PresentationsKeynote
Mike Walker from the Competition and Markets Authority explained that dealing with vertical restraints means facing three challenges. First, vertical restraints are mostly analyzed when the exercise of horizontal power is affected by them. The Amazon market place case is a good example. The most favored nation clause affected the horizontal market, by reducing the incentive for both competing platforms and retailers to lower their prices.
Second, there is a need to find a theory of harm that is incentive compatible. Competition Authorities need to understand why companies enter into vertical agreements. For example, when analyzing the Apple ebook case, the incentive that led publishers to subscribe to Apple agreements was Amazon’s ebooks pricing policy.
Third, the question of efficiencies. Vertical agreements are more likely to generate efficiencies and agencies tend to underestimate their importance when conducting competitive analysis of vertical restraints. The actual tendency to attempt to fit any conduct in the "by object" box is dangerous and would bring us back to a time when the wording of an agreement was the only decisive factor in determining whether a conduct is anticompetitive or not. And there is shockingly little empirical analysis on the subject.