The paper rejects arguments advanced in some quarters for a relaxation of EU competition policy to promote economic recovery. Economic theory and historical experience indicate that competition is likely to assist rather than impede recovery. While the Covid-19 induced recession necessitated increased State Aid, there is a serious risk that such aid will seriously distort competition within the internal market, given differences in the financial capacity of Member States to support businesses. The paper argues that policies designed to promote national champions and greater self-sufficiency are not justified and that action to secure reciprocal market access for EU exports is preferable to protectionist measures. An important lesson from the financial crisis is that actions based on immediate needs are a poor substitute for policy intervention based on sound economic analysis. 1: Recession response, 2: NIRA, Glass-Steagal, 3: Competition Policy, 4: Firm Failure, 5: Industrial Policy, 6: State Aid, 7 National Champions, 8: Trade Policy, 9: Research and Innovation, 10: EU Temporary Framework
{"title":"EU Competition Law: An Unaffordable Luxury in Times of Crisis?","authors":"P. Massey, M. Mcdowell","doi":"10.54648/woco2021023","DOIUrl":"https://doi.org/10.54648/woco2021023","url":null,"abstract":"The paper rejects arguments advanced in some quarters for a relaxation of EU competition policy to promote economic recovery. Economic theory and historical experience indicate that competition is likely to assist rather than impede recovery. While the Covid-19 induced recession necessitated increased State Aid, there is a serious risk that such aid will seriously distort competition within the internal market, given differences in the financial capacity of Member States to support businesses. The paper argues that policies designed to promote national champions and greater self-sufficiency are not justified and that action to secure reciprocal market access for EU exports is preferable to protectionist measures. An important lesson from the financial crisis is that actions based on immediate needs are a poor substitute for policy intervention based on sound economic analysis.\u00001: Recession response, 2: NIRA, Glass-Steagal, 3: Competition Policy, 4: Firm Failure, 5: Industrial Policy, 6: State Aid, 7 National Champions, 8: Trade Policy, 9: Research and Innovation, 10: EU Temporary Framework","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"24 1","pages":""},"PeriodicalIF":0.4,"publicationDate":"2020-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74609973","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Brexit – the UK’s exit from the European Union – brings unprecedented challenges and opportunities of historic magnitude across a raft of legal and policy fields. One of these fields is competition law. These challenges and opportunities deserve careful assessment – whatever shape the outcome of the detachment process might eventually take – in order to prepare for an increasingly uncertain future ahead. This article considers and analyses the future directions for UK domestic competition law enforcement in light of Brexit. The article addresses a range of issues, including: the likelihood of significant post-Brexit reform; the government’s commitment to competition in local markets; the relevance of industrial policy; the issue of regulation; and aspects of institutional structure of the UK competition law regime. The article will also consider changes to UK competition law which currently appear on the horizon. Brexit, UK competition law, Domestic enforcement, Competition and Markets Authority
{"title":"Brexit and Competition Law: Future Directions of Domestic Enforcement","authors":"M. Dabbah","doi":"10.54648/woco2020006","DOIUrl":"https://doi.org/10.54648/woco2020006","url":null,"abstract":"Brexit – the UK’s exit from the European Union – brings unprecedented challenges and opportunities of historic magnitude across a raft of legal and policy fields. One of these fields is competition law. These challenges and opportunities deserve careful assessment – whatever shape the outcome of the detachment process might eventually take – in order to prepare for an increasingly uncertain future ahead.\u0000This article considers and analyses the future directions for UK domestic competition law enforcement in light of Brexit. The article addresses a range of issues, including: the likelihood of significant post-Brexit reform; the government’s commitment to competition in local markets; the relevance of industrial policy; the issue of regulation; and aspects of institutional structure of the UK competition law regime. The article will also consider changes to UK competition law which currently appear on the horizon.\u0000Brexit, UK competition law, Domestic enforcement, Competition and Markets Authority","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"26 1","pages":""},"PeriodicalIF":0.4,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78838843","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article analyses the incentives for a manager to engage in a cartel, by mobilizing the framework of the ‘economics of crime’. We apply a cost-benefit analysis, relating to the decision of starting and/or remaining in a cartel, at an individual level, including psychological and behavioural factors. It also examines the various solutions – both at company and public authority level – to limit individual incentives to engage in this type of practice, and the role of public policy, in the broad sense of the term, in preventing these behaviours. antitrust policy, public policy, cartels, criminal antitrust enforcement, leniency, dissuasive fines, whistleblowing, illegal Behaviour, corporate fraud, incentives
