Copenhagen Economics




	View the webedition on www.copenhageneconomicscom/newletter/no1	nr. 1 2006


		Welcome to the first issue of the newsletter Insights: Competition.

	Our goal with the publication is to share our knowledge of using economics in competition cases with clients and working partners.		We will attempt to bring you practical and hands-on guidance to the most important economic analysis currently used in the EC competition cases. In order to inspire new ideas and to illustrate the potentials of economic analysis, we will provide examples		of how economic reasoning has recently and successfully been used in competition cases in the Nordic region. Claus Kastberg Nielsen, CEO

Efficiency defence - Are the agreements legal?

It is a management responsibility to ensure that all agreements entered into comply with competition legislation. This has however often been seen as a complicated task and possibly therefore neglected, causing substantial fees or damages if challenged by competition authorities, competitors or customers, and found guilty.

To improve the self enforcement, the EC Commission asked Copenhagen Economics to develop a practical guidance that could be used to

test the legality of individual agreements. The test consists of three main steps: Screening, Measuring and Balancing. Only when an agreement generates more effi- ciencies than anticompetitive effects is the agreement legal.

In order to minimise the efforts to analyse an agreement, the analyst can exit at different levels of complexity and thus avoiding excessive work. Only in relatively few cases does the assessor need to proceed to the most complicated quantification. The report describes in

a practical step-wise approach how to go about and with legal and economic tools assess the legality of individual agreements.

The power fallacy – when prices deceive

The Competition Authorities traditionally delineate energy markets Nordic wide when there are no capacity constraints on imports, and nation or region wide when there are no constraints. However, regions should in specificoccasions be considered relevant market even though there are no import constraints. Competitors’ costs are significantly higher and they are

thus not real competitors – The Power Fallacy. This is the conclusion in a new Copenhagen Economics report done for Eltra, the Danish TSO.

Liberalising the market for legal services

Competition is working in the Danish legal sector. However, the competition can be improved if advertising is liberalised and if education requirements, ownership requirements and exclusivity in court

presentations are modified. This is the conclusion in an examination on how a liberalisation of the legal profession could be carried out most appropriately done by Copenhagen Economics for the Danish Bar and Law Society.

Reducing administrative burdens boosts the economy
[Impact assessment]

Everybody benefits from reduction of administrative burdens. A reduction of burdens by 1 billion increases total value added by 1.4 billions, and households benefit through both lower prices and higher wages.

Revealing the effects of antidumping
[Anti-dumping]

Anti-dumping measures are only allowed when the interest of the Community calls for it. Copenhagen Economics has developed an operational tool for economic impact assessments of anti-dumping measures.

Market opening does work
[Impact assessment]

Market opening in the EU has increased overall EU15 welfare by 98 billion and has given rise to additional employment corresponding to about 500,000 jobs until the turn of the century.

	About this Newsletter
	INSIGHTS: COMPETITION is the Copenhagen Economics newsletter on competition issues. Our goal is to share economic knowledge with clients and working partners. The newsletter is issued app. four times a year.		If you should no longer wish to receive the newsletter you can unsubscribe at www.copenhageneconimcs.com If you should no longer wish to receive the newsletter you can unsubscribe at the same place.		Feel free to contact us at: Copenhagen Economics Aps, Nyropsgade 13, 1602 Copenhagen V, Denmark Telephone +45 7027 0740 Fax. +457027 0741 www.copenhageneconomics.com Editor Petter Berg, editor@copenhageneconomics.com