2006–2010

Merger Control and Enterprise Competitiveness: Empirical Analysis and Policy Recommendations

Reprint No. 2006:10

Author(s): Johan Stennek and Frank VerbovenYear: 2006 Title: European Merger Control. Do We Need an Efficiency Defence? Chapter: 4Editor(s): Fabienne Ilzkovitz and Roderick MeiklejohnPublisher: Edward ElgarCity: Cheltenham (UK) and Northampton (MA) Pages: 202–302


This chapter studies the importance of efficiency gains from horizontal mergers. A general theme throughout the chapter is that efficiency gains, and their pass-on to consumers, may vary substantially from merger to merger. For this reason it seems appropriate to reconsider current practice in European merger control, which does not allow the merging parties to appeal to an efficiency defence. We provide a detailed examination of two main parts of an efficiency analysis. The first part of the chapter considers the presence of efficiencies from mergers, with a focus on economies of scale. The second part considers the pass-on of efficiencies to consumers in the form of lower prices. In a final section, we develop an alternative approach based on the concept of the diversion ratio.


Reference:
Stennek, Johan and Frank Verboven (2006), "Merger Control and Enterprise Competitiveness: Empirical Analysis and Policy Recommendations". Chapter 4, pp. 202–302 in Fabienne Ilzkovitz and Roderick Meiklejohn, eds., European Merger Control. Do We Need an Efficiency Defence?. Cheltenham (UK) and Northampton (MA): Edward Elgar.

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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