Threat-Based Competition Policy

This note suggests a link between the theory of contestable markets and competition policy. We propose that in the absence of potential hit and run entrants into an industry the behaviour of a firm may be constrained by the fear of intervention by the competition authorities. Hence, in periods in which hit and run entry is believed to be a non-credible threat, the competition authorities can affect a firm's behaviour by the threat of intervention, as well as by intervention itself. Requirements for the successful use of threat-based competition policy are identified, and its potential benefits are outlined.     

Competition by regulation in energy markets: the case of Turkey

A fundamental question facing the regulatory and competition authorities is whether to delegate competition policy issues of utilities to regulatory agencies or competition authorities. While, some countries prefer ‘light handed regulation’ by competition authorities, others grant substantial power to independent regulatory agencies. Turkey followed the liberalization wave in electricity with a regulatory reform in 2001. Recently, a slight shift of tide has appeared in previously liberalized markets. Electricity markets are the forefront example of this change of course. A similar trend is apparent in Turkey as well. Increasing pressures on prices and excess demand have created more reasons for active government involvement. As political factors weigh in, economic considerations take a secondary place in electricity markets. In order to show the tension between political and economic preferences, we use the Pareto and Kaldor-Hicks criteria of welfare economics metaphorically. This paper discusses the scope of competition policy in the Turkish electricity industry. We focus on the issue of regulatory governance. The absence of a well established institutional environment reduces the potential role of competition policy in the industry and increase political meddling in all segments of the Turkish electricity market. By looking into changes in prices, market power and new entry closely, we discuss the relative success of the regulatory reform in the electricity industry. We conclude by emphasizing the consequences of a passive competition authority in establishing a competitive electricity market.     

Taming digital gatekeepers: the ‘more regulatory approach’ to antitrust law

Antitrust enforcement and competition policy in the digital economy is high on the agenda of authorities and policymakers. The distinctive features of digital markets and the strategic role played by large platforms apparently require a rethinking of the antitrust regime. Several reform proposals point to the need to integrate the antitrust toolkit with ex ante measures since there is a risk that ex post enforcement would be too slow to successfully keep markets competitive and contestable. The aim of this paper is to investigate whether the invoked regulatory approach reflects the distinctive structural features of digital markets or whether it is just an enforcement short-cut.     

The Economic Problem of Fixed Costs and What Legal Research Can Contribute

The antitrust laws demand competition but, in general, no competitive outcome is possible in markets characterized by substantial fixed costs. Consequently, restrictions on competition may have an efficiency defense, and a prohibition of cartel agreements may entail costs as well as benefits. Giving examples, this essay illustrates the problem that fixed costs pose for competition, long recognized in economics, and discusses implications for real-world industries. The author addresses Wiley's recent criticism of theoretical and empirical work on the fixed cost problem and outlines an agenda for legal research that can help illuminate the underlying economic and antitrust policy issues posed by industries with high fixed costs.     

Anticompetitive Employment

Scholars, antitrust agencies, and policy makers have historically paid little attention to anticompetitive practices in labor markets. This was largely due a misconception that antitrust law is meant to govern conventional markets in which goods and services trade, rather than govern labor markets. Antitrust law may also offer a poor remedy to redress employers who enter no-poaching agreements or otherwise impair competition. The primary tension involves antitrust's purpose, which is to promote “consumer welfare.” To identify whether conduct eroded consumer welfare, courts tend to scrutinize whether prices increased. But here, lessening wages can enable firms to sell goods at cheaper prices, benefiting consumers. Another issue is that the typical restraint affects only a smattering of workers instead of lessening wages throughout the greater market. This article uses empirical analyses to show that antitrust should promote labor's welfare as it does consumer welfare, and it argues that enforcement must condemn labor cartels as per se illegal. The research demonstrates that labor cartels are more pernicious than restraints in product markets, as employers can lessen wages with less effort than in product markets. Antitrust should even proscribe no-poaching agreements formed for a legitimate purpose (e.g., to protect trade secrets) because employers could have achieved the same goals using less coercive means; the noncompete agreement, at least, provides labor with a semblance of notice and bargaining power without drawing antitrust scrutiny. The prohibition of labor cartels would thus promote competition and consumer welfare, especially in minimum wage labor markets.     

Regulation and Third-Party Discrimination in the German Electricity Supply Industry

Despite the monopolistic networks, the liberalized electricity supply industry in Germany is unregulated; the network-access charges are only subject to competition law, not to ex-ante approval. This paper explores the consequences of this policy by analyzing empirical observation with the theory of vertical relations. It concludes that the authorities' focus should be on the level of the access charges and not on discriminatory behavior. Unregulated access charges imply that the integrated firms have different incentives as compared to the independent entrants with respect to the competitive markets. Thereby, the principle of a level playing field is violated.     

