<?xml version="1.0" encoding="UTF-8"?><rss version="2.0" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:wfw="http://wellformedweb.org/CommentAPI/" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:atom="http://www.w3.org/2005/Atom" xmlns:sy="http://purl.org/rss/1.0/modules/syndication/" xmlns:slash="http://purl.org/rss/1.0/modules/slash/" > <channel> <title>Fideres</title> <atom:link href="https://fideres.com/feed/" rel="self" type="application/rss+xml" /> <link>https://fideres.com/</link> <description></description> <lastBuildDate>Fri, 22 Nov 2024 16:54:41 +0000</lastBuildDate> <language>en-GB</language> <sy:updatePeriod> hourly </sy:updatePeriod> <sy:updateFrequency> 1 </sy:updateFrequency> <generator>https://wordpress.org/?v=6.7.1</generator> <image> <url>https://fideres.com/wp-content/uploads/2022/01/cropped-fav-1-32x32.png</url> <title>Fideres</title> <link>https://fideres.com/</link> <width>32</width> <height>32</height> </image> <item> <title>DoorDash&#8217;s Algorithm: A Recipe for Higher Prices</title> <link>https://fideres.com/doordashs-algorithm-a-recipe-for-higher-prices/</link> <comments>https://fideres.com/doordashs-algorithm-a-recipe-for-higher-prices/#respond</comments> <dc:creator><![CDATA[Wanyi Wang]]></dc:creator> <pubDate>Thu, 14 Nov 2024 16:14:05 +0000</pubDate> <category><![CDATA[Research]]></category> <category><![CDATA[Competition Economics]]></category> <guid isPermaLink="false">https://fideres.com/?p=39219</guid> <description><![CDATA[<p>Fideres examines the hidden price of dining out.</p> <p>The post <a href="https://fideres.com/doordashs-algorithm-a-recipe-for-higher-prices/">DoorDash&#8217;s Algorithm: A Recipe for Higher Prices</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<h2>Key Points</h2> <ul> <li>In this Research Alert, Fideres examines the anti-competitive effects of DoorDash&#8217;s de facto Most Favored Nation (MFN) clauses.</li> <li>DoorDash has achieved a dominant position in the U.S. meal delivery market, holding a 67% market share as of 2023.</li> <li>Instead of directly applying No Price Competition Clauses (NPCC), which prohibit restaurants from offering lower prices to consumers who order directly from them, DoorDash penalizes restaurants for discounting their offerings outside of the platform.</li> <li>These de facto NPCC clauses, implemented through DoorDash&#8217;s restaurant ranking algorithm, limit the ability of restaurants to offer lower prices to dine-in customers or on competing platforms, harming both consumers and restaurants.</li> <li>Fideres examines how dine-in customers who have eaten at restaurants that are listed on DoorDash in the U.S might have been overcharged as a result of such behavior.</li> </ul> <h2>Background</h2> <p>After a long day, many Americans turn to an online food delivery app to order dinner, with DoorDash—a platform controlling over 67% of the U.S. market—often being the app of choice.<a href="https://www.businessofapps.com/data/food-delivery-app-market/" target="_blank" rel="noopener">¹</a> As users browse for restaurants, they are naturally drawn to those with higher rankings and the “Most Loved” label.<a href="https://get.doordash.com/en-us/about/most-loved" target="_blank" rel="noopener">²</a> However, these consumer-steering features are linked to DoorDash&#8217;s de facto NPCC, which effectively shapes pricing strategies across the restaurant industry.</p> <p><img fetchpriority="high" decoding="async" class="aligncenter wp-image-39221 size-medium_large" src="https://fideres.com/wp-content/uploads/2024/11/Picture2-768x486.png" alt="" width="768" height="486" srcset="https://fideres.com/wp-content/uploads/2024/11/Picture2-768x486.png 768w, https://fideres.com/wp-content/uploads/2024/11/Picture2-300x190.png 300w, https://fideres.com/wp-content/uploads/2024/11/Picture2-1024x649.png 1024w, https://fideres.com/wp-content/uploads/2024/11/Picture2-1536x973.png 1536w, https://fideres.com/wp-content/uploads/2024/11/Picture2.png 1650w" sizes="(max-width: 768px) 100vw, 768px" /></p> <h6 style="text-align: center;"><em>Source: <a href="https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/" target="_blank" rel="noopener">Bloomberg Second Measure³</a></em></h6> <p>With DoorDash&#8217;s commission fees ranging from 15% to 30%,<a href="https://get.doordash.com/en-us/products/marketplace" target="_blank" rel="noopener">⁴</a> many restaurants are forced to raise their prices to avoid incurring a loss. The platform’s algorithm penalizes restaurants that list menu prices on DoorDash higher than their in-store prices, effectively pushing restaurants to keep prices consistent across channels.<a href="https://www.restaurantbusinessonline.com/technology/doordash-pushes-back-against-inflated-delivery-prices" target="_blank" rel="noopener">⁵</a></p> <p>This policy may appear to protect consumers from price hikes, but the reality is more complex. To maintain visibility on DoorDash, restaurants are compelled to align their DoorDash menu prices with in-store pricing, often resulting in supra-competitive prices.</p> <p>Restaurants normally would not match their original in-store prices to DoorDash menu prices, since they would make a loss after accounting for the high commission fees.⁶ As a result, the only viable way to maintain parity between DoorDash menu and in-store prices is to raise in-store prices, ensuring takeaway orders remain profitable. This de facto NPCC harms all consumers who use restaurants listed on food delivery platforms, whether they dine-in or order food for delivery. These consumers face elevated prices as a consequence.<a href="#_ftnref1" name="_ftn1"></a></p> <h2>Classical Most Favored Nation Clauses</h2> <p>Imposing MFN clauses is common in the food delivery market. Grubhub and Uber Eats adopt a wide MFN clause, which stops restaurants from offering lower prices elsewhere, including to their dine-in customers.⁷</p> <p>This mechanism ensures the price listing on their platform is the lowest among all sales channels, regardless of the commission fee they impose to the restaurants. Without the pressure to compete horizontally, platforms can charge supra-competitive commissions without worrying about losing business to more efficient rivals with lower commission fees. These clauses stifle competition on fees and deter new platforms from entering the market with better rates, since restaurants cannot pass those savings on to customers.</p> <p>In the absence of MFN clauses, we would expect to see competition on commissions between platforms. Rival platforms would be incentivized to offer lower commissions, and monopoly platforms would have an incentive to cut their own commissions in order to match those offers and retain restaurants on their platforms. As a result, commissions across all restaurant platforms would fall and consumers would pay lower prices.</p> <p>MFN clauses therefore create barriers to entry, discouraging competition from new or smaller players.<a href="https://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=2144&amp;context=facsch_lawrev">⁸</a> This leads to increased marginal costs for restaurants and customers that use the platform, while imposing higher prices on those that do not use the platform.</p> <p><img decoding="async" class="aligncenter wp-image-39227 size-medium_large" src="https://fideres.com/wp-content/uploads/2024/11/Restaurant-flow-chart-768x431.png" alt="A flow chart highlighting the impact of prices with and without MFN clauses. With MFN clauses, high dine-in prices have to match platform prices which are already elevated to account for high commissioning fees. Prices without MFN clauses mean restaurants are free to set lower dine-in prices and listed prices on platforms with low commissioning fees will be cheaper which in turn incentivizes the first food delivery platform which has MFN clauses and high commissioning fees to lower the commissioning fees so more people would use the platform." width="768" height="431" srcset="https://fideres.com/wp-content/uploads/2024/11/Restaurant-flow-chart-768x431.png 768w, https://fideres.com/wp-content/uploads/2024/11/Restaurant-flow-chart-300x169.png 300w, https://fideres.com/wp-content/uploads/2024/11/Restaurant-flow-chart-1024x575.png 1024w, https://fideres.com/wp-content/uploads/2024/11/Restaurant-flow-chart.png 1499w" sizes="(max-width: 768px) 100vw, 768px" /></p> <h2>DoorDash’s De Facto MFN Clauses</h2> <p>Instead of directly including the MFN clauses in the contracts signed with restaurants, DoorDash is imposing de facto MFN clauses tied to restaurant ranking on the platform. DoorDash does this in the following ways:</p> <ul> <li>Restaurant Ranking: DoorDash gives priority ranking in its app to restaurants that list their menu items on DoorDash at the same price as their dine-in menu.</li> <li>Menu Price Labels: it uses labels – such as “Menu Matches In-Store Prices: Get the same prices you would in-store on DoorDash” – to identify when a restaurant matches prices on the DoorDash app with those on its dine-in menu.<a href="https://www.restaurantbusinessonline.com/technology/doordash-pushes-back-against-inflated-delivery-prices" target="_blank" rel="noopener">⁹</a></li> <li>Most Loved Labels: Price parity is a condition to qualify for Most Loved, a category of restaurants that are more visible on the platform.<a href="https://get.doordash.com/en-us/about/most-loved" target="_blank" rel="noopener">¹⁰</a></li> </ul> <p>DoorDash explicitly states on their merchant support webpage that marking up menu prices on DoorDash can result in “up to 37% fewer sales and up to 78% lower reorder rates.”<a href="https://help.doordash.com/merchants/s/article/How-to-Maximize-Visibility-and-Order-Volume-on-DoorDash?language=en_US" target="_blank" rel="noopener">¹¹</a> With these preferential algorithm measures, although not compulsory, restaurants are effectively induced to match their DoorDash menu prices to their dine-in prices. Otherwise, they risk gaining very little visibility on the platform.</p> <p>Through this price-matching mechanism, DoorDash has monopolized the meal delivery market by imposing de facto MFN clauses tied to restaurant ranking on the platform.