Xuelin Li, Andrew Lo, Richard Thakor, 11 August 2021

Innovation is a key driver of economic growth, and incentivising research and development is therefore a vital policy goal. This column explores the role of competition policy in stimulating innovation by pharmaceutical firms. Specifically, the authors assess the effect that ‘pay-for-delay’ agreements have on firm-level research and development in the US. The results suggest that restricting the ability of firms to engage in pay-for-delay agreements appears to increase their incentives to innovate in the face of competition, although the aggregate effects are not clear-cut.

Cristina Caffarra, Gregory Crawford, 15 June 2021

The newly launched CEPR Competition Policy RPN is organizing a discussion between senior antitrust regulators, privacy experts, and economists. In the first panel, privacy and data protection experts will discuss some key insights for antitrust enforcers. The second panel will discuss with antitrust leaders how these ideas are progressing in practice.
Cristina Caffarra & Greg Crawford tell Tim Phillips about the launch event of the CEPR Competition Policy RPN, which was held on June 17 2021
You can see a recording of the event here 


CEPR Competition Policy Event 17 June 2021

15:00-18:00 BST / 16:00-19:00 CEST / 10:00-13:00 EDT

Privacy/data protection and antitrust enforcers continue to operate in silos: data protection agencies (supposedly) enforcing data protection rules, and antitrust agencies doing “market power” and traditional anticompetitive conduct.  Yet market power allows violations of privacy and data protection, and those in turn entrench market power.   Privacy experts deserve a place at the antitrust table to inform the analysis of mergers and conduct, to lessen consumer exploitation and discipline market power. We have long needed “integration,” not just “intersection”.
Is it starting to happen?  The State AG complaints in the US against Facebook and Google are concerned with privacy degradation as monopoly rents, and discriminatory privacy changes as anticompetitive conduct.  There are calls for federal privacy regulation.  In Europe, we have had the GDPR since 2018 but enforcement is lagging.   Germany has been a pioneer with Facebook and new cases with a data focus being opened under the new competition law regime. France too.  In the UK the competition and data protection agencies – CMA and ICO – just issued a joint statement setting out a “holistic” approach. This is unprecedented. 

The newly launched CEPR Competition Policy RPN (https://cepr.org/content/cepr-rpn-competition-policy) is organizing a discussion between senior antitrust regulators, privacy experts, and economists.  In the first panel, privacy and data protection experts will discuss some key insights for antitrust enforcers.  The second panel will discuss with antitrust leaders how these ideas are progressing in practice.

Part 1: What are the Privacy Experts Seeing that the Antitrust Regulators are not?

15:00-16:20 BST / 16:00-17:20 CEST / 10:00-11:20 EDT

  • Johnny Ryan (Senior Fellow, Irish Council for Civil Liberties)
  • Dina Srinivasan (Thurman Arnold Project, Yale University)
  • Jason Kint (CEO, Digital Content Next)
  • Simeon Thornton (Director, UK Competition and Markets Authority)
  • Alessandro Acquisti (Professor of Information Technology and Public Policy, Carnegie Mellon University)

Part 2: What's the Progress on Integrating Antitrust & Privacy?

16:30-18:00 BST / 17:30-19:00 CEST / 11:30-13:00 EDT

  • Andrea Coscelli CBE (Chief Executive, UK Competition and Markets Authority)
  • Elizabeth Denham CBE (UK Information Commissioner; Global Privacy Assembly Chair)
  • Andreas Mundt (President, German Cartel Office)
  • Rebecca Slaughter (Acting Chair, US Federal Trade Commission)
  • Wojciech Wiewiórowski (European Data Protection Supervisor)
  • Chris d'Angelo (Chief Deputy Attorney General, Office of the New York Attorney General)
  • Henri Piffaut (Vice President, French Competition Authority)

If you do not yet have a CEPR profile, you can create one here before registering at:
https://portal.cepr.org/privacy-antitrust-integration-not-just-intersection The Register/Submit option will appear at the top and bottom of this page once logged in.

Georges Siotis, Carmine Ornaghi, Micael Castanheira, 28 February 2021

A perplexing feature surrounding generic entry is that the price of the other on-patent potential substitutes is barelyaffected, leading competition authorities to conclude sometimes that a single molecule may constitute a distinct antitrust market.  Using data on prices, quantities, and promotional effort for a large number of molecules sold in the US, this column finds that there is no such thing as a single/natural antitrust market, even for a fixed set of products (and absent technological, regulatory, or trade shocks).  

Romesh Vaitilingam, 06 January 2021

The US Federal Trade Commission and 46 states have brought antitrust cases against Facebook, which could potentially require the company to unwind its acquisitions of Instagram and WhatsApp. The IGM Forum at Chicago Booth invited its panels of leading US and European economists to express their views on whether requiring the company to make these divestments is likely to make society better off. As this column reports, a considerably larger proportion of experts on the European panel agree or strongly agree with the statement than the US panel (78% compared with 59%); nearly a quarter of US experts are uncertain; and just over a sixth of US experts disagree.

