EMEA THE ANALYSIS
Economic analysis can clarify even the most intractable issues, to inform better decisions. Here we bring the best that economics has to offer without bias: setting out what is and isn’t known, and what needs to be considered when there is no consensus.
FROM THE EDITOR
In The Analysis, we consider the complex challenges that businesses and policymakers face, and demonstrate the light that economic analysis can shed on them – albeit partially – to inform better decisions and advance important debates.
In this edition, our economists:
• Review studies on the impact that four-to-three mergers between mobile telecom operators have had on consumers, and find that many improved service quality without increasing prices;
• Examine the European Commission’s assessment of all benefits presented by merging parties in the past decade, and offer insights that parties need to consider; and
• Look at the potential effects of price announcements to show the importance of analysing whether or not pro-competitive motivations better explain potentially harmful conduct.
IN THIS ISSUE
Do four-to-three mobile mergers harm consumers?
In the last decade, Competition Authorities have become sceptical about four-to-three mergers between mobile network operators. In this article, Jorge Padilla, Thilo Klein, Paul Reynolds and Martin Wickens evaluate studies on the effects of such mergers, which show they have led to a higher service quality without increasing prices. Therefore, there is no sound basis to presume such a merger will likely harm consumers. Instead, careful assessment of the likely effects on prices and service quality is needed to determine whether a particular merger will make the consumers worse or better off.
Lessons from the life and death of merger efficiency claims: Merger rationales v merger efficiencies
In this article, Lau Nilausen reviews the European Commission’s (”EC”) assessment of all benefits presented by merging parties in the past decade. While his review demonstrates EC’s scepticism, it also shows the sources of efficiency that the EC has accepted in principle and highlights the obstacles that merging parties will need to consider if they wish to demonstrate them successfully.
Pro-competitive rationale of public price announcements
When analysing potentially anti-competitive conducts, it is important to consider whether pro-competitive motivations could also explain that conduct. In this article, Guillaume Duquesne and Hippolyte Brosse demonstrate this using the example of price announcements. While such announcements can facilitate collusion, they can alternatively operate as a barometer, promoting efficiency by informing other suppliers and customers about changing market conditions. It is important to establish which of those rival explanations is consistent with the facts of a particular case.