</p> <h2>Why Are Dine-in Consumers Harmed?</h2> <p>DoorDash charges restaurants a commission fee based on the selected plan, ranging from 15% for the Basic Plan, 25% for the Plus Plan, and 30% for the Premier Plan.<a href="https://get.doordash.com/en-us/products/marketplace" target="_blank" rel="noopener">¹²</a> The Plus and Premier Plans include access to DashPass, which offers customers free delivery through their subscription. Additionally, the Premier Plan comes with a Growth Guarantee, promising higher visibility and more bookings for the restaurant.</p> <p>Restaurants typically incur three major expenses: food (28-32%), labor (28-32%), and rent (22-29%). This means that operating costs generally fall between 78% and 93%, leaving a profit margin of only 7% to 22%.<a href="https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/ordering-in-the-rapid-evolution-of-food-delivery" target="_blank" rel="noopener">¹³</a> With the added commission fees charged by food delivery platforms, restaurants face additional costs to serve their customers. Given commission rates ranging from 15% to 30%, restaurants are often forced to raise their menu prices in order to avoid operating at a loss.</p> <p>However, because of the de facto MFN clauses imposed by DoorDash, restaurants will simultaneously increase their in-store prices to ensure visibility on the platform, causing dine-in consumers to pay higher prices. Given the widespread use of MFN clauses—both implicit and explicit—by DoorDash and other platforms, most restaurants face similar pressures. As a result, inter-restaurant competition is unlikely to constrain the upward pressure on prices.</p> <p>In theory, restaurants could threaten to delist from a platform to avoid the impact of MFN clauses, which would likely reduce the anti-competitive effect. In practice, however, this is often an irrational choice, as delisting would lead to a substantial loss in sales. Without MFN clauses constraining pricing, restaurants could freely set lower prices for dine-in customers, who would therefore benefit from more competitive prices.<a href="#_ftnref1" name="_ftn1"></a></p> <h2>Conclusion</h2> <p>DoorDash’s de facto MFN clauses pressure restaurants to set higher prices for both delivery and dine-in services to offset the 15-30% commission fees, creating a spillover effect that impacts all parties in the market, including those not using the delivery service. If restaurants had the freedom to offer lower prices outside of DoorDash, these additional costs could be significantly reduced, benefiting both consumers and the restaurant industry as a whole.</p> <p>Sales from full-service restaurants in the U.S. are estimated at USD 513 billion in 2023, up from USD 470 billion in 2022.<a href="https://www.ers.usda.gov/data-products/food-expenditure-series/" target="_blank" rel="noopener">¹⁴</a> Even isolating the 30% attributable to dine-in customers,<a href="https://www.pymnts.com/restaurant-technology/2022/41-pct-of-restaurant-revenue-now-comes-through-digital-channels/" target="_blank" rel="noopener">¹⁵</a> and adjusting for restaurants listed on a food-delivery platform and customers who are not DoorDash users,¹⁶ the economic impact remains substantial. A potential class action on behalf of dine-in consumers would therefore be economically viable, aiming to address the higher prices driven by DoorDash&#8217;s de facto MFN clauses and restore fair competition in the food delivery market.<a href="#_ftnref1" name="_ftn1"></a></p> <p>The post <a href="https://fideres.com/doordashs-algorithm-a-recipe-for-higher-prices/">DoorDash&#8217;s Algorithm: A Recipe for Higher Prices</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/doordashs-algorithm-a-recipe-for-higher-prices/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item> <title>Fideres Has Submitted Comments To The European Commission On Its Proposed Guidelines For Applying Article 102 TFEU To Exclusionary Conduct</title> <link>https://fideres.com/fideres-has-submitted-comments-to-the-european-commission-on-its-proposed-guidelines-for-applying-article-102-tfeu-to-exclusionary-conduct/</link> <comments>https://fideres.com/fideres-has-submitted-comments-to-the-european-commission-on-its-proposed-guidelines-for-applying-article-102-tfeu-to-exclusionary-conduct/#respond</comments> <dc:creator><![CDATA[Julia Gillman]]></dc:creator> <pubDate>Fri, 01 Nov 2024 15:52:23 +0000</pubDate> <category><![CDATA[News]]></category> <guid isPermaLink="false">https://fideres.com/?p=39194</guid> <description><![CDATA[<p>Fideres has submitted comments to the European Commission on Section 4.2.5 of its proposed guidelines for applying article 102 TFEU to abusive exclusionary conduct &#8211; we believe the proposed guidelines&#8217; approach to margin squeeze cases risks protecting competitors while failing consumers. Fideres’s letter to the European Commission is available to read here.</p> <p>The post <a href="https://fideres.com/fideres-has-submitted-comments-to-the-european-commission-on-its-proposed-guidelines-for-applying-article-102-tfeu-to-exclusionary-conduct/">Fideres Has Submitted Comments To The European Commission On Its Proposed Guidelines For Applying Article 102 TFEU To Exclusionary Conduct</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<p>Fideres has submitted comments to the European Commission on Section 4.2.5 of its proposed guidelines for applying article 102 TFEU to abusive exclusionary conduct &#8211; we believe the proposed guidelines&#8217; approach to margin squeeze cases risks protecting competitors while failing consumers.</p> <p><a href="https://fideres.com/wp-content/uploads/2024/11/2024-10-31_EC-Letter_Fideres_102_Exclusionary_Guidelines_Submission_.pdf" target="_blank" rel="noopener">Fideres’s letter to the European Commission is available to read here.</a></p> <p>The post <a href="https://fideres.com/fideres-has-submitted-comments-to-the-european-commission-on-its-proposed-guidelines-for-applying-article-102-tfeu-to-exclusionary-conduct/">Fideres Has Submitted Comments To The European Commission On Its Proposed Guidelines For Applying Article 102 TFEU To Exclusionary Conduct</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/fideres-has-submitted-comments-to-the-european-commission-on-its-proposed-guidelines-for-applying-article-102-tfeu-to-exclusionary-conduct/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item> <title>Crypto ETFs: Simple Concept, Big Issues</title> <link>https://fideres.com/crypto-etfs-simple-concept-big-issues/</link> <comments>https://fideres.com/crypto-etfs-simple-concept-big-issues/#respond</comments> <dc:creator><![CDATA[Robert Chang]]></dc:creator> <pubDate>Thu, 17 Oct 2024 13:36:00 +0000</pubDate> <category><![CDATA[Research]]></category> <category><![CDATA[Financial Litigation]]></category> <guid isPermaLink="false">https://fideres.com/?p=38890</guid> <description><![CDATA[<p>Crypto ETFs present unique risks to investors. Reliance on risky liquidity providers and market concentration could trigger instability, price distortions, and investor vulnerability.</p> <p>The post <a href="https://fideres.com/crypto-etfs-simple-concept-big-issues/">Crypto ETFs: Simple Concept, Big Issues</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<h2>Key Points</h2> <ul> <li>In January 2024, the SEC approved Bitcoin and Ethereum ETFs, opening the door to broader crypto investing with a combined market cap now exceeding $60 billion.</li> <li>Despite this milestone, crypto ETFs bring their own set of risks. Unlike traditional ETFs, which rely on established authorized participants (APs), these funds depend on liquidity providers (LPs) with lower credit ratings and reserves, raising concerns about potential disruptions to share creation and redemption processes if LPs encounter instability.</li> <li>Market concentration is another red flag, with just three LPs controlling over 70% of the crypto ETF market. This dominance not only stifles competition but also raises the risk of price distortions, which could impede the ETF’s ability to accurately reflect the underlying assets’ value.</li> <li>Most crypto ETF LPs are linked to proprietary trading firms, raising concerns about market manipulation or front-running, especially given the limited competition and the lack of robust ethics walls in the industry.</li> <li>Crypto ETFs’ reliance on a single custodian is a source of additional risk for investors: any major issues, such as a security breach, could have widespread consequences for investors.</li> <li>Crypto ETFs may face increased litigation risk if they fail to fully disclose these distinct risks.</li> </ul> <h2>Background On Bitcoin Investment Vehicles</h2> <h3>Overview</h3> <p>Interest in cryptocurrencies has exploded over the years, attracting a wide range of investors. Yet, many institutional investors have been hamstrung by restrictions preventing direct investments in digital assets. In response, a wave of cryptocurrency-based investment vehicles, primarily private trusts, emerged to offer exposure to the crypto market.</p> <p>However, these private vehicles lacked the key mechanisms for efficient fund creation and redemption, prompting issuers to file numerous ETF conversion applications with the SEC as early as 2013. For years, the SEC rejected these proposals, citing concerns over market manipulation and investor protection until January 10, 2024, when it adopted rule changes permitting the creation of Bitcoin ETFs on major exchanges.<a href="https://www.sec.gov/files/rules/sro/nysearca/2024/34-99306.pdf">¹</a> The first ten Bitcoin ETFs began trading the following day.²Subsequently, the SEC approved Ethereum (ETH) spot ETFs on May 23, 2024, after which nine ETH ETFs began trading on July 23, 2024.