"More economic approach"
in competition policy:
EU & Hungarian developments
Csorba Gergely
Hungarian Competition Authority
Budapest, 2010-04-23
More economic approach
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The role of economic thinking and economists
becomes more important in CP analysis
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But economics still has a supportive complementary
role to competition law
Reasons for the spread of economic analysis
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Parties (and sometimes courts) raise more economic
points that need to be addressed
Economic theory (industrial organizations) is more
developed and unified to answer relevant questions
Empirical methods are more common & suited to help
More data are available to analyze (both quantity &
quality + software to handle)
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Effect-based approach
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More emphasis put on competitive assessment
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Recognised that some behaviors (like vertical restrictions) can be
procompetitive or efficiency-increasing
Importance of counterfactual approach: what would have
happened on the market without the behavior examined
It is not a definitive black&white choice whether you go
effect-based or not
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Quite a few cases are (should be) judged on form basis (cartels)
Better be careful not to go more effect-based than case requires
Main advantage of analysing effects: "reality check"
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Could be easier to defend
But it also raises the bar: could lead to more rejections as well
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Forensic economics
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This is not economics in the academic sense
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Usually not enough time
Usually not (good) enough data
Needs to be explained such that lawyers understand
Needs to be recognised that it cannot be a perfect
method, but one can decrease errors
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The theory (of harm) should be consistent and
applicable to the industry in case
"Simple" emprical methods can be also useful if one
acknowledges their limitations
The more empirical results lead to the same
conclusion, the more robust it is
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European developments
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DG Comp reforms & policy papers
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2004: Horizontal Merger Guidelines & introduction of SLC test
2007: Non-Horizontal Merger Guidelines
2005-2009: §82 reform and Guidance Paper
2010: Guidelines on data & economic analysis
2010: §81 (§101) reform both on horizontal & vertical agreements
Institutions also move towards more economic approach
1.
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Courts expect and use more economic reasoning in cases (from
2000, unfortunately not in a consistent way)
Founding of Chief Economist Team (2003): both for serious
economic analysis in high-profile cases + quality control
Strengthening of economic consultant firms
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Economics in the Hungarian CA
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Chief Economist Team established in 2006
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All major cases are now given theoretical and empirical
foundations if needed
Significant impact in-house
Court decisions : few cases but seems to have some
effect (not definitve in a case yet)
Debates with parties: positive signs
Policy: new merger regulation from 2009 (SLC)
Most visible impact on mergers
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Good number of consistent decisions in 4 years
Especially in horizonal non-coordinated effects
In 2009, a major case was remedied, 2 blocked
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How different is to do effect-based
CP in a CEE country?
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Potential difficulties
Less trained economists (smaller staffs)
Less experience / economic culture
Less demand (courts, consultancy)
Personal view: CAs should take a pro-active role
May not be easy on the short-run (neither on long-run..)
Setting precedents can be quite useful in non-abuse &
clearence decisions
Mergers can be a strategic area: parties are more
incentivized to go economic, give data and cooperate
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