规范内外资企业所得税优惠政策有关问题的思考

我国现行的企业所得税优惠政策存在过多过滥、优惠目标多元化、内外资企业所得税优惠政策差别过大等问题,不但影响了国家财政税收收入,而且不利于内外资企业的公平竞争,所以在统一和规范内外资企业所得税优惠政策时必须统一内外资企业所得税优惠目标和政策措施。     

Privatisation or Competition?

Market competition is essential for any economy to be efficient. In order to develop competition in a transition economy, it is conventionally thought that privatisation should take place first. This wisdom has been challenged by the Chinese reform experience of the last two decades, which modified the incentive structure of state enterprises and created markets and market competition in the absence of large scale privatisation. China's experience, however, raises the question of whether its chosen type of reform is sufficient to promote competition in a market dominated by public firms. To answer this, we need to know what kind of markets were created – regional markets closed to trade or unified markets with easy access – and whether or not improved incentives for state firms have led to competition. This paper investigates these questions on the basis of a survey of both theory and empirical evidence; and finds that the Chinese reform policies did succeed in stimulating competition among state firms.     

Should competition policy in banking be amended during crises? Lessons from the EU

This article investigates the nexus of competition and stability in European banking. It analyzes the European legal framework for competition policy in banking and several cases that pertain to anti-cartel policy, merger policy, and state-aid control. It discusses whether and how competition policy should be amended in order to preserve the stability of the banking system during crises. The article argues for increased cooperation between prudential regulators and competition authorities, as well as an enhanced framework for bank regulation, supervision, and resolution that could mitigate the need to change competition policy in crisis times.     

Structural Reform Policy: Privatisation and Beyond—The Case of Greece

Privatisation, coupled with liberalisation and competition, constitutes one of the most popular policy options to improve the performance of state-owned enterprises. However, in Greece, it was only after 1991 that privatisation started to gain ground in the political and economic agendas of governments. Drawing upon the theoretical underpinnings of privatisation, the paper overviews and critically analyses the new legal framework on denationalisation in Greece. The paper argues that, though the modernisation of the legal regime is welcomed, the Greek government has failed to treat privatisation as part of wider structural reforms aiming at enhancing competition and foreign investment. The paper concludes that wider structural reforms, including regulatory reform and liberalisation, as well as combating corruption and bureaucracy and promoting transparent capital markets, are absolutely necessary in order to create a competitive environment, which would both complement and support privatisation efforts.     

Strategies to enhance price and quality competition in health care: lessons learned from tracking local markets

Drawing on observations from tracking changes in local health care markets over the past ten years, this article critiques two Federal Trade Commission and Department of Justice recommendations to enhance price and quality competition. First, we take issue with the notion that consumers, acting independently, will drive greater competition in health care markets. Rather we suggest an important role remains for trusted agents who can analyze inherently complex price and quality information and negotiate on consumers' behalf. With aggregated information identifying providers who deliver cost-effective care, consumers would be better positioned to respond to financial incentives about where to seek care and thereby drive more meaningful competition among providers to reduce costs and improve quality. Second, we take issue with the FTC/DOJ recommendation to provide more direct subsidies to prevent distortions in competition. In the current political environment, it is not practical to provide direct subsidies for all of the unfunded care that exists in health care markets today; instead, some interference with competition may be necessary to protect cross subsidies. Barriers can be reduced, though, by revising pricing policies that have resulted in marked disparities in the relative profitability of different services.     

The collective welfare dimension of dark patterns regulation

Dark Patterns are interface design elements that can influence users' behaviour in digital environments. They can cause harm, not only on an individual but also a collective level, by creating behavioral market failures, reducing trust in markets and promoting unfair competition and data dominance. We contend that these collective effects of Dark Patterns cannot be tackled by existent laws, and thus call for policy intervention. This article reviews how existing and proposed laws in Europe and the US, namely the EU Digital Services Act and Digital Markets Act as well as the U.S. DETOUR and AICO Acts, address these collective dimensions of welfare and add to existing protection. We find that the novel legislative measures attain that goal to varying degrees. However, the collective welfare perspective may prove useful to both support a risk-based approach to the enforcement and provide guidance as to which practices should be addressed as priority.     

Human Rights, Development, and the WTO: The Cases of Intellectual Property and Competition Policy

The World Trade Organization (WTO) has sometimes been portrayedas being at odds with the protection of human rights. This articletakes issue with this perception, both generally and with specificreference to WTO agreements/activities in the areas of intellectualproperty (IP) and competition policy. The rules and proceduresof the WTO are directly supportive of civil rights in the senseof freedom to participate in markets and freedom from arbitrarygovernmental procedures. In addition, the system contributesto development and to the realization of broader economic, social,and cultural rights, by stimulating economic growth and therebyhelping to generate the resources that are needed for the fulfilmentof such rights. The article examines various human rights andpublic interest rationales for the protection of intellectualproperty rights (IPRs). The recent amendment to the Agreementon Trade-Related Aspects of Intellectual Property Rights (TRIPS)to facilitate access to medicines in the event of public healthemergencies is outlined. With respect to competition policy,such policy constitutes an important aspect of governance insuccessful market-based economies. There is a clear need forcooperative approaches to the implementation of national competitionpolicies. The appropriate scope and venue for such cooperationare a matter for further deliberation.     

