Market studies and other market analysis tools for competition authorities

1. Introduction

A broad range of activities could be described as market studies, varying in scale, scope and motivation. While the term has a specific legal meaning in some jurisdictions, many different names are used to describe similar market analysis tools, such as market or sector inquiries, market assessments, fact-finding or general studies, or surveys, amongst others.

At one end of the spectrum, smaller inquiries might consider competition in a sector with a simple view to increasing an authority’s understanding of it. At the other, intensive investigations may identify competition issues and then implement remedies to fix them, with such tools often described as market investigations. Other market studies might seek to identify competition concerns in a market but need to advocate for remedies to promote competition.

Competition between firms drives many benefits, lowering prices and raising quality for consumers, as well as being crucial for macroeconomic performance, for example boosting productivity and innovation (OECD, 2014[1]). Market analysis tools generally hold a common desire to gain information to promote competition, including when market complexity makes assessing risks to competition difficult. Whereas traditional competition law tends to focus on preserving competition by controlling the conduct of dominant firms or firm acquisitions, market analysis tools partly stem from an acknowledgement that not all hindrances to competition result from illegal conduct, for example relating to the structure of the market, barriers to entry and expansion, or weaknesses on the demand side.1

Market studies can be useful tools to better understand, and potentially address, underlying and longer-term competition issues (Naismith and Mullen, 2022[2]) (Peitz and Motta, 2020[3]). Further, there may be competition issues that relate to markets rather than specific firms or require legislative action to remedy. (OECD, 2018[4]) notes that competition market studies are “a versatile tool for competition authorities to analyse whether there are competition problems in a sector, outside the context of a merger review or antitrust investigation”.

Despite the range in practice, almost all market analysis tools do not involve enforcement action (ICN, 2016[5]). This paper will consider such tools as analysis which consider competition in a market, or set of markets, distinctly from an investigation into a potential breach of competition law. For simplicity, it will refer to them broadly as market studies, also distinguishing them from broader research projects or evaluations, or smaller pieces of advocacy.2

The OECD Competition Committee has considered market studies and related tools on many occasions, including producing multiple outputs on the topic, culminating in the OECD Market Studies Guide for Competition Authorities in 2018 (OECD, 2018[4]). Box 1 summarises the OECD Competition Committee’s work on market studies to date.3

Box 1. OECD work on market studies

Since 2008, the OECD has worked extensively on market studies, resulting in the production of several publications. A policy roundtable on market studies was held in 2008, which emphasised the value of market studies, clarified their aim and stressed the need for future work. In 2015, the OECD conducted a survey to gather data from around 50 jurisdictions worldwide, revealing a variety of approaches in dealing with market studies, and identifying the need to better understand their differences, advantages and disadvantages.

In the following years, market studies became a priority topic for the OECD Competition Committee, and the Global Forum on Competition held a discussion on “The role of market studies as a tool to promote competition”. In June 2017, a roundtable discussion on market studies methodologies was held by Working Party No. 3 on Co-operation and Enforcement. This highlighted the need for flexibility when conducting them and the importance of background research and economic analysis.

In 2018, the OECD Market Studies Guide for Competition Authorities was released. The Guide summarised the previous work of the OECD on the topic, incorporating the shared experiences of competition authorities. Its main purpose is to assist with the design of market studies frameworks, and to help guide competition authorities with the execution of market studies, through practical steps. The publication provides valuable insights into the market studies process, starting from the selection of the sector, outlining main methodologies, and addressing final remedies and outcomes, along with the ex-post evaluation phase. In recent years, market studies have continued to trigger interest from the OECD Competition Committee and associated bodies, including a discussion at the Global Forum on Competition in 2020, focussing on the use of market studies to tackle emerging competition issues.

The OECD has also worked with specific countries on market studies. For example, in 2014 it provided support to Chile, Colombia, Costa Rica, Mexico, Panama, and Peru on the implementation of market studies in their jurisdictions. Further, in 2023 and 2024, the OECD Secretariat completed market studies of Ukraine’s Electricity Sector and Tunisia's retail banking study, and is currently undertaking a joint market study in Poland, Latvia and Lithuania on online marketplaces. Both completed studies identified areas where competition was not working as well as it could in the respective sectors and made recommendations to improve it.

Source: OECD (2024) Chronology of OECD Work on Market Studies, https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/competition-market-studies/chronology-oecd-work-competition-market-studies.pdf

The OECD is not the only international body to have undertaken significant work on market studies. The International Competition Network (ICN) has also produced materials on the topic, including the ICN Market Studies Good Practice Handbook (ICN, 2016[5]) and the ICN Market Studies Guiding Principles Booklet (ICN, 2016[6]). It has also created a Market Studies Information Store which is a repository of information relating to market studies conducted by ICN members.4

To build on this previous work, this paper will consider the commonalties and differences in approach across market studies, with a view to identifying common and best practices. Further, it will consider the role of co‑operation when conducting studies, for example across country borders or alongside domestic regulators or agencies.

While there have been many discussions on market studies, the OECD Competition Committee has not discussed market investigation tools in detail before, although the OECD 2015 survey on market studies includes a summary of those powers in three jurisdictions (OECD, 2015[7]) and it was also considered in the Roundtable on Using Market Studies to Tackle Emerging Competition Issues (OECD, 2021[8]). Defining precisely when a market study becomes a market investigation may not always be straightforward, but for the purposes of this paper, the defining characteristic of a market investigation tool is that it provides some form of remedial power for competition authorities if competition issues are identified. Market investigation powers have become more prevalent recently, with more countries possessing these powers than ever before and several others publicly stating that they would like them. As such, the paper takes the opportunity to consider market investigation tools and their potential benefits and drawbacks, relative to other market analysis tools.

The paper is structured as follows. The first section provides an overview of common approaches to market studies and summarises some of their key legal frameworks and practices. The next section considers market investigations. The last section discusses the potential for co‑operation and cross-border market studies, before a conclusion.

Notes

← 1.  Market studies relate closely to another market analysis tool, Competition Assessments, which consider the potential for regulations to impose restrictions on competition. The OECD has conducted a significant volume of work on Competition Assessment, including the 2019 Recommendation of the Council on Competition Assessment and the OECD Competition Assessment Toolkit. For more detail, see the OECD’s website at: https://www.oecd.org/en/topics/sub-issues/competitive-and-fair-markets/competition-assessment.html.

← 2.  In practice this distinction can be blurry, with some projects looking at both markets and broader research questions. The intention is to focus on studies that perform some form of assessment of competition in actual markets, rather than research that seeks to answer specific questions on issues not directly related to a particular market.

← 3.  Unlike some other competition tools, such as mergers, competition assessment or hardcore cartels, there is not a recommendation of the OECD Council relating to market studies at this point in time.

← 4.  See ICN Market Studies Information Store at: https://www.internationalcompetitionnetwork.org/working-groups/advocacy/market-studies/market-studies-information-store/.