This presentation by DG Comp (European Commission) was delivered during a workshop on “Methodologies to measure market competition” held virtually for competition authorities officials on 23 February 2021. More materials on the topic can be found at http://oe.cd/mmkts. This presentation was uploaded with the author’s consent.

1. The application of different measures
of market competition for competition policy
enforcement and advocacy
Adriaan Dierx, Szabolcs Lorincz, and Gábor Koltay
European Commission, DG Competition
OECD Workshop on
Methodologies to Measure Market Competition
23 February 2021
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2. From micro level to industry level and macro level:
• Assessment of competition and effects on competition
in affected markets
(merger control and abuse of dominance cases)
• Measures of industry concentration/profitability
• Competition policy enforcement, competition and
macroeconomic performance
Applications of measures of market competition
2

3. Merger control
• Article 2(2) EU Merger Regulation:
does the merger “significantly impede
effective competition in particular as a
result of the creation or strengthening
of a dominant position” (SIEC test)?
• Par. 24 EU Horizontal Merger
Guidelines: a horizontal merger may
lead to a SIEC by “removing important
competitive constraints on one or
more sellers, who consequently have
more market power”
Abuse of dominance
• A position of economic strength
enjoyed by an undertaking
which enables it to prevent
effective competition being
maintained on the relevant
market by affording it the power
to behave to an appreciable
extent independently of its
competitors, its customers and
ultimately of its consumers”
(ECJ, 2/76, United Brands v
Commission)
Assessment of effects on competition in relevant markets
3

4. 4
Some indicators used in case investigations
Dimension of
competition
Indicators Examples
Market concentration Market shares of merging parties, Market share increment
HHI levels before and after the merger, HHI delta, C4
Siemens/Alstom, Ball/Rexam
Market contestability Number of remaining competitors
Market shares of main competitors/importers
Bidding market (Y/N)
Imports/turnover
Heidelberg/Cemex CR
H3G/O2 IE
GE/Alstom
Outokumpu/Inoxum
Prices/profits Margin/mark-up evolution and comparison across segments Wieland/Aurubis
Entry barriers Capital investments/turnover
R&D spending/turnover
Market entry/exit
Telefónica/E-Plus DE
Dow/Dupont
DEMB/Mondelēz, Ryanair/Aer Lingus
Countervailing buyer
power
Share of sales to main customers
Switching behaviour of customers
WD/Viviti
Praxair/Linde
Risk of collusion Number of competitors
Price transparency
Symmetry of market shares
ABF/GBI
ABInBev/SAB Miller
H3G/Wind IT
Stage in product cycle Changes in production capacity (investment)
Changes in sales (turnover)
Ineos/Solvay

5. • Net profit as a share of GDP, EU14+UK and US
• Trend increase
• Technology change and/or competition issues?
• Methodological issues: profit =/= mark-up, etc.
• Philippon (2019), Autor et al. (2020), Barkai (2020),
De Loecker et al. (2020)
EC calculations based on AMECO database
Measures of industry concentration/profitability
5
28.4
20.9
36.7
35.7
24.5
43.9
20
25
30
35
40
45
Share
of
the
four
largest
firms
(%)
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Unweighted average
Weighted average, Total industry production
Weighted average, Largest four firms' production
• Average industry concentration C4 (DE, ES, FR, IT, UK)
• Moderate increase, though widespread across industries
• Trend towards oligopolistic structures (but not monopoly)
• Methodological issues: industry =/= antitrust market
• OECD (2019), IMF (2019), Grullon et al. (2020)
EC calculations based on Euromonitor International’s Passport Industrial database

