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COMPETITION COMMITTEE
METHODOLOGIES TO MEASURE
MARKET COMPETITION
Presentation by the Secretariat
11 June 2021
Patricia Bascunana-Ambros
Competition Division
1
• To apply competition law in markets affected by
mergers and potential abuse of dominance –
competition enforcement
2
• To assess whether pro-competitive intervention is
needed and whether such intervention is likely to
be net beneficial – competition advocacy
3
• To assess ex-post the effectiveness of competition
policy of an authority
Why measure competition? At least
three broad reasons
Structural – HHI, other concentration indices (CRs)
and entry and exit condition measures
Dynamic – entry rates, churn, volatility of market
shares concentration and rank
Performance – mark-ups, profit measures, Boone,
Panzar-Rosse
Survey measures – consumer and business
perception of competition
A plurality of measures of competition
The need for a
plurality of
competition
measures
The level of data
aggregation
The need to take
account of the
dynamic aspects of
competitive rivalry
The importance of
imports, exports
and multinational
firms
The purpose for
measuring market
competition
Key issues to consider when measuring
competition
• Given data and methodological limitations when measuring the intensity of
competition the analysis of such measures cannot be interpreted as
providing a definite set of conclusions.
• However, such analysis can provide useful information for identifying
where competition authorities want to do further research / or be more
vigilant.
Potential areas for further improvement:
• Conceptualisation of competition as a dynamic process
• Level of data aggregation: anti-trust markets vs. SIC industry codes
• Scoping of markets – not just domestic markets – imports /exports and the
role of multinational firms
• Partial ownership
• Mark-up estimation
Looking to the future

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Methodologies to Measure Market Competition – OECD COMPETITION DIVISION – June 2021 OECD discussion

  • 1. COMPETITION COMMITTEE METHODOLOGIES TO MEASURE MARKET COMPETITION Presentation by the Secretariat 11 June 2021 Patricia Bascunana-Ambros Competition Division
  • 2. 1 • To apply competition law in markets affected by mergers and potential abuse of dominance – competition enforcement 2 • To assess whether pro-competitive intervention is needed and whether such intervention is likely to be net beneficial – competition advocacy 3 • To assess ex-post the effectiveness of competition policy of an authority Why measure competition? At least three broad reasons
  • 3. Structural – HHI, other concentration indices (CRs) and entry and exit condition measures Dynamic – entry rates, churn, volatility of market shares concentration and rank Performance – mark-ups, profit measures, Boone, Panzar-Rosse Survey measures – consumer and business perception of competition A plurality of measures of competition
  • 4. The need for a plurality of competition measures The level of data aggregation The need to take account of the dynamic aspects of competitive rivalry The importance of imports, exports and multinational firms The purpose for measuring market competition Key issues to consider when measuring competition
  • 5. • Given data and methodological limitations when measuring the intensity of competition the analysis of such measures cannot be interpreted as providing a definite set of conclusions. • However, such analysis can provide useful information for identifying where competition authorities want to do further research / or be more vigilant. Potential areas for further improvement: • Conceptualisation of competition as a dynamic process • Level of data aggregation: anti-trust markets vs. SIC industry codes • Scoping of markets – not just domestic markets – imports /exports and the role of multinational firms • Partial ownership • Mark-up estimation Looking to the future