INTRODUCTION

A g u i da n c e docum e nt for ICN members on market studies practice and process, and An examination of ICN members' experience in specific sectors of t e econom!" In some countries, market studies have a long history. In the United States, they were initiated at the beginning of the 20th century, and in Japan, they have been conducted since !"#. $orldwide at least "0 competition authorities %out of the 00 plus I&' members that enforce some kind of competition law( use market studies as part of their portfolio of tools. )or many of these authorities, market studies are a relatively new tool. *here has been one significant worldwide comparison of market studies, conducted by the +,&- by way of a .oundtable on /arket Studies in June 2000. *he +,&- .oundtable concluded that market studies were generally performed for one of two reasons1 either as a lead2in to enforcement action when anticompetitive behaviour is suspected in a sector but competition authorities do not know the e3act nature and source of the competition problem4 or as a lead2in for competition advocacy, where no violation of competition laws is suspected but it appears that the market is not functioning well for consumers. *his may be due to public restrictions on competition or inefficient market e5uilibrium. In such cases a market study can identify the root causes of any dampening of competition and formulate appropriate remedies. *hese can include recom m endati

ons to government or other decision makers for regulatory or policy change, or encouraging market participants to take voluntary action to stimulate competition. +ther possible purposes for conducting market studies may be1 6 to build technical e3pertise about markets 7 this may be particularly useful for markets that are new or fast2moving, or to take account of recent developments 6 to address public interest or concern about markets, for e3ample, where there are allegations of anticompetitive conduct or agreements that a market study can reveal to be unfounded 8 to reduce uncertainties about how the authority will apply competition principles again this may be particularly useful in new or fast moving markets, or those where there have been recent changes 6 to develop thinking about proposals for future regulation so as to be able to advocate to minimise adverse effects on competition.

)or those countries with combined competition and consumer authorities, market studies can also be a good way to develop the link between consumer and competition policy. Internationally, market studies have been used in a variety of ways, including all of the purposes mentioned above. *hey are a fle3ible tool that can, when used efficiently and effectively, address a wide range of needs. 9uilding on the work of the +,&-, this :ro;ect gathered data on market studies practice among I&' members on the basis of a set of directly comparable datasets relating to the definition and purpose of market studies, powers to conduct studies, their selection, process, and outcomes, and measurement of their impact. *he :ro;ect proceeded by way of a 5uestionnaire sent out to I&' members. < total of =! responses were received from =# ;urisdictions. +ne of these responses indicated that the ;urisdiction concerned does not undertake market studies work, so it is not reflected in the report. *he remaining =0 responses were analysed and are summarised in this report. *his report concludes with a number of suggested areas for further I&' work in this field. >eadline findings of this :ro;ect are that1 6 there are varying formulations of powers to conduct market studies, and to gather information for studies, but there seems no clear need, or appetite, for greater convergence of legislative powers 6 most authorities find that market studies are useful for collecting information and developing thinking that informs their enforcement work
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6 there is scope for greater transparency on the process and findings of market studies 7 and being more transparent may help authorities make the most of their studies and any advocacy that comes out of them 6 where the success of a study is dependent on follow2up advocacy, it pays for authorities to make smart decisions about the topics they choose to study and the way that they seek to influence decision2makers 7 a commitment by government to consider market study recommendations may be useful for some authorities 6 there may be more scope for authorities to use studies to advocate voluntary changes in business practice where conduct falls short of infringement of competition law 6 advocacy may be more successful if authorities have clearly identified the benefits, or have estimated the likely costs and benefits of their recommendations 7 e3perience of actually doing this appears largely non e3istent or relatively new and this may be a fruitful area for e3perience sharing. *he I&' now has 2# members from ;urisdictions, a membership that 5uite literally spans the globe and includes nearly all of the world?s competition agencies. *wo recent members are from the <mericas1 ,cuador?s Super intendancy for the &ontrol of /arket :ower4 and Uruguay?s &ommission for :romotion and -efence of &ompetition. +ther recent members include agencies from @uernsey, /alawi and the :hilippines. <s membership increases, meaningful participation in I&' work also grows apace. *his past I&' year, for e3ample, almost 00 member agencies attended an in2person I&' conference or workshop, and most attended multiple events. <lso during the past I&' year, #0 member agencies and 00 '@<s actively contributed to creating I&'?s 20 = work product, which includes the following1 6 >andbooks, such as a chapter on international cooperation and information sharing for the <nti&artel ,nforcement /anual, and a new chapter on the role of economics and economic evidence in merger analysis for the Investigative *echni5ues >andbook for /erger .eview. /embers and '@<s also prepared two draft chapters for the <gency :ractice /anual, including one on knowledge management and one on human resources management, and a chapter on the analysis of e3clusive dealing arrangements for the Unilateral &onduct $orkbook. 6 Survey .eports on ,nforcement *ools and *ransparency :ractices, which provide comprehensive overviews of the range of agencies? investigative tools and the ways in which agencies provide transparency during their investigations. *he I&' also ;oined forces with the &ompetition &ommittee of the +rganiAation for ,conomic &ooperation and -evelopment to prepare a comprehensive study of international enforcement cooperation. *he I&' report discusses future I&' work that could best help agencies address the challenges of engaging effectively in cross border enforcement cooperation. *he :olish &ompetition <uthority, as part of a special pro;ect they prepared as 20 = annual conference host, prepared a survey report on member e3perience working with courts and ;udges.
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6-raft .ecommended :ractices for &ompetition <ssessment, on the process and analytical framework for conducting competition impact assessments, were presented for discussion. 6*hree new video training modules for I&'?s virtual university were developed1 planning an investigation4 competition advocacy4 and challenges faced by competition agencies in developing economies. 6*he I&' continued to create self2assessment tools to help members identify areas for reform, including this year a tool for members to use to analyse their merger analysis practices, based on the /erger <nalysis .ecommended :ractices and /erger @uidelines $orkbook. <nother noteworthy achievement in 20 = is the development of a programme to support I&' members who want to engage in reforms. I&' &hair ,duardo :BreA /otta introduced this support programme, and this past year he worked with the I&'?s Steering @roup to develop principles and processes to guide the programme. <t member re5uest, the I&' will provide a formal letter describing the member?s proposed reforms? conformity with I&' best practices. In some cases, this may involve presentations or in2country support. *his past year, the I&' provided public comments on the proposed reforms to the merger regime in :eru and on merger guidelines for the &+/,S< &ompetition &ommission. #uture $ork programme <lmost without e3ception, the I&' begins each new year by addressing a new area of competition law. *his past year, I&' tackled new work in the area of international enforcement cooperation, investigative process, courts and ;udges, and competition assessments. *hese new pro;ects reflect a broadening of the I&'?s work and a willingness to seek a degree of synthesis of issues across different enforcement areas. *hese pro;ects, and the competition assessment pro;ect in particular, demonstrate a strong confidence in the I&'?s voice and messaging, and ability to encompass all aspects of what enables a competition agency to accomplish its mission and promote competition principles. *his year, however, instead of addressing new topics, the I&' will instead include a focus on a new audience1 economic policymakers. +ne workstream is already under way1 the best practices for competition impact assessments. *he I&' will also engage in new efforts to help members promote the importance of sound competition policy with their policymakers, including through a compendium of e3amples of 5uantitative evidence of the benefits of competition, and will seek opportunities to promote competition policy in the international arena as well. *he I&'?s core work in the area of mergers, cartels, unilateral conduct, advocacy and agency effectiveness will continue. >ighlights include1 6advocacy 7 practical guidance on e3plaining the benefits of competition to the legislature, a framework for promoting competition culture and the competition impact assessment best practices4 6agency effectiveness 7 stocktaking of agencies? investigative processes and confidentiality in particular, three new video training modules, road2testing, and finalising chapters on knowledge and human resources management4
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6cartels 7 discussion call series on settlement instruments and another on the type of conduct that should be investigated as a cartel, updated chapters on digital evidence gathering and implementing an effective leniency programme for the <nti2&artel ,nforcement /anual. *he annual cartel workshop will be in &ape *own on C7 0 +ctober 20 =4 6 mergers 7 foundation work product for enforcement cooperation guidance and promoting implementation of e3isting I&' merger work product4 and 6 unilateral conduct 7 a new chapter on loyalty rebates and discounts for the Unilateral &onduct $orkbook and continued work on e3isting chapters on ob;ectives of unilateral conduct laws, assessment of dominance, predatory pricing, and e3clusive dealing. *here will be a a workshop on e3clusive dealing analysis on 07 ! September 20 =, in Stockholm, aimed at 9altic SeaD,astern ,urope agencies. *his work is for consideration at the ne3t I&' annual conference, which will take place from 2=72C <pril 20 " in /arrakech, /orocco.

Definition and purpose of market studies *he :ro;ect proposed a draft definition of market studies. .esponses indicated broad support %#! per cent( in favour of the draft definition. /embers were asked to state the purposes for which they conduct 2market studies, selecting from a list of possible purposes. *he highest scoring responses were for use of market studies1 6 6 as preparation for intervention in the legislative process to enhance knowledge of the sector

6 to investigate suspected market failure that cannot be assigned to a specific undertaking. Use to define markets for enforcement action scored lowest, followed by use for assessing the state of competition in the market. %o$ers to conduct market studies /embers were asked a series of 5uestions about their overall powers to conduct market studies, and their powers to collect information for market studies. Satisfaction levels with e3isting powers were tested, and comments sought as to what additional powers, if any, would be useful. $e learned that there are a range of formulations of powers to conduct studies. Some members have clearly spelled2out statutory powers. +thers rely on a general function, or conduct studies without any specific legislative function. -espite this variation, members seem to be broadly satisfied with their powers to conduct market studies, including
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information gathering powers. /ost respondents %#E per cent of those that responded to the 5uestion( can compel the supply of information, but those that cannot seem content with seeking information on a voluntary basis. In addition, some ;urisdictions with compulsory powers noted that they do not always use them for market studies. &e'ection of market studies /embers were asked about the sources of their ideas for market studies, and the factors that influence selection of a market or practice for study. *hey were asked to select from a list of possible sources and factors. .esponses indicated a range of sources for ideas for market studies. Just over half of the respondents can be instructed by others to conduct studies. )or a few, this is their only source of study ideas, but most are also free to select markets to study on their own initiative. *he two highest scoring factors that influence market study selection were Fimpact on consumersF and Fmarket importanceF. *he two lowest scoring factors were Fdegree of product differentiationF and Fproduct life cycleF. (arket studies process /embers were asked a series of 5uestions about their market studies process. Guestions covered1 6 6 6 6 information gathering stakeholder engagement and communication timeframes for market studies use of third parties to undertake market studies work studies, and

6 whether members have a standardised process for conducting market guidance covering this process

6 numbers of market studies conducted and resource dedicated to conducting studies 6 overall satisfaction with the process for conducting studies.

Responses indicated t at) 6 e3isting market research, administrative data, in2depth interviews and large statistical surveys are the most common ways to collect information, and focus groups and mystery shopping are the least common ways to collect data 6
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the ma;ority of respondents have used information obtained in their market studies work

to inform their enforcement work 6 most respondents provide stakeholders with information on the reasons for selecting markets for study, the purpose and scope of the study, and the reasons for recommendations 6 fewer give details of the stages involved in the study, the study timetable, any progress reports and the names of members of the study team 6 the most common ways to engage with stakeholders are to issue press releases, put information on web sites, hold private meetings with stakeholders and to issue 5uestionnaires 6 far fewer respondents hold a public consultation before publishing their findings, or hold public stakeholder meetings, workshops or seminars 6 6 few respondents have to complete market studies within a specified time frame ;ust under half of respondents commission consultants to carry out market studies work

6 less than half of respondents have a standardised process for market studies, and only about a 5uarter of those that responded have published guidance 6 the level of resource devoted to studies varies 5uite widely 2 teams for each study range from one person to C to 2C people. /ost authorities do not have dedicated market study resource 6 the number of studies produced annually varies 5uite widely from one per year to over C0 per year. *he ma;ority of respondents have an average figure of under five per year 6 process for carrying out market studies and lack of resources seem to be particular problems for some respondents 6 there is a reasonably high satisfaction rating for market studies processes.

Outcomes of market studies (embers $ere asked) 6 whether they take into account the costs and benefits of any recommendations before deciding on them 6 about the range of outcomes that can and do result from their market studies 6 whether governments have any obligation to respond to recommendations coming out of their market studies 6 to indicate their level of satisfaction with implementation of any recommendations 6 to list their techni5ues for seeking to ensure that any recommendations are adopted 6 whether they ever work collaboratively with third parties to help achieve desired outcomes. Si3ty2si3 per cent of respondents confirmed that they do take into account whether benefits
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would e3ceed costs to business and others when deciding on market study outcomes. *he outcomes %recommendations andDor other actions( most often identified for market studies were Frecommendations to government for changes to the lawF, closely followed by Frecommendations to government for changes to policyF and Fcompetition enforcementF. +nly 2C per cent of respondents said that government is re5uired to respond to any recommendations coming out of market studies. .esponses as to how often government implements recommendations, and how satisfied respondents are with implementation, indicate scope for improvement. <mong the most common ways of seeking to increase implementation levels are government advocacy, using public speaking opportunities, and using the press. )ifty2eight per cent of respondents have used third parties, on some occasions at least, to help achieve the desired outcomes.

*+a'uation of indi+idua' market studies /embers were asked whether they evaluate the effect or impact of individual market studies and if so, whether they have a formal process and dedicated team for doing so and what costs and benefits this takes into account. /ost respondents %0E per cent( said that they do review the effect of their market studies work, but most %#0 per cent of those that responded( said that they do not e3plicitly estimate the monetary value of changes in market outcomes coming out of market studies. /ost respondents do not measure or estimate the costs and benefits of individual market studies, though a minority do. Assessment of t e market studies too' /embers were asked to list their three most successful, and three least successful, market studies, and to reflect on the reasons for success or lack of it. *hey were also asked to list the top three benefits of market studies and to provide details of any stakeholder feedback on market studies process. Studies were most likely to be considered successful when they led to changes in law or policy that improved competition andDor delivered other consumer benefit. <lso important as an indicator of success was that studies led to successful enforcement action. Studies were least likely to be considered successful when recommendations were not or largely not implemented.
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*he most commonly acknowledged benefits of market studies were1 6 to identify and address market failures 6 6 6 to build the authorityFs knowledge base to address public restrictions on competition by means of advocacy to reach better and more targeted enforcement decisions

)orty per cent of respondents said they had received stakeholder feedback about their market studies work. *he feedback provided was mi3ed, ranging from positive comments from industry and other bodies about the process followed, 5uality of analysis and results, to complaints about the cost and time that studies take, criticism of the level of transparency, and outcomes, and 5ueries about the rationale for conducting studies. (arkets studied o+er t e 'ast t ree !ears /embers were asked to list the studies they have conducted over the last three years, providing details of the1 6 6 6 6 6 6 6 market studied source of the idea reason for studying that market duration of the study value of the sector study outcomes assessment of outcomes.

< wide range of topics have been studied over the last three years. Studies in the financial services sector are the most common. T e commonest sources of ideas for studies o+er t e 'ast t ree !ears are) 6
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authoritiesF own idea %including complaints received(

6 6

the work or suggestion of other bodies e3ternal market conditions.

<mong reasons given for studying particular markets over the last three years the most common were1 6 to understand market structure %including market power and barriers to entry or e3pansion( 6 to e3amine the competition effects of conduct or agreements. *he number of studies conducted by individual authorities in the last three years ranged between one and 20, with an average of seven studies conducted each year. Sectoral values %where provided( were in a wide range from 2.C million ,uros to hundreds of billions of ,uros.

*he most common outcomes for studies over the last three years were 6 recommendations to government for changes in policy 6 recommendations to government for changes in the law 6 initiating competition enforcement action. /ost studies were given no overall rating of satisfaction. +f those that were given a rating, 0 per cent were marked at the higher end of satisfaction. &uggestions for furt er $ork *here is a diverse wealth of e3perience in conducting market studies across the I&' membership, and a wide range of practice used to do so. It is hoped that the insights in this report will provide a useful tool for greater convergence, and informed divergence, in what appears to be an e3panding field. *here is clearly scope for cross2fertilisation of ideas, including on1 6 ideas for markets and topics to study 7 a list of markets studied in the last three years by respondents that supplied this data is attached at <nne3e " 6 the approach to selecting and carrying out studies %and use of study powers( 6 ways to conduct studies efficiently and effectively.
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In addition, this :ro;ect has identified some areas for possible future work for the I&' on market studies. It has identified a high degree of consensus for future work in two areas1 6 9est practice 7 there appears to be scope for outlining best practice in relation to a number of aspects of the conduct of market studies. *he I&' might therefore consider producing a document setting out best practice on these aspects. It could also consider creating a web2 based database of market studies carried out andDor being carried out by member authorities. 6 ,stimating or measuring impact 7 few authorities have yet taken steps to estimate or measure the specific impact of their market studies. *his may be an area where those that have developed, or are developing, evaluation programmes could share best practice. *wo further areas have been identified for further discussion as to whether they should be the sub;ect of future work1 6 -efinition of market studies 7 this :ro;ect has identified broad agreement on the definition of market studies, albeit that there e3ists a degree of diversity in the purposes for which studies are carried out. *his diversity may be such as to make it not worthwhile to seek consensus on a detailed and prescriptive definition at this stage. It is suggested, however, that there is scope for further discussion on the benefits of seeking to achieve greater convergence by means of an agreed definition.

6 Sectoral studies 7 a wide range of markets have been the sub;ect of market studies, reflecting the diversity of the economies of those countries whose authorities conduct studies and the different competition problems which may emerge depending on local circumstances. *here may, however, be scope for discussion as to whether there are any sectors that member authorities might, collectively, focus on, and consider the possibility of sharing best practice relating particularly to the study of markets in those sectors.R*,I* - O #

.IT*RATUR*
T e context for t e %ro/ect" It discusses the connection bet$een market studies and
competition ad+ocac!, gives details of the ;urisdictions whose competition authorities are known to conduct market studies, summarises past comparative work on market studies, and sets out the purpose of this :ro;ect in the light of that work. (arket studies and competition ad+ocac! /arket studies are typically a mechanism for competition advocacy. *he I&'Fs <dvocacy $orking @roup has defined competition advocacy in the following terms1 'Competition ad+ocac! refers to those activities conducted by the competition authority related to the promotion of a competitive environment for economic activities by means of non2enforcement mechanisms, mainly through its relationships with other governmental entities and by increasing public awareness of the benefits of competition.F Competition ad+ocac! is widely recognised as a useful component of a competition authorityFs work. )or e3ample, the $orld 9ank has recognised the importance of competition advocacy in addressing governmental interventions in markets1 FH&Iompetition may be lessened significantly by various public policies and institutional arrangements as well. Indeed, private restrictive business practices are often facilitated by various government interventions in the marketplace. *hus, the mandate of the competition office e3tends beyond merely enforcing competition law. It must also participate more broadly in the formulation of its countryFs economic policies, which may adversely affect competitive market structure, business conduct, and economic performance. It must assume the role of competition advocate, acting proactively to bring about government policies that lower barriers to entry, promote deregulation and trade liberaliAation, and otherwise minimiAe unnecessary government intervention in the marketplace. &ompetition advocacy has been noted as having a particular role in transition and developing countries where many state assets may be privatised and where interest groups may have a stronger lobbying voice in relation to recent, or proposed, liberalisation.= +ther commentators, however, have highlighted competition advocacy as an indicator of the success
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of any system of competition law, and speculated that the benefits of competition advocacy to the economy and to consumers can be as significant as those arising from traditional enforcement activity.