{"title":"Why Managers Engage in Price Fixing? An Analytical Framework","authors":"Constance Monnier-Schlumberger, E. Combe","doi":"10.54648/woco2020003","DOIUrl":"https://doi.org/10.54648/woco2020003","url":null,"abstract":"This article analyses the incentives for a manager to engage in a cartel, by mobilizing the framework of the ‘economics of crime’. We apply a cost-benefit analysis, relating to the decision of starting and/or remaining in a cartel, at an individual level, including psychological and behavioural factors. It also examines the various solutions – both at company and public authority level – to limit individual incentives to engage in this type of practice, and the role of public policy, in the broad sense of the term, in preventing these behaviours.\u0000antitrust policy, public policy, cartels, criminal antitrust enforcement, leniency, dissuasive fines, whistleblowing, illegal Behaviour, corporate fraud, incentives","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"22 1","pages":""},"PeriodicalIF":0.4,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75936285","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article fills the gap in the State aid literature by discussing the optimal rule for State aid assessment, which shall increase the reliability and accuracy of State aid enforcement by the European Commission. Moreover, it contributes to decision theory more broadly, by putting emphasis on the error in application of law, which hampers an effective distinction between desirable and undesirable measures. The argument developed in this article is that the informational asymmetries, which the Commission faces when assessing measures, may be overcome to a different extent at each procedural stage. Hence, and due to the interrelation between complexity of rules and the probability of error in their application, State aid assessment requires two assessment rules, one for the preliminary examination and one for the formal investigation. However, it seems that such optimal assessment rules have not been identified, and no concern about accuracy in application of complex rules is reflected in the literature or in the legal framework. Consequently, the Commission shall structure and make known the rules which guide its assessment, especially in the preliminary examination. This would benefit the quality and transparency of the decision-making and might be particularly valuable in the context of the on-going revision of State aid guidelines. EU State aid law, Article 107 TFEU, Decisional Errors, Decision Theory, State Aid Procedure, Compatibility Assessment, Notion of Aid, State Aid Modernisation, Revision of State Aid Guidelines, Optimal Assessment Rule
{"title":"The Optimal Assessment Rule for EU State Aid Procedure","authors":"A. Nowak-Salles","doi":"10.54648/woco2020005","DOIUrl":"https://doi.org/10.54648/woco2020005","url":null,"abstract":"This article fills the gap in the State aid literature by discussing the optimal rule for State aid assessment, which shall increase the reliability and accuracy of State aid enforcement by the European Commission. Moreover, it contributes to decision theory more broadly, by putting emphasis on the error in application of law, which hampers an effective distinction between desirable and undesirable measures.\u0000The argument developed in this article is that the informational asymmetries, which the Commission faces when assessing measures, may be overcome to a different extent at each procedural stage. Hence, and due to the interrelation between complexity of rules and the probability of error in their application, State aid assessment requires two assessment rules, one for the preliminary examination and one for the formal investigation. However, it seems that such optimal assessment rules have not been identified, and no concern about accuracy in application of complex rules is reflected in the literature or in the legal framework. Consequently, the Commission shall structure and make known the rules which guide its assessment, especially in the preliminary examination. This would benefit the quality and transparency of the decision-making and might be particularly valuable in the context of the on-going revision of State aid guidelines.