The application - or need for further application of economic principles in EU merger control

Abstract

Indeed, merger control has been based on economics for a long time. The assessment of mergers in light of modern economic principles that are robust and empirically tested, and the reliance on a number of empirical methodologies that help identify a theory of harm, is at the core of this trend. Consequently, the proper interpretation of economic evidence is essential in order to work towards better decision making. Although there seems to be a significant increase in the use of economic principles, an increased reliance on economic analysis implies a need for stronger economic expertise. The purpose of this thesis is to provide some input on the proper application of economic principles in EU Merger control. Chapter One begins with a discussion on the method in which mergers are nowadays regulated – this provides the bedrock for a better understanding of the more complex issues discussed in subsequent chapters. Chapter Two examines the economic concepts of efficiency which will then be placed in the context of different market forms. The importance given to efficiency gains in the assessment of mergers will be discussed. Chapter Three focuses on the effects of mergers in oligopolistic markets, referred to as 'non-coordinated effects'. An analysis of the notions relative to collective dominance and coordinated effects will also be given. Chapter Four addresses the relationship between the economic concept of market power and the legal concept of dominance. Approaches taken in practice to define the relevant market and establish dominance will be examined and will be analysed in terms of their consistency with economic theory. Chapter Five discusses the new substantive test adopted in the EU Merger Regulation and whether it is better suited than the dominance test in capturing anti-competitive effects. This thesis aims to provide lawyers who do not have a background in economics with an overview of the economic principles incorporated into merger legislation and the analytical techniques used in practice to appraise the competitive impact of mergers. An evaluation of possible future developments in EU Merger control will be given.