It has also been noted that advocacy and enforcement work are interrelated, and indeed mutually reinforcing1 '0e1nforcement is strengt ened b! acti+e ad+ocac!, and ad+ocac! is 'ess effecti+e in t e absence of enforcement po$ers, or $ en enforcement 'acks credibi'it!" *he I&' <dvocacy $orking @roup identified two main branches of competition advocacy1 F%i( activities directed at other public authorities in charge of regulation or rule making and %ii( activities directed at all constituencies of the society with the aim of raising their awareness of the benefits of competition and the role competition policy can play in the promotion and protection of competition. *he +,&- conducted a /arket Studies .oundtable.# *he work of the .oundtable demonstrates that market studies can combine work under both these branches, for e3ample when addressing Finefficient market e5uilibrium.F In cases where there is no clear anticompetitive conduct, but where the market is nonetheless not as competitive as it could be, whether due to information asymmetries, regulatory or other barriers to entry, consumer inertia, barriers to switching or for some other reason, market studies can diagnose the root causes of any dampening of competition and formulate appropriate remedies. *hese may include recommendations to government or other decision makers for legislative or policy changes, as well as encouraging voluntary action by industry and consumers to stimulate increased competition. *he newly merged, and independent, Spanish competition authority0 described this function in the following terms1 F/arket studies can be more appropriate than pure enforcement activities where competition problems identified are not due to specific anticompetitive behaviours of operators and affect the whole of the industry. *hrough market studies we can detect market flaws and evaluate regulations that may be un;ustifiably distorting competition i.e. by establishing unnecessary entry barriers. *he +,&- .oundtable also shows that market studies can fulfil a wider function than pure competition advocacy. Some competition authorities that also have a consumer protection ;urisdiction use market studies as a means of ;oining up their competition and their consumer work.
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As t e O*CD's paper noted) F/arket studies can be an e3cellent vehicle for such integration because market studies can readily accommodate a wider perspective than a competition authority would be allowed to take in litigation.

Competition aut orities t at conduct market studies /arket studies, as a practice of some competition authorities, have a long history.In the United States market studies were initiated at the beginning of the 20t>&entury, and in Japan market studies have been conducted since !"#. = +ther authorities have introduced market studies more recently. )or e3ample in Italy, market studies were first conducted in !!0 " and in Ireland in !!# C, and other authorities have introduced market studies, or secured strengthened market study powers, more recently still. E *he table below shows the countries whose competition authorities reported, in the course of the +,&- .oundtable # and in the course of this :ro;ect, or in both, that they use market studies %in one form or another(. <t least "0 authorities out of the more than 00 competition authorities in the world enforcing some kind of competition law responded to the +,&- andDor I&' pro;ects, reporting that they use market studies as part of their portfolio of tools. Tab'e 02"31) 4urisdictions $ ose competition aut orities reported using market studies as part of t eir portfo'io, in t e O*CD (arket &tudies Roundtab'e, in t is %ro/ect, or in bot 4urisdiction Reported on market studies in t e O*CD %o'ic! Roundtab'e on (arket &tudies J J Reported on market studies in t e ICN (arket &tudies %ro/ect J J J J J J J J J J J

9raAil &anada &hile &olombia &roatia &Aech .epublic -enmark ,stonia ,uropean &ommunity
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)rance @ermany >onduras >ungary India Indonesia Ireland Israel Italy Jamaica Japan Jersey Korea Lithuania /e3ico /ongolia 'etherlands 'orway :oland .omania .ussian )ederation Serbia Singapore Slovak .epublic South <frica Spain &hinese *aipei *urkey United Kingdom United States
C C

J J J

J J J J J

J J J J J J J J

J J J J J J J J J J J J J J J J J J J J J J J J J J J J

%ast $ork on market studies *he only significant worldwide comparison of market studies conducted to date appears to be the 2000 +,&- .oundtable. <s such, it is worth highlighting a few of its findings that supplement the data collected during this :ro;ect. *he +,&- .oundtable demonstrated that there is significant variation in the purpose competition authorities ascribe to market studies. *here appear to be two broad categories of market study1 those that are, or can be, used as a precursor to enforcement action, and those that tend not to be. )or e3ample, the &anadian &ompetition 9ureau reported that it does not, and would not, use a market study in a case that could lead to enforcement action1 FIf the nature of the market problem is most appropriately considered under one of the enforcement provisions, the 9ureau will deal with the issue as an enforcement matter and will not commence a market study with respect to the same matter. Similarly, the Irish &ompetition <uthority noted that the main purpose of market studies is to identify and evaluate restrictions on competition stemming from laws, regulation or administrative practices, with a view to advocating that government and its agencies remove any unnecessary distortions of competition. *he United KingdomFs +ffice of )air *rading also noted that it has not conducted market studies in circumstances where there is a clear case for competition enforcement action at the outset of a study 7 though it listed enforcement action under its competition or consumer protection powers as one of the possible outcomes of a market study. In practice so far it has not needed to take competition enforcement action following a market study. *he antitrust authorities in the United States also noted that they do not typically use market studies as the basis for enforcement actions.20 +n the other hand, some authorities reported using market studies as part of the process of investigating in order to take enforcement action in competition or merger cases. )or e3ample the )ederal <ntimonopoly Service of the .ussian )ederation reported using Fantitrust market studiesF to define markets, market share and market power as part of the process of investigating violations of competition legislation, though it also uses market studies to inform its annual presentation to the @overnment of the .ussian )ederation on competition in the economy of .ussia.2 *he ,uropean &ommission, and several competition authorities of ,U member states,22 have a model of market studies known as Fsector in5uiriesF. *he trigger for conducting such in5uiries is fre5uently similar to that for conducting enforcement action,2= and the in5uiries themselves are primarily a tool to better understand the market with a view to taking later %separate( enforcement cases.2" *he ,uropean &ommission has, with the members of the ,uropean &ompetition 'etwork,
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adopted the following agreed definition of Fsector in5uiryF1 Fan in5uiry into a particular sector of the economy or into a type of agreement across various sectorsMthat considers that there are indications of competition being restricted or distorted but where it is not clear whether and to what e3tent problems can be attributed to the behaviour of particular undertakings. @enerally, a SHectorI IHn5uiryI is the basis for future investigation in the relevant industry sectors, notably, for proceedings of infringement pursuant to <rticles 0 or 02 or e5uivalent national legal provisions against particular undertakings.F2C In relation to powers, some authorities have formal powers to re5uest information that are coe3tensive with their enforcement investigative powers. *his can lead to confusion on the part of market participants as to whether the authority is conducting an enforcement case, or a market study.20 It can also lead to concerns from business that authorities may be using studies to conduct Ffishing e3peditionsF that subvert the usual rights of the defence.2! *wo authorities reported having a legislative power to challenge, or to re5uire the revision of, anticompetitive administrative acts and regulations.=0 *he success of competition advocacy can be difficult to measure,= and market studies, as a tool of competition advocacy, are no e3ception. >owever, the +,&- .oundtable noted several factors that may increase the likelihood of success. *hese include careful selection of studies that have a higher probability of success,=2 ensuring that analysis is technically sound,== engaging transparently and openly with interested parties,=" and effective follow2up to promote results and recommendations, recognising that it may take some time for results to
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emerge.

It has been asserted in relation to competition advocacy in general that1 Fit is effective if and perhaps only if it is backed by legal or political power. -etails of statutory authority, authority structure and management matter little4 what really matters is whether the very idea of competition has a significant constituency. +ne of advocacyFs functions is building that constituency.F= *his was supported by the 9usiness and Industry <dvisory &ommittee to the +,&-, which considered that a best practice approach that led to greater convergence across ;urisdictions would help to minimise the burdens on business.=0 *he +,&- .oundtable identified the following possible areas for agreed best practice1 transparenc!
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 forma'ising t e process of conducting market studies, inc'uding restraint in t e use of forma' po$ers to minimise cost setting time'ines and sticking to t em in+o'+ing market participants"56

*he 9usiness and Industry <dvisory &ommittee also called for use of published guidelines on how market studies are selected."0 In line with the I&'Fs goal of promoting convergence in competition laws and practices and cooperation between authorities" this :ro;ect built on the work of the +,&.oundtable by gathering data on market studies practice, on the basis of a set of comparators relating to purpose, selection, process, outcomes and evaluation. *his :ro;ect differed from that of the +,&- in its methodology, in that it was based on a standard form 5uestionnaire, aiming to collect directly comparable datasets. It is not anticipated that this :ro;ect would necessarily lead %or would lead directly( to I&' recommended practices,"2 since practice and process on market studies is so variable. >owever it could form the evidential basis for discussion and development of a set of Fbest practicesF to which I&' members could refer in developing and refining their market studies policy, and for sharing e3perience in selected areas.

0 0

R*&*ARC7 (*T7ODO.O89
%ro/ect organisation and aims *he /arket Studies :ro;ect was conducted under the aegis of the ICN Ad+ocac! -orking 8roup, co2chaired b! t e United :ingdom's Office of #air Trading ;O#T< and t e Russian #edera' Antimonopo'! &er+ice" *he :ro;ect was led by an +)* team %the :ro;ect *eam( together with the /arket Studies $orking @roup %the $orking @roup(. T e aims of t e %ro/ect, as set out in t e %ro/ect proposa', $ere to) 6 conduct a stock2taking e3ercise of e3isting work about market studies to inform the development of a 5uestionnaire 6 develop a 5uestionnaire that e3amines member e3perience with market studies focusing on three themes1 2 selection %how are markets selected and what measures can be employed to increase appropriateness of selection process4 role of stakeholders in selection process(4 2 procedure %agency powers, resource evaluation, developing a work plan, including goals, consultations, etc(4 and 2 outcomes %success of particular initiatives in terms of impact on consumers and market processes, follow up and evaluation processes( 6 evaluate the 5uestionnaire responses, identifying what works and what has not worked well. T e %ro/ect proposa' a'so suggested t at t e %ro/ect s ou'd) 6 consider e3amining member e3perience with specific sectors, either as part of the 5uestionnaire or as a follow2on activity 6 consider developing a guidance document with procedure and evaluation criteria for the market studies work described above. %ro/ect met odo'og! *he :ro;ect *eam, in consultation with the $orking @roup, proposed a :ro;ect plan to address the aims of the :ro;ect. *he :ro;ectFs goal was to collect, analyse and present data on membersF market studies e3perience, and to make recommendations for any further work that
! !

appears to be useful. .ecommendations for further work will be considered by the I&' at its annual conference, following presentation and discussion of this report. T e met odo'og! of t e %ro/ect fo''o$ed t e aims of t e %ro/ect proposa'" T e stages of t e %ro/ect, and steps taken $ere as fo''o$s) 6 *he :ro;ect *eam reviewed e3isting literature on market studies and prepared a draft 9ibliography. /aterials reviewed consisted primarily of submissions to the +,&.oundtable on /arket Studies. *he draft 9ibliography was circulated to the $orking @roup and discussed in a $orking @roup conference call. *he 9ibliography is at the end of this report. 6 *he :ro;ect *eam prepared a draft definition of market studies for use in the later 5uestionnaire. *his was circulated to the $orking @roup for written comment. $ritten comments were incorporated, and a further draft was discussed in a $orking @roup conference call. < final draft was circulated to the $orking @roup for written comment 6 *he :ro;ect *eam developed a 5uestionnaire to e3plore a proposed definition of market studies, and to e3amine member e3perience in market studies selection, process, outcomes and evaluation. <ttached to the 5uestionnaire was an anne3e, asking for details of authoritiesF market studies for the last three years1 the markets studied, the reasons for studying them, the duration of each study, the value of the sector, the outcomes achieved and an assessment of how satisfied authorities were with the results achieved, and why. 6 *he 5uestionnaire was sent to members of the $orking @roup and the wider I&' membership. < copy of the 5uestionnaire, and its anne3e, is attached at <nne3e 2 to this report. 6 <ll members submitted responses to the 5uestionnaire. < total of =! responses were received. 6 *he :ro;ect *eam prepared a draft outline of a report to analyse the findings from the responses to the 5uestionnaire. *he draft outline was circulated to the $orking @roup. 6 *he :ro;ect *eam wrote up the findings set out in &hapters = to of this report. *hese draft chapters were circulated to the $orking @roup for written comment. 6 *he findings will be presented at the I&' conference.

It was agreed that responses to the 5uestionnaire would not be attributed to individual authorities. )or this reason, the results that are presented in the following chapters do not identify the responding authorities.
2020

=uestionnaire respondents *he :ro;ect *eam received replies from =! member authorities of the I&'. < full list of respondents is attached at <nne3e = to this report. +ne respondent noted that market studies are not carried out in its ;urisdiction, though their use is under serious consideration. <ccordingly, save where noted otherwise, the base for the chapters that follow is =0 respondents. It should also be noted that for the US and the UK two authorities responded for each ;urisdiction. )or the US these were the US -epartment of Justice, <ntitrust -ivision and the )ederal *rade &ommission. )or the UK these were the +)* and the &ompetition &ommission. In both these countries there are two bodies that conduct work that falls within the definition of market study. <ccordingly the =0 responses represent =E ;urisdictions in which market studies are carried out. *o understand the broad functions of the responding authorities, the 5uestionnaire asked authorities to state whether they are a competition and consumer body, or a competition body, and whether certain sectors of the economy are regulated by sectoral competition authorities. *wenty2five authorities that responded reported that they are competition bodies. *welve authorities reported that they are both competition and consumer bodies. In 22 cases %representing 20 ;urisdictions(, authorities reported that there are separate regulators applying competition law in one or more sectors such as utilities, transport and telecoms 7 in some cases they do so concurrently with the responding authority. In E cases authorities reported that, whether or not there are separate sectoral regulators, these do not have concurrent powers to apply competition law. *hese authorities are responsible for applying competition law in the regulated sectors themselves. *he range of sectors in which competition law is applied by sectoral regulators includes telecoms, broadcasting, energy %gas and electricity(, oil or petroleum products, water and sewerage, transport %rail, air traffic, airports, shipping, ports, trucking, ta3is(, waterways, financial services %including banking, pensions, securities(, fisheries and a5uaculture, healthcare, postal services, and armed security services. In some cases, the e3istence of sectoral regulators with e3clusive or concurrent competition functions in one or more of these areas may affect the range of topics that authorities choose to address by way of market studies. *opics studied in the last three years are considered.

2 2

2222

D*#INITION AND %UR%O&* O# (AR:*T &TUDI*&

<s noted in the introduction, there is no universally recognised definition of market studies. Indeed there is not even any consistency of terminology. .espondents to our 5uestionnaire spoke variously of Fmarket monitorsF, Ffact2finding surveysF, Fresearch pro;ectsF, Fsector in5uiriesF, and Fmarket scansF as well as of market studies. $ith the aim of securing some degree of consensus around what would be reported in the responses to the 5uestionnaire, for the purposes of this :ro;ect, authorities were presented with the following draft definition of market studies1 '#or t e purposes of t is pro/ect, market studies are distinguis ed from enforcement action against indi+idua' undertakings" (arket studies are researc pro/ects conducted to gain an in>dept understanding of o$ sectors, markets, or market practices are $orking" T e! are conducted primari'! in re'ation to concerns about t e function of markets arising from one or more of t e fo''o$ing) ;i< firm be a+iour? ;ii< market structure? ;iii< information fai'ure? ;i+< consumer conduct? ;+< pub'ic sector inter+ention in markets ;$ et er b! $a! of po'ic! or regu'ation, or direct participation in t e supp'! or demand side of markets< and ;+i< ot er factors $ ic ma! gi+e rise to consumer detriment" T e output of a market stud! is a report containing findings based on t e researc " T is ma! find t at t e market is $orking satisfactori'! or set out t e prob'ems found" - ere prob'ems are found t e market stud! report can inc'ude) ;i< recommendations for action b! ot ers, suc as 'egis'atures, go+ernment departments or agencies, regu'ators, and business or consumer bodies? and@or ;ii< commitments b! t e competition ;or competition and consumer< aut orit! itse'f to take ad+ocac! and@or enforcement action"A <uthorities were asked to comment on the draft definition, and to state in what respects it is similar to, or different from, how they define market studies. +f the == authorities that responded to this 5uestion, roughly #! per cent agree wholly or mostly with the draft definition. *his includes four authorities whose practice differs slightly, for e3ample because they do not address consumer policy issues, or they focus on distortions and restraints of competition rather than the consumer detriment that can arise out of it, or because they do not necessarily publish a final market study report. *his figure also includes three authorities that said that they also carry out other forms of study or work that do not fit clearly within this definition. &omments here were1
2=2=

T ere are t$o kinds of studies t at t e 0Aut orit!1 makes, on one side is t e kind of stud! t at is described in t e abo+e definition" On t e ot er side, t e 0Aut orit!1 often makes economic ana'!sis of t e 'ike'! impacts of 'egis'ation pro/ects t at are being studied b! 'egis'atures" T ese studies are s orter, mig t not inc'ude Buantitati+e studies and are done in a muc faster $a!, t oug t e! are a +er! important part of our $ork"' +f the 2 per cent of respondents that said their definition of market studies was different from the proposed draft, reasons included that1 6 market studies do not result in enforcement action %one authority( 6 market studies do not arise from firm behaviour %two authorities( 6 market studies are conducted solely at the re5uest of the relevant government /inister for the purpose of advising that /inister %one authority( 6 market studies are conducted primarily to assist the authority in its understanding andDor for public information %two authorities( 6 market studies are conducted primarily as a means of informing enforcement action, either during the course of enforcement action %one authority( or on a stand2alone basis, to inform understanding and enforcement priorities %one authority(. Included in these comments, there was one more instance of an authority that conducts studies for more than one purpose1 F*he H<uthorityI has conducted two types of studies1 Nindustry studiesO, which assess the state of competition in an industry and are usually undertaken in response to unusual market events4 and, more recently, Nmarket studiesO, which are conducted as part of the H<uthority?sI legislated mandate to intervene before government tribunals and other decision2 makers to advocate in favour of competition and a greater reliance on market forces.F

'T e 0Aut orit!1 as extensi+e po$ers to take competition enforcement action direct'! to address t e outcomes of a 0market stud!1" If t e 0Aut orit!1 finds an ad+erse effect on competition it as a dut! to remed! it and an! damage to customers as compre ensi+e'! as possib'e" T e 0Aut orit!As1 remed! po$ers are extensi+e, ranging from t e making a+ai'ab'e of more information to consumers, to c anging t e terms of agreements or reBuiring t e di+estment of $ o'e businesses"'
2"2"

%urpose of market studies <uthorities were asked about the purpose%s( of market studies. <uthorities were given nine possible purposes and asked to rank them in order of importance with one being the most important, and nine being the least important. *he nine possible purposes were1 6 6 6 6 6 6 6 6 6 to help set internal priorities for the market or sector to enhance knowledge of the sector as a preparation for intervention in the legislative process to assess the state of competition in the marketDsector to obtain understanding of the market to take enforcement action to decide which of a range of further tools to employ if a problem is found to investigate suspected market failure that cannot be assigned to a specific undertaking to define a market for the purposes of enforcement action to assess the impact of government policyDregulation on a market.

+thers ranked according to importance, repeating numbers where purposes were of e5ual importance. Some ranked only those purposes that were applicable to them. *o represent these responses graphically 7 so that the most important purposes are displayed as scoring the highest 7 the scores were reversed %i.e. a score of one %being the most important( became a score of nine, a score of two %the second most important( became a score of eight and so on(. *he scores for each criterion from all respondents were then totalled and are presented in bar chart form, in the chart below.