6. Measurement of competition policy vs. competition
6
Cartels
Mergers
1. Measure the strength of EU competition policy by the number and importance of
merger interventions and cartel prohibitions by the European Commission
2. Reinforce the micro-foundations of a macroeconomic assessment of the impact of
EU competition policy by making a link between the strength of competition policy
enforcement and competition (as measured by mark-up and price shocks)
10% 15%
AT.37956 Reinforcing steel bars 900 6 540 810 13,863% 35,866%
AT.40127 Canned vegetables (settlement) 600 3 180 270 9,242% 11,955%
AT.40135 FOREX (THREE WAY BANANA SPLIT - ESSEX EXPRESS) 3.560 1 356 534 54,837% 23,645%
AT.40481 OSS II - Occupants Safety Systems (for VW - for BMW) 1.432 3 429,6 644,4 22,058% 28,533%
TOTAL 6.492 1.505,6 2.258,4
Share total
turnover
Share total
customer
savings
Avoided overcharge
(in mnEUR)
Case No. Case name
Parties' turnover
(in mnEUR)
Class**
ME_Calculation
s
Case No. Case Decision Products/markets where competition concerns were
identified
Market value
(in mnEUR)
Barriers to entry* Market share
in % of total
duration price
increase
Customer savings share in total
2,3,5 1% 3% 5%
M.9094 AMCOR / BEMIS
6.1 (b) with condition and
obligations
Flexible packaging for medical applications in the EEA 1000 Significant
1,97% 2 20,0 60,0 100,0 1,06%
M.9163
DA AGRAVIS MACHINERY /
KONEKESKO EESTI /
KONEKESKO LATVIJA /
KONEKESKO LIETUVA /
KONEKESKO FINNISH
AGRIMACHINERY TRADE
BUSINESS
6.1 (b) with condition and
obligations
Retail sale of new forage harvesters; Retail sale of
new combine harvesters in Estonia
25,5 Significant
0,05% 2 0,5 1,5 2,6 0,03%
M.9196
Marsh & McLennan
Companies / Jardine Lloyd
Thompson Group
6.1 (b) with condition and
obligations
Broking services for Aicraft Operators; Broker
services for Aerospace Manufacturers in the EEA or
wider
3379,4 Significant
6,64% 2 67,6 202,8 337,9 3,58%
M.8864
Vodafone/Certain Liberty
Global
8.2
Retail supply of fixed internet access services; Retail
supply of multiple play 2p bundles including fixed
telephony services and fixed internet access services;
Wholesale TV signal transmission in Germany
12,6
Extremely
significant
0,02% 5 0,6 1,9 3,2 0,03%
M.8674
BASF / SOLVAY'S EP AND P&I
BUSINESS
8.2
ADN C4; HMD; Adipic Acid; AH Salt; PA 6.6 Base
Polymer; PA 6.6 Engineering Plastic; PA 6 3D Printing
Powder in the EEA
3302,3 Very Significant
6,49% 3 99,1 297,2 495,3 5,25%
M.9274
GLAXOSMITHKLINE / PFIZER
CONSUMER HEALTHCARE
BUSINESS
6.1 (b) with condition and
obligations
Topical pain managements (“TPM”) products in
Austria, Belgium, France, germany, Ireland, Italy,
Netherlands, Portugal, Spain and the UK
825,8 Very Significant
1,62% 3 24,8 74,3 123,9 1,31%
M.9234
HARRIS CORPORATION / L3
TECHNOLOGIES
6.1 (b) with condition and
obligations
Image intensification night vision devices (Image
intensification NVDs); Image intensification tubes
(I2Ts) in the EEA
345
Extremely
significant
0,68% 5 17,3 51,8 86,3 0,91%
M.8677 SIEMENS / ALSTOM Prohibition
High-speed trains and very high-speed trains in the
EEA; ETCS OBU projects
4107,88
Extremely
significant
8,07% 5 205,4 616,2 1.027,0 10,88%
M.8948 SPIRIT/ASCO
6.1 (b) with condition and
obligations
Global market for slats (slat system of the wing
aerostructure)
510 Very Significant
1,00% 3 15,3 45,9 76,5 0,81%
M.9331
DANAHER / GE HEALTHCARE
LIFE SCIENCES BIOPHARMA
6.1 (b) with condition and
obligations