³</p> <p><img decoding="async" class="aligncenter wp-image-38894 size-2048x2048" src="https://fideres.com/wp-content/uploads/2024/10/Timeline-of-Crypto-ETFs-e1729268823726-2048x990.png" alt="A line graph depicting the timeline of Crypto ETFs. The X axis charts years from 2013 to 2024. The Y axis covers BiTC Price starting at $0k going up in increments of $50k to $200k. The line graph starts with the first spot of BTC ETF application being submitted to the SEC in January 2013, other key dates are also highlighted between this point and the FCA approves the first BTC and ETH spot ETPs in the UK. The following day on 22 May 2024, the SEC approved the first RTH ETF." width="2048" height="990" srcset="https://fideres.com/wp-content/uploads/2024/10/Timeline-of-Crypto-ETFs-e1729268823726-2048x990.png 2048w, https://fideres.com/wp-content/uploads/2024/10/Timeline-of-Crypto-ETFs-e1729268823726-300x145.png 300w, https://fideres.com/wp-content/uploads/2024/10/Timeline-of-Crypto-ETFs-e1729268823726-1024x495.png 1024w, https://fideres.com/wp-content/uploads/2024/10/Timeline-of-Crypto-ETFs-e1729268823726-768x371.png 768w, https://fideres.com/wp-content/uploads/2024/10/Timeline-of-Crypto-ETFs-e1729268823726-1536x742.png 1536w" sizes="(max-width: 2048px) 100vw, 2048px" /></p> <h6 style="text-align: center;"><em>Figure 1 Timeline of Crypto ETFs</em></h6> <p>As of September 30, 2024, these newly created crypto ETFs had a total market capitalization of over $68bn. In the case of Bitcoin, Blackrock and Grayscale’s ETFs hold roughly 3% of all coins outstanding.</p> <h3>Significant Price Distortions Before ETF Conversions</h3> <p>Prior to their transition into publicly traded ETFs, the pain point of private crypto investment vehicles was the significant and persistent disparity between their share price and net asset value (NAV) per share. This discrepancy meant that investors in these vehicles often saw returns that diverged sharply from those of the underlying assets.</p> <p>Take Grayscale’s Bitcoin Trust (GBTC) as a prime example (Figure 2). As Bitcoin surged to nearly $60,000 in March 2021, GBTC investors endured steep discounts, with the trust trading as much as 50% below its NAV. Not only did investors suffer from the broader decline in Bitcoin’s price, but they were also stuck with the inability to redeem their GBTC shares for actual Bitcoin, further exacerbating their losses.⁴</p> <p>This prompted GBTC and other funds to seek ETF conversion, using creation and redemption mechanisms to align NAV with the traded share price.</p> <p><img loading="lazy" decoding="async" class="aligncenter wp-image-38986 size-2048x2048" src="https://fideres.com/wp-content/uploads/2024/10/GBTC-Premium-and-Discount-Source-Bloomberg-Fideres-e1729268860810-2048x986.png" alt="" width="2048" height="986" srcset="https://fideres.com/wp-content/uploads/2024/10/GBTC-Premium-and-Discount-Source-Bloomberg-Fideres-e1729268860810-2048x986.png 2048w, https://fideres.com/wp-content/uploads/2024/10/GBTC-Premium-and-Discount-Source-Bloomberg-Fideres-e1729268860810-300x144.png 300w, https://fideres.com/wp-content/uploads/2024/10/GBTC-Premium-and-Discount-Source-Bloomberg-Fideres-e1729268860810-1024x493.png 1024w, https://fideres.com/wp-content/uploads/2024/10/GBTC-Premium-and-Discount-Source-Bloomberg-Fideres-e1729268860810-768x370.png 768w, https://fideres.com/wp-content/uploads/2024/10/GBTC-Premium-and-Discount-Source-Bloomberg-Fideres-e1729268860810-1536x739.png 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /></p> <h6 style="text-align: center;"><em>Figure 2 GBTC Premium and Discount; Source: Bloomberg, Fideres</em></h6> <h2>The Mechanics Of ETF Creation And Redemption</h2> <h3>Typical ETF Creation And Redemption Structure</h3> <p>ETFs maintain alignment between their net asset value (NAV) per share and the traded share price through a creation/redemption mechanism, overseen by Authorized Participants (APs), who are typically large financial institutions. APs leverage arbitrage opportunities for risk-free profits, helping keep the ETF’s share price close to its NAV. When the share price falls below NAV, APs buy shares at the lower price, redeem them for underlying assets at NAV, and pocket the difference, pushing the price up. Conversely, when the share price exceeds NAV, APs buy underlying assets, create new shares, and sell them at the higher price, driving the price down. This continuous AP activity is key to maintaining price-NAV alignment (Figure 3).</p> <p>&nbsp;</p> <p><img loading="lazy" decoding="async" class="alignnone wp-image-38989 size-full" src="https://fideres.com/wp-content/uploads/2024/10/ETF-Creation-and-Redemption-Process-1-e1729268939664.png" alt="" width="2728" height="1345" srcset="https://fideres.com/wp-content/uploads/2024/10/ETF-Creation-and-Redemption-Process-1-e1729268939664.png 2728w, https://fideres.com/wp-content/uploads/2024/10/ETF-Creation-and-Redemption-Process-1-e1729268939664-300x148.png 300w, https://fideres.com/wp-content/uploads/2024/10/ETF-Creation-and-Redemption-Process-1-e1729268939664-1024x505.png 1024w, https://fideres.com/wp-content/uploads/2024/10/ETF-Creation-and-Redemption-Process-1-e1729268939664-768x379.png 768w, https://fideres.com/wp-content/uploads/2024/10/ETF-Creation-and-Redemption-Process-1-e1729268939664-1536x757.png 1536w, https://fideres.com/wp-content/uploads/2024/10/ETF-Creation-and-Redemption-Process-1-e1729268939664-2048x1010.png 2048w" sizes="auto, (max-width: 2728px) 100vw, 2728px" /></p> <h6 style="text-align: center;"><em>Figure 3 ETF Creation and Redemption Process</em></h6> <h3>Bitcoin ETFs&#8217; Creation And Redemption Structure</h3> <p>The SEC mandates Bitcoin spot ETFs to use a cash-only creation and redemption process, meaning APs can only exchange cash for shares, not Bitcoin directly. This necessitates fund providers to work with a newly introduced Bitcoin trading counterparty, or Liquidity Provider (LP), to convert between cash and Bitcoin.</p> <p>While the SEC has not explicitly detailed the rationale behind this requirement, it may aim to reduce risks related to money laundering or prevent self-dealing by market makers. As highlighted in Grayscale’s own presentation to the SEC, many traditional bank APs lack the ability to transact in BTC, giving an advantage to those that can.<a href="https://www.sec.gov/comments/sr-nysearca-2021-90/srnysearca202190-318679-829963.pdf">⁵</a></p> <h2>Concerns For Crypto ETFs</h2> <h3>Potential For Market Manipulation</h3> <p>Before approving the first spot crypto ETF, the SEC had already approved Bitcoin Futures ETFs, trusting the CME&#8217;s surveillance system to curb manipulation risks in the futures market. Spot crypto ETF applicants argued that this system should extend to the spot market, pointing to the strong correlation between Bitcoin futures and spot Bitcoin. However, even in its approval, the SEC did not find or provide quantitative evidence proving that Bitcoin and Bitcoin futures are “functionally identical.”⁶</p> <p>The SEC’s analysis, based on a limited number of platforms, instead showed an intraday correlation as low as 67.9%, suggesting significant differences between the futures and spot markets. This implies that some of the possible sources for manipulation identified by the SEC still exist and that CME’s futures market surveillance may not catch all manipulations in spot cryptos. Specifically, the SEC listed the following types of potential spot bitcoin price manipulation:⁷</p> <ul> <li><strong>Wash trading</strong>: engaging in simultaneous buying and selling of Bitcoin to create a misleading impression of market activity.</li> <li><strong>Price manipulation:</strong> individuals with dominant positions in the Bitcoin spot market influencing prices.</li> <li><strong>Network hacking:</strong> unauthorized intrusions into the Bitcoin network or trading platforms.</li> <li><strong>Malicious network control:</strong> actions aimed at exerting harmful control over the Bitcoin network.</li> <li><strong>Insider trading:</strong> trading based on material, non-public information, or spreading false and misleading information.</li> <li><strong>Stablecoin manipulation:</strong> manipulative activities involving purported “stablecoins,” such as Tether (USDT).</li> <li><strong>Trading platform fraud</strong>: fraud and manipulation occurring on Bitcoin trading platforms.⁸</li> </ul> <h3>Market Concentration</h3> <p>As detailed above, the stability and tradability of an ETF’s price hinge on the ongoing creation and redemption of fund shares. Simply labeling a fund as an “ETF” does not ensure it will be actively tradable at all times. For this to happen, the fund must actively collaborate with APs and have agreements in place that require APs or other third parties to provide ongoing creation and redemption services, thereby maintaining the ETF’s price stability.</p> <p>For stock ETFs, this process typically involves a large number of APs, which helps to prevent any single entity from exploiting long-term, risk-free arbitrage opportunities. However, crypto ETFs face distinct restrictions — they are not allowed to trade cryptocurrencies . Like the AP market for stock ETFs, the crypto ETF market similarly needs competition among LPs to ensure accurate price tracking and prevent opportunities for long-term, risk-free gains. Currently, the $68 billion crypto ETF market is characterized by significant concentration among a few LPs, which raises concerns about failure/reduced efficiency in the fund creation/redemption process.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><img loading="lazy" decoding="async" class="aligncenter wp-image-38987 size-large" src="https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Liquidity-Provider-Market-Share-as-of-Q2-2024-2-e1729268970369-1024x626.png" alt="" width="1024" height="626" srcset="https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Liquidity-Provider-Market-Share-as-of-Q2-2024-2-e1729268970369-1024x626.png 1024w, https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Liquidity-Provider-Market-Share-as-of-Q2-2024-2-e1729268970369-300x183.png 300w, https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Liquidity-Provider-Market-Share-as-of-Q2-2024-2-e1729268970369-768x469.png 768w, https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Liquidity-Provider-Market-Share-as-of-Q2-2024-2-e1729268970369.png 1522w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></p> <h6 style="text-align: center;"><em>Figure 4 Crypto ETF Liquidity Provider Market Share as of Q2 2024; Source: SEC, Fideres</em></h6> <h3>Credit Risk</h3> <p>These LPs also play a significant role as market makers in the cryptocurrency space. Unlike heavily regulated traditional bank APs, these trading firms carry elevated credit risk (Figure 5). This is due to their primary focus on the highly volatile crypto market and their relatively smaller capital reserves which may not be enough to mitigate the impact of extreme events like the situation witnessed in FTX’s bankruptcy. Consequently, investors in crypto ETFs are likely to see higher average premiums or discounts compared to traditional equity ETFs.