2C2C

&hart H". I1 $hich of the following does your <uthority consider to be the purposeHsI of market studiesP :lease rate your answers in order of importance, with H!I being the most important and use %'D<( where this applies

Key to &hart ". . :reparation for intervention in the legislative process. 2. ,nhance knowledge of the sector. =. Investigate suspected market failure that cannot be assigned to a specific undertaking. ". <ssess the impact of government policyDregulation on a market. C. -ecide which of a range of further tools to employ if a problem is found. E. +btain understanding of the market to take enforcement action.
2E2E

#. >elp set internal priorities for the market or sector. 0. <ssess the state of competition in the marketDsector. !. -efine a market for the purposes of enforcement action. *his shows the highest level of consensus for use of market studies as a preparation for intervention in the legislative process. *he second most important purpose, among all respondents, is to enhance knowledge of the sector. Investigating market failure that cannot be assigned to a specific undertaking emerges as the third most popular purpose for studies, with assessing the impact of government policyDregulation following closely behind. *here was less consensus on the use of market studies for setting internal priorities for the market or sector, and for assessing the state of competition in the market. *he score for use of market studies to define a market for the purpose of enforcement action was the lowest. *his reflects the broad consensus on the proposed draft definition of market studies, which separates studies from enforcement action. *he score for use of market studies to obtain an understanding of the market for taking enforcement action was also rather low, %this purpose scored as si3th most important out of the nine possible purposes( suggesting that many authorities do not consider studies to be an appropriate tool for gaining intelligence for enforcement action. It is interesting to compare these scores with the data collected in the anne3e to the 5uestionnaire, in particular the reasons given for conducting studies that authorities have carried out over the last three years. In relation to actual studies recently conducted, use of market studies as a lead2in to, or to inform, later enforcement action emerged as more common. >owever, the data in the anne3e to the 5uestionnaire were analysed for these purposes on a study by study basis %rather than on a country by country basis( so variations in the results would have been affected by the number of studies reported by authorities. <uthorities were also asked to list any other purposes for which they conduct market studies. <dditional purposes included1 'To gat er data on specific markets $ ic cou'd be re'e+ant for ot er cases' 'To gain in>dept kno$'edge on priorit! sectors i"e" t ose of particu'ar re'e+ance for consumer $e'fare'

In a case where the authority contracts all of its market study work to outside agencies, an additional purpose given was1 'Capacit! bui'ding of researc ers, and ad+ocac!'
2#2#

2020

%O-*R& TO CONDUCT (AR:*T &TUDI*&

<uthorities were asked whether they have formal powers to carry out market studies. *his 5uestion was aimed at the provision of formal powers to conduct studies per se, rather than formal information gathering powers. <ll =0 respondents answered this 5uestion. +f these, 0! per cent %=" authorities( said that they do have formal powers. *hose authorities that have formal powers were asked to describe the form that these powers take. It is clear from the responses that these powers are contained in a range of different types of legal provision. Some responses indicated a specific legislative power to carry out studies. In some cases the power is linked to particular purposes. In other cases it is not. )or e3ample1 'T e 0Aut orit!1 s a'' a+e, in addition to t e functions assigned to it b! an! ot er pro+isionsCt e fo''o$ing functions) ;a< to stud! and ana'!se an! practice or met od of competition affecting t e supp'! and distribution of goods or t e pro+ision of ser+ices or an! ot er matter re'ating to competition ;$ ic ma! consist of, or inc'ude, a stud! or ana'!sis of an! de+e'opment outside t e0&tate1<C'

In one case the response suggested that the model partially followed was <rticle # of .egulation D200=D,&, the ,uropean &ommission?s power to conduct sector in5uiries1 'Csector inBuiries are forma' proceedings under t e 0name of t e Act1 $ ic are started b! an order and a+e to be finis ed $it a report"""'

In other cases, responses suggested that the formal powers used to conduct studies are more general evidence and information gathering powers. )or e3ample1 'T e term market stud! came into genera' use $it t e entr! into force of t e 0name of t e Act1, section 0x1 of $ ic gi+es t e 0Aut orit!1 genera' po$ers to obtain information and conduct researc , and pro+ides t e statutor! basis for market studies"'

2!2!

*he descriptions suggest that roughly half of all authorities %C2 per cent of those giving any description( have formal powers specifically to conduct studies. <round =C per cent of the descriptions indicated that the respondents have formal powers to gather information which can be used to conduct studies. *he remaining descriptions were not sufficiently detailed to reach a view on whether there are formal powers to conduct studies specifically, or formal powers to gather information that can be used to conduct studies. < minority of respondents %four out of the =0 authorities that responded to this 5uestion( reported having no formal powers to conduct market studies. *here appeared to be no pattern here in terms of the level of development of the country in 5uestion. 'or did the absence of formal powers appear to prevent the authorities from conducting studies. In all four cases, studies were conducted, though in one case, rarely. It is clear that authorities manage to conduct studies under a range of types of formal powers, and sometimes without formal powers at all. %o$ers to compe' t e supp'! of information <uthorities were asked whether they have formal powers to compel the supply of information for market studies purposes. <ll =0 authorities responded to this 5uestion. < large ma;ority %2! authorities, or #E per cent( confirmed that they do have powers to compel the supply of information for market studies purposes. )our authorities said they have such powers sometimes, and five that they have no such powers. T is data is represented in t e c art be'o$" &hart HC. I1 -oes your <uthority have formal powers to compel the supply of information for market study purposesP

=0=0

+ne authority, that answered Qsometimes? to this 5uestion, e3plained that a bill was going through the legislature which would, if passed, Qintroduce more clarity regarding the circumstances with which the competition authority may compel the supply of information for conducting market studies for purposes other than investigations.? <nother authority that answered Qsometimes? e3plained that it had formal powers when conducting studies pursuant to specific statutory duties to1 6 6 monitor markets in which there has previously been a problem, and scan partially regulated markets, but not in other cases.

$hat was striking in this set of responses was the large ma;ority of authorities that have some form of power to compel the supply of information for market study purposes. *hose authorities that have formal compulsory powers were asked to describe the form that they take, whether their use is sub;ect to any constraints, and what sanctions e3ist for non2 compliance. )ive noted that although they have formal powers to compel the supply of information, they do not use them, or at least think carefully about using them for market studies1 F*he H<uthorityI has the formal right to apply sanctions for not providing information, but never has used it and hardly would use it in the future for the purpose of market studies. Large companies always meet the re5uirements of the H<uthorityI to provide information benevolently, whereas some small undertakings sometimes fail to provide information. In such cases the H<uthorityI has never used its formal powers to compel the supply of information, but always would use this power in the case of investigations related to the breach of the Hcompetition prohibitionsI.F

FHhaving described the compulsory powers to re5uire information for market studiesIM >owever, it is commonly recognised that whether to e3ercise this power in Hmarket studiesI should be carefully decided since the power is binding based on the penal provision. In general the H<uthorityI conducts Hmarket studiesI today by obtaining voluntary cooperation from survey targets. $e are, in practice, confronting no particular problem in Hmarket studyI activities.F

F*he H<uthorityI is very careful to see that Hthe compulsory power to re5uire informationI is not misused because the agency does not want to unnecessarily burden industry.F

F*he H<uthorityI isMmindful of the burdens its processes place on businesses. In general parties respond to informal re5uests for evidence in the knowledge that Hthe <uthorityI has the power to compel production.F

F,3ercising formal powers generally achieves greater compliance HandIMenhances the reliability of the information provided. >owever, we use formal powers much less fre5uently than informalDvoluntary.F In one case an authority reported a specific legislative provision designed to prevent unnecessary business burden1 FIf an information re5uest is to be directed to ten or more recipients, approval must be sought from Hanother government agency, with oversight for budgetsI under the terms of the Hname of the relevant <ctI.F Sanctions for failure to provide information in response to a formal re5uest ranged from administrative fines to criminal fines and imprisonment. In all, ! authorities %EE per cent of the 2! authorities with compulsory powers( reported having the power to impose, or to sue or prosecute for, some form of fine, and seven specifically mentioned criminal sanctions, including imprisonment. Several authorities reported sanctions not only for failure to comply with a re5uest but also for supplying false, incomplete or misleading information. In five cases, authorities said they have power to fine up to one per cent of annual turnover or income. In four cases daily rates are payable %in three cases this is in addition to the fi3ed penalty for non2compliance(. In one case an authority reported that the statute sets out a 0 day time limit for supplying information Qunless given the nature of the re5uest or the circumstances of the case a different
=2=2

;ustified deadline is set.? +ne authority reported that its sanctions for non2compliance are low. *wo authorities reported that although they have formal powers to re5uire the supply of information there are no penalties for not doing so. In one of these cases, the penalties for refusal to supply information, or supplying false or misleading information, appear to have been specifically disapplied in respect of market studies. <uthorities were then asked to give their view as to whether it is better to have formal powers to compel the supply of information for market studies purposes. *hirty of the =0 authorities that replied to this 5uestion %00 per cent( said they thought having the power to compel the supply of information is preferable. Si3 % E per cent( said that it is not. *wo authorities responded that there are pros and cons of each. )ormal powers to compel the supply of information are1 6 useful in cases, where the market study is intended as a leverage for possible enforcement action or deterrence purposes, or where there is a risk that companies will not comply with a re5uest 6 not useful in cases where the best strategy is to build a cooperative dialogue with market players. <uthorities were asked to e3plain why it is better either to have, or not to have, formal powers to compel the supply of information. +f those =0 authorities that said that formal compulsory powers are better %or, in the words of some respondents Qessential? or Quseful? (, reasons given included1 6 to guarantee the ability to obtain the necessary information, for e3ample QHwIe believe that without formal powers the H<uthorityI would lose relevant market data and up2to2date information. Undertakings are not always willing to provide all re5uested information? 6 to ensure that processes are robust, transparent and fair 6 to improve the legitimacy of decision or findings, ensuring they are based on the best available information

====

6 to ensure information is submitted in a suitable time frame 6 as a means to address the limited number of e3pert staff in companies who can provide the data 6 because businesses will only tend to act if they are legally re5uired to do so 6 because without formal powers, there would be legal problems securing information 6 formal powers encourage cooperation even when not used 6 formal powers give respondents a basis for providing information which otherwise they might find difficult to provide 6 may result in more, and more useful, information 6 to make market studies more efficient1 information can be collected more 5uickly, in greater detail, and using less authority resource. Of t ose t at said it $as better not to a+e forma' po$ers, reasons inc'uded) 6 such powers are not needed because market studies are not about ac5uiring evidence of specific infringements, but rather about competition advocacy 6 e3tensive use of formal powers to conduct market studies, and calls to use them fre5uently, can distract an authority from its core enforcement mission 6 use of formal powers can be a burden on business and other sources 6 use of formal powers for market studies can compromise the integrity of the enforcement procedures, and lead to confusion among stakeholders. &ome examp'es of t e specific comments are)

="="

F>aving formal powers to compel the supply of information would fundamentally change the nature of Hthe <uthority?sI market studies work. H*he <uthorityI sees market studies as a fle3ible tool of advocacy, rather than a means of taking enforcement action. In practice, this lack of formal powers has not been a problem. /any businesses want the H<uthorityI to understand their perspective, whether motivated by self2interest or otherwise, such that they will readily answer 5uestions and consider and present their views.F$e consider having formal powers for general market studies not to be necessary. *he main goal of market studies is to enhance our knowledge of a given market. *his is achievable by accessing public sources and by a healthy cooperative relationship with the private agents involvedF ,ven some authorities that have formal powers recognised some of these drawbacks, or said they rarely use them1 F+ne drawback isM that strong powers on information gathering and the fact the H<uthority?s market studiesI are formal procedures often causes misunderstandings among parties, who tend to confuse Hmarket studiesI with normal enforcementF FIn general it is not necessary to have formal powers to compel the supply of information because the investigation of the H<uthorityI has the ob;ective to increase the general knowledge of a market and the factors which limit its functioning, not to ac5uire specific evidence of antitrust infringements. In this view, it constitutes a tool of advocacy, not a means to take antitrust action. )or this reason, the supply of information by the re5uested sub;ect %generally undertakings, but not only( has generally a voluntary characterM there is awareness that the re5uest of information is intended to guarantee the institutional mission of the H<uthorityI %not to collect evidence to enforce the law(4 this facilitates the cooperation and data collection.
=C=C

+ne authority noted that it was content with its powers of on2site inspection which it had used only in one case to date. <nother authority said it would like on2site inspection powers. < third said it would like its powers revised so that they clearly defined the places that can be searched, including domestic premises and vehicles. *wo authorities said they would like clear powers to access banking data. *hree authorities that have formal information gathering powers, backed up with penalties for non2 compliance, reported that they

would like the ability to impose administrative sanctions directly themselves. +ne reported it would like stronger powers, but did not specify how it would like them strengthened. +f those that did not have compulsory powers to re5uire information, two authorities said having these would be beneficial1 F$e would like the H<uthorityI to be able to fine firms in case they do not provide basic information regarding their activity.F

F$hile the H<uthorityI does not have access to formal powers to conduct market studies, it envisions that such powers could be highly beneficial in certain circumstances. )or e3ample in cases where parties are reluctant to provide information voluntarily for fear of reprisals or key information is known to be available but is not being provided voluntarily, compulsory powers might be beneficial. @reater access to information and data could be a clear benefit of having compulsory powers in the conte3t of market studies, and could lend the H<uthority?sI findings greater credibility. .ecommendations stemming from market studies that have had the benefit of more complete information are also likely to be more specific and pointed. Insufficient information might sacrifice the 5uality of the study, and the impact that the study?s findings might ultimately have on addressing problematic restrictions on competition.F +ne of these two authorities, however, recognised that such powers, if granted to it, would not necessarily be fre5uently used1 F*hat being said, it should be noted that compulsory powers are not necessarily the only way to obtain the re5uired
=E=E

volumes of information, as sufficient data may already be available from third parties, such as sector e3perts, industry associations or regulators. *herefore, the need for, and utility of, compulsory powers would have to be determined on a case2by2case basis. It should not be assumed that compulsory powers, if available, would be regularly used for market studies. +ther authorities without compulsory powers were content not to have them for market studies1 FIt is useful to be in a position to compel the supply

of information. >owever in the absence of any suspicion of competition law infringement, such power is unnecessary. $e consider our powers ade5uate in this regard.F

O+era'' satisfaction $it market stud! po$ers )inally, in this section, authorities were asked to rate, on a scale of one %very dissatisfied( to si3 %very satisfied( how satisfied they were with their market studies powers. *hirty2si3 out of the =0 total respondents answered this 5uestion. *he responses are set out in the chart below.

&hart HC.2I1 Using a scale of %very dissatisfied( to E %very satisfied( please rate how satisfied your <uthority is with its powers

*he average satisfaction rating was ".0. Interestingly, the authorities that answered that they do not have, or only sometimes have, formal powers to compel the supply of information

had the same average satisfaction rating %calculated on the basis of eight of the nine
=#=#

authorities without formal powers that also provided a satisfaction rating(. *his suggests that those without formal powers to compel the supply of information are, on the whole, ;ust as satisfied with their powers and their ability to produce useful market studies overall as those that have them. <uthorities were asked to e3plain their rating, to identify whether, and if so how, they consider their powers to be e3cessive, and what additional powers they would like and why. Reasons for being satisfied inc'uded) 6 powers are sufficient to accomplish goals

power to conduct own initiative studies 7 though this would re5uire a change in the law. +ne authority noted that its powers were 5uite new and it would need further time to evaluate them. +ne respondent, with market study powers modelled on the ,& sector in5uiry, reported that the formality of this approach often caused misunderstanding s with market participants, who would confuse sector in5uiries with enforcement action. +ne authority that appeared to have undefined market study powers pointed out that, although its use of these powers for market studies purposes had

6 power of on2site inspection prevents evidence from being destroyed in cases where this may be likely 6 powers allow for fle3ibility and efficiency 7 stronger powers would lengthen procedures and increase the risk of legal challenge. *hose giving slightly lower satisfaction ratings identified the following factors as influencing the lower score1 6 difficulties securing information from undertakings %in spite of formal powers to compel( 6 lack of a clear re5uirement for government to take on recommendations 6 lack of a commitment from government to update the authority on progress when recommendations are accepted by government 6 a re5uirement to get clearance from legislators for studies in a particular sector. +ne authority said it was pursuing legislation to introduce a new power to impose binding remedies in respect of oligopolistic markets. It said the proposed amendment to the law was inspired, inter alia, by the UK &ompetition &ommission. <n authority that can only conduct market studies on the instruction of /inisters noted potential scope for introducing a
=0=0

never been challenged in law, it might be safer to have defined powers. In spite of these points, the overriding flavour of responses was one of satisfaction with e3isting overall powers to conduct studies.

=!=!

&*.*CTION O# (AR:*T &TUDI*&

8at ering ideas <uthorities were asked how they gather ideas for potential market studies and were given a list of options to mark in the 5uestionnaire. /ost indicated more than one source of ideas. +f the =0 authorities that responded to this part of the 5uestionnaire two advised that they are solely directed by third parties to carry out studies and hence play no part in the selection process. *he chart below shows the responses received from the remaining =E authorities. &hart HE. I1 >ow does your <uthority gather ideas for market studiesP

complaint and publish a reasoned response within !0 days setting out what action, if any, it will take. +ne of the possible outcomes of a super2complaint could be a market study.""

T e additiona' sources of ideas are noted in t e c art be'o$" &hart HE.2I1 <dditional sources of ideas

In addition to the options shown above, 2 authorities advised that they have other sources of ideas, most notably their own enforcement e3perience. +ne authority describes a process whereby designated consumer bodies have the power to make what is called a Qsuper2complaint? which sets out how a feature or combination of features in a market seems to be significantly harming the interests of consumers. $hen such a complaint is received the authority must, by law, consider the
"0"0

C oosing studies <uthorities were asked if they choose which markets to study or if others can and have instructed them %i.e. compelled or re5uired them( in this respect. *he chart below shows that the ma;ority of the =# respondents advised that they always select their market studies. &hart HE.=I1 -oes your <uthority choose which markets to studyP

*his section also provides that the Hrelevant /inisterI may direct the H<uthorityI to make such a submission. $hile this has never occurred, it is possible %although unlikely( that the Hrelevant /inisterI could rely on this provision to direct that the H<uthorityI undertake a market study.F Leaving aside whether FothersF can in theory instruct authorities to carry out market studies, authorities were asked whether they had ever been so instructed. +f the = authorities that responded the

<s to whether FothersF can instruct %i.e. re5uire( authorities to carry out market studies C" per cent of the =# respondents advised that they can be so instructed. $here authorities are instructed to carry out market studies such instructions had been received from government, government agencies, other regulators or a combination of these. *wo authorities advised that whilst it is possible in theory to receive a direction to undertake a market study it has never happened to date or is very infre5uent. FSection 2C of the Htitle of <ctI stipulates that the H<uthorityI is authoriAed to make representations before federal boards and tribunals in respect of competition.
" "

results were evenly split, as indicated in &hart E." below, between those that had never received such instructions and those that had only occasionally received such instructions to date.

occasional ly

&hart HE."I1 >as your <uthority been instructed to carry out market studiesP

<uthorities were then asked if third parties had ever asked them voluntarily to carry out market studies and if so to identify the third parties concerned. +f the =0 respondents that replied to this 5uestion C" per cent advised that they had received such re5uests. .e5uests were identified as coming from a variety of sources including1 other regulated bodies, business groups, consumer groups, complainants, government and in a few cases trade unions. <n e3ample of such a response is below. F$hen asked to give opinion on general competition issues related to the competitive state of a market4 such opinions may be prompted by the :arliament, the @overnment, local authorities, professional organisations and trade unions, consumer associations, chambers of agriculture, chambers of commerce and industry and chambers of trade.F < few of the "E per cent of respondents that had never received such re5uests from third parties advised that there was nothing to stop such re5uests being made4 they had ;ust never received any to date.
"2"2

FIt would be possible for the H<uthorityI to be asked to voluntarily carry out market studies, however, so far we did not have such situation.F F*o date sector in5uiries were conducted to look into market situations which came to the H<uthorityFsI notice on the basis of complaints by stakeholders, among others. Stakeholders are free to prompt Hthe <uthorityI to carry out sector in5uiries.F #actors t at inf'uence t e se'ection of studies <uthorities were given a number of options relating to factors that may influence their market study choices and were asked to indicate which of them influenced their decisions. +f the =# authorities that responded the two factors that scored the highest were Qimpact on consumers? and Qmarket importance?. *he two lowest scores related to Qdegree of product differentiation? and Qproduct life cycle?. +ne authority advised that it is usually the combination of more than one factor that influences its choice. *his statement is likely to be true of other authorities, given the many responses that indicated several influences. &hart HE.CI1 $hat factors influence your selection of a particular market studyP

"="=

Key to &hart E.C . 2. =. ". C. E. #. 0. !. Impact on &onsumers. /arket Importance. /arket Structure. LevelD*ype of &onsumer &omplaintD&oncern ,ntry 9arriers -esire to +btain Knowledge. -egree of &oncentration. LevelD*ype 9usiness &omplaintD&oncern. SiAe of -etriment . Unusual /arket ,vents 2. :olitical InterestD<ttention =. *ype of -etriment ". -esire to +btain ,nforcement ,vidence C. Likelihood of /ergers E. Likelihood of Successful +utcome #. :rofile of &onsumer Rulnerability 0. -egree of :roduct -ifferentiation !. :roduct Life &ycle

0. Ralue of /arket

""""

<uthorities were given the opportunity to highlight other factors that may influence why they choose particular markets to study. < total of authorities identified additional factors, which broadly fall into the headings below1 6 6 6 6 6 6 6 6 6 6 6 6 6 resource implicationsDavailability fit with authority prioritiesDstrategyDportfolio whether another body would be better placed to conduct the study the degree of public regulation in the market involved work done by other national authorities or the ,U &ommission impact on all market players %not ;ust consumers( availability of a ready forum to present information ability to bring a uni5ue perspective to bear in a useful way belief that advocacy efforts will have clear benefits ability to gauge or measure the effects of advocacy efforts assessment that the benefits are likely to e3ceed the costs belief that the study is likely to yield useful recommendations opening up of markets and emerging markets.

+f all the factors identified that influence choices, authorities were asked to rate the five most important. *he chart below shows those factors that featured in most of the =# respondents? top five selection reasons. 9y far the three highest scoring factors are impact on consumers, market importance and market structure. Likelihood of successful outcomes along with likelihood of mergers scored the lowest.

