UPP stories from Sweden

May 9, 2016

CPI Europe Column edited by Anna Tzanaki (Competition Policy International) & Juan Delgado (Global Economics Group) presents:

UPP stories from Sweden by Apostolos Baltzopoulos (Konkurrensverket – Swedish Competition Authority)

Intro by Anna Tzanaki (Competition Policy International)
Our latest Europe Column delves into the economists’ world of metrics for evaluating competitive effects in merger cases. Apostolos Baltzopoulos (Swedish Competition Authority) introduces us to the mechanics of the UPP analysis, explains the theory behind the methodology and comments on its application and the Swedish experience. While the UPP approach is now widespread and praised as a move away from traditional tools measuring unilateral effects during merger review, the author also provides a few cautionary tales: the UPP is a very useful but not a standalone economic tool. Read through to discover how holidays and weather conditions may intertwine with the UPP framework and more!

Effect-based approaches are rapidly gaining momentum in competition circles, especially so in merger review processes where the lack of suspicions of collusion or abuse of dominance makes models of non-cooperative strategic interaction most relevant. A prominent example of this trend is the increasing popularity and application of the Upward Pricing Pressure (UPP) framework that has been welcomed by some while highly criticized by others.

The UPP framework is the name commonly used to describe