Intermediate Course on Economic Regulation and Competition Economics
Capacity Building Programme
University of Nairobi
12-14 September 2016
Venue: Fairview Hotel, Nairobi, Kenya
COURSE OUTLINE
On Day 1, this short course provides an introduction to economic regulation and competition
economics on that will highlight the core principles and key concepts in competition and economic
regulation as well as the appropriate tests, evidence and assessment needed to analyse specific
competition and regulatory matters. On Days 2 and 3, it will cover frameworks for understanding
abuse of dominance, coordinated conduct and mergers from theoretical and practical perspectives,
including the latest developments in economic theory and their application to analysis of
competition cases, with case examples from international jurisdictions.
Approach
The course will combine lectures and case study seminars, drawing from key cases in southern
Africa, as well as precedent-setting cases from around the world. The lectures will be complemented
by in-depth case study exercises involving analysis of data and fact patterns in breakaway groups
who will present findings in feedback sessions. Key principles and tests taught during the lectures
will be reinforced through the case study exercises.
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Programme
Day 1
0845-0900
0900-1000
Registration
Introduction to competition policy and economic regulation
 The natural monopoly problem, barriers to entry and market power
 Introduction to strategic behaviour
 Externalities and market failures
 Assessing the private and social returns from investment
1000-1100
Regulating for competitive outcomes: issues of entry, licencing and deterring
collusion
 Why is there a need for competition policy and economic regulation?
 Link between regulation, competition, industrial policy and inclusive
growth
 Key competition and regulatory decisions and application of economic
principles in energy, banking, telecoms, transport and network industries
 Entry, access and vertical integration
 Creating rivalry while incentivising investment
 Licencing and universal access
1115-1230
1330-1500
1500-1600
Tea break
Market definition, market structure & market power
 How to define markets, why do we need to define markets?
 Tests used (demand substitution, supply substitution, potential competition
etc.)
 Difficulties in market definition
 Evaluation of market power
Lunch break
Understanding Restrictive Trade Practices
 Categories of abuse
 Price discrimination/unfair pricing
 Introduction to exclusionary conduct
o Undermining rivalry
o Exclusive dealing
o Loyalty rebates
o Tying and bundling
o Margin squeeze
o Access to essential facilities
Merger analysis
 Types of mergers
 Possible anti-competitive effects (theories of harm)
 Analytical framework to assess mergers
 Efficiency justifications
2


Introduction to evaluation of vertical mergers
Public interest criteria
3
Day 2
0830-0845
0845-1100
1115-1230
1330-1430
1445-1630
0830-1000
Registration
Collusion
 Considering different forms of collusive understanding, how agreements are
sustained and screening methods
 Collusive markers and methods for behavioural screening
 Coordination and information exchange
 What kinds of information and when does it matter
o Factors in tacit coordination: focal points, benchmarks, second best
rules and conventions
o Significance of sales information; its disaggregation by demand
segments (geography, customer & product categories)
 Case examples
Exercise 2: Using economic analysis to identify coordination and its impact introduction and group work
Tea break
Exercise 2: Presentations and discussion
Lunch break
Frameworks for understanding abuse of dominance:
 Concept of dominance and abuse
 Exploitative practices vs. exclusionary practices
 From theory to practice: economics-based rules
Unfair pricing and price discrimination
 Key principles
 Introduction to price discrimination
 Forms of price discrimination
 Case examples
Tea break
Exclusionary abuse, predation
 Incentives and effects
 Theories based on imperfect information and financial market failures
 A scale-economies based theory of predation
 Factors needed to apply these theories of harm
 A proposed rule: a two-tier approach (definition of proper cost benchmarks)
Day 3
Loyalty rebates and exclusive dealing
 Introduction to rebates: conditional rebates and price discrimination;
classification of rebates
 Efficiency justifications of rebates
 Scale-economies based theories of rebates
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1000 -1115
1115 – 1130
1145 – 1230
1230 - 1330
1330 - 1445
1500-1630
 Factors needed to apply these theories of harm
 Rebates in the EC Guidance Paper: the suction test and the effective price
 Exclusive dealing, theories of harm and relevant factors
 Exclusive dealing and efficiency gains
 Balancing pro- and anti-competitive effects
Refusal to supply and margin squeeze
 Introduction to refusal to supply and margin squeeze
 Outright and constructive refusal to supply
 Key tests to assess anti-competitive effects
 Balancing pro- and anti-competitive effects
 Case examples, including in telecommunications
Tea Break
Recent developments in merger analysis & analysing vertical agreements
 Merger analysis overview
 Challenges in mergers with differentiated products
 Considering efficiencies
 Case examples
Lunch
Analysing vertical mergers and agreements
 Evolution of economic thinking regarding vertical arrangements
 Chicago School critique and post - Chicago theories
 Theories of foreclosure: types of foreclosure
 Assessing ability, incentive and effects of foreclosure
 Treatment of efficiency justifications
Tea break
Exercise 3: Exclusive dealing/Rebates
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Programme Lecturers and Facilitators
Professor Simon Roberts is Executive Director of the Centre for
Competition, Regulation and Economic Development (CCRED) and
professor of economics at the University of Johannesburg. He held the
position of Chief Economist and Manager of the Policy & Research
Division at the Competition Commission South Africa from November
2006 to December 2012 where he played a lead role in prioritisation,
running complex cases and settlements. In addition, Simon has
consulted extensively on competition matters over the past 15 years, has
been an expert witness in a number of major cases, and has advised
competition authorities across the African continent. He has published
widely in local and international journals including World Competition,
Journal of Competition Law and Economics, Industrial and Corporate
Change, Journal of African Economies, Review of African Political
Economy.
Thando Vilakazi is a Senior Economist working in the competition field
at CCRED. He worked as an economist in the Policy and Research
Division at the Competition Commission of South Africa from 2010 to
2014 where he worked on cases across a number of industries and
markets. He has also provided advice and capacity building on
competition in a number of countries including Kenya, Malawi, Zambia
and Zimbabwe. Thando has co-authored a number of conference papers
and made contributions to the Competition Commission’s research on
the role of government institutions in markets. Thando holds a Master
of Commerce degree in Applied Economics (Development) from the
University of Cape Town and a BBusSc in Management Studies
(Economics Stream) from the same institution.
Tamara Paremoer is a Senior Researcher at the Centre for Competition,
Regulation, and Economic Development at the University of
Johannesburg. Prior to that, she worked as Principal Economist and
Inquiry Director of the Competition Commission of South Africa’s first
market inquiry, the Market Inquiry into the Private Healthcare Sector.
Tamara also worked as an investigator at the Competition Commission
of South Africa where she investigated a number of cases in the agroprocessing and supermarkets sector. She has also conducted research,
provided advice and conducted capacity building on competition in a
number of countries including Kenya, Zambia, Zimbabwe and Uganda.
Tamara holds a Master of Commerce (Economics) from Wits
University. She has also worked for several leading consultancies,
including McKinsey & Company and Ernst & Young.
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