The “excellent” Peter Davis secures extensive recommendations from peers for his outstanding work on merger analysis, follow-on damages actions and market investigations.
Peter Davis leads Cornerstone Research’s European competition practice and heads its London office. Dr Davis is an expert in competition economics and econometrics, focusing on merger inquiries, market investigations (sector inquiries) and cartel damages cases. He has provided expert testimony before the High Court of England and Wales; the EU Directorate-General for Competition; and the UK’s CMA and FCA. He has also provided expert reports or advice in cases in China, the Netherlands and South Africa.
Describe your career to date.
My career to date has had three distinct yet intertwined aspects, each helpful when seeking to understand the important and evolving questions at the heart of competition policy. I taught microeconomics and industrial organisation for almost 10 years at MIT and LSE after obtaining my PhD from Yale. I then joined the Competition Commission (CC), a forerunner organisation to the CMA, as a deputy chairman. In that role, I sat on the board and acted as an inquiry chairman for a range of investigations, with responsibility for both fair process and substantive analysis in phase II merger cases, as well as market and regulatory investigations. I went into consulting in 2011, joining Cornerstone Research as the founder and head of our European competition practice in 2016.
What qualities make for a successful competition economist?
First, an innate desire to understand the richly complex world in which we live. Second, since applying competition economics raises fascinating, practical questions, an ability to think creatively. Third, a commitment to focus firmly on the evidence. Economists have long recognised that initial intuitions, uninformed by evidence, often provide a poor guide to developing sound competition policy. Instead, the analytical framework of economic theory can help guide how we collect and interpret evidence. Combining theory with qualitative and quantitative analyses, and an assessment of internal documents, to understand what is going on in an industry is hugely rewarding – and can lead to “eureka” moments.
Competition issues in digital markets and the technology sector are a hot topic right now. What do you see as the main issues and challenges?
Large technology firms are under particular scrutiny in three main areas. First, nascent (or, to use a loaded term, “killer”) acquisitions wherein an incumbent firm acquires young, innovative target firms –agencies are concerned that such acquisitions may limit future competition. Second, agencies express concerns about the potential for exclusionary conduct by the leading digital platforms such as Google, Facebook and Amazon, and whether their access to a large quantity of individual user data provides an advantage that entrants cannot replicate. And lastly, agencies are considering concerns that customers of dominant platforms are paying “prices” that are excessive to the point of being unfair – either in terms of actual money (eg, the allegations from app developers against Apple) or in terms of loss of privacy when individuals must agree to platforms using their personally identifiable information as payment to use the platform.
Are there other sectors where competition issues are becoming more prevalent?
Like the technology sector, life sciences is strongly dependent on innovation and intellectual property. A central question in merger analysis is whether a merger is likely to reduce innovation. Analysing the effects of mergers on innovation is far from straightforward. First, the theoretical effects of mergers on innovation are ambiguous except in special cases – mergers can be either good or bad for innovation. Second, there is usually a lot more uncertainty involved when we try to predict the long-term effects of a merger on innovation compared to evaluating the effects of a merger on shorter-term tactical variables such as price.
Competition issues in the financial sector are also very interesting. The Financial Conduct Authority’s (FCA) competition powers are now a few years old, and they are still bedding down. Allegations of anticompetitive behaviour in financial and trading markets can be very broadly categorised under two main headings: manipulation and collusion. Efforts to manipulate a financial market or a specific company’s stock require an understanding of trading patterns and price movements. You also see allegations of price fixing, tying and anticompetitive coordination. It was a pleasure to recently work on the first case in which the FCA deployed its competition enforcement powers which involved an allegation of anticompetitive exchange of information in initial public offering and placement markets.
How does Cornerstone Research stand out from its competitors?
We offer tremendous depth across the firm with our combination of both in-house consulting and testifying experts, as well as the external academic and industry experts that we also often support in cases. Our unique selling point is that we are very comfortable supporting the best set of experts for each matter we work on. Sometimes that is most definitely an in-house expert, but it can also sometimes be a leading academic or an industry expert with specialist expertise. The core values of our firm – high-quality, clear communication and respect – contribute to extremely effective, high-functioning teams.
Another resource that I believe is unparalleled in economic consulting in Europe is our internal data analytical resources and expertise. We have the infrastructure to process datasets with tens of billions of records (our largest so far is 100 billion rows of data for a cryptocurrency matter) and the internal capability in our dedicated substantial team to deploy custom machine-learning and artificial intelligence (AI) solutions within cases. For example, in the UK we recently employed AI to combine two datasets. I like to say that AI must be used intelligently and so we built on, rather than replaced, more traditional approaches. Access to state-of-the-art capabilities allows us to respond to client requests quickly and efficiently.