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The Economics of Secondary Product Markets

Resumé

Some goods or services are sold in a 'secondary' market; that is, they are ancillary to, or complementary with, products sold in a 'primary' market. Everyday examples are consumables such as razor blades or toner cartridges for laser printers, but also add-on products such as extended warranties, payment protection insurance (PPI), overdraft charges on personal current accounts, or payments for baggage on budget airlines. In these situations, firms offering both the primary and the secondary product may sometimes appear to charge high prices in the secondary market. This may happen if customers do not place great emphasis on the secondary product (for example, razor blade) price when purchasing the primary product (for example, razor) and yet face a cost of switching to other providers of secondary products once they have purchased a primary product. That is, if they are partially or completely locked-in to a particular supplier. As a result of high secondary market prices, firms’ profits in secondary markets may also appear high. However, firms may have an incentive to charge low prices for the primary product, in order to attract customers and thus sell more secondary products. Therefore firms’ profits in primary markets may appear low. This pattern of low primary (for example, p rinters) and high secondary (for example, cartridges) prices and profits has typically been termed by the Competition Commission and the Office of Fair Trading (OFT) a 'waterbed effect'.

Myndighed
OFT
Regel
Rapport
Udfald
Rapport
Mødedato

ECN MODEL LENIENCY PROGRAMME

Resumé

In a system of parallel competences between the European Commission (hereinafter the Commission) and National Competition Authorities (hereinafter NCAs), an application for leniency1 to one authority is not to be considered as an application for leniency to another authority. It is therefore in the interest of the applicant to apply for leniency to all Competition Authorities (hereinafter CAs) which have competence to apply Article 101 of the Treaty on the Functioning of the European Union (hereinafter TFEU) in the territory which is affected by the infringement and which may be considered well placed to act against the infringement in question. The purpose of the ECN Model Leniency Programme (hereinafter the ECN Model Programme) is to ensure that potential leniency applicants are not discouraged from applying as a result of the discrepancies between the existing leniency programmes within the ECN. The ECN Model Programme therefore sets out the treatment which an applicant can anticipate in any ECN jurisdiction once alignment of all programmes has taken place. In addition, the ECN Model Programme aims to alleviate the burden associated with multiple filings in cases for which the Commission is particularly well placed by introducing a model for a uniform summary application system. The ECN Model Programme sets out a framework for rewarding the cooperation of undertakings which are party to agreements and practices falling within its scope. The ECN members commit to using their best efforts, within the limits of their competence, to align their respective programmes with the ECN Model Programme. The ECN Model Programme does not prevent a CA from adopting a more favourable approach towards applicants within its programme.

Myndighed
ECN
Regel
Rapport
Udfald
Rapport
Mødedato

Best Practices on Cooperation between EU National Competition Authorities in Merger Review

Resumé

The national competition authorities of the EU who have responsibility for merger review (“NCAs”) operate in compliance with different national legal systems. They believe, however, that it is desirable to cooperate in the review of some mergers which meet the requirements for notification or investigation in more than one Member State (“multi-jurisdictional mergers”), and have therefore decided jointly to publish an agreed set of Best Practices on Co-operation in Merger Review. This document, which has been drawn up by the EU Merger Working Group, sets out the Best Practices which the NCAs, to the extent consistent with their respective laws and enforcement priorities, aim to follow when they review the same merger transaction. It also sets out the steps that merging parties and third parties are encouraged to take in order to facilitate cooperation between NCAs. Cooperation extending beyond the existing ECA Notice system is limited to NCAs who are reviewing the same merger transaction (“the NCAs concerned”). It is not intended that cooperation should provide a forum whereby NCAs not concerned will be involved in the review of a specific case. This document is intended to provide a non-binding reference for cooperation between NCAs. NCAs reserve their full discretion in the implementation of these Best Practices and nothing in this document is intended to create new rights or obligations which may fetter that discretion.

Myndighed
ECN
Regel
Rapport
Udfald
Rapport
Mødedato

Principles on the application, by National Competition Authorities within the ECA, of Articles 4 (5) and 22 of the EC Merger Regulation

Resumé

These Principles were agreed on by the National Competition Authorities (NCAs) within the European Competition Authorities Association (“ECA”) in 2005 and relate to Articles 4(5) and 22 EC Merger Regulation ("ECMR") as set out in Council Regulation (EC) No 139/04 of 20 January 2004 on the control of concentrations between undertakings. They replace the version of 2002 and may be reviewed by the NCAs from time to time to reflect legislative developments (European or national) or decisional practice. The Principles should be read in conjunction with and as complementary to the EU Commission's Notice on Case Referrals in respect of concentrations (the EU Commission Notice) and the relevant parts of Commission Regulation (EC) No. 802/2004 implementing the ECMR including its annexes (Form CO, Short Form CO and Form RS).

Myndighed
ECN
Regel
Fusion
Udfald
Rapport