GCR THE HANDBOOK OF COMPETITION ECONOMICS. A Global Competition Review special report published in association with: Copenhagen Economics

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1 THE HANDBOOK OF COMPETITION ECONOMICS 2017 A Global Competition Review special report published in association with: GCR GLOBAL COMPETITION REVIEW

2 Overview Henrik Ballebye Okholm and Karl Lundvall The demand for more in-depth economic analyses by competition law practitioners continues to increase as the Norwegian Competition Authority s (NCA) taste for more advanced economics grows. Hence, the NCA asks for more and more information from parties, in particular in merger investigations, which sometimes puts an unbalanced administrative burden on companies, says a number of competition lawyers in Oslo. At the same time, the lawyers also say the NCA has a very fast and efficient way of handling small uncomplicated mergers. Increasing use of competition economics The competition law firms interviewed including Bahr, Arntzen de Beeche, Wiersholm, Selmer, Simonsen Vogt Wiig, Thommesen and Kvale convey a uniform picture that the economics focus at the NCA has stimulated a wider use of economic consultants among parties. Both Norwegian and European economics firms appear regulatory in the market and the threshold among lawyers to use economists to boost up the team appears to be diminishing. On the other hand, academics appear much less frequently today in the market, probably because the tasks are becoming much more resource demanding. For the NCA, various screen tests, such as the Katz and Shapiro UPP-model and its refinements, are routinely adopted. Although these tests provide additional economic insights regarding the unilateral effects of mergers, some lawyers express concern that they are used almost indiscriminately. The core of this concern seems to be that these tests are used as economic arguments to block mergers rather than actual screens for identifying mergers for further scrutiny, such as merger simulation. New director general One might ask: What is the underlying reason for the economics focus in the Norwegian competition law theatre? One prominent figure, and one who has spurred the interest in and demand for competition economics, is Lars Sörgard, who has been director general of the NCA since early The competition law community in Oslo describes Lars as a highly efficient clerk with integrity and an open, attentive attitude. He likes interacting and regularly appears with his case teams in meetings with parties. Given his long tenure as an economics professor, he is by far the most academically experienced director general in Scandinavia, if not in Europe. A strong focus on merger cases For the past year, the NCA has been very busy with a number of complicated mergers. Consequently, resources have been under pressure and there are very few abuse cases under investigation at present. Lawyers generally feel that the NCA is sincerely interested in alleged abuse by dominant firms. However, it is unlikely that a case will be prioritised if there is any doubt regarding the fulfilment of the dominance criteria. Also, the track record of the NCA during the past year regarding abuse of dominance cases suggests that prioritisation will be done with great care. Aside from mergers, cooperation agreements in tenders between bidders has been an area of great interest among lawyers where legal uncertainty has risen lately. The background is a case where a subcontractor agreement between two taxi companies was reached before the tender procedure was finalised. Although in a likely legal grey zone the NCA challenged the conduct, alleging it constituted no less than an anticompetitive by object and therefore forbidden agreement. The decision was appealed in two courts and is now pending an opinion from the EFTA court, which is expected later in The uncertainty regarding the lawfulness of collaboration between companies in tenders, especially in construction and engineering, has led to a surge in the demand for legal advice. The case-law in the area, however, is very limited, and the possible view of the NCA is hard to predict. Counselling has thus became harder lately. It cannot be ruled out that the legal uncertainty in this area has had a chilling effect on certain sectors. Regarding the efficiency and transparency of the NCA, lawyers provide a mixed picture. Knowing the direction in which an investigation is heading, or learning about the key points of concern, is sometimes very difficult for parties, which some lawyers experience as 101

3 frustrating. More transparency and a more open dialogue with the case team would in many cases result in better investigations, according to some lawyers. More transparency wanted Regarding the efficiency and transparency of the NCA, lawyers provide a mixed picture. Knowing the direction in which an investigation is heading, or learning about the key points of concern, is sometimes very difficult for parties, which some lawyers experience as frustrating. More transparency and a more open dialogue with the case team would in many cases result in better investigations, say some lawyers. On the positive side, which is quite extraordinary from a Nordic perspective, are the increasingly more frequent clearance decisions in mergers well in advance of the elapse of the deadline of the first phase of investigation. This reflects a new policy that is very welcome by parties and which speeds up the realisation of unproblematic mergers. 102 The Handbook of Competition Economics 2017

4 Henrik Ballebye Okholm Dr Henrik Ballebye Okholm is partner at Copenhagen Economics A/S. He has a PhD in agricultural economics from The Royal Veterinary and Agricultural University from Dr Okholm is an expert in applied microeconomics, especially industrial organisation, contract theory and the economics of cooperatives. Dr Okholm now uses his expertise on projects regarding competition and regulation. He has been project leader on several projects regarding competition and regulation in many different industries, including the postal sector, professional services, telecommunication, electricity, retailing and the food industry. He has, among others, helped a the Danish Bar and Law Society and Association of Danish Law Firms with an assessment of competition and productivity in the Danish legal profession in response to regulative scrutiny. Henrik is appointed expert assessor at the Danish Maritime and Commercial Court and is listed in Who s Who Legal: Competition Economists. Karl Lundvall Dr Karl Lundvall helps clients with economic arguments and analysis in competition law cases, providing support which helps them present their cases convincingly. He specialises in competition and regulation cases where he excels at clearly arguing, for example, the value creation that stems from sound competition in various markets. Karl spent seven years working for the Swedish Competition Authority prior to Copenhagen Economics and taught economics at the University of Göteborg. Kungsgatan 38, 5tr Stockholm Sweden Tel: Henrik Ballebye Okholm hbo@copenhageneconomics.com Tel: Karl Lundvall kl@copenhageneconomics.com Tel: is the leading economic consultancy in the Nordic region. We have more than 70 employees located in offices in Copenhagen, Stockholm and Brussels. We provide independent and effective counselling services based on recognised research methods particularly within antitrust, mergers, agreements, state aid and damage claims. Based on our mission, Better decisions through hard facts and clear stories, we focus on providing valuable advice that is valid and to the point. We advise companies, authorities and politicians, where the market meets regulation and conflicts arise. For the past eight years, we have been ranked in Global Competition Review s top 20 of the world s best economics consultancies. Solving problems and creating value is our passion, and we excel in communicating the practical results of our analyses to the public. Our key experts have significant professional experience from companies, regulators or governments, and we have ambitious programmes for developing our skills. Most of our competition economists have previously worked for national and European competition authorities. We regularly cooperate with top-level academic economists from universities and business schools

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