\u0000EU State aid law, Article 107 TFEU, Decisional Errors, Decision Theory, State Aid Procedure, Compatibility Assessment, Notion of Aid, State Aid Modernisation, Revision of State Aid Guidelines, Optimal Assessment Rule","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"2 1","pages":""},"PeriodicalIF":0.4,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73844799","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Yes, it should. Pay for delay settlements have raised concern across the globe and have led to significant competition law scrutiny in the US and Europe. Branded pharmaceutical companies use patent settlements to pay potential generic entrants in order to stay off the market, thereby reducing competition and harming consumers. This conduct has been found to be unlawful by the US Supreme Court and the EU General Court. In Japan, however, such anticompetitive settlements allegedly do not take place, despite offering similar economic incentives to pharmaceutical companies in the second largest pharmaceutical market in the world. This is intriguing and warrants close scrutiny. This article is the first to investigate, based on a comparative analysis with the US and EU whether or not the Japanese pharmaceutical sector is susceptible to pay for delay settlements. We come to the conclusion that the regulatory regime in Japan features the necessary prerequisites to make pay for delay settlements a feasible yet anticompetitive drug lifecycle management strategy. Pay for delay, Japan, pharmaceutical, US antitrust, competition, comparative analysis, theory of harm, Japanese Antimonopoly Act, Europe, patent settlement
{"title":"Should Pay for Delay Be a Cause for Concern in Japan?","authors":"S. Gallasch, Naoko Mariyama","doi":"10.54648/woco2020008","DOIUrl":"https://doi.org/10.54648/woco2020008","url":null,"abstract":"Yes, it should. Pay for delay settlements have raised concern across the globe and have led to significant competition law scrutiny in the US and Europe. Branded pharmaceutical companies use patent settlements to pay potential generic entrants in order to stay off the market, thereby reducing competition and harming consumers. This conduct has been found to be unlawful by the US Supreme Court and the EU General Court. In Japan, however, such anticompetitive settlements allegedly do not take place, despite offering similar economic incentives to pharmaceutical companies in the second largest pharmaceutical market in the world. This is intriguing and warrants close scrutiny. This article is the first to investigate, based on a comparative analysis with the US and EU whether or not the Japanese pharmaceutical sector is susceptible to pay for delay settlements. We come to the conclusion that the regulatory regime in Japan features the necessary prerequisites to make pay for delay settlements a feasible yet anticompetitive drug lifecycle management strategy.\u0000Pay for delay, Japan, pharmaceutical, US antitrust, competition, comparative analysis, theory of harm, Japanese Antimonopoly Act, Europe, patent settlement","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"38 1","pages":""},"PeriodicalIF":0.4,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87736375","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Oliver Budzinski, Annika Stöhr, Victoriia Noskova, Philipp Kunz-Kaltenhäuser, Sophia Gaenssle
This article provides an economic analysis of recent vertical and horizontal mergers in the US industry for audio-visual media content, including the AT&T–Time Warner and the Disney– Fox mergers. Using a theory-driven approach, we examine economic effects of these types of mergers on market competition, focusing on digital media content distribution. In doing so, we address three research questions: (1) Is the current development of the industry with its recent merger activity concerning? (2) Would vertical or horizontal integration be more preferable for overall welfare and competition in this industry? (3) What are implications for antitrust policy? We conclude from our analysis that in the already highly horizontally concentrated US market for audio-visual content the process of further vertical integration creates concerns from a competition policy perspective. Moreover, even though horizontal concentration on some of the market stages may be anticompetitive as well, vertical integration is likely to be more harmful. As a consequence, we recommend a stricter approach to vertical merger control in this industry, as well as a more active abuse control against already vertically integrated media companies. competition policy, antitrust, industrial economics, digitization, media economics, institutional economics, industrial organization, mergers, vertical integration, horizontal integration
