The Directorate General for Competition at the European Commission enforces competition law in the areas of antitrust, merger control, and state aids. This year’s article provides first a general presentation of the role of the Chief Competition Economist’s team and surveys the main achievements of the Directorate General for Competition over 2016/2017. The article then reviews the economic work undertaken in one merger case between Dow/DuPont, which raised specific issues related to innovation, as well as in an antitrust case on parity clauses related to Amazon e-books.
The Directorate General for Competition at the European Commission enforces competition law in the areas of antitrust, merger control, and state aids. This year's article provides first a general presentation of the role of the Chief Competition Economist's team and surveys some of the main achievements of the Directorate General for Competition over 2018/2019. The article then reviews the Siemens/ Alstom merger, the Google Android case, as well as two state aid cases that related to a public service compensation for obligations that involved press delivery in France and Italy. Keywords Antitrust • Competition policy • Mergers • State aid • European champions • Google • Net avoided costs This article provides first an overview of the activity of the Directorate General for Competition of the European Commission (DG Competition) in 2018/2019 that is related to antitrust, mergers, and state aid (Sect. 1). In the following sections, the contribution by the Chief Economist Team (CET) to the economic analysis in
Considering the US railroad industry, which is characterized by seven integrated firms that provide freight services on tracks they own and maintain, this paper provides a structural model that allows to evaluate the potential effects of opening the rail network to new firms on prices and investment incentives. In particular, we propose a framework for analyzing the tension between static efficiency (pricing behavior) and dynamic efficiency (investment behavior). The investment behavior is rendered endogenous by means of a dynamic model where the current investment depends on the expected future profits. We then use a forward simulation procedure to analyze the effect of an open-access market structure where a new firm uses the network of one of the biggest railroad firm. Under a simple access charge equaled to the marginal cost of access, investment in network infrastructure decreases by 10% per year, leading to a significant decrease in network quality over time. Under this setting, despite the increase of price competition, the decrease in network quality leads to a fall in consumer welfare. Other types of (more evolved) access charges might even allow to relax the tension between static efficiency and dynamic efficiency, allowing more price competition while preserving investment incentives. This topic deserves further research and is beyond the scope of this paper.
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