Does Merger Policy Converge after the 2004 European Union Reforms

45 Pages Posted: 29 Sep 2016 Last revised: 26 May 2020

See all articles by Mats Bergman

Mats Bergman

Södertörn University, Stockholm

Malcolm B. Coate

U.S. Federal Trade Commission (FTC)

Anh Mai

Sodertorn University (University College of Southern Stockholm)

Shawn W. Ulrick

U.S. Federal Trade Commission (FTC)

Date Written: October 26, 2018

Abstract

More than ten years after the European merger policy reform, sufficient data has been accumulated to explore the impact of the reform on the difference between the European Union (EU) and the United States (US) merger policy. We expect policies to converge following the EU 2004 reform that established an economically-based “significant impediment to effective competition” standard; this approach seems to closely approximate the US “substantial lessening of competition” standard. We start by identifying changes in the EU regime and verifying the consistency in the US regime. We detect a softer EU policy for clear dominance and monopoly cases and some changes in its collusion policy after the reform. The incidence of collusion cases falls while EU’s policy, conditional on collusion being the theory of harm, appears tougher. Limited data precludes detailed analysis for the non-dominance unilateral concerns, although the EU data implies stability in the challenge probability associated with that type of case. Decompositions show some convergence in policy for unilateral cases and non-parametric analysis shows further convergence occurs in unilateral-effects analysis. Matching analysis is attempted, but fails to generate results, because even adjusted, the sample distributions are not sufficiently balanced. Thus, we must rely on the structural form assumptions of our logit models.


This version of the article is a working paper, whose final form appears in the Journal of Competition Law & Economics, Volume 15, Issue 1, 2019, Pages 664–689.

Keywords: merger policy, international comparison, decomposition, Matching, European Union, Federal Trade Commission

JEL Classification: G34, 21, L40

Suggested Citation

Bergman, Mats A. and Coate, Malcolm B. and Mai, Anh and Ulrick, Shawn W., Does Merger Policy Converge after the 2004 European Union Reforms (October 26, 2018). Available at SSRN: https://ssrn.com/abstract=2844402 or http://dx.doi.org/10.2139/ssrn.2844402

Mats A. Bergman

Södertörn University, Stockholm ( email )

Alfred Nobels allé 7, Flemingsberg
Stockholm, Stockholm 14189
Sweden

Malcolm B. Coate (Contact Author)

U.S. Federal Trade Commission (FTC) ( email )

601 Pennsylvania Avenue, NW
Washington, DC 20580
United States

Anh Mai

Sodertorn University (University College of Southern Stockholm) ( email )

Alfred Nobels allé 7, Flemingsberg
Stockholm, Stockholm 14189
Sweden

Shawn W. Ulrick

U.S. Federal Trade Commission (FTC) ( email )

600 Pennsylvania Ave., NW
Washington, DC 20580
United States

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