</p> <p><img loading="lazy" decoding="async" class="aligncenter wp-image-38898 size-large" src="https://fideres.com/wp-content/uploads/2024/10/APLP-Long-term-Credit-Ratings-e1729268992981-1024x415.png" alt="Figure 5 is entitled 'AP/LP Long-term Credit Ratings" width="1024" height="415" srcset="https://fideres.com/wp-content/uploads/2024/10/APLP-Long-term-Credit-Ratings-e1729268992981-1024x415.png 1024w, https://fideres.com/wp-content/uploads/2024/10/APLP-Long-term-Credit-Ratings-e1729268992981-300x121.png 300w, https://fideres.com/wp-content/uploads/2024/10/APLP-Long-term-Credit-Ratings-e1729268992981-768x311.png 768w, https://fideres.com/wp-content/uploads/2024/10/APLP-Long-term-Credit-Ratings-e1729268992981-1536x622.png 1536w, https://fideres.com/wp-content/uploads/2024/10/APLP-Long-term-Credit-Ratings-e1729268992981-2048x829.png 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></p> <h6 style="text-align: center;"><em>Figure 5 AP/LP Long-term Credit Ratings</em></h6> <p>Many of these entities also face legal actions and government investigations for issues like selling unregistered securities,<a href="https://www.sec.gov/news/press-release/2023-7">⁹</a> receiving preferential treatment on exchanges<a href="https://www.bloomberg.com/news/articles/2023-04-05/jane-street-tower-and-radix-are-unnamed-vips-in-binance-case">¹⁰</a>, and engaging in market manipulation.<a href="https://decrypt.co/news-explorer?pinned=131875&amp;title=authorities-investigate-jane-street-jump-trading-for-potential-market-manipulation-in-terrausd-collapse">¹¹</a> Without compelling evidence showing that these new crypto ETF LPs have implemented a robust ethics wall for their newly created roles in the ETF market, the probability of misconduct, such as market manipulation or frontrunning, may be notably higher compared to traditional stock ETFs.</p> <h3>Market Manipulation Risk</h3> <p>The substantial trading volume driven by crypto ETFs also grants these LPs access to a considerable amount of trading data. This information is highly valuable, as significant creation or redemption activity in crypto ETFs can impact the prices of the underlying cryptocurrencies, and trading on such confidential insider information can lead to significant profits.</p> <p>Without robust information barriers, LPs or their affiliated entities might be tempted to breach federal securities laws, leading to potential legal actions from ETF or crypto investors (for example, under Section 10(b) of the Exchange Act and rule 10b-5 thereunder).</p> <p>Similar violations recently led to Morgan Stanley being fined over $249 million for leaking and misusing confidential block trade information.<a href="https://www.sec.gov/newsroom/press-releases/2024-6">¹²</a></p> <h3>Custodians Concentration Risk</h3> <p>Finally, Crypto ETFs rely on nontraditional custodians to safeguard their assets. As of 2024 Q2, Coinbase held 85% of all Bitcoins owned by Bitcoin ETFs. This heavy concentration is concerning, particularly given historical precedents like the Mt. Gox security breach in 2014, where the world’s largest Bitcoin exchange lost approximately 850,000 Bitcoins. If Coinbase were to encounter major operational issues, security breaches, or insolvency, the fallout for crypto ETFs and their investors could be disastrous. This dependence on a single custodian amplifies these vulnerabilities and underscores the potential risks involved.</p> <p><img loading="lazy" decoding="async" class="aligncenter wp-image-38988 size-large" src="https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Custodian-Market-Share-as-of-Q2-2024-2-e1729269032397-1024x576.png" alt="" width="1024" height="576" srcset="https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Custodian-Market-Share-as-of-Q2-2024-2-e1729269032397-1024x576.png 1024w, https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Custodian-Market-Share-as-of-Q2-2024-2-e1729269032397-300x169.png 300w, https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Custodian-Market-Share-as-of-Q2-2024-2-e1729269032397-768x432.png 768w, https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Custodian-Market-Share-as-of-Q2-2024-2-e1729269032397-1536x864.png 1536w, https://fideres.com/wp-content/uploads/2024/10/Crypto-ETF-Custodian-Market-Share-as-of-Q2-2024-2-e1729269032397.png 1631w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></p> <h6 style="text-align: center;"><em>Figure 6 Crypto ETF Custodian Market Share as of Q2 2024; Source: SEC, Fideres</em></h6> <h2>Conclusions</h2> <p>In summary, the SEC’s approval of crypto ETFs was predicated on the assumption that the CME’s surveillance system for futures would also address manipulation risks in the spot market. However, the SEC’s own findings instead reveal significant disparities between these markets, suggesting that manipulation risks—such as wash trading and price manipulation—can persist unnoticed in the spot market.</p> <p>While ETF price stability relies on the efficient creation and redemption of shares, crypto ETFs face distinct challenges due to their dependence on LPs with lower creditworthiness and higher market concentration compared to traditional APs.</p> <p>The heavy reliance on a single custodian, like Coinbase, further compounds these risks, as any major issue could have severe repercussions for both the ETFs and their investors.</p> <p>As a result, spot crypto ETFs may face heightened litigation risks if they fail to adequately disclose these distinct risks, and investors suffer losses from market manipulation or failures in the fund creation and redemption process.</p> <p><a href="#_ftnref1" name="_ftn1"></a></p> <p><a href="#_ftnref1" name="_ftn1"></a></p> <p>The post <a href="https://fideres.com/crypto-etfs-simple-concept-big-issues/">Crypto ETFs: Simple Concept, Big Issues</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/crypto-etfs-simple-concept-big-issues/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item> <title>Skipping The Flight Fantastic</title> <link>https://fideres.com/skipping-the-flight-fantastic/</link> <comments>https://fideres.com/skipping-the-flight-fantastic/#respond</comments> <dc:creator><![CDATA[Emily Hatchett]]></dc:creator> <pubDate>Fri, 04 Oct 2024 12:14:07 +0000</pubDate> <category><![CDATA[Research]]></category> <category><![CDATA[Competition Economics]]></category> <guid isPermaLink="false">https://fideres.com/?p=38833</guid> <description><![CDATA[<p>How US airlines abuse their market power around airport hubs to overcharge consumers. </p> <p>The post <a href="https://fideres.com/skipping-the-flight-fantastic/">Skipping The Flight Fantastic</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<h2><span style="font-family: proxima-nova-light;">Key Points</span></h2> <ul> <li>In this note we consider the anti-competitive effects of restrictions by US airlines on &#8216;skiplagging’ and the potential for them to breach section 2 of the Sherman Act.</li> <li><span data-teams="true"><span class="ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak" dir="ltr">It is often cheaper to book a multi-stop flight with a layover, without boarding the second flight. Many airlines prohibit this &#8211; known as skiplagging &#8211; increasing prices for consumers on routes where there is a lack of competition.</span></span></li> <li><span data-teams="true"><span class="ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak" dir="ltr">Skiplagging occurs on approximately 15% of flights and predominantly on flights operated by the “big four” airlines – American, Delta, United and Southwest, which together control 80% of flights in the United States.</span></span></li> <li><span data-teams="true"><span class="ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak" dir="ltr">The use of market power to apply restrictions on consumer skiplagging has two effects, each of which results in consumers paying higher prices. Firstly, it allows the airlines to exclude Skiplagged – a website that allows customers to locate and book cheaper “skiplag” tickets.  Secondly, it forces consumers to purchase a product that delivers negative utility (a ‘bad’) in order to obtain the product that they want.</span></span></li> <li><span data-teams="true"><span class="ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak" dir="ltr">The use of market power around airline hubs to apply restrictions on skiplagging has two effects. Firstly, it allows airlines to exclude Skiplagged – a website that assists customers to locate and book cheaper “skiplag” tickets. Secondly, it ties consumers to purchase an unwanted product in order to obtain the product that they want, thereby allowing airlines to maintain supra-competitive prices.</span></span></li> <li><span data-teams="true"><span class="ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak" dir="ltr">Imposing this penalty, and excluding intermediaries, allows the airlines to set supra-competitive prices on direct routes in which they hold a monopoly.</span></span></li> <li><span data-teams="true"><span class="ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak" dir="ltr">If customers skiplagged wherever feasible, the total damages would be in the order of $2 billion per year.</span></span></li> </ul> <h2><span style="font-family: proxima-nova-light;">Skiplagging</span></h2> <p>Skiplagging occurs when a consumer purchases a multi-stop flight and disembarks at the stopping point instead of completing the entire journey, to save money.