{"title":"Happily Ever After?: Vertical and Horizontal Mergers in the US Media Industry","authors":"Oliver Budzinski, Annika Stöhr, Victoriia Noskova, Philipp Kunz-Kaltenhäuser, Sophia Gaenssle","doi":"10.54648/woco2020007","DOIUrl":"https://doi.org/10.54648/woco2020007","url":null,"abstract":"This article provides an economic analysis of recent vertical and horizontal mergers in the US industry for audio-visual media content, including the AT&T–Time Warner and the Disney– Fox mergers. Using a theory-driven approach, we examine economic effects of these types of mergers on market competition, focusing on digital media content distribution.\u0000In doing so, we address three research questions: (1) Is the current development of the industry with its recent merger activity concerning? (2) Would vertical or horizontal integration be more preferable for overall welfare and competition in this industry? (3) What are implications for antitrust policy?\u0000We conclude from our analysis that in the already highly horizontally concentrated US market for audio-visual content the process of further vertical integration creates concerns from a competition policy perspective. Moreover, even though horizontal concentration on some of the market stages may be anticompetitive as well, vertical integration is likely to be more harmful. As a consequence, we recommend a stricter approach to vertical merger control in this industry, as well as a more active abuse control against already vertically integrated media companies.\u0000competition policy, antitrust, industrial economics, digitization, media economics, institutional economics, industrial organization, mergers, vertical integration, horizontal integration","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"8 1","pages":""},"PeriodicalIF":0.4,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85956965","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article assesses the fundamental elements of national and international cartel sanctioning practices from a proportionality perspective under both retributive and consequentialist theories on punishment. It finds that the current framework of setting fines for international cartels fails to ensure proportionate overall punishment. This is due to two types of shortcomings. First, the amplification at an international level of the failure of national sanctioning methodologies to fully observe retributive or consequentialist proportionality principles. Second, the absence at an international level of an appropriate maximum limit on the level of punishment or any consideration of the overall proportionality of the overall punishment. Overcoming these shortcomings calls for not only the coordination of sanctions between authorities pursuing the same cartel, but also a serious reconsideration of the fundamental elements of national cartel fining methodologies. At the least, achieving overall proportionate punishment requires authorities to start considering the retributive and consequentialist objectives already achieved by fines imposed elsewhere for the same overall cartel conduct.
{"title":"Proportionality of Fines in the Context of Global Cartel Enforcement","authors":"Pieter J. F. Huizing","doi":"10.54648/woco2020004","DOIUrl":"https://doi.org/10.54648/woco2020004","url":null,"abstract":"This article assesses the fundamental elements of national and international cartel sanctioning practices from a proportionality perspective under both retributive and consequentialist theories on punishment. It finds that the current framework of setting fines for international cartels fails to ensure proportionate overall punishment. This is due to two types of shortcomings. First, the amplification at an international level of the failure of national sanctioning methodologies to fully observe retributive or consequentialist proportionality principles. Second, the absence at an international level of an appropriate maximum limit on the level of punishment or any consideration of the overall proportionality of the overall punishment. Overcoming these shortcomings calls for not only the coordination of sanctions between authorities pursuing the same cartel, but also a serious reconsideration of the fundamental elements of national cartel fining methodologies. At the least, achieving overall proportionate punishment requires authorities to start considering the retributive and consequentialist objectives already achieved by fines imposed elsewhere for the same overall cartel conduct.","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"22 1","pages":""},"PeriodicalIF":0.4,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81053679","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The article aims to discuss the use of quantitative methods in quantifying merger effects as evidence, taking the particularities of the Brazilian experience and considering both technical, institutional and policy issues. Therefore, the article investigates evolution and patterns in the Brazilian institutional framework and jurisprudence in terms of technical aspects and adequacy of implementation, policy issues regarding the acceptance within the administrative tribunal and the main challenges imposed. The information collected considered all the merger cases, as far as we know, in which quantitative methods were applied by Administrative Council of Economic Defense (CADE) in order to measure, estimate or imply the merger’s potential anticompetitive effect on prices. Among the conclusions we find that the models are employed in few complex cases and mostly to sustain some restriction by the authority. We also note that the authority seems concerned about sensibility analysis, in some cases revealed by the combination of the use of different methods and/or competitive models.