Global market for microcarriers; global market for
tangential Flow Filtration (“TFF”) systems (Single Use
Technology/”SUT”); Global market for Flat sheet TFF
systems (SUT); Global market for Hollow fibre TFF
1448,4 Very Significant
2,85% 3 43,5 130,4 217,3 2,30%
M.8870 E.ON / INNOGY 8.2
Retail supply of electricity in Czechia (low voltage);
Retail supply of gas in Czechia to (i) small and (ii)
large customers; Retail supply of electricity in
Hungary to (i) small businesses and (ii) large
businesses; Retail supply of electricity in heating
electricity in Germany ; Installation and operation of
EV charging stations on German motorways
9300
Extremely
significant
18,28% 5 465,0 1.395,0 2.325,0 24,64%
M.9064 Telia/Bonnier 8.2
Wholesale supply of FTA and basic pay TV channels;
Wholesale supply of premium pay sports TV
channels; Retail supply of AV services; Sale of
advertising space
11936 Significant
23,46% 2 238,7 716,2 1.193,6 12,65%
M.8947 Nidec/Whirlpool 8.2
Variable speed household hermetic reciprocating
refrigeration compressors; Variable speed light
commercial hermetic reciprocating refrigeration
compressors; Fixed speed light commercial hermetic
347 Significant
0,68% 2 6,9 20,8 34,7 0,37%
M.8713
TATA STEEL / THYSSENKRUPP /
JV
Prohibition
Production and supply of hot-dip galvanised flat
carbon steel products to the automotive industry
(‘automotive-HDG’); Production and supply of tinplate
(‘TP’); Production and supply of electrolytically
11100
Extremely
significant
21,82% 5 555,0 1.665,0 2.775,0 29,40%
M.9076 Novelis/Aleris 8.2 Aluminium automotive body sheets in the EEA 864
Extremely
significant
1,70% 5 43,2 129,6 216,0 2,29%
M.9110
AMERRA / MUBADALA /
NIREUS / SELONDA
6.1 (b) with condition and
obligations
Marine aquaculture : supply of Mediterranean farm
fish; Supply of Mediterranean fish fry in the EEA
1631 Very Significant
3,21% 3 48,9 146,8 244,7 2,59%
M.9287 CONNECT AIRWAYS / FLYBE
6.1 (b) with condition and
obligations
air passenger transport on the routes Amsterdam-
Birmingham and Paris-Birmingham
64,7 Very Significant
0,13% 3 1,9 5,8 9,7 0,10%
M.8900
WIELAND / AURUBIS ROLLED
PRODUCTS / SCHWERMETALL
Prohibition Rolled copper products 672
Extremely
significant
1,32% 5 33,6 100,8 168,0 1,78%
M.9449 VAG / VARTA
6.1 (b) with condition and
obligations
Wholesale supply of branded HABs to the mass retail
channel (downstream)
9 Significant
0,02% 2 0,2 0,5 0,9 0,01%
19 mergers Total 50.880,58 100,00% avg: 3,4 1.887,5 5.662,4 9.437,4 100,00%

7. Competition policy
• Merger interventions
• Cartel prohibitions
• Antitrust interventions (in progress)
Market competition
• Price shock
• Mark-up shock
Productivity
• Labour productivity
• TFP
Economic growth
• GDP, etc.
Competition policy enforcement, competition
and macroeconomic performance
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8.  Multiple measures of market competition
 At micro level, case-by-case decision on measures used
depending on market characteristics and data availability
 At industry and macro level, concentration and profitability
measures are used mostly for advocacy purposes
 Challenge to overcome discrepancies between:
 Theory and practice
 Micro-indicators and industry & macro-indicators
Conclusion
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9. Thank you
© European Union 2021
Reuse of this presentation authorised
under the CC BY 4.0 license.
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