</p> <p>For example, suppose a passenger would like to travel from New York City to Austin. A non-stop flight from New York City to Austin might cost $400. However, a flight from New York City to Denver with a layover in Austin might cost $200. The passenger may be motivated to book the cheaper flight and disembark at Austin, saving $200.</p> <p><img loading="lazy" decoding="async" class="size-full wp-image-38838 aligncenter" src="https://fideres.com/wp-content/uploads/2024/10/graph.png" alt="A graph depicting skiplagging, indicating that a flight from New York City to Denver with a layover in Austin is cheaper than a direct flight from New York City to Austin." width="841" height="372" srcset="https://fideres.com/wp-content/uploads/2024/10/graph.png 841w, https://fideres.com/wp-content/uploads/2024/10/graph-300x133.png 300w, https://fideres.com/wp-content/uploads/2024/10/graph-768x340.png 768w" sizes="auto, (max-width: 841px) 100vw, 841px" /></p> <h3>What Restrictions Are There?</h3> <p>Skiplagging is prohibited by most airlines in the U.S. For example, American Airlines’ Conditions of Carriage prohibit “purchasing a ticket without intending to fly all flights to gain lower fares (hidden city ticketing).”<a href="http://www.aa.com/i18n/customer-service/support/conditions-of-carriage.jsp">¹</a> Many airlines impose penalties for engaging in skiplagging, which include banning the customer from the airline, canceling the rest of the roundtrip ticket, refusing to let the passenger fly and check bags, and charging the passenger for what the ticket would have cost if they hadn’t skiplagged. Airlines argue that they lose revenue when passengers skiplag. If a passenger does not board the connecting flight, there will be an empty seat on the second leg of the trip, which the airline could otherwise have sold (albeit for the second time).<a href="http://www.npr.org/2023/08/23/1194998452/skiplagging-airfare-flying-skiplagged-american-airlines">²</a></p> <p>In the U.S., airlines have objected to an innovative intermediary service called Skiplagged – a flight search engine that uses an algorithm to allow users to locate and book cheaper ‘skiplag’ tickets. Skiplagged explains that “Our goal is to empower consumers to use their buying power however they please. We exist to just find the best prices for you.”<a href="https://skiplagged.com/about">³</a> This intermediary therefore assists customers to purchase better value tickets. It plays the same role as rail ticket intermediaries such as Trainline that invest in algorithms that discover and sell cheaper split-fare tickets that are sold by rail companies in the UK and Europe. In response, some airlines – including American Airlines – have filed lawsuits against Skiplagged, alleging that it employs “unauthorized and deceptive” ticketing practices.<a href="http://www.documentcloud.org/documents/23923387-american-airlines-v-skiplagged">⁴</a> In Europe, by contrast – many low-cost airlines (such as Ryanair for example) do not prohibit skiplagging.</p> <p><a href="#_ftnref1" name="_ftn1"></a></p> <h3>How Common Is Skiplagging?</h3> <p>Academics estimate that HCT opportunities arise on approximately 15% of US flights.<a href="https://mpra.ub.uni-muenchen.de/113960/1/MPRA_paper_113960.pdf"><span style="font-size: 10pt;">⁵</span></a> This is consistent with a 2001 report from the U.S. Government Accountability Office, which found that HCT opportunities arise 17% of the time.<a href="http://www.gao.gov/assets/gao-01-831.pdf">⁶</a></p> <p>The extent to which passengers exploit HCT opportunities when they arise is, however, unclear. Researchers found that some passengers <em>are</em> taking advantage of skiplagging opportunities, but noted that this usually involves purchasing two separate one-way tickets, given the risk that “failure to show up for the second leg of the outbound portion of the trip typically results in cancellation of the rest of the roundtrip ticket.”⁷ Other consumers may end up spending more by purchasing the higher-priced non-stop flight, so as not to violate the conditions of carriage.</p> <p>Skiplagging also depends on route competition and primarily occurs on full-service carriers that operate large hub-and-spoke networks (American, Delta, and United).⁸ These airlines account for the majority of HCT.⁹ A study found that “an additional nonstop carrier on route A-C increases the likelihood of HCT by 1.6%-3.6% while an additional nonstop carrier on route A-B decreases the likelihood of HCT by 3.5%.”¹⁰ The study describes how, “by controlling a large fraction of flights and gates at their hubs, carriers are also able to exercise market power and charge a “hub premium” to passengers who originate or terminate their trips at the hub.”¹¹</p> <h2>Anticompetitive Harm</h2> <p>We examine two possible theories of harm in relation to skiplagging: (1) exclusion of a market intermediary; and (2) an unusual tying claim.</p> <h3>Exclusion Of A Rival</h3> <p>By banning skiplagging and seeking to exclude through legal action the intermediary Skiplagged, airlines are excluding a rival ticket retailer that imposes a constraint on their price setting. Skiplagged’s purpose is to increase transparency in the market and help consumers to locate the “best prices”. Therefore, using monopoly power to exclude it can be expected to lead to higher prices for consumers. Given the restrictions it faces, Skiplagged is not yet widely used. But if it were not suppressed by the airlines, the service it offers is an innovation that should incentivize rival intermediaries to invest in similar algorithms to improve their price competitiveness.</p> <p>Notably, there have been parallels to this conduct outside the United States. In 2023, the German Competition Authority found that Deutsche Bahn – Germany’s largest rail company &#8211; abused its market power by withholding information, such as traffic data, from rival websites including Trainline.<a href="http://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2023/28_06_2023_DB_Mobilitaet.html">¹²</a> The same year, the European Commission commenced an investigation into Renfe – Spain’s state-owned rail operator – over concerns that it restricted competition by withholding information, including real-time passenger data, to third-party ticketing platforms.<a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3455">¹³</a></p> <h3>Tying A ‘Bad’ To Protect Monopoly Pricing</h3> <p>As a consequence of skiplagging restrictions, consumers who want flight A-B (e.g. New York to Austin) at a competitive price are forced to also purchase <em>and use</em> flight B-C (Austin to Denver). Here, the tied product is the B-C flight (Austin to Denver) which has no additional financial cost, but which creates no utility. In fact, it creates a considerable utility cost to the customer. This product (B-C) is therefore – for this customer – an economic “bad” with a negative value.¹⁴</p> <p>Absent market power, an airline would be expected to price A-B at more competitive prices and would be unable to enforce a boilerplate skiplagging clause.¹⁵ The tie here therefore leverages market power in the A-B route to force unwanted purchases in the A-B-C route, the prospect of which prevents consumers buying cheaper A-B tickets from third party retailers. This helps to maintain the airline’s monopoly pricing in A-B. In these circumstances, the use of market power to impose the tie (and to suppress output of A-B-C tickets) serves to protect and maintain the ability to use that market power to overcharge in the direct A-B market. The restriction therefore acts to prevent arbitrage that would otherwise benefit consumers.</p> <h3>Is There An Efficiency Defense?</h3> <p>It might be argued that skiplagging restrictions facilitate a kind of price discrimination that improves consumer welfare. Airlines already price-discriminate through their dynamic pricing, selling tickets at different prices in order to efficiently use their capacity. To do so they apply restrictions to prevent consumers reselling their tickets (intermediaries like Skiplagged can resell but at live rates, not via advance purchases). Such price discrimination helps to expand output by ensuring that flights are operated that otherwise may not be.</p> <p>However, banning skiplagging does not contribute in the same way. This is because – when the airline sells a seat, it receives whichever ‘price’ it puts on that seat – regardless of whether or not the seat is actually used. Therefore, while the restriction on skiplagging may increase prices and revenues overall, it does not change the incentive to run the flight in question, nor the incentive to run unprofitable flights.</p> <p>A different pro-competitive argument for this pricing practice might be that absent the skiplagging restriction, an airline would have increased the price of indirect A-B-C routes in order to reduce arbitrage incentives and to protect its ability to charge higher prices on A-B tickets. However, this argument relies on out-of-market efficiencies in the A-C market being weighed against consumer harm that is incurred in the A-B market.¹⁶ Such out-of-market efficiencies are not generally considered relevant by the courts (since distortionary cross-subsidization of another market by A-B purchasers is not a recognized goal of antitrust law).</p> <p>Moreover, it is far from clear that A-C prices would actually increase absent the restriction. Direct A-C prices face little or no constraint from indirect A-B-C prices. This means that withdrawing A-B-C offers would not reduce the constraints on direct A-C prices. Furthermore, indirect A-B-C prices can also be assembled by consumers or intermediaries who would be paying less on the A-B leg even if the B-C price were to increase. This would suggest that the net price on A-B-C tickets may not be reduced.</p> <p>Finally, the airline might, absent the skiplagging restriction, increase B-C prices to reduce the possibility of arbitrage by customers building their own A-B-C routes. This however would be an out-of-market efficiency claim, and not relevant to competition on the B-C route. Moreover, it is unclear that there would be any benefit to consumers in terms of lower B-C prices.