Professor Justus Haucap is founding director of the Düsseldorf Institute for Competition Economics (DICE), Germany’s leading academic think-tank on competition economics, and partner of DICE Consult. From 2006 to 2014 he was a member of the German Monopolies Commission and for four years also its chairman. He is a member of several advisory boards and has contributed his expertise in all areas of competition economics, including merger proceedings, abuse of market power and cartel damages.
What motivated you to specialise in competition economics?
After completion of my PhD on advertising and market organisation, I started working as an analyst for the New Zealand Treasury. One of my very first tasks, back in 1997, was to formulate the Treasury’s view on penalties, remedies and court processes under the NZ Commerce Act 1986 and the then-ongoing competition law reform in New Zealand. After that, I never left the fascinating field of competition law and economics again.
How has the market changed since you first started practising?
The market for economic consultancy services is still growing at a tremendous rate in Germany. Fortunately, we have seen more and more high-quality entry in recent times, with international firms locating in Germany. The level of debate has risen significantly.
What do clients look for in an effective competition economist?
Apart from being a smart economist, you need to be able to communicate in plain and simple English and, in Germany, especially in German. In Germany, you also need to understand the particularities of Germany’s competition law. If you fail to communicate your smart ideas to officials and judges, your client is lost.
How has your work as a university professor enhanced your work as a private practitioner?
At the Düsseldorf Institute for Competition Economics (DICE), we are now about 60 academics who work on competition matters. We have two seminars every week with high-level guest speakers, and we are always confronted with cutting-edge research, and new ideas and findings from around the globe. This is of invaluable help when dealing with practical cases.
Practitioners have noted that access to data and the sharing of information is an ongoing topic of discussion in the field. How are these issues impacting your private practice?
We are currently dealing with the first of these issues, where one firm is seeking access to another firm’s data. I am absolutely sure that we will see many more of these cases in the future, given the growing importance of data as a resource. We have also noted that many platforms face significant uncertainty about what data they can share with their users.
To what extent does German competition law need to evolve to meet modern developments in the digital economy?
I had the pleasure to be one of the co-authors (with Heike Schweitzer and Wolfgang Kerber) of the German report on how to adapt Germany’s competition law with respect to the abuse of market power. Our proposals – to facilitate third-party access to data; incorporate a concept of intermediation power for platforms into competition law; and shift the burden of proof when platforms with superior market power impede multi-homing – will very likely all be incorporated into Germany’s competition law in 2020. In addition, I think the Federal Cartel Office should adopt a more lenient approach to vertical restraints, especially dual pricing. The European Commission’s review of the guidelines on vertical restraints, and possibly on digital platforms more generally, will be an important opportunity to correct the enforcement practice where it is overly strict.
How would you like to see your practice develop over the next five years?
Our practice is growing at a steady pace. We are increasingly getting involved in very interesting merger cases and were rather successful in helping to get Remondis’ proposed acquisition of DSD blocked last year. I also expect that so-called section 20 cases – where firms may not be dominant but have relative market power in relation to their trading partners – become more important, especially in digital platform markets. Given that these cases are a German particularity, I suspect that German practices like ours are getting increasingly involved in these cases.
What advice would you give to younger economists hoping to be in your position one day?
First, come and study economics at DICE, since we are offering already highly specialised courses on competition law and economics during your master studies. Second, do internships at different places (agencies, consultancies, firms). Third, invest into econometrics and big-data analytics. Fourth, read a lot and write a lot. Fifth, work hard, but also party hard.
Professor Dr Justus Haucap is a partner of DICE Consult and founding director of the Düsseldorf Institute for Competition Economics (DICE), the leading academic centre for competition economics in Germany. A previous chairman of the German Monopolies Commission, he has recently advised clients in merger proceedings (eg, Edeka/Tengelmann, Remondis/DSD and CRRC/Vossloh), abuse of market power cases and private damage claims. Clients include Deutsche Telekom, Vodafone, Swiss Post, Siemens, RWE, EON, Telekom Austria, Shell and others.
What do you enjoy most about working in competition economics?
