The U.S. Federal Communications Commission is responsible for regulation in the communications marketplace and for management of the nation's non-federal radio frequency spectrum. During the past year, FCC economists assisted in the development of initiatives that were aimed at closing the connectivity gap which proved especially critical in light of the COVID-19 pandemic; contributed to the Commission's extensive responses to COVID-19; were involved in various spectrum auctions; evaluated competition in the communications marketplace in the ; and published a series of working papers.

We discuss three important projects that economists at the Competition and Markets Authority have completed over the past year. First, our work on the Funerals Market Investigation provides an illustration of how demand-side problems can lead to a lack of competition, as well as demonstrating the CMA's willingness to consider price control and regulatory remedies where necessary. Second, on the merger case, we point to how our assessment dealt with uncertainty in innovative markets, the importance of preventing incumbents from acquiring start-ups, and the risks of following formalistic market definitions, especially in multi-sided platform sectors. Third, we set out the most notable developments in our revised Mergers Assessment Guidelines-including the assessment of future competition even when subject to significant uncertainty-and the assessment of the loss of dynamic competition and its effect on innovation incentives.

The Directorate General for Competition at the European Commission enforces competition law in the areas of antitrust, merger control, and State aid. After providing a general presentation of the role of the Chief Competition Economist's team, this article surveys some of the main developments at the Directorate General for Competition over 2020/2021. In particular, the article discusses the Commission proposal on the Digital Markets Act, the developments on the State aid response related to the COVID pandemic as well as the Danfoss/Eaton merger.

The U.S. Federal Communications Commission is responsible for regulation in the communications marketplace and for management of the nation's non-federal radio frequency spectrum. During the past year, FCC economists helped develop efficient mechanisms for making available more flexible-use spectrum for the deployment of advanced broadband technologies; developed two new universal service funding mechanisms that aim to close the digital broadband divide; and, through careful analysis of firm cost data, contributed to a renewed effort by the Commission to develop price caps for interstate calls on prison inmate calling services. FCC economists also contributed to the Commission's extensive response to COVID-19.

This paper estimates the effect of a sugar-factory privatization policy on sugar beet acreages in Turkey. It finds that sugar beet acreages decreased by more than 15% due to the 2018 privatization of several sugar factories. Farmers decreased their contracted acreages in the middle of 2018, after the privatization announcement but before the actual transfer of the institutions. Production continued to decrease in the following years for the farms that were in the "catchment area" of the privatized factory group. However, for the farms that were in the area of the factories in which privatization was subsequently canceled, the negative effect of the announcement vanished. The results show that privatization policies can significantly affect markets even before the transfer of the institutions to the private sector.

This study estimates the competitive effects of horizontal mergers in the French long-distance bus industry. We examine the two mergers that followed the 2015 Deregulation Act (the Macron Law); we use an exclusive and exhaustive dataset that covers eight consecutive quarters. We analyze the merger effects by comparing bus links that were affected by mergers with those that were unaffected; we use difference-in-differences estimations. We find that the two mergers are associated with price increases of about 13.5% immediately that then moderate to 5.3%; and with the frequency decreases from - 21.5 to - 25.7%; we observe no effects on load factors. These findings show evidence of short-run anticompetitive effects, while the mergers under study were not scrutinized by the French competition agency, as they were below the notification thresholds.

In this article, which is part of the Symposium on the Tenth Anniversary of the 2010 Horizontal Merger Guidelines, we suggest a number of improvements that should be considered in the next revision of the Guidelines. Our analysis is based on the observation that horizontal merger policy has suffered from under-enforcement. We provide evidence that the enforcement agencies face significant resource constraints that require a triage process that inevitably leads to under-enforcement. In light of merger law placing greater weight on avoiding false negatives and under-deterrence than false positive and over-deterrence, the article suggests a number of ways in which the under-enforcement bias might be corrected, including (among others): rolling back the increase in the HHI "red zone" thresholds; mandating anticompetitive presumptions for mergers with high GUPPIs, acquisitions of mavericks, and acquisitions by dominant firms; closer analysis of common ownership by financial funds; and expanded analysis of potential competition mergers.

The Federal Communications Commission (FCC) is responsible for regulation in the communications marketplace and for management of the nation's non-federal radio spectrum. During the past year, FCC economists continued to work on auctions so as to repurpose mid-band spectrum for advanced wireless services - including 5G - as well as initiatives to close the connectivity gap and make broadband more affordable. FCC economists also evaluated the likely competitive effects of Verizon's proposed acquisition of prepaid competitor TracFone Wireless. Finally, FCC economists helped in setting up the novel Broadband Data Collection.

This article discusses three important pieces of work that the Competition and Markets Authority has completed over the last year. The first two are market studies: The Mobile Ecosystems Market Study was launched over concerns that Apple and Google have too much control over operating systems (iOS and Android), app stores (App Store and Play Store), and web browsers (Safari and Chrome) that together form their 'ecosystems'; the Electric Vehicles Charging Market Study took actions and provided recommendations in a nascent but critically important market. The final piece of work is "State of Competition": a research project that assesses the evolution of competition in the UK over the past two decades.