¹⁷ Ultimately, the airline’s ability and incentive to increase direct B-C prices will depend on direct B-C competition and demand. The case for an efficiency defense therefore appears a weak one.</p> <h2>Quantifying Harm</h2> <p>Given that the U.S. airline industry generated $179 billion in revenue from passenger fares, and around 15% to 17% of flights are affected by HCT, we estimate that the volume of affected commerce was around $30 billion in 2023. HCT saves an average of around $24 per ticket,¹⁸ and U.S. airlines carried 658 million passengers in 2021.<a href="http://www.bts.gov/newsroom/full-year-2022-us-airline-traffic-data">¹⁹</a> Therefore if consumers skiplagged where feasible they would make savings in the order of $2 billion per year.²⁰<a href="#_ftnref1" name="_ftn1"></a></p> <p>The post <a href="https://fideres.com/skipping-the-flight-fantastic/">Skipping The Flight Fantastic</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/skipping-the-flight-fantastic/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item> <title>Matt Stoller newsletter reports on Fideres&#8217;s original investigation into Steinway</title> <link>https://fideres.com/matt-stoller-newsletter-reports-on-fideress-original-investigation-into-steinway/</link> <comments>https://fideres.com/matt-stoller-newsletter-reports-on-fideress-original-investigation-into-steinway/#respond</comments> <dc:creator><![CDATA[Fideres]]></dc:creator> <pubDate>Mon, 29 Jul 2024 09:36:26 +0000</pubDate> <category><![CDATA[News]]></category> <category><![CDATA[News Competition Economics]]></category> <guid isPermaLink="false">https://fideres.com/?p=38693</guid> <description><![CDATA[<p>In his weekly BIG Newsletter, Matt Stoller reported on Fideres&#8217;s &#8220;fascinating report&#8221; into Steinway&#8217;s monopolization of the grand piano market resulting in overpriced instruments. Read the full article here.</p> <p>The post <a href="https://fideres.com/matt-stoller-newsletter-reports-on-fideress-original-investigation-into-steinway/">Matt Stoller newsletter reports on Fideres&#8217;s original investigation into Steinway</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<p><span class="ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak" dir="ltr">In his weekly BIG Newsletter, Matt Stoller reported on Fideres&#8217;s &#8220;fascinating report&#8221; into Steinway&#8217;s monopolization of the grand piano market resulting in overpriced instruments.</span></p> <p>Read the full article <a href="https://www.thebignewsletter.com/p/monopoly-round-up-price-fixing-in?utm_campaign=email-post&amp;utm_source=substack" target="_blank" rel="noopener">here</a>.</p> <p>The post <a href="https://fideres.com/matt-stoller-newsletter-reports-on-fideress-original-investigation-into-steinway/">Matt Stoller newsletter reports on Fideres&#8217;s original investigation into Steinway</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/matt-stoller-newsletter-reports-on-fideress-original-investigation-into-steinway/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item> <title>Exploring Aspects Of The State Of Competition In The EU</title> <link>https://fideres.com/exploring_aspects_of_the_state_of_competition_in_the_eu/</link> <comments>https://fideres.com/exploring_aspects_of_the_state_of_competition_in_the_eu/#respond</comments> <dc:creator><![CDATA[Fideres]]></dc:creator> <pubDate>Thu, 27 Jun 2024 11:50:07 +0000</pubDate> <category><![CDATA[News]]></category> <guid isPermaLink="false">https://fideres.com/?p=38640</guid> <description><![CDATA[<p>We at Fideres are happy to see the European Commission publish &#8220;Exploring Aspect of the State of Competition in the EU&#8221;.   This overarching report is the product of our work alongside colleagues at Lear, UEA/CCP, E.CA, DIW, Prometeia and Verian, and sits alongside a parallel report by the OECD. The overarching report provides original evidence [&#8230;]</p> <p>The post <a href="https://fideres.com/exploring_aspects_of_the_state_of_competition_in_the_eu/">Exploring Aspects Of The State Of Competition In The EU</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<p>We at Fideres are happy to see the European Commission publish <strong>&#8220;Exploring Aspect of the State of Competition in the EU&#8221;</strong>.   This overarching report is the product of our work alongside colleagues at Lear, UEA/CCP, E.CA, DIW, Prometeia and Verian, and sits alongside a parallel report by the OECD.</p> <p>The overarching report provides original evidence of the multifaceted benefits of effective competition, which has been shown to deliver improved outcomes for customers, to boost the competitiveness of domestic companies in international markets and, more generally, to contribute to economic growth and societal well-being. However, the report also identifies worrying signs that competition has weakened across markets in the EU.</p> <p>In particular the <strong>Fideres-CCP Report</strong> on <strong>Price-Concentration Analysis</strong> provides both quantitative and qualitative evidence of the link between higher concentration and higher prices in six sectors: airlines, beer, cement, mobile telecom, modern consumer retail and mortgages. For mobile telecom and airline pricing, we performed detailed empirical analyses confirming a causal link between prices and concentration. We also found higher concentration associated with lower investment, based on the example of mobile telephony.</p> <p>Our findings, alongside those of the wider project, speak to the vital importance of protecting competition to build an economy that works for everyone</p> <p>Read the report <a href="https://bit.ly/4cC8dmE" target="_blank" rel="noopener">here</a>, the EC report <a href="https://bit.ly/3L1Dbch" target="_blank" rel="noopener">here</a>, and watch the conference <a href="https://bit.ly/3XDCKw9" target="_blank" rel="noopener">here</a>.</p> <p>For more information on Fideres’s work to protect competition in Europe and the US, see <a href="https://fideres.com/expertise/competition-economics/" target="_blank" rel="noopener">here</a>.</p> <p>The post <a href="https://fideres.com/exploring_aspects_of_the_state_of_competition_in_the_eu/">Exploring Aspects Of The State Of Competition In The EU</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/exploring_aspects_of_the_state_of_competition_in_the_eu/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item> <title>Are Piano Buyers Being Played?</title> <link>https://fideres.com/are-piano-buyers-being-played_/</link> <comments>https://fideres.com/are-piano-buyers-being-played_/#respond</comments> <dc:creator><![CDATA[Ludovica Paradisi]]></dc:creator> <pubDate>Mon, 24 Jun 2024 11:14:13 +0000</pubDate> <category><![CDATA[Research]]></category> <category><![CDATA[Competition Economics]]></category> <guid isPermaLink="false">https://fideres.com/?p=38594</guid> <description><![CDATA[<p>Fideres's investigation finds that Steinway’s dominance in the market for professional grand pianos might be attributable to anticompetitive deals with schools, concert halls, and artists.</p> <p>The post <a href="https://fideres.com/are-piano-buyers-being-played_/">Are Piano Buyers Being Played?</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<h2>Key Points</h2> <ul> <li>Fideres&#8217;s investigation finds that Steinway’s dominance in the market for professional grand pianos might be attributable to anticompetitive deals with schools, concert halls, and artists.</li> <li>This resulted in Steinway gaining market power in the market for grand pianos in the US, with about 68% of US concert pianists having studied at a school tied to Steinway.</li> <li>The combination of the exclusivity agreements and conditional discounts offered to the schools creates high barriers to entry, making it hard for competitors to access a part of the consumer base that is willing to use other brands.</li> <li>This ultimately harms consumers in the market for grand pianos, including music schools and concert halls, in the form of supracompetitive prices.</li> <li>Fideres estimates average overcharges per Steinway grand piano up to $36.8k or $45.9k for model A and B, respectively.</li> </ul> <h2>Introduction</h2> <p>If you are studying to be a professional pianist, the piano on which you will learn to play is likely to shape your preference on the instruments you will choose throughout your career.</p> <p>As for other industries,¹ Steinway Musical Instruments Inc&#8217;s (also known as Steinway &amp; Sons or Steinway), one of the largest manufacturers of concert pianos, has over time adopted a series of strategies to exploit this fact and gain market share in the grand piano segment by forcing music academies and artists to use their instruments. First, they signed deals with schools and concert halls where they agreed to use Steinway pianos almost exclusively in exchange for discounts. Then, they created an artist program that provided a network for top performers in exchange for the artist’s compulsory use of Steinway pianos.</p> <p>Students who grew up in those academies to become professional musicians tied to Steinway as the instrument they trained with. This created a vertical tie between schools, venues, students, and artists, making it nearly impossible for other piano manufacturers to compete.</p> <h2>The Market For Grand Pianos</h2> <p>Performers, composers, students, and practitioners typically prefer to keep playing the same piano they have been trained on throughout their career. This is because of the unique qualities of each brand and model, which make pianos not interchangeable with other manufacturers, and even with other models of the same manufacturer.²</p> <p>Acoustic pianos differ based on type and size, serving distinct customer bases. High-end grand pianos, which provide the higher level of customization, are purchased almost exclusively by artists, schools and concert halls. On the other hand, baby grand pianos and smaller scale pianos are targeted to non-performers and likely constitute a separate market compared to grand pianos. In other words, a small but significant increase in the price (SSNIP)³ of grand pianos will not result in artists switching to upright pianos.