Tommaso Bighelli, Filippo di Mauro, Marc Melitz, Matthias Mertens, 13 October 2020

Aggregate firm concentration has increased in Europe in the last decade. Using firm-level data, this column shows that concentration is positively associated with productivity at the sector level. As a result, rising concentration should not be viewed as conclusive evidence of a weak competitive environment and need not necessarily be a cause for concern. Rather, rising concentration may be a reflection of more efficient market processes. This has important consequences for industrial and antitrust policy, which must carefully evaluate the costs and benefits of increasing concentration.

Sébastien Jean, Anne Perrot, Thomas Philippon, 18 June 2019

Some policymakers believe that EU competition policy prevents the emergence of industrial champions. The column argues that Europe’s competition policy has successfully contained the rise in concentration and excess profits, and the EU should not follow the US in weakening its approach. Instead, the EU needs to strengthen its trade policy to be more assertive on reciprocity in market access and control of industrial subsidies. 

Hal Varian, 14 August 2018

The European Commission’s case against Android has been hailed as a “milestone” in antitrust enforcement. This column, written by Google’s Chief Economist, argues that the case is more of a millstone than a milestone for not just Google, but the entire Android ecosystem of equipment manufacturers, carriers, app developers, and end users.

Murillo Campello, Daniel Ferrés, Gaizka Ormazabal, 07 September 2017

Strategies for cartel detection and prosecution differ across countries. This column uses a US dataset to show that independent directors of cartel-indicted firms favour the implementation of corrective actions in order to mitigate damage to their personal reputations. Firms with a larger fraction of independent directors on their boards observe smaller value losses and lower cartel duration during cartel-busting episodes.

Martin Watzinger, Thomas Fackler, Markus Nagler, Monika Schnitzer, 19 February 2017

There is growing concern that dominant companies use patents strategically to keep competitors from entering their market. This column uses the landmark 1956 Consent Decree against Bell Labs to explore whether antitrust enforcement is an effective remedy to the problem. Results show that patents can indeed be used as an entry barrier for start-up firms, and that the compulsory licensing of patents can foster market entry and innovation. However, compulsory licensing is found to be ineffective in markets where dominant firms have other means of market foreclosure.

, 05 October 2016

How did Intel maintain its competitive advantage over AMD? In this video, Michelle Sovinsky explains how vertical constraints helped increase Intel's market share. This video was recorded during the European Economic Association's Congress held in Geneva at the end of August 2016. 

Giacomo Calzolari, Vincenzo Denicolò, 20 January 2016

Intel dominates the market for microchips, an essential component of innumerable electronic devices. This column proposes a structured antitrust test that could tackle the issue of how antitrust authorities make decisions on whether a dominant firm’s rivals can compete for exclusive contracts effectively. This decision depends on the size of the dominant firm’s competitive advantage, which isn’t something that we can easily measure but is something that is correlated with other variables, such as the firms’ market shares.

Hugh Rockoff, 04 October 2014

World War I profoundly altered the structure of the US economy and its role in the world economy. However, this column argues that the US learnt the wrong lessons from the war, partly because a halo of victory surrounded wartime policies and personalities. The methods used for dealing with shortages during the war were simply inappropriate for dealing with the Great Depression, and American isolationism in the 1930s had devastating consequences for world peace.

Vasiliki Bageri, Yannis Katsoulacos, Giancarlo Spagnolo, 23 March 2014

Competition policy is central to the management of a modern economy. This column analyses some key distortions caused by competition policy and argues in favour of criminal sanctions in nations lacking resources for an appropriate fine-tuning of antitrust fines.

Mario Mariniello, 09 November 2013

Since the adoption of the Anti-Monopoly law in 2007, the Chinese competition authorities have stepped up enforcement of mergers and anti-competitive practices. The Chinese Ministry of Commerce has relied heavily on behavioural remedies in merger cases (as opposed to the more efficient structural remedies favoured by the European Commission). Furthermore, merger policy has been used to protect domestic industries from competition. In contrast, Chinese fines for cartels have shown no foreign bias, and if anything have been too low.

Duarte Brito, Ricardo Ribeiro, Helder Vasconcelos, 28 September 2013

Horizontal acquisitions affect prices through two channels: by eliminating competition between the firms involved, and by changing the incentives for collusion in the affected industry. This column summarises recent research that quantifies these two effects using a new methodology – one that accounts for the difference between financial interests and corporate control. A study of the disposable-razor industry shows that small firms have the greatest incentive to undercut pricing agreements. After acquisitions, acquiring firms have greater incentives to collude, whereas other firms in the industry are more likely to defect.

Dennis Carlton, 26 March 2009

How effective is US merger policy? US policymakers lack any systematic quantitative study to answer the question. This column says that merger policy studies should measure the systematic bias in price predictions of the antitrust agency and see what methods work best. Such data-driven assessment would result in analysis replacing opinion as the basis for judging merger policy.


CEPR Policy Research