&hart HE.EI1 /ost popular top five factors that influence authorities? selection of a particular market study.

*he remaining less common top five factors that scored two or less votes each are shown below. 6 6 6 6 6 6 6 6 6 6 fit with wider strategyDpriorities %2 votes( impact on tariffs and competition % vote( damage to small enterprises % vote( public interest % vote( market failure % vote( ability to provide uni5ue perspective % vote( profile of affected economic agents % vote( whether success can be easily measured % vote( to order the market % vote( opening up of markets and emerging markets % vote(.

Summary of Key )indings Key findings of this chapter1 ( *he ma;ority of authorities get their ideas for market studies from a range of sources and choose which markets to study. 2( )ifty four per cent of respondents can be instructed by others to conduct

studies and "0 per cent have been so instructed. =( < range of factors influence market study selection. *he two highest scoring factors are Fimpact on consumers and market importanceF. *he two lowest scoring factors are Fdegree of product differentiationF and Fproduct life cycleF.

(AR:*T &TUDI*& %ROC*&&

*his chapter considers the procedural aspect of market studies work. <uthorities were asked a range of 5uestions on this sub;ect including the type of information they use for studies, how they staff their market studies teams and the duration of the average study. *ypes of information obtained for market studies <uthorities were asked if they collect and use anecdotal and empirical information for market studies. +f the =# authorities that responded, only one does not collect empirical information and only seven % ! per cent( do not collect anecdotal information. <uthorities were asked about sources of information and were given a range of options to select. +f the =# authorities that responded, all confirmed that they collect information from at least three different sources. Indeed, as &hart #. below indicates, most authorities collect information from all the sources identified in the 5uestionnaire. &hart H#. I1 $ho does your authority collect information fromP :lease mark whichever apply

<uthorities also use a number of means to conduct both 5uantitative and 5ualitative market research. *he results are shown in &hart #.2, where the categories of 5uestionnaires, focus groups and in2depth interviews are 5ualitative research tools and the categories of large statistical surveys and mystery shopping are 5uantitative research tools.

&hart H#.2I1 -oes your authority use any of the followingP :lease mark whichever apply

U < t d < & < &

*wo authorities also noted their fre5uent use of public invitations for written comments and public hearings or workshops to gather information for market studies. Slightly more than half %C= per cent( of the =E respondents always or usually carry out e3ternal
C0C0

< > c &

+f the =E authoriti es that answere d the 5uestion as to whether they publish a

C C

final report at the end of a market study, the ma;ority %E! per cent( advised they either always or usually do so. +nly four authorities %! per cent( do not publish final reports. *wenty %CE per cent( of the authorities that publish reports, be it always, usually or occasionally, publish supporting material. *his material can include associated research, feedback from stakeholders, evidence obtained, and results of consultations. +ne authority noted that it created a sector2 specific web page on its web site containing the results of a market study and supporting materials. <uthorities were asked to identify the pros and cons of their approach to engagingD communicating with stakeholders. .esponses were received from =2 authorities. &omments can generally be categorised as below4 some of the comments made are more about the pros and cons generally of engaging with stakeholders rather than their specific approach. <pproach to engagingD communicating with stakeholders 2 pros 6 stakeholders willingly supply information

6 A 6 6 6 6 6 < < <

6 market studies are informed by stakeholder informationDfeedbackD knowledge 6 transparency 7 stakeholders are not taken by surprise and are more likely to engage in and inform the debate 6 engaging with stakeholders assists the handling of the study 6 engaging with parties is seen to be fair

6 stakeholders may change their behaviour as a result of engagement

C2C2

. )or the remainin g =" authoriti es, the disclosur e of confiden tial informat ion can result either in civil or criminal action against the member of staff who disclose d the informati on or in a claim for damages against the authority itself if confiden tial informati on is disclosed .

Timing of market studies <uthorities were asked if they have to carry out market studies within a statutory timeframe. +f the =0 authorities that responded, only two %C per cent( advised that they do have to work within a statutory timeframe, with one advising that Qthe statutory timeframe for market studies is set annually.? +f the =E authorities that do not have to adhere to a statutory timeframe, thirty one %02 per cent( set their own defined timeframe and milestones for their market studies. >owever, few authorities publish information about their timeframes and milestones. +f the =E authorities that answered this 5uestion, nine % ! per cent( publish information on timeframes and si3 % # per cent( publish information on defined milestones, although one authority advised it only does so Qsometimes?. <uthorities were asked if the timeframe and defined milestones can then be subse5uently altered. +nly two authorities %E per cent( out of =E respondents advised that they cannot. *here was a significant range in the average length of a market study reported by the =# authorities which responded to this 5uestion. < few authorities gave a range band rather than an average figure. +f those that did provide an average the shortest was one month and the longest was two years. /ost respondents indicated an average duration of less than one year %forty one per cent(. *his response reflects the actual duration of studies reported in the anne3e to the 5uestionnaire, discussed in &hapter .
C=C=

U < &

< lw ays Usually +ccasio nally 'eve

r<uthorities were asked to e3plain the circumstances under which they would commission

third parties to carry out their market studies work. *he two reasons most fre5uently identified by the 22 authorities that responded are1 6the specialised market knowledge or e3pertise that third parties can bring to market studies 6 that the authority lacks the human resources to do all or part of the study. +ne authority advised that it sometimes outsources studies intended to gather general knowledge on specific antitrust themes and sectors to third parties. <nother authority advised that it has only commissioned a third party to carry out a market study on two occasions. In both cases these were technical studies with a narrow focus and limited stakeholder engagement. *wo authorities pointed out that any third parties they may use would not be able to use the statutory investigatory powers available to the authorities themselves. 'o doubt this would apply to other authorities as well. %rocess of market studies <uthorities were asked if they have a standardised internal process on how to carry out market studies and if so to describe it. +ut of the =# authorities that responded to this 5uestion, only C %" per cent( of authorities confirmed that they do have such a process. *wo authorities advised that they are in the process of developing guidance and one authority acknowledged that it is aware that its processes will need to be refined and elaborated upon once it has more e3perience of market studies work. +ne authority advised that its internal processes can vary greatly depending on the comple3ity of the market, the issues and the number of parties involved. Si3 respondents described a standardised process with the following general se5uence1 6 6 6 6 identification of the market to study scoping the pro;ect data collection and analysis publication of report and recommendations.

<uthorities were asked if they have guidance for e3ternal stakeholders about their market studies work. +nly ! authorities %2# per cent( of the =0 authorities that responded have such
C"C"

guidance. <uthorities that have guidance were asked to indicate what areas the guidance covers and were given four options to select. *he results are shown in &hart #.# below. *he guidance of only two out of the nine authorities %20 per cent( covers all four options shown below. *he guidance of four authorities covers three of the options, the guidance of two authorities covers two of the options and the guidance of one authority covers ;ust one of the available options. &hart H#.#I1 $hat areas does this guidance coverP :lease mark whichever apply1

<uthorities were asked to identify their top three areas of procedural best practice. *he == responses were wide ranging and there was no one area that was highlighted by the ma;ority of respondents. >owever, several authorities identified transparency and stakeholder engagement in relation to businesses and other government agencies. >ow authorities identify markets for study and research techni5ues also featured in a number of responses. *he following comments are a representative sample1 F9efore finalising its reports, the H<uthorityI conducts a fact2checking e3ercise with relevant stakeholders. *his kind of transparency both ensures that the results of the studies are factually correct and also that they are highly credible, which in turn boosts their impact.F F&onstructive and creative engagement with stakeholders to deliver voluntary remedies to market problems. Increasingly, we have adopted innovative approaches to securing stakeholder input on remedies such as publishing draft findings and evidence early. *his provides a basis for discussion with the industry,consumer groups and other stakeholders.F
CCCC

CECE

<uthorities were also asked to identify procedural challenges andDor problems for their market studies work. *hirty2one authorities responded to this 5uestion. <gain, answers were 5uite varied, but a few common themes emerged as follows1 6 the challenge in not having an effective process in place for carrying out market studies 6 insufficient resources, covering a lack of staff, staff e3pertise andDor budget 6 making the right selection and prioritisation decisions 6 information gathering, covering the problems of not getting information, not getting enough information, the insufficient 5uality of the information provided andDor assessing the information in a limited time period. *he latter point above contrasts with the general satisfaction levels in relation to powers to conduct studies, including information gathering powers, reported in &hapter C. +ther less common themes included a lack of remedial powers, limitations on measuring the impact of studies and coordination with other regulatory authorities. *he following comments are a representative sample1 F$ithout a clear plan, focus, and timeframe, market study work may languish and its completion can be delayed as it competes for resources with enforcement.F

QUsually only one person is assigned to work on a particular market study and this person may also be a case handler. < large workload will prevent them from being able to perform a large scale and very comprehensive market study.?

Q<d hoc approach to selecting markets for research 2 markets for e3amination are often selected upon re5uest of authority management or by the @overnment who are concerned with a particular situation in markets that are of vital economic andDor social significance. *his may lead to considerable differences in scope and time frame of research in various markets, sub;ect to character of particular re5uest.?

C#C#

Resources de+oted to market studies <uthorities were asked how many market studies are conducted in a twelve month period. *hree authorities advised they were unable to provide this information as they either contract all their market studies work out to third parties, their e3perience in doing market studies is too recent to say or it can vary due to the number of re5uests, available resources and other priorities. +f the =2 authorities that did provide details, a number of them pointed out the difficulties in doing so. *hese difficulties were due to1 6 6 6 the number of studies per year having changed the authority having only recently started market studies work the variance in siAe and scope of different studies.

*he ma;ority %CE per cent( of authorities which responded to this 5uestion gave an average figure of under five studies per year. )ourteen authorities %"0 per cent( produce on average one to two studies per year. +ne authority advised that it does over C0 studies per year, whilst another gave a number of appro3imately "0 per year. *he third highest number of studies per year was . *hese variances could in part be due to differences in how some authorities define their market studies work. <uthorities were asked how many people %full time e5uivalents( on average typically work on a market study. *wo authorities were unable to provide this information for the reasons that they contract all their market studies work out to third parties and their e3perience in doing market studies is too recent to say. +f the =C authorities that did provide details, responses were varied. *he largest teams comprise C to 2C full time e5uivalents, whereas the smallest involve only one member of staff. < number of responses confirmed that the siAe of the team changes over the course of the market study. )orty three per cent of respondents indicated that the teams are usually made up of two to three full time e5uivalents. *here was more consistency in responses to the associated 5uestion on team membersF skills and 5ualifications. /ost authorities confirmed that teams are made up of either economists or a combination of economists and lawyers. <uthorities were asked how many people %full time e5uivalents( they have allocated to working on market studies at any one time. +ne authority advised this can vary tremendously depending on the study being undertaken. +f the 20 authorities that provided details the results were again diverse. +f those that did provide details one authority advised that it has "0 to E0 members of staff allocated, whilst si3 authorities have ;ust one person. *he most common response %2! per cent( gave a figure of between two and five full time e5uivalents.
C0C0

+nly ! per cent of the =# authorities that responded confirmed that they have dedicated teams who only do market studies. *he responses from the four authorities that provided more detail to their answers indicate some interesting differences as shown below. F$e have dedicated teams who undertake work on all advocacy2related functions which include market studies. $e believe that there is merit in ensuring that all case officers do a range of activities. )ocussing on market studies only would adversely affect the human capital of the organisation.F F9ased on our workload and the number and type of industries which e3ist it would be very useful if we could have a department dedicated to conducting market studies. >aving such a department would improve our process by sharpening our skills, reducing the time taken to complete studies, and allow us to use the information in more beneficial ways.F <uthorities, that do not have dedicated market study team resource, were asked what their process is for creating a market study team. *wo authorities advised they have no special process. /any of the remaining 2" respondents advised that teams are created on the basis of previous e3perience of the market or e3pertise and capacity. Aut oritiesA 'e+e' of satisfaction $it t eir processes for market studies <uthorities were asked to rate their satisfaction with their processes for carrying out market studies using a scale of one %not satisfied( to si3 %very satisfied(. <s &hart indicates, the satisfaction ratings of the =# authorities that responded are reasonably high.

C!C!

&hart H#.0I1 Using a scale of %not satisfied( to E %very satisfied(, please rate below how satisfied your authority is with its process for carrying out market studies work.

*here were ;ust two authorities that rated their satisfaction level at si3. ,ven then one of these cited as a problem the Qlack of any formal follow up of the H<uthority?sI recommendations and of any system to measure the success of the finding en5uiry.? )our authorities, that gave satisfaction ratings of four, mentioned their relative ine3perience in carrying out market studies work, with some saying that they still have lessons to learn. Some authorities with greater e3perience also highlighted the need for further learning and an associated desire to improve. +ne of the authorities that gave a satisfaction rating of two indicated its rating would have been higher if it had dedicated resources to work on market studies.
E0E0

Summary of Key )indings Key findings of this chapter1 ( /ost respondents collect evidence for studies from several sources. 2( ,3isting market research, administrative data, in2depth interviews and large statistical surveys are the most common ways of collecting information. )ocus groups and mystery shopping are the least common way. =( *he ma;ority of respondents have used information obtained in their market studies work to help enforcement work. "( /ost respondents provide stakeholders with information on the reason for selecting markets for study, the purpose and scope of the study, and the reasons for recommendations. C( )ewer give details of the stages involved in the study, the study timetable, any progress reports and the study teamFs names. E( *he most common ways to engage with stakeholders are to issue press releases, put information on web sites, hold private meetings with stakeholders, and to issue 5uestionnaires. #( )ar fewer respondents hold a public consultation before publishing their findings, or hold public stakeholder meetings, workshops or seminars. 0( )ew respondents have to complete market studies within a specified time frame. !( Just under half of those that responded commission consultants to carry out market studies work. 0( Less than half of those that responded have a standardised process for market studies, and only about a 5uarter of those that responded have published guidance. ( *he level of resource devoted to studies varies 5uite widely 2 teams for each study range from one person to C to 2C people. /ost authorities do not have dedicated market study resource.
E E

2( *he number of studies produced annually varies 5uite widely 2 numbers of studies produced in a year range from one per year to over C0 per year. *he ma;ority of respondents have an average figure of under five per year. =( :rocess for carrying out market studies and, lack of resources seem to be particular problems for some respondents. "( *here is a reasonably high satisfaction rating for market studies processes.

E2E2

OUTCO(*& O# (AR:*T &TUDI*&

*his chapter considers the outcomes of market studies, in particular the different types of recommendations made, the nature of the response to them by government and business, and their implementation. Assessment of costs and benefits <uthorities were asked whether it is standard procedure to take into account, when deciding on the outcomes of market studies, whether the benefits of implementing the recommendations would e3ceed the costs to business and others. < clear ma;ority %EE per cent( of the =E authorities that responded to this part of the 5uestionnaire said that it is. +ne authority advised that Qthis has not been a relevant factor in the sector in5uiries conducted so far.? < number of authorities e3plained that a cost2benefit analysis or impact assessment is carried out, if not at the time of making the recommendations, then before any recommendations to government are implemented. Some authorities that do not make such an assessment made the point that their studies do not impose such costs, either because the studies are purely fact2 finding in nature, or because their recommendations entail the removal of restrictions on competition. +ne authority pointed out a primary reason for taking costs to business into account in deciding on a studyFs recommendations is to ensure that Qthe overall benefits to consumers e3ceed any costs to business, because business costs would ;ust be passed on to consumers.F T!pes of recommendation <uthorities were asked firstly what types of recommendation %from a list of options set out in the 5uestionnaire( could potentially result from their market studies, and secondly what types of recommendation actually have been made. *he chart below lists the types of potential recommendation, and the number of authorities %of the =# which responded to this part of the 5uestionnaire( that said that each type of recommendation is available to them.

E=E=

&hart H0. I1 &an your studies result in any of the following recommendations andDor actionsP

*he chart below summarises the types of recommendation which have actually been made in these authoritiesF market studies, again with the number of authorities mentioning each type of recommendation. &hart H0.2I1 >ave your studies actually resulted in any of the following recommendations andDor actionsP

*he most prominent types of recommendation, in terms of both availability and use, are proposals to government for changes either to policy %available to =" authorities, used by 2"( or to the law %available to == authorities, used by 20(, and the use of competition enforcement powers %available to == authorities, used by 2"(. *he use of consumer enforcement powers is among the least prominent types of recommendation, in terms of both availability and use %available to # authorities, used by nine(. *his is likely to be a conse5uence of the fact that only around a third of the authorities that responded to the 5uestionnaire have responsibility for both competition and consumer issues. It is, however, notable that relatively wide use is made of consumer education as a
E"E"

recommendation %available to 2 authorities, used by E(. ,ducation for business is also relatively widespread in terms of availability and actual use as an outcome of market studies %available to 2# authorities, used by 20(. +ther types of action targeted at business are in the middle rank in terms of both availability and use. <uthorities were asked whether any other types of recommendation, beyond those identified in the 5uestionnaire, are available to them as outcomes of market studies. 'o specific additional types of outcome were mentioned, although one authority reported that there are no legal limits on the scope of the recommendations from its market studies. 8o+ernment response to market studies Aut orities $ere asked) 6 whether government is re5uired to respond to recommendations made by them as a result of market studies 6 if so, whether the government response is re5uired to be made within a set timescale 6 whether government is under a legal obligation, or has made a policy commitment, to act upon recommendations made as a result of market studies. +f the =E authorities that responded to this part of the 5uestionnaire, only ! %2C per cent( said that government is re5uired to respond to their recommendations, and in only one ;urisdiction is government obliged to act on them. $here there is a re5uirement on government to respond, a timescale is set in five of the nine ;urisdictions concerned. $here specific times are set, they vary from !0 days to four months. In one ;urisdiction the deadline for a response is set on a case by case basis by the authority carrying out the study, while in another responses must be made Fin a reasonable timeF. +ne authority said that its government has recently announced that it intends in future to pursue a policy of responding to recommendations within nine months, although it was unclear whether this would have retrospective effect. *he fact that most authorities operate in a conte3t where their government is not re5uired to respond to market study recommendations emphasises the importance of accompanying market studies with effective competition advocacy efforts. <uthorities were asked if government is under a legal obligation andDor has given a policy commitment to act upon the authority?s recommendations. +nly one of the =# respondents confirmed this to be the case.
ECEC

Dusiness response to market studies <uthorities were asked whether business is under a legal obligation to act upon recommendations made to them as a result of market studies. +f the =# authorities that responded to this part of the 5uestionnaire, only five % " per cent( said that there is such an obligation. Imp'ementation of market stud! recommendations Aut orities $ere asked to rate) 6 how often their recommendations have been implemented by government andDor business, on a scale of one %not often( to si3 %very often( 6 how satisfied they were with the level of implementation of their recommendations on a scale of one %not satisfied( to si3 %very satisfied(. &hart H0.=I1 Using a scale of %not often( to E %very often( please rate how often your <uthorityFs recommendations have been implemented by government andDor business

&hart H0."I1 Using a scale of %not satisfied( to E %very satisfied( please rate how satisfied your <uthority has been with the level of implementation in respect of its recommendations

EEEE

E#E#

*he responses shown in &hart 0." would appear to indicate significant scope for improvement in the level of adoption of recommendations made as a result of market studies by the 2! authorities that responded. 'evertheless, given that %as indicated in the two previous sections( there is no obligation on the part of either government or business to adopt recommendations in a large ma;ority of the ;urisdictions covered by the 5uestionnaire, the level of implementation would seem to indicate that successful outcomes can be achieved without such an obligation using other approaches, such as advocacy to government or seeking compliance by business on a voluntary basis. Some of the measures adopted to try to ensure that recommendations are adopted are considered later in this chapter. < small number of authorities drew a distinction between the level of implementation by government and business respectively1 in all cases recommendations addressed to business had fared better than those directed at government. Some authorities reported that their recommendations, even if not accepted outright, can nevertheless contribute to change1 F*he government has indicated that it uses our recommendations as well as recommendations andDor information from other sources in making their final decisions.F F<ction has been taken %by government and by business( as a result of the market studies, but this action is not always the e3act action recommended.F

F@enerally the @overnment and business M follow M recommendations, although the H<uthorityI HhasI debates with both of them in order to ;ustify and advocate its recommendations. Sometimes the H<uthorityI alters its recommendations as a result of their discussion with @overnment or business.F

(easures taken to secure adoption of recommendations <s e3plained above, in only a small number of ;urisdictions is there a legal obligation for government andDor business to act on recommendations arising as a result of market studies. *herefore, the success of many market studies may depend on their promotion through effective competition advocacy. <uthorities were therefore asked what other approaches they used to try to ensure that their recommendations were adopted. *he chart below summarises
E0E0

the approaches mentioned by the == authorities that responded to this part of the 5uestionnaire.

