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ESRC Funded Research Groups

  • Market Power and its Regulation
  • Agreements and Tacit Collusion
  • Mergers

Theme

In some industries, one firm may have a large degree of market power – it may be dominant.  This may mean that it can charge higher prices to consumers than it would if it faced more competition from rivals.  Competition law imposes special duties on dominant firms not to act in a way which restricts or distorts competition.  There is a continuing debate over the appropriate limits of intervention, and the extent to which protecting the process of rivalry may conflict with other important objectives, in particular efficiency.  Alongside these issues, we have also focused our research efforts on the regulation of market power in certain industries where there tend to be powerful incumbents, for example, the network industries, pharmaceuticals and the media. 

Project

In recent years a particular focus of our work has been on the relationship between abuse of dominance and other areas of law, such as contract and sector specific regulation, for example, electronic communications and the media.  We are also exploring the interplay between competition law and intellectual property rights, including in pharmaceuticals and new media markets. 

Other work includes a review of the growing number of private enforcement cases under Article 102, switching and competition in UK energy markets.  We are also continuing work on vertical restraints and their potential exclusionary effects.

Work in this theme is wide ranging, encompassing all the main subject disciplines within CCP, often working together; and using a variety of methodologies (archival, theoretical economic modelling, econometric, surveys, content and discourse analysis, and experimental). We are exploring a number of high level questions: What constitutes collusion? How does collusion originate? What is the origin and content of policy on collusion? What are the external perceptions of collusion and its acceptability?

More specifically, our work has extended our understanding of the interface between tacit and hard core collusion by theoretical modelling, empirically contrasting the internal structures of cartels and tacitly collusive groups.  By examining the nature of the competitive process and merger activity during and after cartels, we are exploring the longer-run impact of cartel policy. Within cartels, research has focused on the role of ringleaders.

Recent completed research on mergers focused on policy evaluation, including interpretation of the standard of proof and substantive test of lessening competition, coordinated effects in European Commission decisions and the efficacy and early settlement of merger remedies.   Research has also been undertaken on the selection of mergers for intervention, including the implications of market shares and investigated theories of harm.

Another line of work investigates wider public interest issues.  The latter includes the wider implications of media mergers, and state aid and mergers for financial stability.  Merger policy research continues on energy and healthcare markets which also have specific public interest issues, and a broader analysis of public interest in the UK and EU.

Two pieces of econometric work on market structure also have important implications for merger control.  An analysis of regulation and the diffusion of mobile phones find that consumer uptake was most rapid in markets with five mobile network operators.  Research on entry into patenting also links into merger policy issues.

Current projects include work on post-cartel merger activity to investigate the propensity to merge between firms that had previously been in a cartel together.  This will go on to analyse the characteristics of such mergers.  Further work includes collaboration with a group of French and Norwegian economists on the design and enforcement of competition policy - the efficiency and effectiveness of public intervention, with a particular focus on merger control.

Planned work includes an empirical analysis of merger remedies since the reform of the Remedies Notice.  Has the use of structural and behavioural remedies changed?  Are remedies agreed earlier?  Has there been improved specification of behavioural commitments (e.g. in access agreements)?  

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