We consider the problem of patent licensing in a Cournot duopoly in which the innovator (patentee) is one of the firms and it is capacity constrained. We show that when the patentee can produce a relatively small (relatively large) quantity, it prefers licensing by means of a fixed fee (unit royalty). When the patentee can set two-part tariffs in the form of combinations of fixed fees and unit royalties, it charges a positive fixed fee if and only if it is limited to producing a relatively small quantity. We also show that with combinations of fixed fees and royalties, the royalty rate is lower than is true for the standard case.

The Directorate General for Competition at the European Commission enforces competition law in the areas of antitrust, merger control, and State aid. After providing a general presentation of the role of the Chief Competition Economist's team, this article surveys some of the main developments at the Directorate General for Competition over 2021/2022. In particular, the article reviews the new antitrust "Vertical Block Exemption Regulation" and "Vertical Guidelines", the new "Guidelines on State aid for climate, environmental protection, and energy", and the Veolia/Suez merger.

This paper explains that when there is great uncertainty about which elements of knowledge must be combined to make an invention, the likelihood of invention increases markedly-by many orders of magnitude-when there are numerous diverse research organizations, rather than just a few. The paper examines the possibility that competition (antitrust) policy toward mergers would be improved if enforcement efforts placed more emphasis on protecting the diversity that is provided by numerous research rivals in a market.

We consider a location-then-price game where two traditional retailers compete with a location-irrelevant online retailer. We characterize the existing equilibria, and we show that in any possible equilibrium there is direct competition between the traditional retailers. Furthermore, the traditional retailers locate at neither a maximal nor minimal distance. In equilibrium, the price of the online retailer might be higher or lower than the price of the traditional retailers, depending on the relative competitiveness of the online retailer and the traditional retailers.

Africa has the African Continental Free Trade Area (AfCFTA). The agreement will lower tariffs and facilitate internal market trade on the continent, and policy makers hope that it will help lift 30 million people out of poverty. A competition protocol is now in the process of negotiation and proposals have been made ranging from a full, detailed, technical competition law as in the West to a scaffolding of regional cooperation. For the competition element of AfCFTA, this article makes a bold suggestion: Africa needs a basic but deep competition protocol, which concentrates on the priorities "at the top": It needs to rid the continent of insidious trade-and-competition restraints at member state borders that prevent African integration, which requires a joinder of trade-and-competition violations. And it needs a voice at the top to take a stand for the continent: for example against the mega-mergers that hurt Africa. Only with these three elements-clear basic rules, trade/competition restraint prohibitions, and a voice at the top-can Africa hope to realize the promise of Africa.

On the occasion of the 10th anniversary of the 2010 U.S. Horizontal Merger Guidelines, this article provides an overview of the state of economic analysis of unilateral effects in mergers with differentiated products. Drawing on our experience with merger enforcement in Europe, we discuss both static and dynamic competition, with a special emphasis on the calibration of competitive effects. We also discuss the role of market shares and structural presumptions in differentiated product markets.

The Directorate General for Competition at the European Commission enforces competition law in the areas of antitrust, merger control, and State aid. After providing a general presentation of the role of the Chief Competition Economist's team, this article surveys some of the main developments at the Directorate General for Competition over 2019/2020. In particular, the article reviews the economic analysis in the Qualcomm predation case, recent developments in the assessment of vertical mergers, as well as the new "Temporary Framework" that has been developed in the wake of the COVID pandemic.

When would an oligopolistic entrant imitate an incumbent's product ("me-too" entry), rather than horizontally differentiate? We allow an entrant's product choice to vary endogenously with the cost of product differentiation. Such endogenity of product differentiation significantly affects the comparison of Bertrand and Cournot duopoly. We find that if Bertrand entry occurs, products are differentiated, whereas there is a substantial region in which Cournot entry involves a homogenous product. Bertrand prices may be higher than Cournot prices; and, if product differentiation costs are low enough to induce Cournot differentiated entry, then Bertrand industry profit equals or exceeds Cournot industry profit.

We discuss three important cases that the Competition and Markets Authority (CMA) has completed over the past year: First, the coronavirus pandemic has had implications for a wide range of the CMA's work; we describe the work on price gouging conducted by the CMA's Covid-19 taskforce and respond to the argument that competition authorities should not be concerned about such behaviour. Second, a number of high-profile studies have considered the appropriate application of competition policy in digital industries. The second two cases-the Online Platforms and Digital Advertising market study, and the Google/Looker merger-show the work the CMA has continued to do in this area.

Especially in many online markets, consumers can readily observe prices, but may need to inspect products further to assess their suitability. We study the effects of product differentiation and search costs on competition and market outcomes in a tractable model of price-directed consumer search. We find that: (i) firms' equilibrium pricing always induces efficient search behavior; (ii) for relatively large product differentiation, welfare distortions still occur because some consumers (may) forgo consumption; and (iii) lower search costs lead to stochastically higher prices, which increases firms' expected profits and decreases their frequency of sales. Consumer surplus often falls when search costs decrease.