E!E!

&hart H0.CI1 $hat does your <uthority do to try and ensure recommendations are adoptedP

*hese responses indicate widespread use of both advocacy within government, and various means of achieving publicity, and thus hopefully support, for recommendations. +ther tools mentioned in response to this 5uestion include engagement with business and government stakeholders both before and after recommendations are published. +ne authority also referred to a provision in its competition legislation authorising it to bring legal actions Fagainst administrative acts and regulations from which obstacles to the maintenance of effective competition in markets are derivedF. *he following are a sample of the comments made1 Q<lthough public speaking opportunities have been used by past administrations to procure the application of recommendations, these were rather rare.?

Q$e attempt to identify allies who will promote and support our recommendations both publicly and privately.?

#0#0

Q$e believe that a few critical recommendations were not implemented mainly because the @overnment did not appreciateDrecogniAe the &ompetition effects of the recommendations within the relevant markets. +ver time we have steadily-orking $it t ird parties to e'p ac ie+e desired outcomes <uthorities were asked whether they had ever worked collaboratively with third parties to help achieve the desired outcomes from their market studies 7 e3amples given were working with consumer groups on a consumer education campaign, or with businesses or business groups to secure voluntary changes to behaviour. +f the =E authorities that responded to this part of the 5uestionnaire, 2 %C0 per cent( said that they have adopted such an approach on at least some occasions. <uthorities gave a number of e3amples of the kind of organisations with which they have worked, of which the ma;ority were either consumer groups or industry associations. <s well as playing a part in the actual implementation of recommendations, in some instances cooperation with third parties took the form of seeking support from organisations with similar ob;ectives. Summary of Key )indings Key findings of this chapter1 ( EE per cent of respondents confirmed they do take into account when deciding on outcomes whether benefits would e3ceed costs to business and others. 2( *he three most chosen outcomes identified are1 6 6 6 =( 6 6 6 recommendations to government for changes to the law recommendations to government for changes to policy competition enforcement. *he three least chosen outcomes are1 consumer enforcement referral to third party for action voluntary business compliance

"( +nly 2C per cent of respondents said government is re5uired to respond to their market studies recommendations.
# #

C( .esponses as to how often government implements recommendations, and how satisfied respondents are with implementation, indicate significant scope for improvement.

#2#2

,R<LU<*I+' +) /<.K,* S*U-I,S

!. *his chapter describes how authorities evaluate their market studies work, in particular their processes and methodologies for measuring impact. Is evaluation work undertakenP !.2 <uthorities were asked whether they look back and reflect on the effect of their market studies work. +f the =# authorities that responded to this part of the 5uestionnaire, =2 authorities %0E per cent( advised that they do. !.= <uthorities were then asked if they measure the impact of their market studies work. $e e3plained that by this we meant measuring the changes in market outcomes following the market studies work. *he ma;ority, #0 per cent of the =# respondents, advised that changes in market outcomes following their market studies work are not measured. !." <uthorities were asked if they have published criteria for measuring impact. *he ma;ority, 0C per cent of the 20 respondents to this 5uestion, advised they have not. +ne authority advised that it does have such criteria but only for merger reviews. < few authorities commented that they are only in the early stages of establishing meaningful criteria for measuring impact, or that such criteria have only recently been established. *he following are a sample of the comments made1 FH*he <uthorityFsI F e3perience in market studies is still fairly nascent, and hence it is still in the process of formulating meaningful criteria for measuring the effectiveness of its market studies.F

FH*he <uthorityFsI e3perience in tracking the impacts of its work is relatively recent. $hile all market study proposals must include performance measures by which their impact can be measured, the tracking of these is in its infancy.F

F*heH<uthorityI is committed to undertake such systematic impact evaluations in the near future. In fact, our Strategic :lan for 20002200! states that the H<uthorityI will lay the groundwork for carrying out e3 post evaluations of the work of the H<uthorityI ,
#=#=

identifying possible 5uantitative and 5ualitative indicators for monitoring performance in its different areas of action Hincluding advocacy workI , and analysing effective techni5ues and

#"#"

methodologies for the degree of success to be ade5uately gauged.F

&osts and benefits !.C <uthorities were asked what aspects of costs and benefits are taken into account when measuring the impact of their market studies work. +nly seven authorities responded to this part of the 5uestionnaire and only one respondent provided substantive detail. *his indicates that for many, at present, measuring the costs and benefits of their market studies work after completion is relatively new, not fully developed, or non2e3istent. *his contrasts with the results, in paragraph 0.2, that show the ma;ority of authorities do take into account costs and benefits before they make their study recommendations. !.E +n the substantive response received, the authority concerned reported that it1

6 >as a performance framework which states that it will deliver measurable benefits to consumers of five times its annual budget over the financial years 20002 . In order to embed outcome focused performance monitoring, all pro;ects are encouraged to develop impact estimation plans that clearly state1 2 2 2 what outcomes the pro;ect is designed to achieve an estimate of their scale of impact, and a description of how to monitor it.

<t the time of pro;ect completion, teams use their plans to provide an estimate of pro;ect impact. 6 ,stimates the direct financial benefits to consumers. *hese may arise from actions to remedy price raising anticompetitive activity, as well as from market studies that facilitate switching, enforcement of consumer law, or educate consumers. Included in its calculations are1 decreases in prices, monetised improvements in 5uality, range or service, monetised time savings, and the benefits that consumers gain from making better informed choices. $here problems are in an upstream market and benefit arises in the first instance to business customers then it is assumed that the benefits will be passed on in full to final consumers, unless there is strong evidence to the contrary. 6
#C#C

-oes not e3plicitly calculate business costs of authority action.

9ut it is

assumed that costs to business will be passed on to consumers in increased

#E#E

prices, and the aim is to ensure that the direct financial benefits to consumers of any authority intervention far e3ceed costs to business. 6 -raws on information from e32post evaluations carried out by independent parties. So far two e32post evaluations have been carried out. /ethods used in e32post evaluations will depend on the market study in 5uestion. )or e3ample in the evaluation of a ta3i market study, the contractor calculated the estimates of impact by comparing waiting times and ta3i utilisation before and after the study recommendations were implemented. !.# +ne authority advised that for reports initiated internally, it e3amines the number of staff hours needed to complete the study and any data or other purchased input costs. Its recommendations on competition reports usually entail the removal of restrictions to competition, and thus do not entail imposing costs on business. *he same authority mentioned the difficulties in 5uantifying costs and benefits for market studies work. F<lthough there are large benefits from our studies, they are much more difficult to 5uantify. *he benefits are1 6 greater knowledge and understanding of the industry affecting our enforcement efforts4 and 6 informing legislative, ;udicial, or regulatory agencies about the functioning of the particular industry as an input to their policy making decisions.F

!.0 +ne authority advised that its methodology in each case is highly specific to that case. $here adverse findings are found these relate to features of the market that already e3ist, and calculations of the detriment arising are typically related to the last few years. *his information is used when considering whether to take remedial action and the proportionality of the remedies under consideration. !.! +ne authority advised that it does Qnot see the direct relationship between the costs and benefits of its market studies work, which is intangible in its nature and cannot therefore be directly and reliably measured in financial terms. &onversely, the costs of enforcement action can be compared to the benefits resulting from it through, for e3ample, the amount of
####

fines imposed.? !. 0 <nother authority advised that the final report of a sector in5uiry may contain no recommendation or formal decision aimed at market players. *herefore, from its

#0#0

point of view, Qthe purpose of the sector in5uiry itself is not necessarily to achieve a certain measurable FimpactF. /easuring the impact of market studies work !. <uthorities were asked how they measure the impact of their market studies work and were asked to confirm whether they do any of the following activities1 6 6 6 contact third parties to carry out independent evaluation conduct their own evaluation publish the results of evaluations.

!. 2 *he ma;ority %0# per cent( of the E respondents to this 5uestion confirmed that they carry out their own evaluations. < smaller ma;ority of CE per cent advised they publish the results of their evaluations. +nly =# per cent of respondents advised that they commission third parties to carry out independent evaluations. )our authorities, representing 2C per cent of respondents, advised that they do all three activities. &hart H!. I1 >ow does your <uthority measure the impact of its market studies workP
E " 2

" :ublish .esult s of ,valuat ions &ont act *hird :art ies *o &arry +ut Independent ,valuat ion E !

0 0 E " 2 Sour +w n 0

&onduct ,valuat ions

#!#!

!. = <uthorities were then asked if they have a dedicated team to measure impact. +f the 22 authorities that responded only three authorities % " per cent( advised that they do. !. " *he final 5uestion of this part of the 5uestionnaire asked authorities to describe the pros and cons of their process for measuring impact. < few authorities commented

0000

generally about the benefits. +nly seven authorities responded specifically about their process and there was very little consensus in the answers provided. < summary of the pros and cons provided is listed below. !. C 6 :rocess for measuring impact 2 pros having performance measures in place before the study starts

6 helps inform future market studies work %which market to choose, how to evaluate market, how to conduct studies, lessons learned etc( 6 ensures the budget is spent ade5uately

6 having the measure based on both internal and e3ternal opinion helps to ensure and show ob;ectivity 6 6 6 having impact assessments done by an independent service provider the fle3ibility of our process helps demonstrate value for money

6 helps prove, by comparison with other forms of intervention, that market studies stand up well to scrutiny in terms of costs and benefits 6 tailoring the methodology to apply to each case

6 subse5uent market observation guarantees that knowledge of the specific market is put to further use 6 informality of procedures means it is less burdensome and time consuming to measure impact. !. E 6 :rocess for measuring impact 2 cons our ine3perience 7 measuring impact is 5uite new to us it is not always easy to measure impact, especially when recommendations are

6 long term 6
0 0

lack of an e3plicit cost for studies

6 lack of a formal process for measuring impact and therefore reliance on simple counts and heuristic approaches

0202

6 whether there is more that could be done to support recommendations by providing more detail, when it is reasonable to do so, on their likely impact.

Summary of Key )indings Key findings of this chapter1 ( ,ighty2si3 per cent of respondents review the effect of their market studies work 2( *he ma;ority of those that responded carry out their own evaluations. *hirty2 seven per cent commission independent evaluations. =( Seventy per cent of respondents do not measure changes in market outcomes coming out of market studies. "( )or many, measuring the costs and benefits of market studies work is a relatively new, not fully developed or non e3istent concept at present. C( +nly three authorities have dedicated resource for measuring the impact of their work

0=0=

<SS,SS/,'* +) *>, /<.K,* S*U-S *++L

0. *his chapter seeks to draw some conclusions about how respondents assess market studies as a tool. It draws from responses provided about the top three benefits of market studies, the most and least successful market studies, and details provided about stakeholder feedback about market studies. /ost and least successful market studies 0.2 <uthorities were asked to list their three most successful and three least successful studies, and to comment on why they consider them to be successful or unsuccessful. 0.= *hirty2one authorities responded to the re5uest to list the three most successful studies, and 20 responded to the re5uest to list the three least successful studies. 0." It is difficult to discern any pattern in the topic areas of those studies that were considered most successful versus those that were considered least successful. Studies in the following sectors featured in both lists1 6 generally( health care %e.g. dentistry, health insurance, hospitals, and health care more

6 financial services %e.g. pension funds, banking, credit( 7 banking and retail banking appeared several times on the Qmost successful? list but also featured %though only once( on the Qleast successful? list 6 pharmaceuticals %including pharmaceuticals, generic drugs, commercial medicine, and pharmacies( 6 6 6 basic industries %e.g. mining, steel, wood( energy %including gas and electricity( telecoms %including mobile telephony and network access(

6 transport %including passenger transportation, railways, buses, airports, ports, freight transport, ta3is( 6 6
0"0"

retail %supermarkets, chain stores( basic food products %milk, bananas, sugar, beer, staple foods, poultry, dairy,

beef, agri2food distribution, wine(

0C0C

professions %especially regulatory entry barriers( construction %including brick2making, cement, chipboard, building codes, home

6 building( 6

real estate %including sale and rent back(.

0.C Studies on fuel and petroleum featured only on the Qmost successful? list. In the Fmost successfulF there were also studies on competition compliance and on the system of competition regulation 7 neither of them sectors per se, rather policy areas. Studies on media and publishing featured only on the Qleast successful? list. 0.E +ther sectors listed as Fmost successfulF included1 driving schools4 car distribution4 and outdoor advertising, and as Fleast successfulF included1 defence4 flowers4 tourism4 tobacco4 and international trade. 0.# *here are, however, discernable trends in the reasons listed as to why authorities considered studies more or less successful. *he reasons most fre5uently listed for studies being considered most successful are represented in the chart below. &hart H 0. I1 H*hree most successful market studiesI $hy do you consider these market studies to be successfulP

2C 20 C 0 C 0 2 = " C E # 0 0 22 " ! # C

Key to &hart 0. . Led to change in lawDpolicy Hthat improved competition and benefited consumers in the marketI.
0E0E

2. =.

Led to successfulDon2going enforcement action. Led to change in industry rulesDpractice.

0#0#

". @ave authority understanding of market structure and how market works Huseful for subse5uent workI. C. @ave authority understanding of competition problems in market Huseful for subse5uent workI. E. #. :rovoked useful discussion of competition problems in the market. Led to competition advocacy for change in lawD policy.

0. Led to recommendations for change in lawDpolicy Hunder consideration and likely to be implementedI.

0.0 *he most common reason for studies being considered successful was that they led to a change in law or policy that improved competition and benefited consumers in the market. 'e3t most common were that the study had led to or informed successful, or on2going, enforcement action, and that it had led to changes in industry rules or practice. In the mid range of the chart above are a group of reasons connected with increasing the authority?s understanding of the market andDor its competitive problems, which proved useful for subse5uent work. +ther fre5uently cited reasons were that the study provided an opportunity to recommend or advocate for changes in law or policy, or provoked useful discussion of competition problems in the market. 0.! 6 +ther, less common, reasons for considering a market study a success included1 that it led to action by the industry regulator

6 that it allowed the authority to re;ect a complaint seeking competition enforcement action 6 that it improved policy makers? understanding of competition issues that it provoked useful public debate about the regulatory regime, or policy

6 issues 6

that it was a large scale e3ploratory study.

0. 0 *he reasons most fre5uently listed for studies being considered least successful are represented in the chart below.

&hart H 0.2I1 H*hree least successful market studiesI $hy do you consider these market studies to be least successfulP
# 0 E " 2 0

-if f ic ult y +bt aining Inf ormat ion

:oor *opic )or St udy 2 'ot 9ig ,nough /ark et "

.ecommendat ions 'ot Implement ed

0. 9y far the most common response to this 5uestion was that the recommendations coming out of the study had not been implemented. +ther reasons listed include those in the chart above 7 difficulty obtaining the information on which to base the study?s findings, and that the topic selected was poor because the market was not big enough 7 as well as the following1 6 the recommendations were not well specified, or failed ade5uately to address the problems found 6 lack of resource

6 too much resource was allocated to the study in relation to the relatively low impact that it had 6 the study did not result in enforcement action

0!0!

6 the study was poorly timed in that the problem diminished before it was published, or other reports published around the same time diminished its impact, or the findings were published too late to influence the debate 6 the study took too long

6 there was not enough investment at the time the study was published in advocating for its recommendations to be accepted.

!0!0

0. 2 *here are no discernable linkages between the sectors studied and the reasons why studies were considered successful or unsuccessful. *op three benefits of market studies 0. = <uthorities were asked to list the top three benefits of market studies. *hirty2seven out of =0 authorities responded to this 5uestion. *here were a range of different answers. *o analyse the responses, the answers were grouped into categories. <nswers were scored in reverse order %i.e. the top benefit was given a score of three, the second most important benefit was scored as a two, and the third most important benefit a score of one(. $here answers covered more than one category of response, the corresponding score was added to both categories %for e3ample, a three in each category, where the first listed benefit covered two categories(. *he results are as follows1 &hart H 0.=I1 $hat does your <uthority see as the top three benefits of market studiesP

"C "0 =C =0 2C 20 C 0 C 0

=!

=# == ==

0 0

! E 0 0 = 2 2 = =

"

"

Key to &hart 0.= ( <s a way to identify and address market failures. <llows authority to react to market irregularitiesDidentify market failures and competition problems in marketsDidentify remedies for market problems or the best ways to intervene in markets. 2( 9uilds authority knowledge baseDcapacityDcompetency1 Improves detailed knowledge of whole market rather than specific transactions or conductD :rovides sound evidence base for public policy decisions. =( <s a means to address public restrictions on competition1 <llows authority to address market structure and entry barriers through recommendations to governmentD identifies topics
! !

for competition advocacy and legislative changeD addresses public restrictions on competition 2 which couldnFt be addressed by

!2!2

enforcement action. "( Interaction with enforcement action1 Improves ease of authorityFs workDbetter enforcement decisionsD efficiency of enforcement workD informs market participants about authorityFs strategy e.g. in defining markets, for the purpose of other toolsD helps authority make a competition assessment of market powerD identifies agreements and practicesD allows understanding of the market for enforcement actionD allows understanding of economics underlying competition and consumer protection policies and enforcement decisions. C( ,ducating market participants1 ,ducates market participants and consumers about the effects of restrictions and benefits of competitionD helps promote competitive marketsD encourages market participants to consider competition effects of actionD improves transparency of the market. E( ,ducating government1 ,ncourages government to consider competition effects of policyD promotes understanding of the economic conse5uences of governmental actsD educates government about competition concernsD helps assess impact of governmentDregulation on markets. #( <llows for voluntary remedies saving money on costly e3 post enforcement action. 0( <ddresses markets where competition and consumer issues overlap %if consumer powers as well as competition powers(Dto gather information that is not limited to competition. !( >elps set authority?s priorities including on enforcementDdecide which markets to monitorDhelps determine sector2specific strategy. 0( Improves the credibility of the authorityD demonstrates the impartiality of the authorityD improves the transparency of the authority. ( *o reduce consumer detriment. 2( >elps the authority carry out its function of promoting competitive marketsD advising @overnment and :arliament. =( <llows understanding of the challenges faced by businessD builds trust from market players. "( -evelops relationships with sector regulators. C( <llows analysis of emerging legal and economic issues and understanding of dynamic industries. E( 'on2adversarial nature.

0. " )rom these results it is evident that the four most important benefits of market studies, broadly speaking, appear to be that they are a means to1 6 6 identify and address market failures build the authority?s knowledge base

6 6

address public restrictions on competition by means of advocacy reach better and more targeted enforcement decisions.

0. C +ther key benefits are studies? educational value, both in educating market participants about the benefits of competition and promoting competitive markets and in educating government about the competition effects of policy and regulation. Stakeholder feedback on market studies 0. E <uthorities were asked whether stakeholders had e3pressed opinions about how they conduct market studies. *hirty2seven out of the =0 respondents answered this 5uestion. +f these, "0 per cent % C authorities( replied that stakeholders have provided such feedback. *he balance %E0 per cent, 22 authorities( said that they have not. 0. # <uthorities that said stakeholders have given feedback were asked to briefly outline the issues raised. *welve out of the C authorities that answered yes gave some indication of stakeholders? views. Key views included1 6 6 6 6 6 %from sectoral regulators and industry( good 5uality of analysis %from industry( supportive of the way in5uiries are conducted %from industry( generally supportive of the results of market studies support for market studies as core to the authority achieving its mission studies too slow and e3pensive %twice(

6 more to be done to secure implementability %consider impact and practicality of recommendations(, and implementation of recommendations to government 6 6 government should have an obligation to respond, as it does in the UK 5uerying reasons for launch of studyDsource of ideas %twice(

6 %from consumer stakeholders( formal mechanisms to feed in ideas for studies are not sufficient 6 %from legal community( critical that studies are used in cases where enforcement action would be more appropriate 6 5uerying possible outcomes %including enforcement action(

6 6

%from industry( resistance to being studied 7 no competition problems here %from government( resistance to recommended changes

6 %from industry( insufficient transparencyDstakeholder engagement %three times(, inaccuracies in dataDindustry knowledge, and conclusions %twice( 6 6 %from industry( concern about spill over effects %from industry( views not properly taken into account

6 market studies are viewed with suspicion by stakeholders because the culture of competition is not advanced. <dditional comments 0. 0 +ne authority stressed that it views market studies as critical to addressing governmental restrictions on markets, and to enhancing economic growth. It noted its support for the I&' working group to produce procedural and technical guidance on market studies.

