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

Valerie Meunier | Senior Vice President

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?

Do four-to-three mobile mergers harm consumers?

Jorge Padilla, Thilo Klein, Paul Reynolds, Martin Wickens | November 28, 2023

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

Lessons from the life and death of merger efficiency claims: Merger rationales v merger efficiencies

Lau Nilausen | November 28, 2023

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

Pro-competitive rationale of public price announcements

Guillaume Duquesne, Hippolyte Brosse | November 28, 2023

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.

OUR PHILOSOPHY

Rigorous analysis can establish the facts: revealing what is true and what is false.

However, analysis rarely removes all ambiguity. It can pose new questions and leave others unanswered. Sometimes ambiguity may be inescapable; in which case, decisions should reflect that. Other times, further discussion and study will clarify matters. We believe that ambiguity requires more thought and analysis, not less.

In The Analysis, we aim to describe the facts on which we should agree and also set out the issues on which reasonable people disagree. As such, the views expressed here are the authors’ only and do not necessarily represent the views of Compass Lexecon, its management, its employees, or its clients. The authors will also state if third parties provided financial support for the analysis described.