Reform of Article 82: where the link between dominance and effects breaks down

The reform of Article 82 is high on the EU competition policy agenda. Many commentators are of the view that abuse of dominance cases should move away from the current form-based approach to an effects-based approach. This article explores one of the fundamental shortcomings of the current approach—the use of dominance determinations as a shortcut to infer anti-competitive effects.

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Consumer responses: how quick are they?

Ignoring the potential delayed reactions of consumers when thinking about investment, pricing, or competition cases, or when evaluating changes in consumer behaviour, could lead to biased policy conclusions. This article highlights these limitations and presents ways in which they may be overcome. It also discusses implications for undertaking future modelling exercises.

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Future secure? Why asset managers locate in London

The UK is the largest centre for asset management in Europe, with assets of at least £2.8 trillion under management, and the industry is a major source of income and employment in the UK economy. A recent Oxera study has examined the competitive position of the UK as a centre for asset management, and the major influences, including regulation and tax, which may affect this position in the future.

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Seeking the rationale behind structured finance

While traditionally associated almost exclusively with balance sheet management by financial institutions, structured finance is now being embraced by an increasing number of companies as their financing method of choice. Yet the exact circumstances in which these complex arrangements make sense are not well understood. This article sheds some light on a topic that is at the frontier of financial innovation.

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The EU electronic communications framework: is it on track?

Across Europe, around 450 detailed market reviews are taking place, as the national regulatory authorities (NRAs) assess competition and propose remedies in at least 18 different telecoms and electronic communications markets under the new EU regulatory framework. The European Commission has the power to veto the NRAs’ decisions. This article looks at the NRAs’ progress and the Commission’s justification for the veto decisions it has taken so far.

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Financing investment: can regulation adapt to new challenges?

Water, electricity and transport networks in the UK are facing substantial investment requirements relative to historical levels, reflecting the need to replace ageing infrastructure, and meet environmental obligations and demand for new capacity. While the regulatory regime has to date enabled substantial investment to be delivered, growing pressure on balance sheets as companies issue debt to finance this expenditure raises questions about whether the framework will prove sustainable in the future. This article examines options for change to address this challenge.

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Plugging the carbon productivity gap

Productivity trends are used to explain the changing structure of the economy and to compare the UK’s performance against its peers. When the same concept is applied to energy, and ultimately to carbon, it becomes a clear measure of progress towards achieving long-term greenhouse gas emission targets. The results for the UK electricity sector suggest that, if the government’s existing targets are to be met, the current policy programme will have to be expanded during the next 10–15 years, at a cost of several billions.

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Profitability analysis and competition policy

Professor Paul Geroski, Chairman of the UK Competition Commission, explains why profitability analysis is of importance to competition policy. He discusses various applications of what is, in essence, backward-looking profitability analysis to mergers and market investigations, and then explores the scope for using forward-looking profitability analysis in merger investigations.

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What is the potential for commercially viable renewable generation technologies?

This report formed part of the Department of Trade and Industry’s 2005 review of the Renewables Obligation—the government’s main policy instrument for encouraging electricity generation from renewable sources. It focused on the potential, over time, for some forms of renewable electricity generation to become commercially viable in their own right without requiring support from the Renewables Obligation. The economic viability of future investments in renewable electricity generation will depend on the interaction between the costs of building and operating a renewables project, and the revenues that it could be expected to earn. Drawing on the results of a parallel study carried out by Enviros Consulting to model future renewable generation costs, Oxera’s analysis looked at the major factors affecting commercial viability and estimated the financial support required by different types of renewable generation. How these levels of required support change over time could have important consequences for the renewable generation market and the government’s wider objectives for renewable generation. These consequences were investigated together with potential adjustments to the Renewables Obligation to improve its future efficiency and effectiveness.

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Renewables support policies in selected countries

This paper, prepared for the National Audit Office, on international renewables support policies provides summary introductions to renewables programmes in other countries. It compares, on a common financial basis, the level of the public subsidies offered in those countries. For the associate report on the performance of the Renewables Obligation and capital grants, click here .

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