolution (ELSE) at University College London, whose hospitality we gratefully acknowledge.
The University of Oxford Centre for Competition Law and Policy
2006
Excessive pricing is one of the most controversial topics in competition law. Notwithstanding excessive pricing being one of the most blatant forms of abuse, a non-intervention policy tends to be the prevalent choice worldwide. Such a “hands-off” approach is based on the grounds that excessive prices self-correct, as well as practical difficulties in measuring a competitive benchmark and identifying excessiveness, and the fear of distorting ex ante incentives to innovate and invest. This article aims at providing a more balanced approach, which might be particularly useful for small economies, since market failures tend to linger for a longer time in small markets. Accordingly, it reviews the literature concerning the merit of antitrust intervention and the tests proposed to determine when intervention should take place. Then it illustrates the Chilean experience, which shows challenges concerning the scope of competition law; its goals; and principally the identity of a jurisdictio...
On Optimal Legal Standards for Competition Policy: A General Welfare-Based Analysis
The Journal of Industrial Economics, 2009
We present a formal model for the optimal choice of legal standards which takes into account decision-theoretic considerations and relates them to the underlying quality (in terms of discriminating between benign and harmful actions undertaken by firms) of economic models and information available to regulatory authorities. The model also accounts for the Indirect Effects (or deterrence effects) caused by alternative legal standards (Joskow, 2002) as well as for Systemic Effectsdelays in reaching decisions and (imperfect) detection by regulators of the actions taking place. After deriving necessary and sufficient conditions for adopting discriminating rules (such as Rule of Reason) we then apply our framework to two recent landmark competition cases-Microsoft vs. EU Commission and Leegn Vs. PSKS-in which a change in legal standards has been proposed. * We would like to thank for their useful comments the participants of seminars at CERGE-EI (Prague), Cyprus University, the University of St. Andrews and at the Conference on "Innovation and Competition in the New Economy", University of Milan, Bicocca (May 4-5 2007). Of course all errors, ambiguities and inaccuracies remain our responsibility. Some of the research in producing this paper was undertaken when both authors were visiting the ESRC Centre for Economic Learning and Social Evolution (ELSE) at University College London, whose hospitality we gratefully acknowledge.
Optimal legal standards for competition policy further re-visited
Economics Letters, 2020
Katsoulacos and Ulph (2009) showed how all the factors identified as being relevant to choosing between a Per Se and an Effects-Based legal standard in terms of their decision error costs could be combined into a simple formula for determining which standard to use. Seifert (2020) gives an alternative characterisation of an Effects-Based legal standard and shows that its decision error costs are never higher than those of Per Se We argue that nevertheless our original formula remains valid for choosing between these two legal standards.
Competition law is intrinsically connected with economics and economic theory. This thesis tries to find out how economics is reflected in case law of the Court of Justice of the EU in competition cases. It discusses the role of economics in European competition law and in legal reasoning, and it examines limits and constraints of this role. Besides this, the thesis takes into consideration the role of the CJEU and some aspects of its work which may have influence on the perception of economics. The core of the thesis lies in the assessment of the practice of the CJEU. It focuses on the field of abuse of dominance and examines how the CJEU works with economic arguments, how its approach differs from economic theory and in which way the approach has developed over time. URI: http://hdl.handle.net/1814/34406
The Role of Economics in Competition Policy
The case for competition rests mainly on economic grounds. Basic economics principles tell us that competition increases economic efficiency and welfare. Unlike many other elements of economic policy, the day to day implementation of competition policy is based on a legislative framework. The essential element of this framework is that it seeks to prohibit anti-competitive behaviour by business undertakings and it is hoped that this prohibition will be sufficient to ensure that firms compete. In this regard competition policy can be seen essentially as an attempt to implement economic policy by legal means. Of course the case for competition policy is not based purely on economic considerations. Competition policy has often been used as a mechanism to achieve political objectives. Originally a major goal of the US Sherman Act was the restraint of political power. Similarly the victorious Allied Powers imposed competition law on Germany for political reasons. Historically EU competition policy has had as its objective the promotion of greater market integration and the creation of a single market rather than competition per se and certainly in the past where a conflict arose between market integration and competition, the former inevitably won out. Arguments in favour of competition are often couched in terms of fairness. While for economists competition is often seen as being about increasing efficiency, lawyers, in particular, often view competition as being about ensuring equity. There is therefore a fundamental difference in approach between lawyers and economists. In spite of these diverse and, sometimes conflicting objectives it is nevertheless fair to say that economics is at the core of competition law and policy. "Competition law is about economics and economic behaviour, and it is essential for anyone involved in the subject-whether as a lawyer, regulator, civil servant or in any other capacity-to have some knowledge of the economics concerned." (Whish, 2001, p.
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 vs Regulation in the Context of Law and Economics
Context of Law and Economics Review competition policy and regulation as an public policy instrument Analyze reasons for state regulation The relationship between competition policy and regulation, types of competition and types of regulation EU Competition law Competition policy in a globalized economy Barriers to a market entry Analyze market entry regulation via licensing Analyze the regulation practices in different countries Some conclusions on market entry regulation.