As every case is different, competition economics never gets boring and often requires creativity. I also enjoy the interdisciplinary approach, which makes teamwork essential. And, finally, I like the intellectual rigour that is required to win cases.
What are the major themes of your research?
Most of my current research focuses on either competition issues in digital markets or the link between competition and innovation. In addition, I have started a research project on territorial supply constraints.
How has your experience as chairman of the German Monopolies Commission enhanced your work in private practice?
As chairman of the German Monopolies Commission, I had to critically review the Federal Cartel Office (FCO)’s enforcement practice in all areas of competition law – that is, its merger decisions and its prosecution of cartels and abuse cases. During that time I have learned a lot about several industries and about the FCO’s procedures and way of thinking. Both are very helpful for advising parties in proceedings today.
What are the biggest challenges competition economists are facing right now?
While the covid-19 pandemic and climate change crisis are challenges for humanity as a whole, one of the major challenges for competition economists is data markets. Third-party access to data and its pricing, and data-sharing agreements, are two issues where we have more questions than answers at the moment. Nevertheless, the effects of voluntary as well as mandated data exchange and its pricing will become more and more important over the coming years.
What impact do you think the evolution of the digital economy will have on the type of work you will receive in the next few years?
While most of the work for competition economists has involved either private damage claims in cartel cases or merger proceedings, I think we will see another renaissance of abuse cases, given the rise of larger platforms and the strengthening of antitrust laws.
In your opinion, how will the latest amendment to Germany’s Competition Act affect the market in the near future?
The amendment focuses on a stricter control of abusive behaviour and also provides more rights for third-party access to data. Hence, I expect to see more cases in these areas.
Looking back over your distinguished career, what has been the most memorable case you have worked on?
There are two cases: in 2010-2011, I advised 2degrees, the third mobile operator in New Zealand, in its (successful) proceedings against the two incumbent operators to bring down mobile termination rates, so as to facilitate entry. As we were quite successful, 2degree’s then CEO, Eric Hertz, sent me a signed picture in a frame with the words “We didn’t break a duopoly. You did.” This picture still decorates my office.
The other case was the Edeka/Tengelmann merger, in the German grocery retail sector; it was approved by ministerial override, and I advised one of the parties.
What is the best piece of advice you ever received?
First, to study economics; and second, that it’s better to take risks than to later regret not having taken them.
Justus Haucap “really is a leading economic thinker on key issues of our times, such as antitrust issues related to digitalisation and innovation”. He enjoys a “fantastic balance of scientific excellence and pragmatism”.
Peers and clients say:
"He really is a leading economic thinker on key issues of our times, such as antitrust issues related to digitalisation and innovation."
"Justus is highly respected by clients and peers, and great fun to work with."
Professor Dr Justus Haucap is partner of DICE Consult and founding director of the Düsseldorf Institute for Competition Economics (DICE), the leading academic centre for competition economics in Germany. From 2006 to 2014, he was a member of the German Monopolies Commission, which advises the German government on competition policy and market regulation. Justus was the Commission’s chairman for four years. Since 2013, he has continuously been included in the list of Germany’s 30 most influential economists by the Frankfurter Allgemeine Zeitung.
Justus has advised private firms and public institutions in merger proceedings (such as Edeka/Tengelmann, Vodafone/Liberty, CRRC/Vossloh and Remondis/DSD, among others), abuse of market power cases and private damage claims. Clients include Deutsche Telekom, Vodafone, Swiss Post, Siemens, RWE, EON, Telekom Austria, Shell and many others.
Justus studied economics at Saarbrücken (Germany) and Ann Arbor (Michigan, USA) and has previously held positions at the University of California at Berkeley, the New Zealand Treasury and various German universities. He is head of the competition working group of the German Economic Association; deputy chairman of the scientific working group for regulatory issues (WAR) of the Federal Network Agency; and a member of several other advisory boards.
Justus has published numerous papers on regulation and competition policy. Recently, he co-authored an influential report to the German government on options for competition law reform regarding the abuse of market power in digital markets.