An econometric analysis of the European Commission's merger decisions

Bergman, Mats; Jakobsson, Maria; Razo, Carlos

doi:10.1016/j.ijindorg.2005.08.006

Cited by 90 publications

(105 citation statements)

References 19 publications

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“…Considering a sample of 167 EU mergers between 1990 and 2002, they find that the Commission's decisions are not solely guided by the motive of protecting consumer surplus but also driven by the institutional and political environment. Bergman et al (2005) provide an econometric investigation of 96 mergers investigated by the European Commission before 2002. Applying logit models, the authors find that the probability of a Phase II investigation (and of a prohibition of the merger) increases with the parties' market shares, the presence of high entry barriers and a collusion-friendly post-merger market structure.…”

Section: Review Of Related Literaturementioning

confidence: 99%

“…Alongside the authority-and case-related determinants, market-related determinants constitute a third subset of variables that possibly influence the duration of Phase II investigations in particular, however variables such as 'premerger HHI', 'combined market share of the merging parties', 'delta HHI post-merger' or 'high entry barriers' by definition relate to the characteristics of specific relevant markets within the merger case under investigation (see also Bergman et al (2005)). As most investigated mergers affect more than one relevant market, the variables in this setting could only refer to, for example, the relevant market in the respective investigation in which competition concerns were the greatest, however such an approach would ignore the situation in all remaining relevant markets and therefore appears problematic as a potential driver of the speed of Phase II investigations.…”

Section: Case-related Determinantsmentioning

confidence: 99%

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The Duration of the EC Merger Control Process: Determinants and the Impact of the 2004 Merger Regulation Reform

2015

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. THE DURATION OF THE EC MERGER CONTROL PROCESS AbstractThe duration of merger proceedings held by competition authorities is an important determinant of the efficiency of the entire merger control process. We use a dataset of 2953 Phase I and 92 Phase II investigations completed by the European Commission (EC) between 1999 and 2008 to examine the key determinants of their duration. Differentiating between authority-and caserelated drivers, we find that while the duration of Phase I investigations largely depends on the type of decision and use of simplified procedure, the duration of Phase II investigations is driven by factors such as industry knowledge, the duration of the preceding Phase I investigation, the origin of the notifying firm or the number of identified relevant markets. We also provide evidence that the significant increase in average duration identified after the 2004 merger regulation reform does not imply a decrease in administrative efficiency, as the probability of indepth investigations was correspondingly reduced.

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Section: Review Of Related Literaturementioning

confidence: 99%

Section: Case-related Determinantsmentioning

confidence: 99%

The Duration of the EC Merger Control Process: Determinants and the Impact of the 2004 Merger Regulation Reform

2015

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“…There is also another strand of the economic literature on ex post evaluations by competition authorities, which focus on merger clearance decisions, and decisions on abusive and concerted practices (e.g. Khemani and Shapiro (1993), Davies, Nigel & Clarke (1999), Bergman, Jakobsson & Razo (2005Carree, Guenster & Schinkel (2010, Gual and Mas (2011)). However, the data generating process for our sample of multilateral practices is unique, and it is different from the data generating process for an authority detecting anti-competitive behavior or the data generating process for leniency or merger clearance applications.…”

Section: Individual Exemptions and Their Economic Effects: A Brief Rementioning

confidence: 99%

Individual Exemption Applications and Their Assessment: Lessons from the Competition Law Change in the Netherlands during the 1990s

Özbuğday

2013

BMR

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One of the most distinctive features of the European competition law was the availability of individual exemptions to agreements or concerted practices which restricted competition, but nevertheless served the generals interests of the European Community. However, established by Regulation 17/62, the individual exemption regime was dismantled by Regulation 1/2003 in an attempt to modernize the European Union (EU) competition law. Prior to the annulment, one country in Europe -the Netherlands, which was famous for its "cartels"-used individual exemptions to provide legal certainty during a period when national competition policy was radically changed. Following the introduction of the Competition Act of 1998, undertakings were allowed to apply for exemption for agreements that were already in existence and that had begun under the superseded Economic Competition Act of 1956. Accordingly, the Netherlands Competition Authority (NMa) received and assessed hundreds of exemption requests, and gave verdicts on the pro-competitiveness of the agreements contained in these applications. This study uses information from 346 decisions of the NMa on exemption applications. According to our analysis, the applications provided the NMa, which was a newly-established enforcement agency, with a huge amount of information about various concerted practices -especially for the ones that are considered to be "grey areas" in competition policy -while the exemptions (or needlessness of the exemptions) guaranteed legal certainty for undertakings that were exposed to a new system.

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“…3 The European report suggested that merger remedies had permitted more concentrations to be accepted but highlighted a series of flaws in their design and implementation. 4 The analysis was based on interviews with merging parties, competitors and trustees. Moreover, the European agency has to face recent questioning about the validity of its merger control.…”

Section: Introductionmentioning

confidence: 99%

“…In order to estimate the relationship between merger remedy decisions and market 4 For instance, the scope of the divested business, the viability of the purchaser, and strategic behaviors between sellers and purchasers can raise serious concerns about the efficiency of some remedies. 5 The famous Airtours/First Choice, TetraLaval/Sidel and Schneider/Legrand merger cases.…”

Section: Introductionmentioning

confidence: 99%

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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An econometric analysis of the European Commission's merger decisions

Cited by 90 publications

References 19 publications

The Duration of the EC Merger Control Process: Determinants and the Impact of the 2004 Merger Regulation Reform

The Duration of the EC Merger Control Process: Determinants and the Impact of the 2004 Merger Regulation Reform

Individual Exemption Applications and Their Assessment: Lessons from the Competition Law Change in the Netherlands during the 1990s

Merger Remedies at the European Commission: A Multinomial Logit Analysis

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