Competition authorities and specialist courts regularly rely on evidence that combines economic and financial analysis, such as profitability analysis, to assess how well competition is working and enforce competition law. We provide expert advice, technical analysis, and economic support on matters of competition finance to firms and regulators during competition inquiries, competition law compliance reviews, enforcement and litigation.
how we can support you
Markets that remain open to competition, but where there is some degree of concentration or market frictions may come under scrutiny by competition authorities. Inquiries include market studies or investigations into how well competition is working, competition law enforcement action and merger reviews.
A comprehensive understanding of competition finance and experience of inquiries by competition authorities is critical for ensuring that outcomes benefit both firms and stakeholders.
We provide specialised services that are designed to support firms and regulators on matters of competition finance in competitive markets during active inquiries, or proactive compliance reviews that mitigate the risk of potential inquiries.
Market studies and investigations
We provide expert advice, technical analysis, and economic support on financial aspects of market studies and investigations by competition authorities. This includes profitability analysis and price regulation remedy design. Importantly, we combine financial analysis with case-specific market dynamics, to ensure that results (or practicability and effectiveness of pricing-related remedies) are interpreted through the correct economic lens. We deliver our findings through impactful expert reports that are designed to withstand scrutiny, and effective communication with stakeholders.
Enforcement and litigation
We provide expert advice, technical analysis, and economic support on the economic and financial evidence base that is used to assess whether competition law has been breached. Should a decision be reached that a breach has occurred, we support firms and regulators during subsequent litigation, including damages quantification. We draw on our combined economic and financial expertise to focus primarily on supporting firms and competition authorities in pricing abuse cases (i.e. excess pricing, predatory pricing and margin squeeze) and follow-on damages.
Competition law compliance
For firms with large market shares, certain pricing behaviours are prohibited under competition law. If the risk of non-compliance is suspected to be material, we support firms and their legal advisors with compliance reviews of their current and future pricing strategies, to help mitigate the risk of future enforcement and litigation.
Competition authorities increasingly rely on financial analysis in merger reviews. In particular, financial expertise is critical for robust estimation of incremental margins for upward pricing pressure tests, and analysis of proposed target valuations, the former being more pertinent for sectors with complex cost structures, such as telecoms. We combine financial analysis with case-specific market dynamics to ensure internal consistency and importantly, that the evidence is interpreted through the correct economic lens.
Subsidy control and State Aid
We support firms, local authorities and competition authorities with commercial market operator (CMO) and market economy operator principle (MEOP) assessments for the purpose of subsidy control and state aid compliance. Both assessments require a combination of economic and financial expertise to determine whether a commercial entity would have provided the support in question (e.g. funding or guarantees) on comparable terms.
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We repost our response to Ofgem’s consultation on frameworks for future systems and network regulation. This response considers how changes to the regulatory framework might affect the financial environment for energy companies, their financing decisions, and the expected returns required to compensate their investors for changes to their level of risk. Read more
The BoE's digital pound consultation signals a move by the BoE into retail payment systems that could put it head to head with Visa and Mastercard. Kairos Economics has responded to the consultation, highlighting the potential benefits of a digital pound for competition in payments and some key challenges for the BoE to work through, if it is to realise these benefits. Read more
Is our model for the supply of water broken? At Kairos Economics we consider that answers to the current financing challenges lie not in the scrapping of the UK’s current regulatory framework for network financing, but in important changes to its implementation. We also highlight the benefits of mandatory public listing requirements across regulated networks, which could form part of the solution. Read more
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If you’d like to discuss how we can support you or if you’re interested in career or collaboration opportunities, please get in touch.