Live comments from the CCP Summer Conference 2014 – Session 2

Session 2: Experience to Date – US and EU:

Fabienne Ilzkovitz and Adriaan Dierx (DG COMP, European Commission, Brussels) considered three interrelated policy tools needed to deal with problem markets: sector screening identifies markets which are not functioning ideally, market studies determine the problems these markets face, and in-depth sector inquiries define appropriate policy remedies. They highlighted DGCOMP’s increasing use of such tools and the need to prioritise based on both ex ante and ex post assessment due to resource limitations by describing an example of the three tools being used in turn. The DG Comp’s own 2007 Single Market Review first identified economically important sectors, then examined indicators of market performance, such as the degree of competition and the sector’s openness to investment and innovation. This sector screen showed that the Food and Beverages market was performing poorly. This, combined with the sector’s importance, led to market studies which revealed potentially unfair trading practices in the retail supply chain for food which meant that the response of retail prices to changes in agricultural prices was asymmetric. The in-depth sector inquiry suggested that the strong bargaining power of food retailers relative to food producers was an important driver of this. A High Level Forum was established to order to design policy to improve the food supply chain. A Food Task Group in DG Comp cooperates with national competition authorities in order to aid them in improving their own policy around food. These remedies were suggested directly by the sector inquiry. They argue that intervening in problem markets is an important objective for policymakers and this framework provides an effective mechanism for designing policy.

CCP Session 2 - Adriaan  CCP Session 2- FabiennE

 

William E. Kovacic (George Washington University and Competition and Markets Authority) presented his personal perspective on defining problem markets and focused in particular on the preeminent problem market of the US petroleum products sector. Petroleum is a sector which, aside from being close to many Americans’ hearts, has featured in US antitrust courtrooms more than any other, with some “big” cases thought, erroneously, to be able to fix the sector’s problems. Although petroleum is subject to divergent consumer expectations, William focused on the wide-ranging “regulatory policy archipelago”: the coexistence of antitrust and competition policy with many other policy needs and the fact that these are subject to complex inter-agency coordination. In response to issues such as the hazard of acting on the basis of political pressure and agencies’ inability to fulfil impossible expectations, it was suggested that seeing competition law and policy as a limited solution may be a distraction, and that the focus should be on identifying and understanding larger policy interrelationships and defining the role of the competition authorities.

CCP Session 2 - Bill

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