‘It’s as much about winning hearts and minds of staff and decision-makers in the public authority as winning specific arguments.’
In this Q&A, Oxera economic experts discuss the success stories and key issues our clients face in market investigations.
What key issues do our clients face with market investigations?
Matthew Johnson Market investigations can have a big impact on clients. Competition authorities can launch inquiries because there’s a problem with the whole market, not just one firm’s behaviour.
Dr Helen Jenkins Some investigations lead to relatively painless remedies, while others can spark the break-up of businesses, as occurred with BAA.
Reinder Van Dijk Some clients welcome investigations because problems are preventing their markets from working well. Sometimes it takes an external body like a competition authority to solve these issues. Individual market players can’t change the market equilibrium on their own.
Jostein Kristensen Market investigations allow economists to have a lot of input. That’s because the legal framework is relatively light and designed to allow the Competition and Markets Authority (CMA) to get to the heart of the substantive problems affecting the market.
What are the main client groups Oxera works with?
RVD We work a lot with law firms. They advise their client on legal and process issues, while we help the partners and associates with economic issues. To help protect the client’s commercial interest, we’ll assess the areas where they face the greatest risk.
MJ When we collaborate with lawyers, we aim to understand where the economic case underlying their client’s position is strongest. Often, we look for a discrete piece of economic analysis to submit to the CMA. We also work with the CMA’s own economists, answering their queries and requests for data.
HJ With corporate clients, we usually deal with an internal legal representative, like the general counsel or specialised competition counsel. We work together and have regular discussions.
JK When we help public bodies, we work with someone who’s focused on a particular research area of the investigation. The public body often expects the parties to provide economic research that is robust to criticism and directly relevant to the theories of harm being investigated.
What are our clients’ most pressing needs?
JK To minimise the risk of commercially painful remedies being imposed on them.
HJ Many of our clients are keen to minimise damage to their reputation—especially in sectors that the media portrays in a bad light, for example energy suppliers and banks.
RVD Sometimes clients are focused less on protecting the status quo and more on using the investigation to drive change. This could be removing restrictions that are stopping them growing and competing against other large businesses.
MJ Our clients need a consistent approach to their submissions and responses to CMA questions. And they need to be from a sound economic perspective.
What are the most valuable benefits we provide our clients?
RVD We support clients in their day-to-day dealings with the public authority. We translate industry language into something they and lawyers can understand.
MJ It’s as much about winning hearts and minds of staff and decision-makers in the public authority as winning specific arguments. That’s where our good relationship with the CMA and other regulators, strong reputation and experience across a large number of market investigations help. These also give us credibility.
JK Business people and external lawyers sometimes try to answer CMA questions in a way they think will lead to positive outcomes. This can create an inconsistent economic position and lead to the client losing credibility with the public authority. It’s our job to make sure clients and lawyers give the CMA a coherent and consistent overall vision that makes sense from an economic perspective.