Incomplete Contracting, Commission Discretion and the Origins of EU Merger Control*

Abstract

"Council Regulation 4064/89 on the Control of Concentration between Undertakings"- more commonly known as the Merger Regulation - was a watershed development in the evolution of the EU's competition policy regime. In this article we seek to cast new analytical light on what, in many respects, is an established narrative. To do this we draw on insights from the new institutional economics (NIE). Specifically, we draw on the complementary concepts of incomplete contracting and delegation. We demonstrate how the Commission utilized the discretion attendant to its delegated authority to interpret and apply the indeterminate language of treaty competition articles so as to alter the economic, political and legal environment as it pertained to merger activity. It did so to such an extent that Member States, long resistant to Commission proposals for a merger control regulation, came to regard legislative action as preferable to the uncertainty represented by the evolving status quo. Copyright (c) 2009 The Author(s). Journal compilation (c) 2009 Blackwell Publishing Ltd.

Delegation in EU merger control: The determinants of referrals to national competition authorities (2004–2012)

“…The Council agreed on EU merger control in December 1989, when it approved the Regulation 4064/89. National governments found an agreement after several decades of heated negotiations on the extent of supranational competences (Bulmer, 1994; Cini and McGowan, 2008: 128–134; Doleys, 2009; Schwartz, 1993). In the end, member states retained control of mergers raising competition concerns at domestic level, whereas the Commission was delegated the assessment of the cases showing a Community dimension.…”

The Challenges and Trajectories of EU Competition Policy in the Twenty-first Century

“…The last 20 years have seen the emergence of a political science community that is increasingly concerned with issues of institutional design, accountability and discretion in EU competition policy, as well as issues of ideational change, power and policy diffusion across the globe (Buch-Hansen and Wigger 2011;Bü the 2007;Cini and McGowan 2009;Damro 2006, Doleys 2009Kassim and Wright 2009;McGowan 2010;Wilks 2007).…”