This presentation by Thibaud Vergé, Professor at ENSAE, Researcher at CREST Paris and Senior Academic Consultant to Charles River Associates ; was made during the Workshop on market studies selection and prioritisation of sectors and industries held on 9 March 2017 at the OECD Headquarters. More papers and presentations on the topic can be found out at http://www.oecd.org/daf/competition/market-studies-workshop-on-selection-prioritisation-of-sectors-industries.htm

1. Strategic considerations for the
selection of market investigations
Thibaud Vergé
Professeur of Economics, ENSAE ParisTech
Adjunct Professor, Norwegian School of Economics and Bergen Centre for Competition Law and Economics
Senior Academic Consultant, Charles River Associates (CRA)

2. Autorité de la Concurrence
Opinion / Market investigations
 Opinions issued upon referral
 Mandatory referrals
 The Autorité must be consulted when a law or regulation contemplates regulating prices or
distorting / restricting competition.
 The Autorité must be consulted on the draft decree of the Conseil d’Etat that sets the pricing
method for some of the regulated legal professions.
 The Autorité makes recommendations for improving access to some of the regulated legal
profession offices (at least every two years)
 Discretionary referrals
 The Autorité may provide an opinion on general competition issues upon request from the
government, the parliament, local authorities, courts, trade unions, professionnal or
consumer associations.
 The Autorité may provide an opinion upon request from a sectoral regulator (ARCEP, CRE,
CSA, …).
 The Autorité is consulted by the Ministry of Justice and the Ministry of the Economy on
prices charged for the services provided by seven regulated legal professions. It may also
issue an opinion on these prices on its own initiative.
 Opinions / recommendations issued on the Autorité’s own initiative.

3. Autorité de la Concurrence
Opinion / Market investigations
 Some statistics
« Investigations » started 2009 2010 2011 2012 2013 2014 2015
Draft laws or regulations 5 3 7 8 8 5 13
Referred by the parliament 1 1 1 0 1 1 0
Referred by a regulator 5 4 5 4 7 8 4
General competition issues 13 15 12 11 7 8 6
Others 36 2 9 15 11 12 1
Own initiative
(share of total)
2
(3%)
3
(11%)
2
(5%)
0
(0%)
2
(5%)
1
(3%)
0
(0%)

4. Autorité de la Concurrence
Own-initiative market investigations
 10 market investigations between 2009 and 2015.
 On average less than 9 months of investigation, about 10 months to a published opinion.
 On average 1.7 case handlers involved.
0 60 120 180 240 300 360 420 480
1
2
3
4
5
6
7
8
9
10
Days to decision Days to hearing

5. Autorité de la Concurrence
Opinion / Market investigations
 What does it mean to select a sector / issue for a market investigation.
 Selecting a sector / issue for an own-initiative market investigations.
 Internet: Online advertising (2010, 2017), online gambling (2011),
 Retailing: affiliation/franchising contracts (2010), category management (2010),
online sales/selective distribution (2012).
 Transport: intermodality / liberalization of regional rail transport (2009), long
distance / interegional buses (2014).
 Healthcare: distribution of pharma products (2013), hearing aids (2016).
 Other cases: cross-selling (2010), impact of norms (2013).
 Expand the scope a referral as the Autorité has always considered that the scope of
the investigation is not limited to the specific question(s) asked by the public
authorities (government, parliament, …), regulator or professional / consumer
associations.

6. How to select / prioritize?
 Selection of markets to investigate will usually depend on various factors
 Resources
 Agency’s powers
 What are the possible consequences of a market investigation?
 Recommendations to public authorities (government / parliament)
 Or, possibility to impose remedies to resolve (at least some of) the competition
problems that have been identified.
 Are the powers of the agency limited to competition policy or do they include other
instruments such as consumer protection or regulatory powers.
 Political pressure
 Not uncommon for agencies to face direct or indirect pressure to open investigations in
several highly visible markets (often in relation to consumer protection issues more than
competition issues).
 Groceries, petrol stations, retail banking, agricultural products (and relations with
downstream industries), …
 Internet / Data related markets.
 Sometimes difficult to reject all requests due to pressure on resources (budget, positions,
…) or career concerns.

7. Possible candidates
 Markets where the recommendations are more likely to be followed by
public authorities
 For instance in relation to a planned reform with a view to provide effective
(and possibly more neutral) guidance to the government / parliament.
 Markets likely to be liberalized in the near future, e.g., energy markets or public
transport markets (passenger trains in most European markets).
 Example: the Autorité issued an opinion on long-distance / interregional buses in
2014, most of the recommendations where included in the “Loi Macron” in July 2015.
 Markets experiencing recent evolutions or where new business practices
seem to be quite common
 Opportunity to provide guidance to firms regarding the legality (or the
competitive risks) of some contractual practices. Try to avoid the risk of
anticompetitive practices taking place.
 Investigation of online markets (e.g., new forms of vertical restraints in online
markets).
 Exclusive contracts on pay-TV / internet-TV markets.
 Partnerships (networks) between health insurance companies and health
professionals.

8. Possible candidates
 Markets on which several similar antitrust decisions have been taken in the
recent months/years
 Take the opportunity to identify problems that seem generalized in a market and to
provide guidance to firms as well as public authorities.
 Example: the 2013 Autorité’s investigation regarding the distribution of pharmaceuticals.
 Could also be an opportunity to make recommendations on how to improve
competition in this market.
 Markets experiencing recent evolutions or where new business practices
seem to be quite common
 Opportunity to provide guidance to firms regarding the legality (or the competitive
risks) of some contractual practices. Try to avoid the risk of anticompetitive practices
taking place.
 Investigation of online markets (e.g., new forms of vertical restraints in online markets).
 Exclusive contracts on pay-TV / internet-TV markets.
 Partnerships (networks) between health insurance companies and health professionals.
 Risk of confusion between competition advocacy and fishing for antitrust
cases.

9. Other considerations
 Broader impact on the economy
 Focus on markets where any change is more likely to benefit consumers more
(for instance markets that account for an important share of consumer
spending directly or indirectly).
 Retail markets, car parts / repairs, healthcare, banking (mortgages, savings, …).
 Benefits: high impact if the investigation leads to improvements on the market.
 Risk: spend resources on large / important markets even if no specific risk has
been identified, need to limit the scope of the investigation (see fourth panel).
 Consistency with government priorities
 Select markets on which public authorities are planning to intervene.
 Benefits: recommendations more likely to be implemented, opportunity to
ensure that regulatory / legal changes will not limit competition on the market.
 Risk: capture.

10. Other considerations
 Sectors investigated in many similar countries
 Investigating a sector where competition concerns have been identified by
other agencies (neighboring countries, for instance taking advantage of
exchanges of best-practices with other agencies).
 But risk of herding.
 Taking advantage of “nicely aligned stars” (good timing)
 Selecting a market / issue that may be important for (some) consumers and
hope that politicians will take the agency’s recommendations on board (close
to important elections for instance!).
 Exemple: the recent investigation of the hearing aids market by the Autorité
(2016).
 But difficult to get the right timing as investigation take about a year and you
thus have to identify a market that may be of interest for candidates more than
a year in advance.
 Quantitative indicators
 See Amelia’s presentation.

11. Strategic considerations for the
selection of market investigations
Thibaud Vergé
Professeur of Economics, ENSAE ParisTech
Adjunct Professor, Norwegian School of Economics and Bergen Centre for Competition Law and Economics
Senior Academic Consultant, Charles River Associates (CRA)