Merger analysis in markets for long-term care

How should competition authorities and regulators approach the issue of mergers among providers of care for the disabled? On September 21, Eric van Damme presented the results of a TILEC study on this topic to an audience consisting of representatives from the Dutch Competition Authority (NMa), the Dutch regulator for the health sector (NZa) and the Dutch organization of providers of care for the disabled (VGN). The latter organization had commissioned the report. The main conclusions were that, while the EC guidelines for the evaluation of horizontal mergers can be broadly followed, the actual implementation has to take the institutional characteristics of the sector into account. Indeed, in the Netherlands, some important aspects call for a cautious approach: (i) the service is almost exclusively supplied by not-for-profits (see Prüfer, 2007); (ii) health care provision and health care insurance are provided by different entities, although the two services are clearly interdependent; (iii) the 'zorgkantoor', a public monopsonist on the health care provision market, plays an intermediating role; (iv) the NZa has the option of regulating any firm that would become dominant as a result of mergers; and (v) there is a lack of data about service quality and patients' behavior. Lessons for all the participants involved were drawn and an agenda for future research was discussed.

ITS conference

The present and the future of telecommunications and internet regulation was debated in detail in Istanbul in the first week of September during the regional conference of the International Telecommunications Society (ITS), with participants from academia, firms and public institutions, both from within and outside Europe. TILEC was well-represented. Filomena Chirico addressed the topic of network neutrality from a European perspective, discussing why the idea that a network should treat equally all contents has been so furiously debated in business and policy circles in the US, while generating only limited passion in Europe (see TILEC DP 2007-030). Ilse van der Haar's presentation dissected the regulatory principle of technological neutrality, which, she argues, is currently based on four different rationales, a figure that accounts for the various interpretations, and misunderstandings, of the principle (see TILEC DP 2007-009). Finally, Maartje de Visser focused on questions of institutional design, in particular the need for addressing the issue of the accountability and legitimacy of the European Regulators Group (see TILEC DP 2007-028).

34th annual conference of the EARIE

How can TILEC members best validate and disseminate the results of their research? Publications in international, peer-reviewed, scientific journals and participations to major international conferences clearly contribute to the realization of TILEC's goal of "excellence in research". Earlier this month, TILEC was well-represented at the 34th annual conference of the European Association for Research in Industrial Economics (EARIE), which took place in Valencia, Spain. EARIE was created in 1974 with the aim of providing a professional society for academics and practitioners with an interest in the field of industrial economics.TILEC members Cédric Argenton, Lapo Filistrucchi, Jens Prüfer and Bert Willems, along with extramural fellow Evgenia Motchenkova presented their recent pieces on topics as varied as exclusivity contracts, habit-driven consumer behavior, mergers among non-profit organizations, electricity plant divestitures and anti-cartelization leniency programs. The keynote speakers, Greg Shaffer, Suzanne Scotchmer, and Lars-Hendrik Röller, respectively addressed the issues of loyalty rebates and selective price cuts, incentives for innovation beyond intellectual property rights, and the political economy of competition policy, all subjects falling within the scope of TILEC research programme, whose relevance thereby got a marked confirmation.

A first analysis of the Microsoft judgment

The ruling of the European Court of First Instance on September 17 has been hailed as a quasicomplete victory for the European Commission in its battle with Microsoft. According to Pierre Larouche, who contributed an opinion article to Het Financieele Dagblad on September 20, it remains to be seen whether it will still resonate in the years to come. Indeed, while the quality of this judgment is to be commended, the Court sometimes seemed submerged in the technicalities of the case. The Court remained very close to the facts, perhaps in an attempt to reduce its exposure to criticism from the European Court of Justice upon appeal, which is limited to points of law. For instance, as regards the disclosure of interoperability information (first issue), observers were expecting the Court to set out clear conditions under which competition law can trump intellectual property rights. The Court preferred instead to recast the reasoning of the Commission decision to conclude that in any event, the Commission was correct even under the narrow set of conditions that recent court cases suggested. As regards the tying of Media Player to Windows (second issue), the Court literally constructed the legal reasoning for the test used in the Commission's decision, thereby filling the gap. The test itself is hardly controversial, however. For the remainder, the Court stuck to the specific facts of the case and confirmed the findings of the Commission. This judgment is therefore unlikely to bring legal disputes to rest, and it is certain to elicit criticism for its conservatism. Future Commission decisions in high-tech sectors will probably continue to be challenged before the Court.

Pierre Larouche appointed special adviser to Commissioner Reding

The European Commission has appointed TILEC director Pierre Larouche as special adviser to Viviane Reding, member of the Commission responsible for Information Society and Media. Pierre will provide advice to the Commissioner and her staff on certain aspects of the Commission's upcoming proposals for reform of the European regulatory framework for electronic communications.

Two upcoming TILEC-AFM seminars on insider trading

Does legal insider trading (e.g. by a director when authorized by the board) contribute to market efficiency? Can supervision help eliminate abnormal stock returns ahead of news announcements, thereby increasing market "cleanliness"? The TILEC-AFM research network on financial market regulation will soon organize two seminars on these important issues. The first seminar, entitled "Market cleanliness and legal insider trading in Dutch financial markets", will be held at the Autoriteit Financiele Markten (AFM, the Dutch financial market supervisor) in Amsterdam on October 2. Two speakers, Bas ter Weel (AFM) and Jérémie Lefebvre (TILEC), will present their recent research, discussing the impact of the market abuse European directive on market cleanliness and the impact of legal insider trading on Dutch stock markets. The second seminar will be held at TILEC on December 14. Eric de Bodt (Université de Lille, CORE & IAG Louvain School of Management) will discuss the impact of legal insider trading on US stock markets, while François Kristen (University of Amsterdam) will highlight the corresponding legal issues. More information about those two events as well as other activities of the TILEC-AFM research network can be found here.