LAW AND ECONOMY: COMPETITION POLICY - COMPETITION AUTHORITIES - CUSTOMER BENEFIT - PRICE INCREASE - MERGER INVENTIONS - CARTEL PROHIBITION

How to measure the direct benefits of competition policy interventions?

Over the recent period, the number of competition authorities estimating the direct customer benefits of their interventions has increased. The estimation approach used by the European Commission is inspired by the guiding principles issued by the OECD. It consists in measuring the customer benefits from the price increases avoided due to the Commission’s merger interventions and cartel prohibitions. According to the Commission estimates, customer benefits averaged 0.06%-0.09% of EU GDP over the period 2012-2017. The large annual fluctuations in customer benefits are explained by changes in the number of decisions taken and the size of the markets affected.

I. Introduction 1. In recent years, there has been an increased concern about the concentration of market power in a small number of large companies, especially in high-tech industries, creating risks of collusion and abuse of market power. The ability of competition policy authorities to identify and stop such anticompetitive behaviour has been put into question. Within this context, it is not straightforward to convince the wider public of the benefits of competition policy for society as a whole. Nevertheless, competition authorities are making an effort to convey to the broader public what is at the heart of their mission: the promotion of competition in product markets to the benefit of the consumers. 2. Several national competition authorities estimate the direct benefits of

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Adriaan Dierx, Fabienne Ilzkovitz, How to measure the direct benefits of competition policy interventions?, February 2019, Concurrences Review N° 1-2019, Art. N° 88874, pp. 46-51

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