EC Competition Policy: Is the Role of the Substantial Part of the Common Market in Determining Jurisdictional Subsidiarity Redundant?

The importance of the principle of subsidiarity lies in its role in drawing the demarcation line between EU and member state responsibility for policy formulation and implementation. In theory, the application of the principle of subsidiarity appears relatively straightforward based on the scale and effects of the action in question. The reality is somewhat more complex, at least in respect of two competition policy instruments—Article 102 EC and the ECMR. At the heart of this complexity is the little understood notion of a substantial part of the common market which, relative to competing jurisdictional subsidiarity tests, can fail to assign cases to the appropriate jurisdiction. This leads to the conclusion that the substantial part test is superfluous as the affects trade criterion and the distinct markets test perform the allocative role more effectively in relation to Article 102 and the ECMR respectively.     

对高利贷的法律规制

民众对财富的渴望会随着我国市场经济的发展而愈发强烈,以高利贷为代表的民间金融在和国家博弈的过程中潜滋暗长。时至今日,资源分配的不均衡、金融市场的高度管制、中央和地方政策的摇摆、法律规制的混乱共同造就了高利贷之患。整体主义的法律治理思路能够促进各部门法在该问题上的合作,以经济法和经济政策为基础解决民间借贷失控的制度根源,纾解民营企业对资本的饥渴,严惩制度外的高利贷违法犯罪活动。     

WTO框架下竞争政策与多边贸易体制的协调问题述评

由于私方反竞争行为日益成为国际贸易自由化的障碍,国际社会正在积极努力以协调竞争政策与多边贸易体制之间的关系。然而,由于竞争问题的复杂性,对于应由什么机构、采用什么方法协调两者之问的关系,国际社会还存在激烈的论争。考虑到WTO能力的有限性和各国竞争政策、经济发展水平以及利益需求的差异性等因素,将竞争政策问题全面纳入WTO调整范畴尚为时过早。竞争政策的国际协调与立法工作可通过两个途径同时展开:逐步将那些与贸易有密切关联关系的竞争政策纳入WTO调整范围;竞争政策的其它问题可在WTO之外进行讨论与协调。     

世贸组织框架下反补贴制度与竞争政策的协调

针对世贸组织反补贴制度与竞争政策的冲突问题，笔者认为，在目前竞争法尚未建立起有效的国际协调机制的情况下，协调世贸组织反补贴制度与竞争政策的冲突的最佳途径是，将竞争法的有关原则融入到反补贴制度中，消除其中反竞争或限制竞争的条款，使反补贴制度能更多的考虑到竞争的需要，加强它们积极的一面，使它们尽可能地相互一致和相互促进。     

A review of telecom markets in the EU: What did the European Commission learn or not from the past?

The EU telecom regulation relies on a market-by-market sunset approach. In order to facilitate the market review of national regulatory authorities, the European Commission has offered two successive sets of recommended markets susceptible to ex ante regulation. The inclusion or exclusion of a recommended telecom market is analyzed on its competition conditions across the EU. Beginning in 2014 the European Commission published the draft third Market Recommendation. This article aims to give a critical evaluation of those recommended markets by surveying the competition situations on every telecom market in the EU Member States. It observes that while the drafted Third Recommendation makes a reasonable assessment for most telecom markets, it may not have appropriately addressed markets such as retail fixed access, wholesale call origination, wholesale fixed and mobile call termination, wholesale high-quality access, and wholesale broadcasting transmission.     

USING COUNTY-BASED MARKETS TO SUPPORT AND FEDERAL RESERVE MARKETS TO IMPLEMENT BANK MERGER POLICY

In this paper, we consider three issues raised by the apparentinconsistency between the current research practice of usingcounty-based markets (Metropolitan Statistical Areas (MSAs)and non-MSA counties) to investigate the validity of the theoreticalunderpinnings of bank merger policy and the current regulatorypractice of using Federal Reserve (FR) banking markets, whichoften do not follow county lines, to implement that policy.Using a national sample of bank and thrift branch deposit data,we find that county-based areas cannot simply substitute forFR markets in the implementation of bank merger policy. Forexample, numerous potential mergers would raise competitiveissues in county-based areas, but not in FR markets, and viceversa. We also conclude that, because of the relative difficultyof assembling demographic data for non-county-based areas, itis impractical to consistently use FR markets in bank mergerpolicy research. However, we do find that, despite the inconsistenciesbetween the two types of markets, analysis that uses county-basedareas is relevant for bank merger policy that is implementedwith FR markets. For example, we find that profitability regressionresults using variables based on FR markets are similar to thosefound using variables based on MSAs and non-MSA counties.