Greg is a founding partner of HoustonKemp, a firm dedicated to the application of economics to assist high-stakes decision making in competition, finance, regulatory and policy matters. Greg is regularly sought to advise on the competitive effects of merger transactions, and to provide expert testimony in antitrust enforcement proceedings. His evidence has been cited favourably in numerous proceedings before Australian and New Zealand courts, and in decisions by international arbitrators and the World Trade Organisation.
What inspired you to specialise in competition economics?
Competition economics is a paradise for the naturally curious. Each week presents the opportunity to gain new insights into how firms and consumers engage in the real world, through the powerful lens of industrial organisation economics.
What has been the most memorable case you have worked on?
Earlier this year, the Australian government received a final, favourable ruling in dispute settlement proceedings before the World Trade Organisation, brought by three tobacco-exporting countries that challenged Australia’s plain packaging legislation applying to tobacco sales.
Colleagues and I filed two expert reports on behalf of the Australian government in these proceedings, analysing the effects on competition and trade of legislative requirements that retail tobacco products are plainly packaged and display dramatic health warnings. The WTO upheld the right of the Australian government to impose such health-related measures and found no detriment to competition or international trade in tobacco products.
Many aspects of this case made it memorable, including its unusual, world-first context, the significance of the outcome for other countries contemplating similar measures, and the opportunity to contribute to an important public health measure.
How have you seen the role of competition economist develop since you first began practising?
Competition economics has become steadily more sophisticated, in keeping with the nature of firms and the way they compete for customers. Developments in game theory, the recognition of multi-sided markets, the advent of algorithmically driven conduct and, most recently, the global focus on digital platforms have all contributed to the need for step changes in the analytical frameworks applied by competition economists.
But most of all, the role of the competition economist is being transformed through the exponential availability of data, along with the processing power and advanced software available for analysing such data. This has transformed the focus of practitioners from data collection and estimation to the analysis and processing of often millions of individual records. Not so long ago, the extent of a retail geographic market was hypothesised by reference to travel time/cost and price differentials; nowadays, bank transaction data can tell us exactly who buys what from where.
What are the best ways of remaining impartial and independent when providing analysis and testimony?
The prospect that analysis will be subject to the most intense scrutiny and pronounced upon by a judge or other form of independent decision-maker rightly imposes a strong discipline on our work. Ultimately, there is no better way of managing these constraints than consistent, rigorously applied analysis. Facts that fit the principles being applied, carefully presented, are also important.
By way of sharp reminder of these principles, in two recent matters I have been requested to produce and account for reports/testimony given on similar questions well more than a decade ago!
What impact do you see covid-19 having on competition policy?
The coronavirus pandemic is bringing disruption to markets in all corners of the economy at a speed and magnitude that would otherwise be unfathomable. The full competition policy implications are still to present, but these will include consequences ranging from failing firms in sectors that may never recover, through to other firms – many, operating online – enjoying unprecedented growth, which will disrupt some sectors or could strengthen market power in others.
Perhaps the biggest covid-19 lesson for competition policy is the extraordinary adaptability of both producers and consumers in the face of rapid change – qualities that are easily underestimated in deploying “bread and butter” analytical considerations of substitutability, barriers to entry and so on.
To what extent is antitrust becoming more politicised?
Antitrust policy and enforcement are prone to politicisation, often by its intrinsic requirement to distinguish harm to competition from harm to competitors. In keeping with the relentless forces associated with rapid technological change, the corresponding political pressures are becoming more intense.
There are few more pertinent examples than the Australian government’s plan for arbitral oversight of payments by digital platforms to news media organisations for ‘core news’ content. Presented as a competition law remedy for a perceived ‘imbalance of bargaining power’, the proposed scheme is openly directed at the policy priority of mitigating the long-term consequences of declining advertising revenues for traditional news media businesses.
How does HoustonKemp distinguish itself from the competition?
A deep bench of dedicated, up-and-coming competition experts is our most important strength. For the past two years, we have been delighted for three members of our firm to be independently recognised by WWL as leaders in competition economics, more than any competing firm in our region. In combination with a yet wider pool of both quantitative and sector-specific experts, clients can be confident of our ability to deliver, irrespective of the size, complexity or urgency of an engagement.
What professional challenges are you expecting to encounter in the remaining year, and how do you expect to navigate them?
The year ahead seems likely to be dominated by the effects of covid-19-induced disruption and an ever-lengthening list of challenges associated with digital platforms.
Our team at HoustonKemp plans to navigate these as we always have – with a clear focus on gathering and analysing the relevant facts, directed to achieving the insights necessary to address the question at hand.