Sunday, May 10, 2015

Market definition in Buyer Power cases

3 weeks ago I had the privilege to be invited as one of the paper discussants of the 1st BECCLE Competition Policy Conference organized in Bergen.

The Conference was a great success for BECCLE and all my recognition to my fellow co-workers that were part of the orginazing team (I was not one of them). Not only it gather a truly remarkable group of keynote speakers, but also the papers presented by PhD candidates and young post-doc were of high quality.

The event took place at the Norwegian School of Economics, just outside Bergen
©
 NHH
In this conference I presented my views concerning market definition for buyer power cases. In a nutshell my (quite long paper) analyze market definition and market power assessment as two fundamental steps carried out by competition authorities – and later on reviewed by courts – whenever dealing with alleged breaches of competition law by undertakings. They are, however, mostly centered in selling side cases. This paper puts forward that a mere reverse of the standard methodologies employed for selling side cases are insufficient for the application in buyer side cases. Thus, it is necessary reassessing the current techniques and their application to be applied to buyer power cases. I submit that in all buyer power cases the market definition ought to be made in both the upstream market and downstream market by adopting a dualistic market definition in buyer power cases. Particular attention ought to be paid to the circumstance of whether the undertaking has market power in the downstream market as this will directly affect whether the conduct is anticompetitive or not. Lastly, this dualistic definition is justified as it fully captures the competitive effects of monopsony or bargaining power and allows for a proper appreciation of buyer power’s welfare effects from a consumer’s perspective.

The working paper I presented is available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2600471

I will be presenting a reviewed version of this paper on May 28-29th in the upcoming Annual Workshop of the Competition Law and Economics Network organized by TILEC in Tilburg, The Netherlands.

Please let me know of your comments/suggestions regarding my paper on market definition in buyer power cases!

Saturday, April 18, 2015

Competition and Buyer Power through an Ordoliberal lens makes top two ten!

Thanks to all of you, my paper on “Competition and Buyer Power through an Ordoliberal lens” has reached in the last two weeks the two top ten lists of most read/download papers of the two categories it has been classified by SSRN: Regulation (European) and Competition Law (European). This is a great source of satisfaction, proud and at the same time thankfulness to those of you interested in my research.

If you have not yet read the paper and want to find out what Ordoliberalism is all about, have a look at it.


Have a good weekend!

Sunday, April 5, 2015

Visiting the EFTA Court

For the next 3 weeks I will be in Luxembourg doing a research visit to the EFTA Court to learn more about EEA law and get some literature related to competition law and public procurement. This is an opportunity that I am looking forward to and that I have been very lucky to get!

The EFTA Court is the little brother of the ECJ. This body has jurisdiction with regard to EFTA States which are parties to the EEA Agreement: Iceland, Lichtenstein and Norway. Nope, Switzerland who is part of the EFTA Agreement is not under the scrutiny of the EFTA Court (very odd but not a surprise when it comes to Switzerland and its peculiar relation with European Integration).

The Court has competence to deal with breaches of the EEA Agreement (basically an extension of the internal market fundamental freedoms) by rendering Judgments determining breaches of EEA law, advisory opinions for national courts dealing with EEA matters and deciding appeals from the EFTA Surveillance Authority (the parallel of the EU Commission).

In relation to my research there have been very few cases in the sphere EEA law that had dealt with buyer power. The notable exception is the Norwegian Color Line case (case no 59120). Apart from this case I have not found any other one in which buyer power has been an important element of a decision and/or Judgment so far. If you know of any, do let me know!

This picture was taken, literally, next to the Faculty of Law of the UiB!
Copyright: Uwe Kahl and found at http://www.panoramio.com/photo/72429
I have managed to do a bit of sightseeing so far as well and… Luxembourg is an odd city! Not only the city itself is built in an interesting and unusual way (in layers and filled with elevators/bridges/hills/cliffs) but also I am always confused what language to use: German, French, Luxembourgish… English? You never know what the other person will speak. Has been fun and interesting. Also the languages issues serve as somehow “market sharing”. Look at this pictures of these 2 fast-food restaurants. They are next to each other (literally)… do you notice something about the languages they use to attract clients?!





















I am looking forward to these next weeks to learn more about EEA law and write a lot for my dissertation.


Until soon!

Tuesday, March 24, 2015

Competition and ordoliberalism

As a result of my fruitful and interesting research stay at the University of Freiburg and the Walter Eucken Institute I have been working on a paper entitled "Competition and Buyer Power through an Ordoliberal Lens". 

The paper submits that Ordoliberalism is a German school of economic thought that advocates regulating the free market economic based on a set of state imposed rules guaranteed by the economic constitution to impose a competitive order in society. It proposes an alternative method to pure laissez-faire and state planned economy for the better regulation of the market economy by having as goals the protection of the competitive process and individual freedom. In this article I submit that ordoliberalism, an indigenous European competition policy, is an adequate economic and analytical tool to base the practice and decision making of competition law and, in particular, for the regulation of buyer power. My aim is twofold: contribute to the discussion on what ordoliberalism is in general and in particular concerning competition policy, and offer a new perspective on an ordoliberal-oriented competition policy for the treatment of buyer power.

If you are interested in reading it, you can find the current version available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2579308


If you have any comments/suggestions, I will be very happy to receive them!

Sunday, January 4, 2015

Visiting the Walter Eucken Institut: Ordoliberalism

Since early November 2014 I have had the opportunity to visit the Walter Eucken Institut to do research on the Freiburg School of Law and Economics: Ordoliberalism.

Ordoliberalism – also known as German Neo-Liberalism - is a school of economic (and legal) thought that was born in Germany in the decade of 1930 and influenced its economic development after the WWII. This was partially carried out due to the influence of first Minister of Economy and then Chancellor Erhard, who proposed following ordoliberal ideas as the basis for the “German Economic Miracle” and the concept of Social Market Economy. 





Ordoliberalism proposes a third way between, on the one hand, traditional liberalism and absolute market freedom and, on the other hand, state planned economy. To do, it suggest adopting a set of (legal) rules that will guide the economic behavior of individuals in the market to produce an outcome close to the economic ideal. This set of rules will foster individual economic freedom, growth and stability. For ordoliberalism the competitive process should be guiding mechanism of economic exchanges. Because of this, proper competition should be protected be preventing undertakings from "cheating the rules" economic efficiency follows. Consequently, it is the role of the state to set the rules and ensure that economic parties comply with them by acting as an investigator and judge. The state, thus, acts as a “market police”, through the competition authority, to ensure the respect of competition law.

Ordoliberalism is of great interest to me because I employ this economic theory to develop an analytical framework to discuss what ought to be the regulation of buyer power in EU competition and public procurement law. Not only do I agree in a personal level with many of its postulates, but also because ordoliberalism proposes limiting market power from both the public and private sector in a holistic manner, which serves my purpose of regulating buyer power in both public and private markets.

In these already 2 months I have been in Freiburg I have been able to familiarize with this trend of economic thought, reflect on it and understand what implications it has for the regulation of buyer power in competition law. It has been a fascinating task that transported me from the world of competition law and competition microeconomics to a broader level of speech in macroeconomics and constitutional economics (the ordoliberals, at least the founding fathers, were/are not microeconomists). Also, not only I have been able to live in Freiburg (a nice university city) but also meet friendly, interesting and very well prepared scholars. To all the team at the Walter Eucken Institut: Vielen Dank!


If you are interested to know a bit more about my stand on ordoliberalism and buyer power, do contact me by email!