EU pharmaceutical strategy: innovative medicine?

The European Commission is setting out a road map of interlinked policies across various sectors, with the stated aims of: (i) improving outcomes for Europeans; (ii) increasing competition and the competitiveness of European businesses; and (iii) supporting European innovation....

State aid spotlight on tax: the General Court’s judgments on Fiat and Starbucks

In 2015, the European Commission ordered Starbucks and Fiat to each pay €20m–€30m in the Netherlands and Luxembourg, respectively, as their tax arrangements were found to constitute illegal state aid. On 24 September 2019, the General Court upheld the Commission’s Fiat decision, but annulled the Starbucks decision. What were the key economic issues in these cases, and what are the implications of the judgments?

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Common ownership and market entry

Investors’ holdings in multiple firms give rise to what is known as ‘common ownership’. Are the strategic decisions of competing firms affected by the presence of common ownership? Albert Banal-Estañol of Universitat Pompeu Fabra, Barcelona GSE and City University of London, and Melissa Newham and Jo Seldeslachts of DIW Berlin and KU Leuven, provide evidence on the impact that common ownership has on market entry, one of the most important strategic decisions that firms make, in US pharmaceutical markets

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Death of an old star…evolution of a new one?

‘Superstar firms’ are increasingly dominating markets. Network effects may consolidate the position of these firms, but they can also help new entrants to undermine them. In some markets, network effects will both dampen competition ‘within’ the market and spur competition ‘for’ the market. Francesca Arduini, Oxera Analyst, argues that we can employ the framework of evolutionary game theory to derive four key policy insights into this topic

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Regulation 2018: ‘back to basics’

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

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Discrimination or differentiation? Price discrimination as an abuse of dominance

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

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By object or by effect: revisiting pharmaceutical patent settlements after paroxetine

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?

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Legitimacy and renationalisation: where next for utility regulation?

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?

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No free rides? Platform bans in light of the Coty case

Are there good reasons for manufacturers to prevent retailers from distributing their products through third-party online platforms? On 6 December 2017, the European Court of Justice delivered a ruling on Coty, finding that, under certain conditions, manufacturers of luxury brands can restrict sales through particular online channels without raising competition concerns. What is the economic case for and against such restrictions, and is the Court’s judgment consistent with the economics?

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De-stressing distressed investments: portfolio returns in restructuring aid cases

In the EU, state intervention to assist firms in financial difficulty is often justified by demonstrating that the aid is compatible based on the European Commission’s Rescue and Restructuring Aid Guidelines. However, these Guidelines impose restrictions on firms’ activities, which can tie the hands of the beneficiary, limiting the options to ensure a return to financial viability. But can state intervention be justified on commercial grounds by focusing on the state’s overall portfolio of assets?

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