Summary of Key )indings Key findings of this chapter1 ( Studies were most likely to be considered successful when they led to changes in law or policy that improved competition andDor delivered consumer benefit. 2( Studies were most likely to be considered unsuccessful when recommendations were not implemented. =( 6 6 6 6 "( *he most commonly acknowledged benefits of market studies are as a way to1 identify and address market failures build the authorityFs knowledge base address public restrictions on competition by means of advocacy reach better and more targeted enforcement decisions. "0 per cent of respondents advised they have received stakeholder feedback

about their market studies work. )eedback provided was mi3ed.

!C

/<.K,*S S*U-I,- +R,. *>, L<S* *>.,, S,<.S

. <uthorities were asked to complete an anne3e to the 5uestionnaire, listing the market studies they have completed over the last three years, and setting out for each study %where possible( the market studied, the reason for studying it, the duration of the study, the value of the sector, the outcomes achieved, and an assessment of the outcomes in terms of how satisfied authorities are with the results achieved, and why. .2 *his chapter considers the information provided under each of these headings. *he findings represent what authorities have actually done over the last three years. $here this appears to differ significantly from authoritiesF general responses to 5uestions covering the same issues in the rest of the 5uestionnaire, we have sought to bring these differences out. .= *he findings in this chapter are based on responses from 2# authorities %out of the overall =0 that responded to the 5uestionnaire(, reporting on !C studies in total. +n the whole, the findings in this chapter may be less reliable than those in other chapters, because1 6 some items 6 basis 6 and the number of respondents was overall lower, and was significantly lower on

results in this chapter are recorded on a per study rather than a per authority

there was a large variation in the number of studies reported by each authority,

6 authorities may have taken different approaches to recording the outcomes of, and to assessing, particular studies. ." .esults show that there is a high volume of studies reported that are connected with enforcement action. It is not always possible to tell whether these were studies that were conducted separately from enforcement action %though intended to provide information that will facilitate it(, or as part of the process of conducting enforcement action. 'umber and duration of studies conducted .C *he number of studies reported as having been conducted in the last three years ranged between one and 20, giving an average of seven studies conducted over the three year period. Some of the authorities that had not conducted many studies

!0!0

noted in their 5uestionnaires that they were new authorities andDor that they had only recently been given legal powers to conduct market studies or otherwise started to use them. .E In terms of duration of studies, not all data were available, but there was wide variation between the authorities that did respond. <t the e3tremes, some reported having completed studies within four months. +thers took up to four years. )or some authorities, duration of individual studies varied widely, for e3ample between one and =0 months for one authority. /ost showed significant variation in the duration of individual studies, suggesting fle3ibility in dealing with different kinds of markets and market problems, entailing varying levels of resource. )or others duration was more homogeneous, for e3ample all studies took between four and si3 months, or all studies took between 2 and 2" months. *wenty2three authorities gave durations for some, or all, of the studies they listed. +f those studies for which duration was given % =# studies in all( the average was around 2 months. *his fits 5uite well with the durations that authorities reported in response to the 5uestionnaire, considered in &hapter #. *he range of averages per country of those studies where a duration was given are represented, anonymously, in the following chart %the names of the authorities are replaced, along the 3 a3is of the chart, by the numbers one to 20(. &hart H . I1 <verage duration of market studies, by <uthority, for those <uthorities that completed the anne3e to the 5uestionnaire, and for those studies for which a duration was given
=C -uration in m onths =0 2C 20 0 C # " = C 0 2 = " C E # 0 ! 0 2 = " C E # 0 ! 20 2 22 2= C C E E E E = ! 2 " 2 = 20 C C ==

22 2"

2=

<uthority averages

.#
!!!!

*here seems little discernable pattern in the average duration of different authorities

though there is, perhaps, a slight bias towards shorter studies in those authorities with the newer competition regimes.

00 00

.0 -ata on duration of studies, however, present only a partial picture, since a study can be shortened if it has more resource devoted to it, and may take longer if it is staffed with minimal resource. /arkets studied .! <uthorities were asked to list the markets they had studied and to give an estimate of the value of the sector. . 0 In terms of the markets studied, a number of common sectors for study emerged. In the data that follows on market sectors there are some very minor overlaps where three or four studies fitted into more than one category. *he top 2 sectors %and number of studies conducted in each one over the last three years( are shown in the chart below. < complete list of study topics reported is attached at <nne3e ". &hart H .2I1 *op 2 sectors for studies in the last three years

'umber of studies =0 2C 2" 20 *elecoms C C " 0 C )inancial services *ransport 0 ,nergy @roceries :etroleum products :rofessions &ompetition policy )ood supply chain Insurance >ealth &onstruction 2 0 0 ! ! !

. In this chart, the Qcompetition policy? sector is made up of more theoretical studies that were conducted in order to e3plore, or raise awareness of, particular aspects of competition policy, or ways to analyse competition problems, or the interface of competition policy with other issues, such as regulation."C *he other sectors are relatively self2e3planatory.

"C

*opics included1 e3change of information by trade associations4 interface between competition authority and regulators4 guidelines for competition compliance by business4 anti2dumping and competition law4 avoiding competition restrictions in regulation4 public subsidies and competition policy4 biases in demand analysis due to variation in retail distribution4 technological tying and competition4 cartel case law in select ;urisdictions4 and patent dispute settlements and market entry and consumer welfare.

. 2 $hat stands out from this chart is the importance of the financial services sector as a topic for market studies. *here were over a third more studies in this sector than any other, including nine studies into retail banking in different countries, nine studies of consumer credit, or payment cards of various types, and two studies of pensions. . = +ther sectors studied that fell outside the top 2 were1 pharmaceuticals %seven studies(4 housing %si3 studies(4 media and media rights %seven studies(4 housing %si3 studies(4 utilities %other than energy 7 i.e. post and water( %five studies(4 chemicals %four studies(4 e2 commerce %four studies(4 manufacturing, non2grocery retail4 education %studies on school books and school uniforms( and leisure %each with three studies(. . " /arkets or sectors in which there were one or two studies were1 advertising4 travel and tourism4 public procurement4 sport4 waste4 international trade %studies on tariffs and bilateral agreements(4 basic industries4 and information markets. Ralue of sector . C <uthorities were asked to give an estimate of the value of the sector for each market study. Sectoral values were provided for #C out of the !C studies reported on. Ralues ranged from T2.C million, in respect of a generic drugs market study, to markets or sectors that were in some cases worth hundreds of billions of ,uros, including1 financial services4 groceries4 telecoms4 energy4 and construction. . E < small minority of respondents %two( gave market value as a percentage of @-:. *his may be a useful measure of the importance of a sector in the relevant national market, but it was not possible to compare these data with the other monetary values. *he five studies reported in this way ranged between .= per cent of @-: and 0.!C per cent of @-:. . # < graph showing the distribution of the remaining #0 studies across the range of market or sector values is set out below. In order to prepare this graph, monetary values given in currencies other than the ,uro were converted into ,uros using an internet currency converter, at the rate applicable at the time of conversion. ,3change rate fluctuations and changes in sector value over time will affect the accuracy of the values presented in the graph, but the data give a picture that is sufficiently accurate for the purposes of understanding the range and spread of sectoral values of markets studied in the last three years.

&hart H .=I1 Sector or market values reported for #0 studies

=C0000

Ralue of sector ,uro millions

=00000 2C0000 200000 C0000 00000 C0000 0 0 E0 Studie s 20 00 "0

. 0 *o give a clearer breakdown of the spread of market or sector values, graphs showing the distribution of studies above and below T billion are set out below.

&hart H

."I1 Sector or market values reported for studies below T billion

000 Ralue of sector ,uro millions 000 E00 "00 200 0 0

20

2C

=0

=C

Studie s 0" 0" 0"

&hart H

.CI1 Sector or market values reported for studies above T billion

=C0,000

Ralue of sector ,uro millions

=00,000 2C0,000 200,000 C0,000 00,000 C0,000 0 0 "0 Studie s 0 C0 20 =0

. ! *hese graphs show that in the T0 to T billion range, the value given for the markets or sectors was fairly evenly spread, but in the T billion to T=C0 billion range, the ma;ority of studies were of markets or sectors valued at TC0 billion or less. .20 +verall the findings show that authorities use market studies to look at markets or sectors covering a very wide range of values. *his demonstrates very fle3ible use of the market studies tool. Source of ideas .2 )or each study listed, authorities were asked to give the source of their idea.

.22 *he results were 5uite disparate, presented in different ways, and not all authorities responded to this 5uestion. In some cases they responded for some studies but not for others, and in some cases they noted more than one source. .2= *hese data were analysed by creating a number of categories and sub2categories of source, and counting each time each category and sub2category of source was noted. *his means that some studies are counted more than once. &ategories of source are1 6 6 6 6 internally generated source e3ternally generated source 7 based on market conditions e3ternally generated source 7 based on legal reasons e3ternally generated source 7 coming from other bodies.

.2" *he sub2categories were more detailed and are noted in the table below. *here will be some overlaps between the categories and sub2categories, but hopefully they give a flavour of the kinds of sources for ideas that authorities listed. *able H
Internal

. I1 Source of ideas for study

+wn initiative Internal competition concerns Internal consumer protection concerns 9usiness complaints &onsumer complaints ,arli er study or advocac y +wn enforc ement or advocac y Int ernal prioriti es

*ota

Sub total ,3ternal 7 mar ket conditions Sub total ,3ternal legal reasons

"# :ric eDcost trends

= 9usiness conduct /arket functioning badly E .e5uired b y la w

0 :ress reports

"

"

0!

2 Legal challenge of authorit y &hanges in la w

2E

Sub total ,3ternal other bodies +,&rep ort identifying country specific productivit y problem

E .eferred b y other competition bod y &ollaboration withD informati on from Sect ora l .egu lator &ollaboration with overseas competition authorit y Suggested by ad visory bod y @overnment re5u est, suggesti on or instruction $ork of other authorities internationally

Sub total

"!

.2C *his suggests that the commonest sources of ideas are from internal thinking, complaints that authorities receive, or other work that they have done %complaints for this purpose are treated as internal because they are information already in the authority?s possession(. *he second most common source of ideas is from other bodies in the field 7 for e3ample government and other competition bodies. >owever an individual subcategory that also scored highly is Qre5uired by law? in the Qe3ternal 7 legal reasons? category. < number of authorities are under a legal duty under particular statutes to look at particular markets or to undertake a study when asked to do so by government or another body. In the Qe3ternal 7 market conditions? category, the commonest sub2categories were press reports and price or cost trends. *his suggests that it is useful for an authority to keep a watching eye on trends and press coverage as a potential source of ideas for markets that may be worth studying.

.easons for studying .2E )or each study listed, authorities were asked to give the reasons for conducting the study. <s with data on sources, the results were 5uite disparate, presented in different ways and not all authorities responded to this 5uestion. In some cases they responded for some studies but not for others, and in some cases they noted more than one reason. .2# *hese data were analysed by creating a number of categories and sub2categories of reason, and counting each time each category and sub2category of reason was noted. *his means that some studies are counted more than once. .20 6 6 6 6 6 6 6 6 &ategories of reason are1

defining the market understanding market structure, market power and barriers to entryDe3pansion e3amining competition effects of conduct and agreements e3amining consumer protection issues remedying problems in the market advocacy goals competition policy goals %i.e. defining competition policy in some way( economic or productivity goals.

.2! *he sub2categories are more detailed and are noted in the two tables set out in the pages that follow. *here will be some overlaps between the categories and sub2 categories, but hopefully they give a flavour of the kinds of reasons authorities provided.

*able H
-efining the /ar ke t

.2I1 :urpose of studies 7 :art I

&onsider market definition ! Understand and e3plain how competition works in the market ,3amine the market structure, market shares, and concentrations ,3amine barriers to entry and e3pansion ,3amine net work effects ,3amine the effects of regulation on the market ,3amine public sector participation in the market ,3amine information failures and problems for consumers ,3amine consumer switching ,3amine developing markets *otal

Subtotal Understanding market structure, market power, barriers to entryD e3pansion

Subtotal ,3amining competition effects of conduct and agreements

=E Understand the terms of contracts operating on the market

0 &ollect information on possible cartels Dcollusion

0 Look at vertical agreements Ddistribution chain Look at I: rights, licensing issues, tying and e3clusivity in contracts C

2E Look at conduct Dpractices of market players .eview prices, price differences and price trends and costs 2!

C .eview profitability of market players

# .eview trends in service provision

" &onduct case studies

00

Subtotal ,3amining consumer protection issues ,3amine consumer protection issues in market 0 /ake recommendation s to address competition failures =

= ,3amine consumer satisfaction

"

0#

Subtotal .emedying problems in the market

Seek the removal regulatory restrictions

of

Leading to enforcement action

&onduct international comparisons

Subtotal

22

0"

*able H .=I1 :urpose of studies 7 :art II

<dvocacy goals *o look at market b efore deregulati on or legislation *o fend off legi slati on that wou ld have anti competitive effects 2 *o analyse the relati onship with sect ora l regu lators *o analyse case la w *o assess the competition provisions in bilatera l inter2 national agreements " *o faci litate regi onal development *o e3amin e markets that are important to the ec onomy 2 <d vocac y about competition effects of regu lation <d vocac y about competition effects of subsidy <d vocac y about competitive tendering *o raise business awa reness of competition principles *o formulat e guidelines for competition complianc e *otal

Sub total &o mpe tition policy goals

0 *o analyse the interfac e bet ween anti2 dumping legi slati on and competition la w

Sub total ,conomic or producti vity goals

Sub total

.=0 *he data suggest that the most common reasons for conducting studies are to understand the market structure, market power and barriers to entry or e3pansion % 00 studies(, and to e3amine the competition effects of conduct and agreements %0# studies(. It is notable that = studies were described as being for the purpose of collecting information on possible collusion or cartels. *here appears to be a degree of divergence of approach among some authorities as to the e3tent to which market studies are used specifically to collect evidence for enforcement action. *his emerges from other data supplied in response to the 5uestionnaire1 compare, for e3ample the relatively low rating given for use of studies to obtain an understanding of the market to take enforcement action %shown in &hart ". and discussed in paragraph ". E( with the higher score

given to Fcompetition enforcementF as an outcome of market studies %&harts 0. and 0.2, discussed at paragraph 0.0(, and with the high score given for reaching better and more targeted enforcement decisions as a benefit of market studies %&hart 0.=, discussed at paragraph 0. "(. .= *here were a relatively lower number of studies %22( that were described as being for the purpose of remedying problems in markets.

.=2 +nly studies were described as being for the purpose of e3amining consumer protection issue in markets. *his may reflect the fact that, as we saw in &hapter =,

around two2thirds of the authorities that responded have competition, rather than competition and consumer functions. .== )ifteen studies were noted as having a specific competition advocacy purpose. <s we saw in &hapter " %&hart ". (, competition advocacy related purposes for market studies scored high in the ranking of possible purposes of market studies. .=" < small number of studies %four( were noted as being for the purpose of defining competition policy positions on specific issues.

.=C < very small minority of studies %two( were noted as having an economic or productivity goal. It seems likely, however, that this goal would underlie many more %if not all( of the studies listed even though authorities did not e3plicitly name it. +utcomes of studies .=E 6 6 6 6 6 6 <uthorities were asked to tick, for each study, what outcomes it had. *he choices given were as follows1

competition enforcement consumer enforcement consumer education business education voluntary business compliance voluntary business action

2 2 2

6 6 6 6 6

recommendations to government for changes in the law recommendations to government to change market structure recommendations for changes to government policy referral to third parties no problem found.

= = =

.=# In many cases, authorities noted that more than one of the above outcomes had resulted from individual studies. *he results of this e3ercise are presented in the chart below1 &hart H .EI1 +utcomes of studies

#0 C0 E0 C0 &hanges In =# "0 =0 20 0
*he Law

CC

C"
9usIness ,ducat ion &onsumer ,ducat ion &hange In / arket St ruct ure Rol 9usIness &ompliance

2#

&ompet it ion ,nf orcement

&hanges *o @overnment :olicy

=2 20

Rol 9usIness < ct ion 'o :roblem )ound .ef *o *hird :art ies &onsumer ,nf orcement

2!

20

"

.=0 *his demonstrates that recommendations to government to make changes to government policy is the most common outcome of the studies that have been conducted over the last three years. *his is followed by outcomes that resulted in competition enforcement action and recommendations to government to change the law. *he use of studies to gain information about markets that can lead to competition enforcement action was also considered in &hapters " and 0 as noted above. 9usiness and consumer education are the ne3t most common outcomes of market studies. *his confirms the strong advocacy role for market studies. Seeking voluntary business compliance or voluntary
" " "

action by business is less common, and perhaps an area that authorities could e3ploit more in the future. &onsumer enforcement action was the least common outcome of market studies. <s noted above %paragraph .=2( this may reflect the fact that around two thirds of the authorities responding to the 5uestionnaire have competition only, rather than both competition and consumer, functions. <ssessment of outcomes .=! <uthorities were asked to rank the outcome of each study overall, using a scale of one %not satisfied( to si3 %very satisfied( and to provide a brief narrative assessment of their rating to include details around for e3ample1 6 6 6 acceptance of recommendations evidence of business compliance results of any formal evaluation.

C C C

.atings ."0 'inety2five of the !C studies in the anne3e were given no overall rating. *here were 2= studies where authorities advised that it was too soon to give a rating because studies had only recently completed andDor action was still being considered or implemented. +ne authority advised that it was unable to provide a ranking for its studies as its e3perience in tracking results is relatively recent. In addition there were three studies where the authority advised that it was impossible to measure the results with any certainty. +ne authority gave individual satisfaction ratings, for three of its studies, for the outcomes on each problem investigated rather than an overall rating for each study. ." +f the 00 studies that were given a specific overall rating, a large ma;ority %0 per cent( were at the higher end of the satisfaction ratings 7 with scores of si3, five or four. &hart H .#I1 Using a scale of %very dissatisfied( to E %very satisfied( please rank the outcome of each study

=C 'umber of St udies =0 2C 20 C 0 = C 0 2 .at ing = " C E C

=2

2!

20

."2 +f the 00 studies that were given a rating, not all authorities provided the re5uested narrative assessment of their ratings. In addition some of the narratives provided did not e3plain the ratings but instead listed the outcomes of the studies. *he number of narrative e3planations, that could be analysed, amounted to #E of the 00 studies concerned %#EU(. < summary of the main e3planations is provided below.

Summary of narrative for ratings ."= *he main reasons, for the 20 studies that scored si3 and for the 2! studies that scored five %the two highest satisfaction ratings(, fall into the categories shown below. 6 6 6 6 6 6 recommendations fully or largely accepted influenced government policy led to regulatory change used successfully to advocate the importance of competition led to voluntary business action led to more competition in the market.

+ther less popular reasons that were cited included finding no problems in the market studied, leading to improved market structure and leading to enforcement action. ."" ,leven of the "! studies given a rating of either si3 or five were instigated at the re5uest of government, so it is perhaps not surprising that they were successful given that government concern, and potentially also appetite for change, e3isted at the start of these studies. *here was no pattern or series of patterns in the sectors that scored the highest satisfaction ratings, so success does not seem to correlate to choice of sector to study. ."C *he main reasons, for the "0 studies that scored ratings of between four and two, fall into the categories shown below. In the ma;ority of cases the ratings given largely reflect the degree to which recommendations have been accepted and implemented by government andDor industry1 6 government adoption of most recommendations

6 6 6 6

government adoption of some recommendations legislation was substantially altered led to change in business practice established market shares

6 6 6 6 6 6 6

led to government debateDconsultation led to agreement with other government bodies on market direction found potential anticompetitive practices guidance produced but not binding led to businessDconsumer education provided knowledge about marketDmarket share led to antitrust proceedings.

."E )or the three studies which scored the lowest satisfaction rating of one, it was noted that this was due in two cases, to government not having adopted the recommendations despite evidence of an abuse of market power and in the remaining case to very little progress having been made in implementation of recommendations.

Summary of Key )indings Key findings of this chapter1 ( < wide range of topics have been studied over the last three years.

20 20 20

2( =( 6 6 6

Studies in the financial services sector are the most common. *he commonest sources of ideas for studies over the last three years are1 authoritiesF own idea %including complaints received( the work or suggestion of other bodies e3ternal market conditions.

"( <mong reasons given for studying particular markets over the last three years the most common are to1 6 6 understand market structure %including market power and barriers to entry or e3pansion( e3amine the competition effects of conduct or agreements.

