E.CA Economists publish regularly in academic journals, competition and regulation journals and the more popular business press. We speak frequently at conferences, workshops and symposiums.
Economists often weigh the pros and cons of different alternatives, none of which is ideal (or first best in economic jargon). The latest paper of our director Alexis Walckiers and his former colleague of the Belgian Competition Authority, Olivier Body, discusses one of such choices: whether to define local markets by relying on catchment areas or by applying a hypothetical monopoly test. It argues that competition authorities should recognise more explicitly that this choice should be driven by the quality of the available data.
They address the issue of geographic market definition, which could be discussed in the context of the review of the Communication on the definition of the relevant market. Specifically, based on the observation that competition authorities use two methods to define the relevant geographic market (the SSNIP test and catchment areas), they argue that the Guidelines should more explicitly recognize that the quality of the available data should guide the choice of the most appropriate method.
Find out in the latest research by Özlem Bedre Defolie, associate professor at ESMT Berlin, and Rainer Nitsche, director at E.CA Economics and research fellow at ESMT Berlin, published by the Journal of European Competition Law and Practice.
Competition authorities are increasingly concerned that their tools are not fit to deal with markets with digital multi-sided platforms (MSPs). These markets have a tendency to ‘tip’ in the sense that one MSP takes it all or dominates the market by far. Policy makers, including the EC, are currently considering various initiatives to prevent tipping in markets with MSPs. At least in Europe, general search markets have tipped for Google, and many social media markets have tipped for Facebook. Several regional platform markets, however, did not tip (e.g. real estate, music, video-on-demand streaming). This raises some interesting questions: Why don’t we have tipping in these markets? Might they tip? Should competition authorities and regulators follow a particular strategy to prevent tipping in markets at risk of tipping?
Our director Alexis Walckiers has published an article on the analysis of local competition by the Belgian Competition Authority with his former colleagues Olivier Body, Griet Jans, Jeroen Vander Cruyssen, and Bert Willekens.
This article seeks to explain how local markets are defined by the Belgian Competition Authority, depending on the quality of available data.
An extract from GCR’s Enforcer Hub is available here. The whole publication is available at https://globalcompetitionreview.com/insight/enforcer-hub/2020
Our director Gregor Langus and manager Brecht Boone contributed to the 14th edition of FOCUS ON COMPETITION, published by Karanovic & Partners. It features insightful articles on various hot topics from some of the most prominent figures in the field of competition law.
Gregor and Brecht explain how irreversibility of investment combined with market power can result in a delay in investments in the current climate of high uncertainty due to Covid-19. Building on these insights, the authors discuss the implications for the design of state aid and other fiscal policies.
Professors Paul Heidhues and Johannes Johnen with support of Dr Michael Rauber of E.CA Economics carried out a research report for the Competition and Markets Authority (CMA). Now the CMA has published the report that reviews the academic literature on the economic theory of the loyalty penalty. This includes both the classical theory such as switching and search costs, and behavioural theories explaining phenomena like consumer inertia.
The study aims to understand how pricing patterns can arise under differing assumptions, whether they may be considered pro- or anticompetitive and what welfare implications may arise. Moreover, the study sets out the lessons it has to offer thereby considering the pros and cons of a wide range of possible policy options ranging from direct price regulation, to intermediaries such as price comparison websites and encouraging consumers to switch.