The UK is experiencing a backlash against the liberal orthodoxy of utility regulation of ten years ago, which was based on privatisation, competition and deregulation. A recent Agenda article on the legitimacy of sectoral regulation in the UK asked ‘Is it policy, ownership, industry structure, governance, financing or regulation that is driving the problem?’ Martin Cave, Visiting Professor, London School of Economics, provides his perspective
When does price discrimination by a dominant firm amount to an abuse? Is the mere existence of a price difference sufficient? A recent ruling by the Court of Justice of the European Union (CJEU) provides some guidance on these questions, highlighting the ability to distort competition as a key criterion for a finding of abuse. Taking an economic perspective, we look at the CJEU’s approach and consider the implications for other cases of discrimination more broadly
On 8 May, the High Court in London issued a judgment on the Signia Wealth v Vector Trustees Limited case. Mr Justice Marcus Smith determined that the fair value of the 49% stake in Signia Wealth owned by Ms Nathalie Dauriac (represented by Vector Trustees Limited ) was £790k—in sharp contrast to the £21m claimed by Ms Dauriac. This valuation decision provides an important precedent on the choice of the appropriate valuation method and the importance of taking into account relevant contractual terms in the valuation exercise
Are patent settlement agreements in the pharmaceutical sector an infringement of competition law by object? Could they be an infringement by effect? The March 2018 judgment of the UK Competition Appeal Tribunal (CAT) on the paroxetine case, which referred these key questions to the Court of Justice of the European Union (CJEU), sheds some light on the matter. What can we learn about both the judgment and the questions in light of the growing economic literature on patent settlements?
How does the presence of consumer protection affect decisions at retirement? Oxera undertook a behavioural experiment for the UK Financial Services Compensation Scheme (FSCS) to understand the role of FSCS protection—in both how consumers select their retirement income products, and whether they choose to obtain financial advice. This revealed how people behave in a realistic environment, providing insight into actual consumer behaviour and the importance of the FSCS in their decision-making
How best to create an enduring framework for investment in world-class broadband connectivity in the UK?
The Future Telecoms Infrastructure Review by the UK Department for Culture, Media and Sport (DCMS) is investigating ‘what longer term changes could be made to market structures and policy frameworks to encourage investment’, and is aiming to reach initial conclusions in the summer. In the spirit of open and constructive debate, Emily Clark, Chief Economist at BT Group, sets out BT’s emerging thinking on what UK policymakers can do to support investment in ultrafast broadband networks across the UK
UK regulated utilities are facing the tightest scrutiny that they have experienced in years. A tit-for-tat battle between the two main political parties in proposing changes to address public concerns has culminated in the Labour Party proposing renationalisation and the Conservative Party greater regulatory supervision. So what is the regulatory outlook for customers, companies and their investors in the context of the renationalisation agenda and other recent developments?
In 2017 the European Commission imposed a record €2.4bn fine on Google for abusing its dominant position in online search by giving preferential treatment to its own comparison shopping service. Such complex cases of leveraging of market power also arise in other digital markets, and raise several questions. How should competition authorities weigh benefits to consumers against harm to competition and competitors? How can competition concerns be remedied without affecting incentives to innovate?
In the UK, complex decisions by economic regulators for their respective sectors are reviewed and appealed according to bespoke regimes, and decided by specialist bodies such as the UK Competition and Markets Authority (CMA). Dr Gavin Knott, Director (remedies, business and financial analysis) at the CMA, looks at the current appeal regimes and how they might develop in future
Investment banks face potential conflicts of interest when conducting initial public offerings (IPOs) of shares, as they provide services for both issuing firms and buy-side investors. Tim Jenkinson and Howard Jones of the Saïd Business School, University of Oxford, and Felix Suntheim of the UK Financial Conduct Authority (FCA), use data gathered as part of the FCA’s market study into investment and corporate banking to shed light on the extent to which conflicts of interest drive allocation decisions