Journal of Competition Law and Economics Advance Access originally published online on February 14, 2008
Journal of Competition Law and Economics 2008 4(2):411-431; doi:10.1093/joclec/nhm036
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THE USE OF CUSTOMER SURVEYS FOR MARKET DEFINITION AND THE COMPETITIVE ASSESSMENT OF HORIZONTAL MERGERS
JEL: K21, L4, L41
In this paper, we discuss the U.K. Competition Commission's (CC) extensive use of customer surveys in merger control. We point out how the U.K.'s "phase two" merger regime compels the CC to decide upon, design, and commission a customer survey almost as soon as its merger investigation begins. We highlight the effect that this has on two areas of the CC's merger control process that use customer surveys—definition of the relevant market and assessment of the competitive effects of a merger in the relevant market. We illustrate how to avoid seven consequential pitfalls in using customer surveys with case-study examples from two recent CC horizontal merger inquiries. We suggest that customer surveys, carefully done, have provided useful insights for the CC, but the complications of doing them have meant that they always have been considered in the context of other evidence.
* Economic Adviser, U.K. Competition Commission. E-mail: graeme.reynolds{at}cc.gsi.gov.uk.
** Assistant Director, Mergers, Office of Fair Trading. E-mail: chris.walters{at}oft.gsi.gov.uk. The views expressed are those of the authors alone and do not rely on any confidential information. Chris Walters worked for the U.K. Competition Commission on both cases used as case studies in this paper. We are grateful for helpful comments from colleagues at the CC, seminar participants at the 2006 Economists in Competition and Regulation conference, the 2007 City University Centre for Competition and Regulatory Policy Winter Workshop, the University of Anglia, and the editor. Errors and omissions are our own.