Enjoying a position of buyer power or even being in a position to set the rules under which suppliers compete (e.g. in tenders) means that public procurement decisions can shape how competition develops. We were commissioned to research the competition effects of public procurement, both from a theoretical perspective and through a number of case studies.

There is often a trade-off between short- and long-term effects. Competition can be diminished by strong buyer power which encourages the highest possible price at the time, whereas long-term objectives such as levelling the playing field for smaller players could bring advantages in the future.

Being able to set the rules of competition when designing tenders offers opportunities but also carries pitfalls. Our conclusions reflect that there is no set of simple rules on how to buy things that could be applied, regardless of what is being bought.

The competition effects of controlling interests in firms are well understood and are at the heart of merger control. The UK Office of Fair Trading (OFT) commissioned us to explore the circumstances in which minority interests, possibly arising from minority share ownership, interlocking dictatorships, loans to competitions or contracts for differences (CfDs), may affect competition.

We developed an economic framework for the analysis of the competition effects of minority interests. Our analysis looked at both unilateral and co-ordinated effects and distinguished different forms of oligopolistic competition.

In general, minority interests can further soften competition in imperfectly competition markets, but specific effects vary across the different sources of such interests. For example, with interlocking directorships, it may be mainly the flow of information that can affect competition; Whereas loans are like minority share ownerships in cases where the recipient is in financial difficultly and may also involve the flow of information that would not normally be available. The effects are also dependent on whether the market is Cournot- or Bertrand-type.

GP's prescription systems play a major role in the replacement of branded drugs by generics once the patent protection expires, resulting in lower prices an lower costs for the NHS. Typically, GPs search for the appropriate medicine using the well-established name and then use a simple function on their systems to see if a suitable generic alternative exists. If this is the case, they are encouraged to write an open prescription which the pharmacist can then fill with any product.

In an abuse case decided by the UK Office of Fair Trading, a manufacturer restricted competition for one of its branded products that was coming off patent by de-listing NHS presentation packs, relying on a similarly named variant that was still covered by patent protection. GPs searching for the name would find this variant for which then generic alternative would be shown.

We supported a manufacturer of a generic product bringing a claim for lost profits as a result of this abusive practice. In estimating the quantum of damages we estimated lost sales based on the general evolution of generic prescriptions in combination with market shares and market developments as well as price tree. The claim was successfully settled out of court.