C( *he number of studies conducted in last three years ranged between one and 20, giving an average of seven studies per year. E( *he most common outcomes for studies over the last three years closely correspond to those identified in &hapter 0, namely1 6 6 6 recommendations to government for changes in policy recommendations to government for changes in the law competition enforcement.

#( +f the !C studies, !C were given no overall rating of satisfaction. +f the 00 that were given a rating 0 per cent were marked at the higher end of satisfaction. 0( Satisfaction ratings on the whole were based on the degree to which recommendations had been acceptedDimplemented. '+*,1 *he findings in this chapter may be less reliable as the number of respondents was overall lower and was significantly lower on some items. In addition the findings in this chapter are on a Qper study? rather than Qper authority? basis

22 22 22

SU@@,S*I+'S )+. )U.*>,. $+.K

2. *here is a wealth of e3perience in conducting market studies across the I&' membership, and a wide range of practice used to do so. It is hoped that the insights in this report will provide a useful tool for greater convergence, and informed divergence, in what appears to be an e3panding field. *here is clearly scope for cross2fertilisation of ideas, including on1 6 ideas for markets and topics to study 7 a list of markets studied in the last three years by respondents that supplied this data is attached at <nne3e " 6 6 the approaches to selecting and carrying out studies %and uses of study powers( ways to conduct studies efficiently and effectively.

2.2 In addition, this chapter suggests some areas for possible future work for the I&' on market studies. *his :ro;ect has identified a substantial degree of consensus for future work in two areas1 6 *here appears to be scope for outlining best practice in relation to a number of aspects of the conduct of market studies. *he I&' might therefore consider producing a document setting out best practice on these aspects. It could also consider creating a web2based database of market studies carried out by member authorities %paragraphs 2.= to 2.#(. 6 )ew authorities have yet taken steps to estimate or measure the specific impact of their market studies. *his may be an area where those that have developed, or are developing, evaluation programmes could share best practice %paragraph 2.0(. *wo further areas have been identified for further discussion as to whether they should be the sub;ect of future work1
2= 2= 2=

6 *his :ro;ect has identified broad agreement on the definition of market studies, albeit that there e3ists a degree of diversity in the purposes for which studies are carried out. *his diversity may be such as to make it not worthwhile to seek consensus on a detailed and prescriptive definition at this stage. It is suggested, however, that there is scope for further discussion on the benefits of seeking to achieve greater convergence by means of an agreed definition %paragraphs 2.! to 2. E(. 6 < wide range of markets have been the sub;ect of market studies, reflecting the diversity of the economies of those countries whose authorities conduct studies

2" 2" 2"

and the different competition problems which may emerge depending on local circumstances. *here may, however, be scope for discussion as to whether there are any sectors that member authorities might, collectively, focus on, and scope to consider the possibility of sharing best practice relating particularly to the study of markets in those sectors %paragraph 2. #(. 9est practice on market studies process 2.= *he +,&- .oundtable on /arket Studies noted scope for greater formalisation of, and transparency about, the general process of market studies, the powers that will be used, and how market participants will be involved. In addition, the 9usiness and Industry <dvisory &ommittee to the +,&- noted that it would aid transparency to business if authorities provided greater clarity on the basis on which they select market studies. 2." ,choing the work of the +,&-, this :ro;ect revealed that authorities select market studies on the basis of a range of factors, that a minority of authorities publish general guidance on the processes they will follow in conducting market studies, and that market studies outcomes can be improved by increased levels of stakeholder engagement. 2.C *here appears to be scope for I&' thought leadership in developing a set of best practices in relation to the conduct of market studies. :ossible practices to consider in any future I&' document outlining market studies best practice include1 6 publishing the criteria which authorities use to select markets to study

6 publishing guidance setting out the processes for conducting market studies, including the mechanisms for consulting with, and involving, market participants 6 publishing the approach to the use of formal powers to compel the supply of information, where these e3ist, together with recognition that these should be e3ercised with constraint, and that any information re5uests should be appropriately tailored
2C 2C 2C

6 6

publishing the likely timing of each market study publishing the findings of studies

6 evaluating the likely costs and benefits of a study, in terms of costs to business and benefits for competition and consumers, before it is formally commenced

2E 2E 2E

using appropriate pro;ect planning techni5ues to manage scope, analysis and delivery of market studies

6 ensuring that there is a plan, and resource, to conduct follow2up advocacy and other work in order to ma3imise the likelihood of a successful outcome from the study 6 any other suggested mechanisms to ma3imise the likelihood that recommendations coming out of market studies will be adopted by government or other decision makers andDor by market participants. 2.E Some authorities noted that securing a government commitment to respond to the recommendations of their studies could be a useful ad;unct to their powers. $hile this would not be in the control of I&' member authorities themselves, a best practice document could include this as a possibility for further e3ploration with their governments by those authorities that consider it could be useful. 2.# It may also be helpful to create a web2based database of markets studied by I&' members, and outcomes of each study, to facilitate cross2fertilisation of ideas and approaches to particular market problems. /arket studies evaluation 2.0 < minority of authorities reported that they have, or are developing, a formalised impact estimation programme for their market studies work. *hose authorities that have an e3isting, or nascent, impact estimation programme could share their e3periences, perhaps through a workshop for the I&' membership. &larity on market studies definition and purpose 2.! In the course of the +,&- .oundtable, the 9usiness and Industry <dvisory &ommittee to the +,&- noted that greater convergence across ;urisdictions would help to minimise the burdens on business."E *his :ro;ect has therefore considered the benefits of seeking greater consensus on the definition and purpose of market studies.
2# 2# 2#

2. 0 $hile there was broad support for the definition of market studies proposed at the outset of the :ro;ect, analysis of the information provided by member authorities in response to the 5uestionnaire indicated some areas of divergence.

"E

+,&- -irectorate for )inancial and ,nterprise <ffairs &ompetition &ommittee, 2 'ovember 2000. :olicy .oundtables1 /arket Studies 2000, page 20 .

20 20 20

2. In particular, there appears to be a divergence between authorities that can or do use market studies for the purpose of gathering information for specific enforcement action and those that do not. It would be difficult to agree on a definition of market studies that did not include this purpose within its scope, in particular because the ,uropean &ommissionFs sector in5uiry process, and the parallel process of several ,& member states, is e3pressly predicated on the possibility of infringements of competition prohibitions. 2. 2 6 6 It might, however, be possible, to agree that market studies are not a tool that is used1 as the sole basis for gathering evidence on which authorities will later rely in subse5uent enforcement proceedings, or in the course of pre2e3isting enforcement proceedings.

2. = -uring the +,&- .oundtable, the ,uropean &ommission clarified that it does not rely on information gathered in the course of its sector in5uiries in later enforcement proceedings. If it uncovers information in the course of a sector in5uiry that could be used in evidence in an enforcement proceeding, it must re2collect that information under its formal enforcement process, before it can rely on it in evidence in an enforcement case. <greeing this basic principle could help guard authorities against accusations that they will use market studies as Ffishing e3peditionsF for later enforcement actions. 2. " In some cases, responses to the 5uestionnaire suggested that certain authorities consider that the investigative work that they conduct in the course of e3isting enforcement cases constitutes a market study. *his does not correspond to other authoritiesF general concept of market studies, and risks confusion on the part of stakeholders and business. 2. C *he e3istence of these differences of view, which this :ro;ect has not so far sought to resolve, suggests that further discussion of the benefits of seeking to agree on a precise definition, as well as on what that definition should be, might be worthwhile. 2. E .egardless of the outcome of any such discussion, given the significant number of authorities that appeared wholly or mainly to use market studies as the basis for informing their enforcement work, and recognising the importance of competition advocacy as a mechanism for
2! 2! 2!

addressing market problems that cannot be addressed by enforcement action alone, and that competition advocacy and enforcement work are mutually reinforcing, there may be scope for authorities to consider using studies for competition advocacy purposes more fre5uently in future.

=0 =0 =0

Sectoral focus in market studies work 2. # < wide range of markets have been the sub;ect of market studies, reflecting the diversity of the economies of those countries whose authorities conduct studies and the different competition problems which may emerge depending on local circumstances. $hile it is recognised that member authorities must be free to determine their own priorities, there may, nevertheless, be scope for members to discuss whether there are any sectors that they might, collectively, focus on, and scope to consider the possibility of sharing best practice relating particularly to the study of markets in those sectors. )or e3ample, the financial services sector has already been an important source of market study topics for a number of authorities, and is likely to remain so in the light of current economic circumstances. Such discussion could be taken forward in the first instance by a workshop at which areas of potential common interest could be e3plored. Sharing of best practice could also be facilitated by means of an I&' database of information about market studies carried out by member authorities, which others could use to inform thinking on their own market studies work.

Guestions for the I&' )or discussion at the I&' conference, and beyond, therefore, are the following 5uestions1 . Should the I&' conduct further work to identify best practices in conducting market studiesP 2. If so, what are membersF views of the suggested areas that such best practice might coverP =.
=

$ould members find it useful to share e3perience on developing a

= =

programme of evaluation of market studiesP ". Should the I&' conduct further work to seek greater consensus on the definition and purpose of market studiesP C. $ould members find it useful to e3plore the possibility of discussing sectors on which their future market studies work might focus, and sharing e3perience of previous work in such sectorsP

=2 =2 =2

<'',J,

7 )ULL LIS* +) $+.KI'@ @.+U: /,/9,.S

I&' /embers <rmenia1 State &ommission for the :rotection of ,conomic &ompetition <ustralia1 &ompetition and &onsumer &ommission 9raAil1 Secretariat for ,conomic /onitoring %S,<,( 9raAil1 &onselho <dministrativo de -efesa ,conVmica %&<-,( &anada1 &ompetition 9ureau &hile1 )iscalWa 'acional ,conXmica &roatia1 &roatian &ompetition <gency ,gypt1 ,gyptian &ompetition <uthority ,l Salvador1 Superintendencia de &ompetencia ,stonia1 ,stonian &ompetition <uthority ,uropean &ommission @ermany1 9undeskartellamt India1 &ompetition &ommission of India Ireland1 *he &ompetition <uthority Italy1 <utoritY @arante della &oncorrenAa e del /ercato Japan1 )air *rade &ommission
== == ==

Jersey1 Jersey &ompetition .egulatory <uthority Jordan1 /inistry of Industry and *rade, &ompetition -irectorate /e3ico1 &omisiXn )ederal de &ompetencia /ongolia1 <uthority for )air &ompetition and &onsumer :rotection 'etherlands1 'etherlands &ompetition <uthority

=" =" ="

:oland1 +ffice of &ompetition and &onsumer :rotection .omania1 &ompetition &ouncil .ussian )ederation1 )ederal <ntimonopoly Service Singapore1 &ompetition &ommission South <frica1 &ompetition &ommission *urkey1 *urkish &ompetition <uthority UK1 &ompetition &ommission UK1 +ffice of )air *rading US1 <ntitrust -ivision, -epartment of Justice US1 )ederal *rade &ommission UAbekistan1 State &ommittee on -emonopoliAation and &ompetition -evelopment Zambia1 &ompetition &ommission 'on @overnmental <dvisors <ustralia1 <llan )els, <ustralia and 'ew Zealand School of @overnment UK1 -avid <itman, )reshfields 9ruckhaus -eringer LL: UK1 John >olmes, $hichP UK1 <tilano [Jorge[ :adilla, L,&@ LL& US1 <bbot [*ad[ Lipsky Jr, Latham \ $atkins LL: US1 John &. >ilke, Independent &onsultant
=C =C =C

US1 /aureen +hlhausen, 9usiness Software <lliance

=E =E =E

<'',J, 2 7 :.+J,&* GU,S*I+''<I.,

I'*.+-U&*I+' Guestionnaire :urpose1 *he 20002200! $ork :lan of the International &ompetition 'etwork?s <dvocacy $orking @roup includes a pro;ect on /arket Studies. *he +ffice of )air *rading is leading this work. *he purpose of this 5uestionnaire is to gather information about members? e3periences conducting market studies as part of their advocacy efforts. $e intend to analyse and report on the results, and to consider developing a guidance document on procedure and evaluation criteria for market studies work. $e would very much welcome your input.

&onfidentiality Statement1 )or research and dissemination purposes, the <dvocacy $orking @roup would like to be able to use and report all of the data collected on this survey. /ost of the data will be reported in aggregate form, but in some cases we may want to report results in such a way that it will be possible to identify the responding agency or ;urisdiction 7 for e3ample we would like to be able to highlight particular areas of best practice. *he report will not identify individual respondents. If there are responses in this 5uestionnaire that you want us to report only in aggregate form, if at all, please indicate which by noting the relevant 5uestions in the bo3 below.

=# =# =#

*he time taken to complete this 5uestionnaire will vary depending on how much authorities have to say on the sub;ect. $e estimate though, based on +)* e3perience, that this 5uestionnaire will take no longer than = hours to complete.

=0 =0 =0

<.

<9 +U * S +U . < U *> +. I* S

< .

$hich of the following describes your <uthorityP

< competition and consumer body < competition body +ther, if so please provide further detail below

<2. <re there any sectors in your country, such as utilities, transport, telecoms, which are regulated by other competition <uthoritiesP Ses 'o
=! =! =!

If so, what sectors are regulated by other <uthoritiesP :lease provide details below.

If you do not have a function similar to the definition of market studies below you need not complete any of the remaining 5uestions. :lease go straight to @= and complete contact details. *hank you.

"0 "0 "0

9.

:U.:+S, +) /<.K,* S*U-I,S

9 .

-raft -efinition of /arket Studies %discussed in the $orking @roup(1

)or the purposes of this pro;ect, market studies are distinguished from enforcement action against individual undertakings.

/arket studies are research pro;ects conducted to gain an in2depth understanding of how sectors, markets, or market practices are working.

*hey are conducted primarily in relation to concerns about the functioning of markets arising from one or more of the following1 %i( firm behaviour4 %ii( market structure4 %iii( information failure4 %iv( consumer conduct4 %v( public sector intervention in markets %whether by way of policy or regulation, or direct participation in the supply or demand side of markets( and %vi( other factors which may give rise to consumer detriment.

*he output of a market study is a report containing findings based on the research. *his may find that the market is working satisfactorily or set out the problems found. $here problems are found the market study report can include1 %i( recommendations for action by others, such as legislatures, government departments or agencies, regulators, and business or consumer bodies4 andDor %ii( commitments by the competition %or competition and consumer( authority itself to take advocacy andDor enforcement action.
" " "

:lease use the bo3 below to comment on the above definition1 in what respects is it the same asDdifferent from the way your <uthority defines market studiesP

"2 "2 "2

92. $hich of the following does your <uthority consider to be the purpose%s( of market studiesP :lease rate your answers in order of importance, with being most important and use %'D<( where this applies1 .ating :urpose of market studies *o help set internal priorities for the market or sector *o enhance knowledge of the sector *o assess the state of competition in the marketDsector <s a preparation for intervention in the legislative process *o obtain understanding of the market to take enforcement action *o decide which of a range of further tools to employ if a problem is found *o investigate suspected market failure that cannot be assigned to a specific undertaking
"= "= "=

*o define a market for the purposes of enforcement action *o assess the impact of @overnment policyDregulation on a market

<ny other purposesP If so please provide further detail below.

"" "" ""

&.

S,L,& *I+'

& . >ow does your <uthority gather ideas for market studiesP :lease mark whichever apply1 )eedback from consumersDconsumer groups

&onsumer complaintsDconcerns

9usiness complaintsDconcerns

&onsultation with +ther @overnment -epartments +wn research 9y asking for the submission of idea on your web2site +ther, if so please provide further detail below

"C "C "C

&2.

-oes your <uthority choose which markets to studyP

<lways Usually +ccasionally 'o

&=.

&an others in s t ruc t your <uthority which markets to studyP

"E "E "E

Ses %please proceed to 5uestion &"( 'o %please proceed to 5uestion &E(

&".

:lease detail below who can instruct your <uthority and in what circumstances

&C. >as your <uthority been in s tru c te d to carry out markets studiesP :lease mark whichever applies1 <lways Usually +ccasionally 'o

"# "# "#

&E. -o others ask your <uthority to voluntarily carry out market studiesP consumers or businesses. Ses 'o If so, please provide details below of who the NothersO are.

)or e3ample organisations representing

"0 "0 "0

&#. If your <uthority chooses the studies, what factors can influence selection of a particular market studyP :lease mark whichever apply1 Ralue of market SiAe of detriment *ype of detriment /arket importance Likelihood of mergers Unusual market events Likelihood of a successful outcome Impact on consumers ,ntry barriers -egree of concentration /arket structure :olitical interestDattention
"! "! "!

-egree of product differentiation :roduct Life &ycle LevelDtype of consumer complaintsDconcerns LevelDtype of business complaintsDconcerns :rofile of affected consumers e.g. vulnerable -esire to obtain knowledge about the market -esire to obtain evidence for enforcement purposes +ther, if so please provide further detail below through ageDdisability

C0 C0 C0

&0. +f the options you have marked in response to 5uestion &#, please detail below the C most important factors that influence your <uthority?s selection choices.

2 = " C

-.

:. +& ,SS

- . Ses 'o

-oes your <uthority have formal powers to carry out market studiesP

If so, what form do these powers takeP :lease provide detail below.

C2 C2 C2

-2. Ses

-oes your <uthority have formal powers to compel the supply of information for market study purposesP

Sometimes 'o %please proceed to 5uestion -"(

-=. $hat form do these powers take, is their use sub;ect to any constraints and what sanctions e3ist to deal with non complianceP :lease provide detail below.

-". )or market studies purposes, is it better to have formal powers to compel the supply of informationP Ses %please proceed to 5uestion -". ( 'o %please proceed to 5uestion -".2(
C= C= C=

-". . :lease e3plain why it is better to have formal powers and identify what, if any, additional powers your <uthority would like. :lease proceed to 5uestion -C.

-".2. :lease e3plain below why it is not better to have formal powers.

C" C" C"

-C. Using a scale of %very dissatisfied( to E %very satisfied(, please rate below how satisfied your <uthority is with its powers.

"

-C. :lease e3plain your rating below and identify whether, and if so how, you consider the powers you have to be e3cessive and what, if any, additional powers your <uthority would like and why.

-E. Information gathering1 the following 5uestions are about the information your <uthority uses when undertaking market studies.

CC CC CC

-E. . -oes your <uthority collect anecdotal evidenceP Ses 'o

-E.2. -oes your <uthority collect empirical evidenceP Ses 'o

CE CE CE

-E.=. $ho does your <uthority collect evidence fromP :lease mark whichever apply1 &onsumers 9usinesses +ther domestic @overnment -epartments 9usiness organisations &onsumer organisations International stakeholders +ther, if so please provide further detail below

-E.". -oes your <uthority use any of the following. :lease mark whichever apply1 ,3isting market research
C# C# C#

<dministrative data "# Gualitative research1 Guestionnaires to small numbers of respondents %less than C0 respondents( )ocus groups In2depth interviews Guantitative research1

"#

<dministrative data is information already held by the <uthority perhaps as a result of case work, en5uiries etc.

C0 C0 C0

Large statistical surveys /ystery shopping "0

-E.C. -oes your <uthority ever undertake e3ternal research by contacting third parties for informationP <lways Usually +ccasionally 'o %please proceed to 5uestion -#(

-E.E. >ow is your e3ternal research undertakenP :lease mark whichever apply1
"0

/ystery shopping is when e3ternal contractors, or an <uthority?s own staff, pose as customers making en5uiries about a purchase in order to see how they are dealt with by businesses. C! C! C!

Sou undertake it yourselves *hrough e3ternal contractors %for e3ample, market research agencies, academics, economic consultants(

-E.#. >ow often is e3ternal research undertaken as part of your <uthority?s market studies workP <lways Usually +ccasionally 'ever

"0

/ystery shopping is when e3ternal contractors, or an <uthority?s own staff, pose as customers making en5uiries about a purchase in order to see how they are dealt with by businesses. E0 E0 E0

-#. Ses 'o

&an your <uthority use evidence obtained during a market study for enforcement actionsP

-0. Ses 'o

>as your <uthority used evidence obtained during a market study to help take forward enforcement workP

-!. Stakeholder "! informationDengagement1 the following 5uestions are about how your <uthority communicates with stakeholders when undertaking market studies.

-!. . -oes your <uthority communicate with stakeholders on any of the following. :lease mark whichever apply1 .easoning behind the selection of the market :urpose of the study Scope of the study
E E E

Stages involved *imescale .easoning behind recommendations :rogress updates

"!

