Competition TILEC


TILEC researchers investigate the design and application of competition policy, paying special attention to the way in which economics can be integrated into the competition policy framework, while retaining the prime features of a sound legal system.

At a fundamental level, the translation of analytical insights from the economic literature into the normative content of competition law remains an open issue, which TILEC is ideally equipped to address. While studying this problem in its generality, TILEC researchers will include in their work the comparative analysis of competition policy regimes and solutions or the experimental investigation of substantive or procedural law.

At a more abstract level, TILEC researchers aim at studying the benefits of competition as a governance mechanism. There are two schools of thought about competition when it comes to competition law enforcement and the design of policies to stimulate competition. A first school believes that it is all about economic efficiency. A second, more interventionist school believes that the efficiency line of reasoning leads to under-enforcement of competition law and to a suboptimal design of markets. The idea then is that competition policy should not merely be about efficiency. A more nuanced approach would seem to be apposite: in the context of enforcement this pushes in the direction of stricter or more lenient enforcement so as to facilitate the pursuit of other goals (e.g. addressing inequality or protecting the environment); when it comes to competition policy to open up markets, it accepts that competition may not always produce socially desirable results and thus also investigates how markets may be best designed to deliver efficiency but also goals like equity and fairness.

As regards substantive competition law, TILEC research deals with basic issues such as the integration of dynamic efficiency concerns (including long-term investments and innovation) into competition law standards. Competition law does not seem yet to be based on a clear view of the
trade-offs that need to be made regarding innovation; moreover, it is not always possible to design and implement competition law so as to foster any and all innovation. An ensuing important question, which to date is still not completely settled, is whether more intense competition stimulates firms to innovate more or less. In this respect, TILEC researchers will seek to refine the models used in the analysis of dynamic markets, including the ‘competition for the market’ model, which is perceived to imply successive monopolies. Similarly, the research work on innovation and competition policy allows revisiting the ever-present tension between the various objectives of competition policy – including market integration, consumer welfare, the protection of competition as a process, but also introducing contemporary policy concerns such as sustainability.

In a digital age, TILEC researchers resolutely turn to explore in a systematic way the impact of big data (and the associated algorithms) on market competition and regulation. When conducting competitive markets analysis, competition authorities struggle with applying long-established concepts such as collusion or abuse of dominance to new technologies and online platforms. More fundamental work on the traits of new data-driven markets is needed to improve our knowledge and allow for informed judgments by regulators and citizens alike. Furthermore, TILEC researchers are becoming increasingly interested in the evolving role of firms in this equation, as they may be moving towards a situation of perfect price discrimination due to the fact that they get vast amounts of information on their customers. Research questions of a regulatory nature also arise in this regard.

TILEC’s work on the regulation of important sectors of the economy will continue apace. This, for instance, applies to network industries, where we will continue investigating the various aspects of the debate about the legal and regulatory treatment of large-scale investments in innovative infrastructures. Indeed, whether in energy or communications networks, enormous investments into next-generation equipment lie ahead. Regulatory schemes which focus on cost incentives sometimes fail to generate the correct incentives, but reliance on interventions by competition authorities is often criticized for creating an environment that is not conducive to investment. TILEC researchers will continue investigating the validity of such claims.

TILEC researchers continue to be interested in healthcare markets in the new time period that this research program covers. The regulation of pharmaceutical prices or the design of co-payments is among those subject-areas that TILEC prioritizes, with a clear emphasis on the impact of introducing competition in such markets. Depending on the subsector (e.g., health insurance or health-related procurement rules), competition may be welfare-enhancing or, to the contrary, detrimental to consumer welfare. Thus, more focused research is needed on the repercussions of introducing competition among insurers, providers and other stakeholders involved. Our interest on how solidarity plays out in such a setting remains, as healthcare will remain a key social and political issue in the developed world. In this regard, we will continue following developments at the global level relating to the international regulation of healthcare services and trade in the relevant sectors.