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How to deal with price wars in cartel damages estimations?
E.CA Compact
price wars, damage estimation

A standard approach to damages estimation is to compare prices during the cartel period with prices before or after. However, it is not uncommon to see prices wars right after the cartel breaks down. As price wars are characterised by prices below the competitive level, an inclusion of price wars in the comparison period can lead to overcharges that are too high. This E.CA Compact explains how we modelled the price war period in the example of a German cement cartel.

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Estimating network effects in two-sided markets without data on prices and quantities
Economics Letters, Volume 117, Issue 3, December 2012 , Pages 585-588.
Two-sided markets; Network effects; Semi-structural model
Efficiencies as a Meaningful Defence in Merger Control
Presentation at the Interdisciplinary Centre for Competition Law and Policy (ICC) and Crowell and Moring LPP Annual Conference, 15 June 2012, Brussels.
efficiencies, merger control
Dominant and Efficient – On the Relevance of Efficiencies in Abuse of Dominance Cases
ESMT Working Paper No. WP-12-01.
antitrust policy, efficiency defence, predatory pricing

Abstract : The European Commission’s policy on the relevance of efficiency considerations in abuse of dominance cases (Article 102 TFEU) has not been resolved satisfactorily. In an attempt to give guidance on this matter, we address the topic from two different angles: First, we review EC soft law provisions and recent decisions. Based on this review, we find that efficiency defences play a limited role under the current practice. They are of relevance in the growing number of IT related cases but only in these. Second, we explore – in the example of low price strategies – business practitioners’ views on the relevance of the pro and anti-competitive motives. Based on a survey of EMBA students, we find that low price strategies are indeed frequently used. The motives are diverse however, often pro-competitive and in line with antitrust compliance, i.e. low price strategies are rarely considered advisable for leading firms. Finally, policy conclusions are drawn.

PDF icon Dominant and Efficient – On the Relevance of Efficiencies in Abuse of Dominance Cases(application/pdf 689.3 KB)
Dominant and Efficient : On the relevance of efficiencies in Article 102 TFEU cases
Presentation at the OECD Roundtable, Paris, 24-25 October 2012.
efficiencies, survey
Defending Cartels in Regulatory Investigations – The Role of Economics
Presentation at the IBC Competition Economics 2012, London, 20 March 2012.
Peter D. Camesasca
cartel, private litigation
Competition Law in Regulated Industries: On the Case and Scope for Intervention
Journal of European Competition Law & Practice 2012, doi: 10.1093/jeclap/lpr087.
Lars Wiethaus
telecommunication, regulation
Automatically renewable contracts hamper switching to competitors
E.CA Compact
telecoms, switching

On behalf of Ofcom, E.CA and Gregory Crawford empirically analysed the impact of BT's automatically renewable contracts on customer switching behaviour between telecom providers. Accounting for a variety of confounding factors, including tenure, bundling, price discounts and self-selection into contracts, it was found that households on automatically renewable contracts switch 35% less often than comparable households on standard contracts. In light of these findings Ofcom decided to prohibit these contracts in the fixed-line voice and boradband sectors for residential and small-business customers.

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Are EC State aid rules compatible with attracting airlines through rebates?
E.CA Compact
state aid, rebates

Operating an airport profitably means generating sufficient traffic to cover operation costs at a margin which allows recovering fixed costs in the long run. Thus, airports often incentivise the opening of new routes or the establishing of hub status by individual airlines through rebate schemes. State-owned airports face the challenge to self-assess whether those rebates are in compliance with EC State aid rules. This note illustrates a simple but robust technique for such a self-assessment.

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Annotation: Van Drie/Alpuro (in Dutch)
Markt & Mededinging, december 2011, nr. 6, pp. 245-248
Paul de Bijl
competition law