Stakeholders are those with an interest in the work being undertaken because of the potential impact it has or could have on them.

E2 E2 E2

/arket study staff names /arket study contact details

-!.2. >ow do you communicateDengage with stakeholders. :lease mark whichever apply1 Issue press releases :ut information on your web2site >old private meetings with stakeholders >old public meetings with stakeholders >old workshopsDseminars Issue 5uestionnaires Issue public consultations before publishing final study +ther, if so please provide further detail below

E= E= E=

-!.=. <t the end of the market study does your <uthority publish a final reportP <lways Usually +ccasionally 'o

E" E" E"

-!.". -oes your <uthority publish anything else at the end of a market study. :lease mark whichever apply1 <ssociated research )eedback from stakeholders ,vidence obtained .esults of any consultations +ther, if so please provide further detail below

-!.C. $hat are the pros and cons of your <uthority?s approach to engagingD communicating with stakeholdersP

EC EC EC

-!.E. Is your <uthority re5uired to make any or all information public or is it left to your discretion what information to discloseP :lease answer below.

-!.#. -oes your <uthority have a process for the handling of sensitive or confidential information obtained from stakeholders during a market studyP )or e3ample do you give assurances or are you under any legal obligations to protect the information suppliedP Ses

EE EE EE

'o %please proceed to 5uestion - 0( If so, please provide detail below.

-!.0. $hat, if any, are the legal conse5uences if your <uthority fails to protect sensitive or confidential informationP )or e3ample could your staff be prosecutedP :lease provide detail below.

- 0. -o your <uthority?s market studies have to be carried out within a statutory timeframeP Ses 'o
E# E# E#

If so, what is the timeframeP

- . If there is no statutory timeframe, does your <uthority set its own defined timeframe and milestonesP Ses 'o %please proceed to 5uestion - C(

E0 E0 E0

- 2. <re the timeframes publishedP Ses 'o

- =. <re the defined milestones publishedP Ses 'o

- ". &an the timeframeDdefined milestones subse5uently be alteredP Ses 'o

- C. +n average what is the length of your <uthority?s market studiesP

E! E! E!

- E. -oes your <uthority ever commission third parties to undertake its market studies workP Ses 'o %please go to 5uestion - !(

- #. >ow fre5uently does your <uthority commission third partiesP <lways

#0 #0 #0

Usually +ccasionally 'ever

- 0. Under what circumstances would you commission a third party to carry out a study on your <uthority?s behalfP :lease e3plain below.

- !. -oes your <uthority have a standardised internal process on how to carry out market studiesP Ses 'o %please proceed to 5uestion -20(

If so, please describe the process below.

# # #

-20. -oes your <uthority have guidance for e3ternal stakeholders about its market studies workP Ses 'o %please proceed to 5uestion -22(

-2 . $hat areas does this guidance coverP :lease mark whichever apply1 :urpose of market studies

#2 #2 #2

Selection :rocess +utcomes +ther, if so please provide further detail below

-22. $hat do you consider to be the top three areas of procedural best practice in your <uthorityFs market studies workP $hat is the reasoning behind your choicesP :lease insert detail below.

2 =

#= #= #=

-2=. $hat do you consider to be the biggest three procedural challengesDproblems for your <uthorityFs market studies workP $hat is the reasoning behind your choicesP :lease insert detail below.

2 =

-2". >ow many studies does your <uthority typically do in a twelve month periodP :lease insert detail below.

#" #" #"

-2C. +n average, how many people %)ull *ime ,5uivalents( at your <uthority typically work on a particular market studyP :lease answer below and provide details relating to whether these people are specialists such as competition lawyers, economists, consumer lawyers, financial analysts etc.

-2E. >ow many people %)ull *ime ,5uivalents( does your <uthority have allocated to working on market studies at any one timeP :lease answer below.

#C #C #C

-2#. -oes your <uthority have dedicated teams who only do market studies workP Ses %please proceed to 5uestion -2!( 'o %please proceed to 5uestion -20(

-20. If you do not have dedicated teams, what is your <uthority?s process for creating a market study teamP :lease describe below.

#E #E #E

-2!. Using a scale of

%not satisfied( to E %very satisfied(, please rate below how satisfied your <uthority is with its process for

carrying out market studies work.

"

:lease e3plain your rating below.

,.

+U *& + /, S

## ## ##

, . 9efore deciding on a study?s recommendations is it standard procedure for your <uthority to take into account whether the benefits will e3ceed any additional costs to for e3ample business or othersP Ses 'o :lease use the bo3 below if you wish to comment on your answer.

,2. &an your studies result in any of the following recommendations andDor actions %i.e. which of these outcomes are possible(P :lease mark whichever apply1

#0 #0 #0

&ompetition ,nforcement &onsumer ,nforcement &onsumer ,ducation 9usiness ,ducation Roluntary business compliance Roluntary business action .ecommendations to business on self regulation .ecommendations to @overnment for changes in the law .ecommendations to @overnment to change market structure .ecommendations for changes to @overnment policy .eferral to third parties for action +ther, if so please provide further detail below

#! #! #!

,=. >ave your studies actually resulted in any of the following recommendations andDor actionsP :lease mark whichever apply1 &ompetition ,nforcement &onsumer ,nforcement &onsumer ,ducation 9usiness ,ducation Roluntary business compliance Roluntary business action

00 00 00

.ecommendations to business on self regulation .ecommendations to @overnment for changes in the law .ecommendations to @overnment to change market structure .ecommendations for changes to @overnment policy .eferral to third parties for action +ther, if so please provide further detail in the bo3 below. :lease also use this bo3 if you wish to comment further on your answers to this 5uestion.

,". Ses

-o your <uthority?s recommendations to @overnment have to be responded toP

'o %please go to 5uestion ,E(

0 0 0

,C. Ses 'o

-oes the @overnment response have to be submitted within a certain timescaleP

If so please provide details below.

02 02 02

,E. Is your @overnment under a legal obligation, or has it given a policy commitment, to act upon your <uthority?s recommendationsP Ses 'o

,#. Ses 'o

Is 9usiness under a legal obligation to act upon your <uthority?s recommendationsP

,0. Using a scale of %not often( to E %very often(, please rate below how often your <uthority?s recommendations have been implemented by @overnment andDor 9usiness.

"

:lease e3plain your rating below.

0= 0= 0=

,!. Using a scale of %not satisfied( to E %very satisfied(, please rate below how satisfied your <uthority has been with the level of implementation in respect of its recommendationsP

"

:lease e3plain your rating below

0" 0" 0"

, 0. $hat does your <uthority do to try and ensure recommendations are adoptedP :lease mark whichever apply1 -edicate a team to take forward follow up work Issue press notices >old press conferences Utilise public speaking opportunities /ake use of third party advocates Use advocacy within @overnment +ther, if so please provide further detail below or use this bo3 to comment further

0C 0C 0C

, . >as your <uthority ever worked collaboratively with third parties to help achieve your desired outcomesP )or e3ample working with consumer groups on a consumer education campaign or business or business groups on voluntary actionP Ses Sometimes 'o %please proceed to 5uestion ) (

0E 0E 0E

, 2.

:lease e3plain briefly how you have worked with third parties in the past to help achieve your desired outcomes.

).

,R <L U < * I+ '

) . $hat are your <uthority?s most successful market studiesP :lease list up to three e3amples and say why you consider them to be successful. /arket Study /ost successful whyP

2 =

0# 0# 0#

)2. $hat are your <uthority?s least successful market studiesP :lease list up to three e3amples and say why you consider them to have been unsuccessful. /arket Study Least successful whyP

2 =

)=. $hat does your <uthority see as the top three benefits of market studiesP :lease insert detail and e3plain your answer below.

00 00 00

2 =

)". -oes your <uthority look back and reflect on the effect of its market studies workP Ses 'o

)C. Ses

-oes your <uthority measure the impact C0 of its market studies workP

'o %please go to 5uestion )

0! 0! 0!

)E. Ses 'o

-oes your <uthority have published criteria for measuring impactP

)#. $hat aspects of costDbenefit does your <uthority take into account when measuring the impact of its market studies workP :lease e3plain below.

C0

9y impact we mean measuring the changes in market outcomes following your market studies work.

!0 !0 !0

)0. >ow does your <uthority measure the impact of its market studies workP :lease mark whichever apply1 &ontract third parties to carry out independent evaluations of your work &onduct your own evaluations :ublish the results of evaluations +ther 2 if so please provide further detail below

)!. Ses 'o

! !

-oes your <uthority have a dedicated team to measure impactP

) 0.

:lease describe below the pros and cons of your <uthority?s process for measuring impact.

:ros &ons

>ave stakeholders e3pressed opinions about how your <uthority conducts market studiesP

!2 !2 !2

Ses 'o If so, please briefly outline the main issues raised.

@.

)I'<LLS

@ . :lease use the bo3 below if you wish to provide any additional information or comments not covered by the 5uestions.

@2.

$ould you please complete the attached anne3e, as far as you are able, so that we have a summary table of the market

!= != !=

studies work undertaken by your <uthority over the last three years.

@=.

:lease provide your contact details below.

<uthority name and address1 &ontact 'ame1 *elephone1 ,2mail1

!" !" !"

-ate1

*hank you for completing this 5uestionnaire.

!C !C !C

<nne3e to I&' /ar ket Studies Guestionnair e1 /ar ket Studies Summar y *able
:lease inser t below details of your <uthor ity?s mar ket studies, conducted over the last thr e e year s. :lease use one line to r ecor d the details of each mar ket study.

/arket

<ssessment of +utcomes

Source of idea for study

.eason for s tudy %$hat were thepr oblems(P

,nd -ate D -urati on

Ralue of Sector

& o m p et it i o n , n f o r c e m e n t

& o n s u m e r , n f o r c e m e n t

& o n s u m e r , d u c a ti o n

9 u s i n e s s , d u c a t i o n

R o l u n ta r y 9 u si n e ss & o m p li a n

R o l u n ta r y 9 u si n e ss < ct io n

.e co m me nda tio ns to @o ver nm ent for &h ang es in the La w

.ec om men dati ons to @ov ern men t to &ha nge /ar ket Str uctu re

.e co m me nda tio ns for &h ang es to @o ver nm ent :ol icy

. e f e rr al to * h ir d : a rt ie s

' o : r o b l e m s ) o u n d

:lease tick one or more columns to indicate the type of outcome%s( from each study, and %in the final column( rank the outcome of each study using a scale of %not satisfied( to E %very satisfied( and provide a brief narrative assessment to include details around for e3ample acceptance of recommendations, evidence of business compliance, and the results of any formal evaluation of outcomes.

Ralue of Sector ,nd -ate D -uration .eason for s tudy %$hat were theproblems(P Source of idea for study

C0

&ompetition ,nforcement &onsumer ,nforcement &onsumer ,ducation 9usiness ,ducation Roluntary 9usiness &ompliance Roluntary 9usiness <ction .ecommendations to @overnment for &hanges in the Law .ecommendations to @overnment to &hange /arket Structure .ecommendations for &hanges to @overnment :olicy .eferral to *hird :arties 'o :roblems )ound

<'',J, = 7 )ULL LIS* +) .,S:+'-,'*S

9raAil1 &onselho <dministrativo de -efesa ,conVmica %&<-,(, Secretaria de -ireito ,conVmico %S-,(, Secretariat for ,conomic /onitoring %S,<,( &anada1 &ompetition 9ureau &hile1 )iscalWa 'acional ,conXmica &olombia1 Superintendencia de Industria y &omercio &roatia1 &roatian &ompetition <gency &yprus1 &ommission for the :rotection of &ompetition &Aech .epublic1 +ffice for :rotection of &ompetition -enmark1 -anish &ompetition <uthority ,stonia1 ,stonian &ompetition <uthority ,uropean &ommission )rance1 <utoritB da la &oncurrence @ermany1 9undeskartellamt >onduras1 &ommission for the -efense and :romotion of &ompetition
200200200

>ungary1 >ungarian &ompetition <uthority India1 &ompetition &ommission of India Ireland1 *he &ompetition <uthority Israel1 Israel <ntitrust <uthority Italy1 <utoritY @arante della &oncorrenAa e del /ercato Jamaica1 Jamaica )air *rading &ommission Japan1 )air *rade &ommission

20 20 20

Jersey1 Jersey &ompetition .egulatory <uthority Lithuania1 &ompetition &ouncil /e3ico1 &omisiXn )ederal de &ompetencia /ongolia1 <uthority for )air &ompetition and &onsumer :rotection 'etherlands1 'etherlands &ompetition <uthority 'orway1 'orwegian &ompetition <uthority :oland1 +ffice of &ompetition and &onsumer :rotection .ussian )ederation1 )ederal <ntimonopoly Service Serbia1 &ommission for the :rotection of &ompetition Singapore1 &ompetition &ommission Slovak .epublic1 <ntimonopoly +ffice of the Slovak .epublic South <frica1 &ompetition &ommission
202202202

Spain1 &omisiXn 'acional de la &ompetencia *urkey1 *urkish &ompetition <uthority UK1 &ompetition &ommission UK1 +ffice of )air *rading US1 <ntitrust -ivision, -epartment of Justice US1 )ederal *rade &ommission Zambia1 &ompetition &ommission

20=20=20=

<'',J, " 7 &+/:L,*, LIS*C +) S*U-S *+:I&S .,:+.*,- I' L<S* *>.,, S,<.S
<dvertising &lassified -irectory <dvertising Services +utdoor advertising 9asic industries Steel &hemicals :esticides sold commercially /anufacturing pesticides and cement &hemical products /anufacturing paint and tyres &ompetition policy *rade associations e3change of information Interface between competition authority and regulators @uidelines for competition compliance by business <nti2dumping and competition law <voiding competition restrictions in regulation :ublic subsidies and competition policy 9iases in demand analysis due to variation in retail distribution *echnological tying and competition &artel case law in select ;urisdictions :atent dispute settlements and market entry and consumer welfare &onstruction &ement %= studies(
20"20"20"

/anufacturing pesticides and cement .oof covering market, especially tin :roduction and distribution of chipboard :roduction and sale of lime for cement >omebuilding

*he following studies are listed twice under two separate sector headings1 /anufacturing paint and tyres %listed under both &hemicals and /anufacturing(4 and >omebuilding %listed under both &onstruction and >ousing(. /anufacturing pesticides and cement is listed three times under the &hemicals, &onstruction, and /anufacturing headings.

20C20C20C

9rick production ,2&ommerce ,2commerce %2 studies( -ebit cards on the internet Internet shopping ,ducation Schoolbooks School uniforms *e3tbook distribution ,nergy .etail electricity @as and electricity markets ,nergy %= studies( $ood raw materials in heating supply ,lectric energy %C studies( $holesale natural gas )inancial Services Store cards >ome &redit :ersonal banking %2 studies( Investment funds .etail banking %" studies( :ensions %2 studies( :ayment cards %= studies( 9anks fees and commissions &onsumer credit contracts *ying of bank products Sale and rent back &onsumer mortgage disclosure -ebit cards on the internet *rade practices in commercial banking
20E20E20E

Switching in retail banking Interchange fees 9usiness loans for real estate development )ood supply chain )ood supply chain bread, milk, butter :rocessed milk

20#20#20#

Sugar %= studies( <gri2food distribution /ilk and milk derivatives /ilk )ood processing -airy processing, wholesale and retail @roceries @roceries %C studies( 9akery services @rocery monitor .etail trade in food %= studies( .etail in beef, poultry and dairy >ealth :rimary health care :rivate health insurance >ospitals Switching in health insurance &ontact lenses &hildren and *R advertising and obesity >ospital merger retrospective >eart health claims in advertising >ospital competition and charity care >ousing &ouncil housing >omebuilding Sale and rent back Scottish property managers .eal estate brokerage %2 studies( Insurance :ayment protection insurance %2 studies( Insurance against loss or damage 9usiness insurance
200200200

:rivate health insurance Insurance Switching in health insurance Insurance of mortgaged property &redit scoring on auto insurance

20!20!20!

Leisure +n2trade beer distribution @reen <ssignments :et trades %dogs and cats( /anufacturing /anufacturing pesticides and cement /anufacturing paint and tyres /anufacturing /edia *elevision and media rights /edia content rights &ollecting societies :roduction and distribution of recorded music )ootball broadcasting rights ,lectronic /edia %content and content aggregation( $holesale and retail sale of books :etroleum products Li5uid :etroleum @as :etroleum products $holesale and retail gasoline @asoline prices %= studies( Rertical relationships in retail gasoline )uel .etail motor fuel $holesale motor fuel $holesale oil2shale oil :harmaceuticals @eneric drugs 9enefiting from generic drugs :harmacies +pium derivatives :harmaceutical :rice .egulation Scheme
2 02 02 0

/edicines distribution ,thical drug distribution :rofessions Self2regulated professions <rchitects

+ptometrists 9arristers and solicitors -entists Rets Legal professional entry barriers :rofessional services %2 studies( <udit services Liberal professions :ublic procurement /unicipalities 7 competitive tendering :ublic procurement .etail .etail malls -oorstep selling &onsumer fraud *elecoms *elecoms %= studies( /obile recharge fees Stationary telephony *elecoms %E small studies( *elecoms symposium and report 9roadband :rovision of wireless broadband *ransport .olling stock leasing <irports %2 studies( -riving schools &ar retailing *a3is .oad goods transport
2 22 22 2

State policy in passenger transport >arbours and inland transport and terminals )reight transport %especially rail( Intercity passenger buses .oad freight transport <irlines &ompetition at H>arbour nameI >arbour -istribution of new motor vehicles

2 =2 =2 =

*ravel and *ourism *our +perators Utilities :ostal services %= studies( $ater $ater supply and sewerage $aste .ecyclable packaging waste $aste and packaging

2 "2 "2 "

9I9LI+@.<:>S
<mato, @. \ Laudati, L. L. ,ds %200 ( *he <nticompetitive Impact of .egulation. ,dward ,lgar, &heltenham &lark, J. %200"( &ompetition advocacy1 challenges for developing countries. Journal of &ompetition Law \ :olicy, E%"(, pp. E!200 -abbah, /. /., %2000( /easuring the success of a system of competition law1 a preliminary view. ,uropean &ompetition Law .eview. 2 %0(, pp. =E!2=#E ,uropean &ompetition 'etwork $orking @roup N&ooperation IssuesO, 0 'ovember 200#. /eeting of -irectors @eneral for &ompetition1 &ooperation on Sector In5uiries within the 'etwork, prepared by1:*, UK, -@ &+/:, reflecting comments made by the $orking @roup members. 2E +ctober 200# HonlineI. 9russels1 ,uropa. <vailable from https1DDcirca.europa.euD/embersDircDcompDecnDlibraryP l]DecnscasesDmanual^operationDmanual ^cooperationD 0 200"0"2#enhtmlD^,'^ .0^\a]d <ccessed 2# /arch 200! @eroski, :. %200C( *he <nnual &hatham >ouse &ompetition &onference, London /arket In5uiries and /arket Studies1 *he view from the &lapham +mnibus HonlineI London1 *he &ompetition &ommission. <vailable from http1DDwww.competition2 commission.org.ukDour^peopDmembersDchair^speechesDpdfDgeroski^chatham^house^0 0#0C. pdf <ccessed 2# /arch 200! International &ompetition 'etwork %undated( < Statement of /ission and <chievements, Up Until 200C HonlineI. H+ttawaI1 International &ompetition 'etwork. <vailable from http1DDwww.internationalcompetitionnetwork.orgDmediaDarchive0E DI&'^/ission^<chieve ments^Statement.pdf <ccessed 2# /arch 200!
2 C2 C2 C

International &ompetition 'etwork &onference, 'aples, Italy %2002( <dvocacy $orking @roup .eport <dvocacy and &ompetition :olicy HonlineI. H+ttawaI1 International &ompetition 'etwork. <vailable from http1DDwww.internationalcompetitionnetwork.orgDmediaDarchive0E Dadvocacyfinal.pdf <ccessed 2# /arch 200! 'iels, @., Jenkins, >. \ &asanova, J. %2000( *he UK /arket Investigations .egime1 *aking Stock <fter C Sears. &ompetition Law Journal, pp. ="E2=C" +,&- -irectorate for )inancial and ,nterprise <ffairs &ompetition &ommittee, 2 'ovember 2000. :olicy .oundtables1 /arket Studies 2000 HonlineI. http1DDwww.oecd.orgDdataoecdD"#DC"D" #2 !EC.pdf <ccessed 2# /arch 200!

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