Second Annual Conference on Competition Enforcement in
the Recently Acceded Member States, Brno, 23 April 2010
Economic analysis in competition law
Panelists:
Milan Brouček - Chief Economist, Office for the
Protection of Competition
Gergely Csorba - Chief Economist, Hungarian
Competition Authority (GVH)
Josef Bejček – Professor at Faculty of Law, Masaryk
University in Brno
More economic approach
in competition policy:
Latest trends in the Czech Republic
Milan Brouček
Chief Economist
Second Annual Conference on Competition Enforcement in the
Recently Acceded Member States, Brno, 23 April 2010
Opening
•the role of economics/economists in competition
policy:
o economics explains how markets work (models of
competition, firm behaviour, consumer behaviour)
o economists have developed quantitative techniques
•role in particular areas of competition policy?
•economists can quantify the „counterfactual“:
– „what if“ situation for mergers
– „but for“ situation for dominance and cartels
I. More economic approach
• conceptual issue - change in approach (effect-based
approach vs. form-based approach)
• priority: assess effect (actual,likely), clear theory of harm
• individual approach to cases
• necessity to apply analytical methods
• greater demand on economic data
• possible objective necessity and efficiencies
I. More economic approach
• key role of economic analysis in definition of relevant
markets:
– SSNIP test
• unavoidable: price-based conduct
• use of quantitative techniques – no reason for different
approach in mergers and antitrust
II. Recent development - EC
• pressure from courts (CFI, ECJ)
• apparent shift to more economic approach (MEA):
o
o
o
o
horizontal merger guidelines (2004)
non-horizontal merger guidelines (2008)
art. 82 (102) reform – guidance (2009)
current art. 81 (101) reform
• giving priority to assess effects of merger/conduct
effect-based approach (EBA)
III. Recent development - Office
•background:
o no pressure from courts
o very low pressure from undertakings
o internal decision to apply MEA/EBA
•main objective:
o increasing efficiency of competition policy
III. Recent development – Office
• advantages:
o harmonization with some other key jurisdictions
o too formalistic approach eliminated
o competition on merits recognized and permitted
• risks:
o burden too high?
o prioritization?
o response from courts?
III. Recent development – Office
•chief economist’s unit established (revived) - consists of
economists, financial analyst, statistician
2009: 4 members, 2010: 7 members
•part of Competition Section within the Office:
o
o
engaged in:
mergers, abuse of dominance, cartels,
vertical restraints
not engaged in: abuse of buyer power („retail chains“), state aid
•role of chief economist unit
•part of Devil’s Advocates’ panel
IV. Office´s experience since 2009
•mainly in abuse of dominance area:
o
o
o
o
o
possible margin squeeze/bundling in ADSL
possible predatory pricing in bus transportation
possible predatory pricing in energy sector
possible margin squeeze in energy sector
possible refusal to deal in financial sector
•mergers:
o influence of financial crisis?
o recently two candidates for econometrics (unfortunately
not realized)
IV. Office´s experience since 2009
•analytical materials (exchange of information,
RPM, art. 82 (102) reform, definition of relevant
markets …)
•personal view: chief economist unit had/has
significant impact in-house
•key task - data collection:
– looking for optimal way (learning by doing)
V. Office´s further plans (visions)
•finish „first more economic“ cases
•guidelines/best practices on applying MEA
•cartels detection (screening markets)
•using consumer survey
•quantifying antitrust damages (i.a. to endorse
private enforcement)
Conclusions
•MEA: right direction of competition policy
•Office has reflected/followed that direction
•but:
– prioritization (econometrics)
– conjunction: legal and qualitative assessment
•wish: economic analysis to be a standard tool
used by Office, undertakings and courts…
Thank you for your attention.
[email protected]
www.compet.cz