The European Commission has intensified its prosecution of alleged cartels, raised the fines, and reformed laws to increase effectiveness. This hardened position raises the stakes for companies implicated in cartel cases, putting greater onus on the accurate and thorough analysis of key economic evidence.
We have been involved in some of the largest investigations of alleged price fixing, hard-core cartel, and other collusive behaviors conducted by the European Commission and national competition authorities. Our approach in these cases is to use economic models and empirical analysis to assess the effects of the alleged conduct to determine if the market outcome resulted in prices and quantities that differ markedly from an estimate of a competitive market benchmark.
Since 2007, The Brattle Group has advised Visa Europe and its legal advisors concerning the ongoing European Commission antitrust investigation of payment card interchange fees. As part of this engagement, we have designed and implemented a consumer survey on attitudes to cash and the surcharging of card payments; designed and implemented a survey of banks and merchants relating to the cost of handling cash and card payments; prepared a detailed report analyzing the economic efficiency of particular interchange levels; provided written and oral testimony to the Commission’s investigations; and carried out econometric and statistical analyses to determine an efficient level of interchange.
A major international air carrier located in the EU was accused of monopolistic leveraging and attempted monopolization of a key market. Members of The Brattle Group analyzed the carrier’s use of corporate discounts and travel agent override commissions, as well as arguments that these agreements could be construed as exclusive dealing.
For a large electricity company in Spain, members of The Brattle Group provided testimony in arbitration proceedings concerning the appropriate management fees in a long-term natural gas supply contract, and concerning allegations that the contract facilitated collusion in the Spanish electricity market.
Members of The Brattle Group assisted a large European energy company in responding to a regulatory consultation paper issued by the Netherlands Competition Authority (NMa) on concentration and market power in the Northwest Europe electricity market. We analyzed wholesale market competition using a Cournot competition framework to determine the incentive and ability that generators had to withhold capacity in certain trading periods. We also analyzed the behavior of generators that were deemed pivotal to serving demand in certain periods, as well as estimated the payoffs (and sanctions) resulting from that behavior.