Compass Lexecon QUESTIONS WITH
CERTIFIED ANSWERS
Get a hint
What do Compass Lexecon do? - ANS Compass Lexecon are a world leading economic consultancy firm
who provide expert advice to law firms, governments, and corporations across a wide variety of issues.
Compass Lexecons global practice has a wide array of divisions (such as international trade and
arbitration, labour and employment etc) but the European practice focuses on anti trust and
competition with divisions conduct, damages, mergres. economic policy and regulation, financial policy
and regulation.
Whenever an issue involving competition law (such as a merger between two large firms, question of
cartel, or if someone accuses a firm of abusing their dominant market position) compass lexicon will
provide analysis to assess whether laws are being breached (how will competition be affected, is it anti
competitive or is there a sound economic rationale for the behaviour.) when conduct investigation lead
to follow on damages, CL support their clients through the litigation process.
What is antitrust conduct - ANS is there an anticompetitive agreement such as price fixing, information
sharing, market sharing arrangements (effectively active as if they were a monopoly) (horizontal
agreements), selective distribution, exclusive supply (vertical agreements). Exclusionary conduct e.g.
predatory pricing. Exploitative conduct e.g. excessive pricing.
Case study: NBC was investigated by the European commission due to geoblocking of certain locations
(so they coildnt access pay TV movies available elsewhere)- European Commission claimes it was in
breach of competition law (as it portioned the European single market by preveting access to choice of
supplier). Fined 16 millions
whhat is anti trust damages - ANS when something is deemed as an antitrust law infringments, CL deal
with assessing the economic damage caused. This involves constructing the counterfactural scenario
which requires a deep understanding of competition in the industry and the clients business. This would
require an identification of what the law infringement is causing e,g, is exclusionary conduct calling a fall
in sales. Then calculate the difference between the counterfactual and factual value (and whether
interest should be applied.) Have to control for other factors e.g. was their a new compeititor, general
trends in the industry, managerial incompetence. Best method with vary case by case.
, what is anti trust - ANS limiting the market power of any one firm
what is anti trust megrers - ANS A merger is the joining of two or more firms into a single legal entity. cl
provide advice on implications of a merger for competition and consumers. Must develop a deep
understanding of the industry and how competitive variables (prices, product characteristics, quality and
innovation are determined). Analysis includes pricing studies, customer switching analyses, bidding
studies, SSNIP tests, merger simulations, entry/expansion analyses, and efficiency studies. Also provide
advice to boards of directors before a deal is sign to assess whether it's a good business decision.
how would you assess the impact of a meger - ANS If before its happened, need to undertake some
counterfactual anaylsis. This will require a knowledge of the variables which affect the way competition
works, how these are determined and how these will likely change as a result of the merger. what are
the market shares of the firms not involved in the merger, how loyal are customers, is there scope for
economies of scale in the industry. etc
If after. How did prices/markups change (is thehre predatory pricing, monopoly pricing), quality of the
product, availability of the product, market shares (horizontal). If verticle, are they restricting the supply
case study: Virgin media and o2 telecoms operations joint venture. Provided support to o2. Assesses the
verticle and horizontal theories of harm in the mobile market. Survey to understand customers
propensity to switch. Also condider the benefits of a merger: economies of scale reducing costs and
mean consumers can get cheaper products, more profit for r and d may increase the number of
products available
what is eoncomic /finalcial reg /public policy - ANS strategic planning, policy reform analysis,
forecasting, public finance.
Compass Lexecon's policy-related work includes participating in rulemaking, requests for comments, and
other public proceedings, as well as authoring whitepapers based on independent research. Our
economists have performed studies on such topics as deregulations of business, data services, the
impact of airline pricing practices, credit card regulations, the effect of environmental regulation on U.S.
and international competitiveness, the deregulation of natural gas purchasing practices, mortgage
industry issues related to Government Sponsored Enterprises ("GSEs"),
CERTIFIED ANSWERS
Get a hint
What do Compass Lexecon do? - ANS Compass Lexecon are a world leading economic consultancy firm
who provide expert advice to law firms, governments, and corporations across a wide variety of issues.
Compass Lexecons global practice has a wide array of divisions (such as international trade and
arbitration, labour and employment etc) but the European practice focuses on anti trust and
competition with divisions conduct, damages, mergres. economic policy and regulation, financial policy
and regulation.
Whenever an issue involving competition law (such as a merger between two large firms, question of
cartel, or if someone accuses a firm of abusing their dominant market position) compass lexicon will
provide analysis to assess whether laws are being breached (how will competition be affected, is it anti
competitive or is there a sound economic rationale for the behaviour.) when conduct investigation lead
to follow on damages, CL support their clients through the litigation process.
What is antitrust conduct - ANS is there an anticompetitive agreement such as price fixing, information
sharing, market sharing arrangements (effectively active as if they were a monopoly) (horizontal
agreements), selective distribution, exclusive supply (vertical agreements). Exclusionary conduct e.g.
predatory pricing. Exploitative conduct e.g. excessive pricing.
Case study: NBC was investigated by the European commission due to geoblocking of certain locations
(so they coildnt access pay TV movies available elsewhere)- European Commission claimes it was in
breach of competition law (as it portioned the European single market by preveting access to choice of
supplier). Fined 16 millions
whhat is anti trust damages - ANS when something is deemed as an antitrust law infringments, CL deal
with assessing the economic damage caused. This involves constructing the counterfactural scenario
which requires a deep understanding of competition in the industry and the clients business. This would
require an identification of what the law infringement is causing e,g, is exclusionary conduct calling a fall
in sales. Then calculate the difference between the counterfactual and factual value (and whether
interest should be applied.) Have to control for other factors e.g. was their a new compeititor, general
trends in the industry, managerial incompetence. Best method with vary case by case.
, what is anti trust - ANS limiting the market power of any one firm
what is anti trust megrers - ANS A merger is the joining of two or more firms into a single legal entity. cl
provide advice on implications of a merger for competition and consumers. Must develop a deep
understanding of the industry and how competitive variables (prices, product characteristics, quality and
innovation are determined). Analysis includes pricing studies, customer switching analyses, bidding
studies, SSNIP tests, merger simulations, entry/expansion analyses, and efficiency studies. Also provide
advice to boards of directors before a deal is sign to assess whether it's a good business decision.
how would you assess the impact of a meger - ANS If before its happened, need to undertake some
counterfactual anaylsis. This will require a knowledge of the variables which affect the way competition
works, how these are determined and how these will likely change as a result of the merger. what are
the market shares of the firms not involved in the merger, how loyal are customers, is there scope for
economies of scale in the industry. etc
If after. How did prices/markups change (is thehre predatory pricing, monopoly pricing), quality of the
product, availability of the product, market shares (horizontal). If verticle, are they restricting the supply
case study: Virgin media and o2 telecoms operations joint venture. Provided support to o2. Assesses the
verticle and horizontal theories of harm in the mobile market. Survey to understand customers
propensity to switch. Also condider the benefits of a merger: economies of scale reducing costs and
mean consumers can get cheaper products, more profit for r and d may increase the number of
products available
what is eoncomic /finalcial reg /public policy - ANS strategic planning, policy reform analysis,
forecasting, public finance.
Compass Lexecon's policy-related work includes participating in rulemaking, requests for comments, and
other public proceedings, as well as authoring whitepapers based on independent research. Our
economists have performed studies on such topics as deregulations of business, data services, the
impact of airline pricing practices, credit card regulations, the effect of environmental regulation on U.S.
and international competitiveness, the deregulation of natural gas purchasing practices, mortgage
industry issues related to Government Sponsored Enterprises ("GSEs"),
