Assessing the Efficacy of Structural Merger Remedies: Choosing Between Theories of Harm?

Assessing the Efficacy of Structural Merger Remedies: Choosing Between Theories of Harm? This paper shows that many structural remedies in a sample of European merger cases result in market structures which would probably not be cleared by the Competition Authority (CA) if they were the result of merger (rather than remedy). This is explained by the fact that the CA’s objective through remedy is to restore pre-merger competition, but markets are often highly concentrated even before merger. If so, the CA must often choose between clearing an ‘uncompetitive’ merger, or applying an unsatisfactory remedy. Here, the CA appears reluctant to intervene against coordinated effects, if doing so enhances a leader’s dominance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Assessing the Efficacy of Structural Merger Remedies: Choosing Between Theories of Harm?

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Publisher
Springer US
Copyright
Copyright © 2010 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-010-9259-3
Publisher site
See Article on Publisher Site

Abstract

This paper shows that many structural remedies in a sample of European merger cases result in market structures which would probably not be cleared by the Competition Authority (CA) if they were the result of merger (rather than remedy). This is explained by the fact that the CA’s objective through remedy is to restore pre-merger competition, but markets are often highly concentrated even before merger. If so, the CA must often choose between clearing an ‘uncompetitive’ merger, or applying an unsatisfactory remedy. Here, the CA appears reluctant to intervene against coordinated effects, if doing so enhances a leader’s dominance.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Jul 24, 2010

References

  • Empirical analysis of merger enforcement under the 1992 merger guidelines
    Coate, M. B.

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