{"title":"Quantitative Methods and Mergers Effects in Competition Policy: The Brazilian Case","authors":"C. Pires-Alves, M. Lyra, M. Bonfatti","doi":"10.54648/woco2019028","DOIUrl":"https://doi.org/10.54648/woco2019028","url":null,"abstract":"The article aims to discuss the use of quantitative methods in quantifying merger effects as evidence, taking the particularities of the Brazilian experience and considering both technical, institutional and policy issues. Therefore, the article investigates evolution and patterns in the Brazilian institutional framework and jurisprudence in terms of technical aspects and adequacy of implementation, policy issues regarding the acceptance within the administrative tribunal and the main challenges imposed. The information collected considered all the merger cases, as far as we know, in which quantitative methods were applied by Administrative Council of Economic Defense (CADE) in order to measure, estimate or imply the merger’s potential anticompetitive effect on prices. Among the conclusions we find that the models are employed in few complex cases and mostly to sustain some restriction by the authority. We also note that the authority seems concerned about sensibility analysis, in some cases revealed by the combination of the use of different methods and/or competitive models.","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"3 1","pages":""},"PeriodicalIF":0.4,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74541065","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Establishing a new competition law regime is never an easy task, especially for developing countries. The current literature of competition law is rich with suggestions on the best political economy preconditions conducive to an effective competition law regime. It is generally believed that countries with a democratic political regime and a stable rule of law are more inclined to enact national competition law. Moreover, countries that embrace the principle of trade liberalization, privatization, and market economy are a fertile ground to the growth of competition law. Yet, the enactments of Myanmar competition law in 2015 and Thailand new competition law in 2017 deviate from this general understanding. Naturally, it is assumed that competition laws adopted in these countries would be starkly different from pre-existing competition laws. It hints towards an emerging trend of competition law, one which manages to enact and enforce competition law regardless of the reality of the local political economy. This article explains the cause and consequence of this deviation, without immaturely evaluating the effectiveness of such young regimes. It concludes with investigating the likely source behind it, specifically whether the ASEAN, in which both Myanmar and Thailand are Member States, is behind such phenomenon.
{"title":"Emerging Trend in Competition Law in Southeast Asia: Perspectives from Myanmar and Thailand","authors":"Ploykaew Porananond, Po Ma Ma Aung","doi":"10.54648/woco2019030","DOIUrl":"https://doi.org/10.54648/woco2019030","url":null,"abstract":"Establishing a new competition law regime is never an easy task, especially for developing countries. The current literature of competition law is rich with suggestions on the best political economy preconditions conducive to an effective competition law regime. It is generally believed that countries with a democratic political regime and a stable rule of law are more inclined to enact national competition law. Moreover, countries that embrace the principle of trade liberalization, privatization, and market economy are a fertile ground to the growth of competition law.\u0000Yet, the enactments of Myanmar competition law in 2015 and Thailand new competition law in 2017 deviate from this general understanding. Naturally, it is assumed that competition laws adopted in these countries would be starkly different from pre-existing competition laws. It hints towards an emerging trend of competition law, one which manages to enact and enforce competition law regardless of the reality of the local political economy. This article explains the cause and consequence of this deviation, without immaturely evaluating the effectiveness of such young regimes. It concludes with investigating the likely source behind it, specifically whether the ASEAN, in which both Myanmar and Thailand are Member States, is behind such phenomenon.","PeriodicalId":43861,"journal":{"name":"World Competition","volume":"12 1","pages":""},"PeriodicalIF":0.4,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73223199","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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