Lear carried out a research and evaluation project for the UK Competition and Markets Authority (CMA) looking at approaches to assessing potential theories of harm and evaluating past merger decisions in the technology sector. Lear’s report identifies which theories of harm Competition Authorities should investigate when facing a merger in the technology sector and what type of evidence they should rely on to predict potential competition. Moreover, The report provides an ex-ante and ex-post assessment of selected UK cases, to ascertain whether the CMA’s decision was reasonable, and it proved to be correct.
Archives
Study on the economic impact of competition policy enforcement on the functioning of telecoms markets in the EU (European Commission – DG competition)
Lear, jointly with DIW Berlin and Analysys Mason, has been retained by DG competition to study the economic impact of competition policy enforcement in the European (“EU”) telecoms markets. The study consists of both a descriptive analysis on the evolution of competition policy enforcement and the functioning of telecoms market over the past 20 years and a quantitative analysis on the impact of competition policy interventions on telecoms markets’ performance. The quantitative analysis deals with the ex-post evaluation of three EC’s decisions in the telecoms sector (a merger, a state aid and an antitrust case). The analyses have been performed through accomplished empirical techniques, such as the difference in differences method, structural models and the synthetic control method.
Quantifying harm from regulation in the telecom sector
Lear is assisting a telecom operator in quantifying harm that will be suffered as a result of a change of the regulated price of compulsory communication data that have to be provided to the Judiciary by law. The analysis developed by Lear aims at verifying the methodology used to determine incremental costs borne by the operator for the activity performed in the public interest, and argues that, as long as such costs are unrelated to private telecom operations, they should be covered by the Government, to avoid any distortion in the efficient allocation of resources.
Study on capacity remuneration mechanisms (CRMs) for an Italian industry association
Lear carried out a study, for an Italian association of electricity generators, aimed at addressing the effectiveness of the Italian capacity market in promoting supply adequacy. The research exhaustively examined the economic theory on CRMs and performed an overview of CRMs implemented across Europe. A specific focus has been provided on the capacity market of France and Great Britain.
Assessment of benefits of open networks deployed under state aid schemes
Lear assisted a leading regulator in the assessment of costs and benefits arising from open access requirements in the deployment of network infrastructure. In particular, Lear was responsible for designing a methodology for the assessment and for applying this to a sample of cases. The project has served to inform the design of subsidies for network deployment.
Study on the development of the audio-visual markets and creation of original contents
Lear carried out a study, for a leading Italian broadcaster, aimed at analysing the development of the audio-visual markets, with a focus on the entry of Over-The-Top (OTT) operators. Lear analysed the regulatory asymmetry between classic broadcasters and OTTs and described the phenomenon of unauthorised use of content protected by copyright, paying particular attention to enforcement policies. The study also assessed the imbalances in the market and their impact on broadcasters’ investment in original content creation
Ex-post evaluation of three sequential merger decisions in the Dutch grocery sector (Dutch Authority for Consumers and Markets – ACM)
Lear performed a detailed quantitative assessment of the ex-post effects of three sequential merger decisions involving competing supermarkets chains. Lear’s team identified and collected all the relevant data on the affected markets and developed a methodology to assess the effect of the mergers on prices, product variety and ancillary services. One of the novelties of this study consists in evaluating the impact of a merger on non-price dimensions such as the depth of products’ assortment. The study also provides an empirical strategy to identify the impact of the remedies (stores’ divestitures) on the competitiveness of the market.
PUBLICATION: Merger in the Dutch grocery sector: an ex-post evaluation
Changes to regulation in the local loop market
Lear’s economists assisted the legal advisors of a major telecom operator in an appeal against a decision of the Administrative Court to remove a set of regulatory obligations on the dominant operator in the wholesale market for access to the local loop, which would reduce the ability of other operators to compete effectively in the downstream market for broadband services.
Study on the ex-post evaluation of two merger decisions (UK Competition Commission)
Lear undertook the detailed quantitative assessment of the ex-post effects on the relevant markets of two merger decisions. Lear’s team identified and collected all the relevant data on the affected markets and evaluated the effects that the mergers had on competition. Lear found that the conclusions drawn by the UK Competition Commission were consistent with the observed market outcomes and that the UK Competition Commission had taken the appropriate decision when it approved the two mergers.
EU rules on State Aid in the telecoms sector
Lear’s economists helped a leading media company in preparing a number of submissions to the European Commission on its guidelines on how to evaluate State Aid to companies investing in new generation networks.