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Thought Leaders - Competition - Economists 2021

Q&A

WWL Ranking: Thought Leader

WWL says

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”.  

Questions & Answers

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 to all areas of competition economics, including merger proceedings, abuse of market power and cartel damages.

Describe your career to date.

After completing my PhD in economics in 1997, my first job was working as analyst at the New Zealand Treasury on the reform of New Zealand’s competition law, and later on competition issues in telecommunications and electricity markets. I later moved back to Germany to the academic world and became professor of economics with a specialisation in competition policy and founding director of the Düsseldorf Institute for Competition Economics (DICE). I was a member of Germany’s monopolies commission for eight years and also served as the commission’s chairman for four years. After leaving the commission in 2014, I started offering consultancy services on competition matters and founded DICE Consult. 

How has the covid-19 pandemic affected the competition space? 

While there has been an even more rapid shift to digital services in many markets, courts have slowed down so many court cases are still pending. Many markets will see increasing concentration levels and we will probably see an increasing number of acquisitions, following the pandemic.

How might regulators improve consumer trust in the digital economy? 

We recently published an empirical evaluation of the Unfair Commercial Practice Directive (UCPD) in the International Journal of Industrial Organization. The UCPD was implemented by EU member states between 2007 and 2010, and we have found a significant relationship between the introduction of the UCPD and consumer trust and cross-border online purchases for countries with a low consumer protection level before the introduction of the UCPD.

What effect has the increasing focus on ‘sustainability’ in competition had on the area? 

New types of “efficiency defences” for horizontal and vertical agreements will emerge, and these justifications will provide new challenges in their assessment. 

How might increasing access to third-party data drive competition in the digital economy? What disadvantages need to be navigated? 

Data is increasingly important in the digital economy. In some instances, data may become an essential facility, but even below the essential facility threshold firms may be heavily dependent on access to data. Since data can be shared, in principle, granting third-party access rights may be justified even below the essential facility threshold, as long as there are no good reasons against data sharing such as privacy. A key unresolved question is the proper access charge, which may be based on FRAND principles.

What advantages does an international perspective in your research bring to your practice?

As an active researcher, I am 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.

How would you like to see your practice and research develop over the next couple of years?

Our practice is growing at a steady pace. We are involved in very interesting merger cases, recently in grocery retailing and digital markets. We also helped CRRC to get its acquisition of Vossloh passed. I also expect that so-called s.20 cases – where firms may not be dominant but have relative or superior market power in relation to their trading partners – will 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 key skills and traits would you encourage in the next generation of competition experts?

For economists, it is very important to develop strong skills with respect to empirical methods. However, you also need a sound background in economic theory and, what is often underestimated by economists, a very good understanding of the law.

WWL Ranking: Thought Leader

WWL says

Justus Haucap is a standout figure in the German market who is well known for his strong academic knowledge of competition matters.

Questions & Answers

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.

Global Leader

Competition - Economists 2020

Professional Biography

WWL Ranking: Recommended

WWL says

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."

Biography

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.

National Leader

WWL Ranking: Recommended
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