Reform of European Merger Policy

Lyons, Bruce

doi:10.1111/j.1467-9396.2004.00447.x

Cited by 37 publications

(19 citation statements)

References 5 publications

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“…His work had an important role in the choice of a conditional acceptance in Phase I (Monti). 21 Unlike Bergman et al (2005), we found that his role as the head of the Antitrust Section undoubtedly affected merger decisions. Although his influence was largely stressed in the media, it was not found in previous empirical works.…”

Section: Model #1: Conditioning a Mergercontrasting

confidence: 52%

“…They all used a basic model to assess 6 Thus, the period covers the beginning of the new merger regulation passed in 2004. See, for instance, Lyons (2004) for further details about the procedure. 7 As Competition Commissioner for the EU Ms. Neelie Kroes says "Our aim is simple: to protect competition in the market as a means of enhancing consumer welfare and ensuring an efficient allocation of resources".…”

Section: Different Approaches To Assessing An Antitrust Authoritymentioning

confidence: 99%

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Merger Remedies at the European Commission: A Multinomial Logit Analysis

Bougette

Turolla²

2006

SSRN Journal

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This paper aims to build and empirically evaluate a discrete choice model of merger remedies as a basis for policy analysis. The database consists of 229 merger cases accepted in Phase I or Phase II of the European merger process between 1990 and 2005. We focus on the following question: Which merging firms' characteristics lead the European Commission to decide whether to require conditional acceptance? Although a lot of empirical studies have been carried out these last years, ours is distinguished by at least two original features. First, we explore determinanting factors of the Commission's decisions with a neural network model differentiating cases accepted with or without remedies (either structural or behavioral). Secondly, we implement three multinomial logit models. We find that variables related to high market power lead more frequently to a remedy outcome, whatever the phase. Innovative industries such as energy, transportation and communications positively affect the probability of a behavioral remedy. Lastly, former Competition Commissioner Mario Monti's policy appears to be pro-remedy, i.e. seeking concessions from merging parties.

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Section: Model #1: Conditioning a Mergercontrasting

confidence: 52%

Section: Different Approaches To Assessing An Antitrust Authoritymentioning

confidence: 99%

Merger Remedies at the European Commission: A Multinomial Logit Analysis

Bougette

Turolla²

2006

SSRN Journal

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“…This is commonly referred to as the dominance test (DT by US competition authorities. Some observers (e.g., Lyons, 2004) argue that the DT puts unnecessary weight on the concept of dominance in cases where the more important issue concerns the significant impediment of effective competition. The new merger regulation, which is applicable from May 1, 2004, focuses on a merger's impact on competition.…”

Section: Institutional Detailsmentioning

confidence: 99%

How effective is European merger control?

Duso

Gugler

Yurtoğlu

2011

European Economic Review

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This paper applies a novel methodology to a unique dataset of large concentrations during the period 1990-2002 to assess merger control's effectiveness. By using data gathered from several sources and employing different evaluation techniques, we analyze the economic effects of the European Commission's (EC) merger control decisions and distinguish between blockings, clearances with commitments (either behavioral or structural), and outright clearances. We run an event study on merging and rival firms' stocks to quantify the profitability effects of mergers and merger control decisions. We back up our results and methodology by using alternative measures for the merger's profitability effects based on balance-sheet data and obtain consistent results. Our findings suggest that outright blockings solve the competitive problems generated by the merger. Remedies are not always effective in solving the market power concerns, at least not on average. Nevertheless, both structural (divestitures) and behavioral remedies do help restore effective competition when correctly applied to anticompetitive mergers during the first investigation phase. Yet, they are on the whole ineffective or even detrimental when applied after the second investigation phase. Finally, remediesespecially behavioral ones -seem to constitute a rent transfer from merging firms to rivals when mistakenly applied to pro-competitive mergers.

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“…The determinants regressions for type I errors show similar coefficients estimates to the main specification, some of 32 Lyons (2004), for instance, notices that several changes in merger control were being implemented around 2003, such as the introduction of devil's advocate panels, the proposal of a clarification of the dominance test, the appointment of the first chief economist, the publishing of the draft merger guidelines and the extension for timetable for remedies.…”

Section: The Timing Of the Reformmentioning

confidence: 58%

An Empirical Assessment of the 2004 EU Merger Policy Reform

2010

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Based on a database of 326 merger cases scrutinized by the European Commission between 1990 and 2007, we evaluate the economic impact of the change in European merger legislation in 2004. We first propose a general framework to assess merger policy effectiveness, which is based on standard oligopoly theory and makes use of stock market reactions as an external assessment of the merger and the merger control decisions. We then focus on four different dimensions of effectiveness: 1) legal certainty; 2) frequency and determinants of type I and type II errors; 3) rent-reversion achieved by different merger policy tools; and 4) deterrence of anti-competitive mergers. To infer the economic impact of the merger policy reform, we compare the results of our four tests before and after its introduction. Our results suggest that the policy reform seems to have been only a modest improvement of European merger policy.Keywords: merger control, regulatory reform, EU Commission, event-study JEL codes: L4, K21, C13, D78

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Reform of European Merger Policy

Cited by 37 publications

References 5 publications

Merger Remedies at the European Commission: A Multinomial Logit Analysis

Merger Remedies at the European Commission: A Multinomial Logit Analysis

How effective is European merger control?

An Empirical Assessment of the 2004 EU Merger Policy Reform

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