</p> <h2>Steinway’s Market Power In The Market For Grand Pianos</h2> <p>Among other well-known manufacturers in the grand piano market segment (such as Yamaha, Kawai, Fazioli, and Bechstein), Steinway pianos are recognized as top-notch instruments played by pianists around the world.⁴</p> <p style="text-align: center;"><img loading="lazy" decoding="async" class="aligncenter wp-image-38558 size-large" src="https://fideres.com/wp-content/uploads/2024/06/pie-charts-1-1024x468.png" alt="" width="1024" height="468" srcset="https://fideres.com/wp-content/uploads/2024/06/pie-charts-1-1024x468.png 1024w, https://fideres.com/wp-content/uploads/2024/06/pie-charts-1-300x137.png 300w, https://fideres.com/wp-content/uploads/2024/06/pie-charts-1-768x351.png 768w, https://fideres.com/wp-content/uploads/2024/06/pie-charts-1-1536x702.png 1536w, https://fideres.com/wp-content/uploads/2024/06/pie-charts-1-2048x936.png 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><span style="font-size: 8pt;"><em>Source: <a href="https://steinwaygrand.com/pages/price-guide">Park Avenue Pianos</a></em></span></p> <p>In 2020, 76.3% of Steinway’s total sales ($416 million) were acoustic piano sales.⁵This represents about 38.6% of global sales of acoustic pianos.⁶ Approximately 37.6% of Steinway’s acoustic piano sales occurred in the US in the same year.⁷ According to public sources, the grand piano segment covers 15% of Steinway&#8217;s total piano business, or $47.6 million in 2020.⁸</p> <p>To acquire its global market dominance, Steinway built an extensive network of artists, institutions and schools that accepted to use Steinway instruments exclusively. These networks included:⁹</p> <ul> <li><em>Steinway Artists Program</em>. Artists joining this global network are required to own and perform on Steinway pianos. To this purpose Steinway has ensured that a selection of Steinway pianos is always available in all main concert halls worldwide: this “bank” of pianos includes about 300 instruments worldwide;¹⁰ Steinway also provides a similar program with agent-like services to young professionals.¹¹</li> <li><em>All-Steinway Schools</em>. Schools and institutions who agree to exclusively purchase Steinway pianos to gain the label of “All-Steinway”. This program likely entitles them to receive important conditional discounts in exchange for their commitment to use almost none of Steinway’s competitors.</li> </ul> <p>According to Steinway, there are approximately 1900 Steinway Artists who represent 97% of all concert pianists.¹² Based on Fideres’s analysis, approximately 42% of them studied in a US school. Of these, 68% studied in an All-Steinway school or one that was classified as such until recently.¹³ About 220 institutions and schools globally are labelled All-Steinway.¹⁴</p> <h2>Steinway’s <em>All-Steinway</em> Program</h2> <p>One of the ways Steinway preserved and strengthened its position is through the <em>All-Steinway </em>program. To join and remain in the <em>All-Steinway </em>program, music institutions must have an inventory of at least 10 pianos and 90% of this inventory must be made of Steinway brands (which includes, beyond Steinway, the Boston and Essex brands).¹⁵ The share of non-Steinway pianos cannot</p> <p>exceed 10% in these schools. This 10% is included as buffer to accommodate for pianos that gifted to the school by alumni or historical instruments.¹⁶</p> <p>Many of the most renowned international music schools are part of the <em>All-Steinway </em>program.¹⁷ According to Steinway sources, 248 out of 260 pianos at the Juilliard School in New York, one of the most famous music schools in the world, are Steinway.¹⁸</p> <p>The preference of performers for keeping a specific piano throughout their career makes it very important for musical institutions to be able to reflect these preferences in the composition of their instrumental inventory, such as by maintaining a significant amount of Steinway pianos for their practitioners. If forced to choose between dealing exclusively with Steinway or with lesser-known suppliers, most buyers would probably choose to deal exclusively with Steinway.¹⁹</p> <p>As a result, an institution willing to accumulate more than 10% of its inventory of non-Steinway pianos to satisfy the preferences of some of its musicians could lose the <em>All-Steinway </em>label by failing to meet its requirements, potentially resulting in reputational and practical damage, resulting from the loss of discounts and of musicians who rely on Steinway pianos for their performances.</p> <h2>Steinway Forecloses Its Competitors In The Market For Grand Pianos</h2> <p>The <em>All-Steinway </em>label works as a gatekeeper to schools. Schools that might have opted for brands that were cheaper, or that offered other qualities, would face the risk of losing the patronage of influential artists with a narrow preference for Steinway instruments.</p> <p>In fact several grand pianos produced by other manufacturers, such as Yamaha, Kawai, Fazioli, or Bechstein, are comparable in quality to Steinway&#8217;s grand pianos and many international artists choose to play on them.²⁰ One of these brands defined as a historic achievement the sale of the first grand piano to the Juilliard School, &#8220;<em>breaking a monopoly that for more than 80 years had tied it to the purchase of instruments from another historic brand</em>,&#8221; namely Steinway.²¹</p> <p>Steinway&#8217;s dominance and near-monopoly in the institutional market for grand pianos is mentioned in several articles²² and seems to go beyond supply agreements: in the context of an international</p> <p>music competition, Fazioli pianos were allegedly replaced to give Steinway pianos²³ more visibility, and some participating artists were surprised when they were not given the opportunity to play them for their performances.²⁴</p> <p>Steinway themselves admitted that the purpose of their programs is precisely to maintain and grow their reputation among top artists and institutions strong and solid, and that:</p> <p>“The loss of the support of artists and institutions for our musical instrument products or our inability to gain endorsements from new artists or institutions may harm our business, financial condition and cash flows. […] if these artists or institutions attract negative publicity or are no longer popular or if we are unable to continue to attract the endorsement of new artists or institutions in the future, the value of our brands and our business, financial condition and cash flows could be harmed”</p> <p>and therefore they have:</p> <p>“created a number of programs to further promote our brands”.²⁵</p> <h2>Anticompetitive Harm Of Steinway’s Conduct: Economic Discussion</h2> <p>The grand piano market seems to present two levels of contestability:</p> <ul> <li>Non-contestable portion: made of loyalists and students who have trained with Steinway and prefer to keep using the same instrument.</li> <li>Contestable portion: made of artists that have not yet developed a preference, those who prefer other brands because of their features, and those that are more price elastic. Other brands can compete for these artists and students.</li> </ul> <p>Assuming that a significant part of the market for grand pianos for musical institutions and professionals is dominated by Steinway and is therefore not contestable, Steinway should still face competition from other manufacturers for artists that are not as loyal to Steinway. Consumers (musicians and institutions) would benefit from this process in the form of lower prices and higher incentives to innovate.</p> <p>By enforcing its exclusive programs Steinway refuses to supply its pianos to a buyer who decided to purchase one or more grand pianos from a different brand, implying that:</p> <ul> <li>An institution would lose a significant portion of its business (i.e., performers and students who are willing to attend a music school or concert hall only by playing on Steinway pianos) if it switched to purchasing a greater share of other pianos than the agreement with Steinway would allow (e.g., the <em>All-Steinway </em>program).</li> <li>Steinway can sell its products at a premium, even in a contestable market. Any institution that switched to other brands of pianos of similar quality would be more harmed by the loss of its non-contestable demand than by paying Steinway&#8217;s surcharge.</li> <li>This essentially &#8220;ties&#8221; the non-contestable part of the market to the contestable part, extending Steinway&#8217;s market power in a potentially illegal way.</li> </ul> <p>For these reasons, an exclusionary vertical conduct may produce an anticompetitive result and violate competition laws: in a competitive world, Steinway and other piano makers, would compete for available market share, while with this exclusionary conduct Steinway obtains, at a premium price, both the contestable and non-contestable share.</p> <h2>Who Has Been Harmed?</h2> <p>We argue that Steinway violated competition law by foreclosing its competitors from competing for the contestable market share in grand pianos. As a result, Steinway’s competitors have been harmed in the form of lost profits they could have achieved in the absence of the conduct.</p> <p>Similarly, Steinway may have been overcharging schools with a supracompetitive price on its grand pianos, enabled by exclusive provisions that eliminated competition. As stated by the price guide of <a href="https://steinwaygrand.com/pages/price-guide">Park Avenue Pianos</a>, a large resellers of Steinway pianos, <em>“Of course new Steinways go up in price over time! They set their own prices without competition, plus there’s inflation”.²⁶</em>Steinway pianos prices have increased significantly more than inflation. A model B has gone from $8,900 in 1975 to approximately $101,800 in 2017, over a 1000% price increase, compared to 355% cumulative price change between the two dates.