Taking Britain to net zero: Ofgem’s decarbonisation action plan

On 3 February Ofgem, the energy regulator for Great Britain, published its decarbonisation action plan to support the UK in achieving net zero carbon emissions by 2050. Outlining Ofgem’s role in facilitating decarbonisation, the plan lists the trade-offs faced and nine actions that the regulator will take. We look at what the plan says and its implications

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Consumer protection in the online economy

The Netherlands Authority for Consumers and Markets (Autoriteit Consument en Markt, ACM) has recently published guidelines for online firms and other interested parties, indicating its view on which online business practices are allowed within the boundaries of consumer protection laws— and which are not. Annemieke Tuinstra, Senior Economist in ACM’s Chief Economist Team, discusses the economic and psychological concepts behind the guidelines

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Consumer vulnerability: making sense of this new ground for regulatory intervention

In February 2019, the UK Competition and Markets Authority (CMA) published a major study on consumer vulnerability, which puts vulnerability firmly on the agenda of regulators and firms. Peter Andrews, Oxera Senior Adviser, considers what is driving this focus on vulnerability, what its implications are, and the principles under which the concept of vulnerability would lead to intervention

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Regulation and policy in Italy: don’t throw away the baby with the bath water!

The Italian water sector is undergoing a period of significant change. The sector does not require radical intervention in its ownership structure to improve investment levels and quality standards, but rather a package of measures to improve the management model and enhance independent regulation. How can tariff regulation be extended nationwide, and how can existing industry fragmentation be overcome?

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Digital platform regulation: What are the proposals across Europe?

Calls to ‘do something’ about tech giants are getting louder. Some suggest that breaking them up is the best way to go, but such strong intervention is absent from the most developed regulatory proposals seen so far. Taking into account recent prominent reports from (or for) the European Commission and several national competition authorities, what are the main proposals on the table, and are they plausible?

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Conduct risk management—high five?

Financial services providers around Europe are subject to clear expectations from regulators regarding conduct risk (or ‘the risk of misconduct’ that can cause poor consumer outcomes or undermine market stability or competition). What are these expectations, and how can providers meet them? In our experience, managing conduct risk requires a new toolkit based on behavioural economics, business model analysis, machine learning, competition economics, and good governance.

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Risky business: political uncertainty and the cost of capital for regulated firms

Statements by politicians about nationalising or intervening in the functioning of regulated industries have attracted substantial media attention in recent times, leading to an increase in political and regulatory risk for regulated industries. A case study focusing on National Grid, the energy transmission company in the UK, suggests that increased political and regulatory risk can affect the valuation of regulated utilities through a combination of lower expected cash flows and a higher cost of capital

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EU broadband: co-investing in a faster future

Rolling out very high-capacity networks (VHCNs) across Europe to deal with ever-increasing broadband demands is challenging. To incentivise investment, the European Commission has introduced new conditions relating to co-investment agreements, including a promise (subject to certain conditions) not to regulate SMP operators that enter into an investment agreement with at least one other operator. Peter Culham, Senior Adviser, Felipe Flórez Duncan, Partner, and Michael Weekes, Senior Consultant, ask: is it enough to unlock investment in VHCNs?

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Water sector draft determinations: a stocktake

Ofwat’s July 2019 draft determinations for water companies in England and Wales signal that the regulator is toughening its stance on allowed returns, cost efficiency and performance incentives. Credit rating agencies have provided their own thoughts on what this means for the sector. We go under the bonnet to explore the detail

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Sharing is caring: supporting the roll-out of 5G networks

Early 5G services are being launched in major towns and cities around the world, providing enhanced mobile broadband services to users. However, further investment in new network infrastructure will be required to support widespread deployment of 5G and take full advantage of the technology’s transformational capabilities. Given the significant costs involved, network sharing agreements may be increasingly important. Will this greater industry collaboration have an impact on head-to-head competition? If so, how should this tension be assessed?

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