²⁷</p> <p><a href="#_ftnref1" name="_ftn1"><img loading="lazy" decoding="async" class="aligncenter wp-image-38559 size-large" src="https://fideres.com/wp-content/uploads/2024/06/Steinway-1024x511.png" alt="" width="1024" height="511" srcset="https://fideres.com/wp-content/uploads/2024/06/Steinway-1024x511.png 1024w, https://fideres.com/wp-content/uploads/2024/06/Steinway-300x150.png 300w, https://fideres.com/wp-content/uploads/2024/06/Steinway-768x384.png 768w, https://fideres.com/wp-content/uploads/2024/06/Steinway-1536x767.png 1536w, https://fideres.com/wp-content/uploads/2024/06/Steinway-2048x1023.png 2048w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /></a></p> <p style="text-align: center;"><span style="font-size: 8pt;"><em>Source: <a href="https://steinwaygrand.com/pages/price-guide">Park Avenue Pianos</a></em></span></p> <p>We have analysed a sample of three different types of concert pianos for the US:</p> <ul> <li>Extra-large grand pianos, comparable to Steinway Model B;</li> <li>Large grand pianos, comparable to Steinway Model O;</li> <li>Medium grand pianos, comparable to Steinway Model A.</li> </ul> <p>In each bucket, Steinway’s prices are consistently higher than those of its competitors, by at least 36.7%.²⁸ On this basis, Steinway pianos are on average overcharged by $36.8k for a model A and by $45.9k for a model B, compared to rival models of the same type. In the market for upright pianos, where Steinway faces competition, Steinway’s K model (the only upright model they manufacture) is priced at a 17% premium over the average price of the pianos in the same segment.²⁹</p> <h2>Conclusion</h2> <p>Steinway has been able to gain dominance in the market for professional grand pianos through a series of exclusive deals with schools, concert halls, and artists. This enabled them to avoid competition from other piano manufacturers and raise prices gradually over time. We consider this a potential example of unlawful conduct, resulting in higher prices to artists and schools, as well as a suppression of competition that might have resulted in lower incentives to innovate in the market for grand pianos.</p> <p><a href="#_ftnref1" name="_ftn1"></a></p> <p><a href="#_ftnref2" name="_ftn2"></a></p> <p><a href="#_ftnref1" name="_ftn1"></a><a href="#_ftnref2" name="_ftn2"></a><a href="#_ftnref5" name="_ftn5"></a></p> <p><a href="#_ftnref1" name="_ftn1"></a><a href="#_ftnref5" name="_ftn5"></a></p> <p><a href="#_ftnref1" name="_ftn1"></a></p> <p>The post <a href="https://fideres.com/are-piano-buyers-being-played_/">Are Piano Buyers Being Played?</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/are-piano-buyers-being-played_/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item> <title>Goldman – Three Years On</title> <link>https://fideres.com/goldman-three-years-on/</link> <comments>https://fideres.com/goldman-three-years-on/#respond</comments> <dc:creator><![CDATA[Per Axelson]]></dc:creator> <pubDate>Mon, 17 Jun 2024 16:34:04 +0000</pubDate> <category><![CDATA[Research]]></category> <category><![CDATA[Securities Litigation]]></category> <guid isPermaLink="false">https://fideres.com/?p=38535</guid> <description><![CDATA[<p>In an earlier publication, Fideres analyzed how defendants’ strategies at the 10b5 class certification stage developed following the 2021 and 2023 Goldman rulings. We have extended this analysis to cover more recent cases where plaintiffs filed a motion for class certification through February 1, 2024. Our findings indicate an important change in defendants’ class certification [&#8230;]</p> <p>The post <a href="https://fideres.com/goldman-three-years-on/">Goldman – Three Years On</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<p>In an <a href="https://fideres.com/after-goldman-trouble-getting-to-class/">earlier publication</a>, Fideres analyzed how defendants’ strategies at the 10b5 class certification stage developed following the 2021 and 2023 <em>Goldman</em> rulings. We have extended this analysis to cover more recent cases where plaintiffs filed a motion for class certification through February 1, 2024.</p> <p>Our findings indicate an important change in defendants’ class certification strategies, with price impact now being a central tenet.</p> <p style="text-align: left;">Our updated analysis shows that the previously observed trends persist. Between the 2021 Supreme Court ruling and the 2023 Second Circuit ruling, defendants challenged price impact in 43% of class certification proceedings, up from 16% before the Supreme Court ruling. Following the 2023 Second Circuit ruling, this tendency intensified, with 70% of defendants challenging class certification. As before, we observe that most defendants challenging price impact rely on expert witness testimony.</p> <p><img loading="lazy" decoding="async" class="size-full wp-image-38536 aligncenter" src="https://fideres.com/wp-content/uploads/2024/06/Picture1-Fraction-of-Defendants-Challenging-Price-Impact.png" alt="" width="2727" height="1361" srcset="https://fideres.com/wp-content/uploads/2024/06/Picture1-Fraction-of-Defendants-Challenging-Price-Impact.png 2727w, https://fideres.com/wp-content/uploads/2024/06/Picture1-Fraction-of-Defendants-Challenging-Price-Impact-300x150.png 300w, https://fideres.com/wp-content/uploads/2024/06/Picture1-Fraction-of-Defendants-Challenging-Price-Impact-1024x511.png 1024w, https://fideres.com/wp-content/uploads/2024/06/Picture1-Fraction-of-Defendants-Challenging-Price-Impact-768x383.png 768w, https://fideres.com/wp-content/uploads/2024/06/Picture1-Fraction-of-Defendants-Challenging-Price-Impact-1536x767.png 1536w, https://fideres.com/wp-content/uploads/2024/06/Picture1-Fraction-of-Defendants-Challenging-Price-Impact-2048x1022.png 2048w" sizes="auto, (max-width: 2727px) 100vw, 2727px" /></p> <p>At the heart of the <em>Goldman</em> class certification challenge an alleged mismatch in the genericness of alleged misrepresentations and their corresponding corrective disclosures. However, we observe that defendants tend to cite to <em>Goldman</em> in a broader context, with only 25% of defendants that challenge price impact doing so on ground of the alleged misrepresentations being overly generic.</p> <p>The post <a href="https://fideres.com/goldman-three-years-on/">Goldman – Three Years On</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/goldman-three-years-on/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item> <title>Business Insider Releases A New Article On Blackstone&#8217;s BREIT Valuation Issue</title> <link>https://fideres.com/business-insider-releases-a-new-article-on-blackstones-breit-valuation-issue/</link> <comments>https://fideres.com/business-insider-releases-a-new-article-on-blackstones-breit-valuation-issue/#respond</comments> <dc:creator><![CDATA[Fideres]]></dc:creator> <pubDate>Tue, 07 May 2024 15:58:38 +0000</pubDate> <category><![CDATA[News]]></category> <category><![CDATA[REIT; BREIT; Blackstone;]]></category> <guid isPermaLink="false">https://fideres.com/?p=38450</guid> <description><![CDATA[<p>Today, Fideres&#8217;s research has been cited in a Business Insider article on Blackstone&#8217;s BREIT Valuation Issue, Fideres&#8217;s original research on REIT&#8217;s can be found here.</p> <p>The post <a href="https://fideres.com/business-insider-releases-a-new-article-on-blackstones-breit-valuation-issue/">Business Insider Releases A New Article On Blackstone&#8217;s BREIT Valuation Issue</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<p><span class="ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak" dir="ltr">Today, Fideres&#8217;s research has been cited in a Business Insider article on <a href="https://www.businessinsider.com/blackstone-breit-commercial-real-estate-fund-misled-investors-private-equity-2024-5">Blackstone&#8217;s BREIT Valuation Issue</a>, Fideres&#8217;s original research on REIT&#8217;s can be found <a href="https://fideres.com/navgate-in-the-private-reit-space-2/">here</a>.</span></p> <p>The post <a href="https://fideres.com/business-insider-releases-a-new-article-on-blackstones-breit-valuation-issue/">Business Insider Releases A New Article On Blackstone&#8217;s BREIT Valuation Issue</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/business-insider-releases-a-new-article-on-blackstones-breit-valuation-issue/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item> <title>Fideres Opens A New Office In Madrid</title> <link>https://fideres.com/fideres-opens-a-new-office-in-madrid/</link> <comments>https://fideres.com/fideres-opens-a-new-office-in-madrid/#respond</comments> <dc:creator><![CDATA[Fideres]]></dc:creator> <pubDate>Thu, 02 May 2024 17:08:18 +0000</pubDate> <category><![CDATA[News]]></category> <guid isPermaLink="false">https://fideres.com/?p=38439</guid> <description><![CDATA[<p>Fideres announces the opening of the new office in Madrid.</p> <p>The post <a href="https://fideres.com/fideres-opens-a-new-office-in-madrid/">Fideres Opens A New Office In Madrid</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></description> <content:encoded><![CDATA[<p><img loading="lazy" decoding="async" class="aligncenter wp-image-38440 " src="https://fideres.com/wp-content/uploads/2024/05/Frame-59-4.png" alt="" width="1073" height="605" srcset="https://fideres.com/wp-content/uploads/2024/05/Frame-59-4.png 4623w, https://fideres.com/wp-content/uploads/2024/05/Frame-59-4-300x169.png 300w, https://fideres.com/wp-content/uploads/2024/05/Frame-59-4-1024x578.png 1024w, https://fideres.com/wp-content/uploads/2024/05/Frame-59-4-768x433.png 768w, https://fideres.com/wp-content/uploads/2024/05/Frame-59-4-1536x867.png 1536w, https://fideres.com/wp-content/uploads/2024/05/Frame-59-4-2048x1155.png 2048w" sizes="auto, (max-width: 1073px) 100vw, 1073px" /></p> <p>The post <a href="https://fideres.com/fideres-opens-a-new-office-in-madrid/">Fideres Opens A New Office In Madrid</a> appeared first on <a href="https://fideres.com">Fideres</a>.</p> ]]></content:encoded> <wfw:commentRss>https://fideres.com/fideres-opens-a-new-office-in-madrid/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> </channel> </rss> <!-- plugin=object-cache-pro client=phpredis metric#hits=2614 metric#misses=123 metric#hit-ratio=95.5 metric#bytes=3386828 metric#prefetches=305 metric#store-reads=106 metric#store-writes=2 metric#store-hits=315 metric#store-misses=119 metric#sql-queries=8 metric#ms-total=1311.54 metric#ms-cache=44.94 metric#ms-cache-avg=0.4200 metric#ms-cache-ratio=3.4 -->