CONTENTS
I. Introduction 2
II. Substantive test - New test for the assessment of concentrations 3
1. The dominance test and the substantial lessen of competition (SLC) 4
2. The Green Paper 6
3. The Significant impediment to effective competition (SIEC test) 7
CRITICAL APPROACH TO EU MERGER CONTROL SINCE THE ADOPTION OF REGULATION 139/2004
I. Introduction
In 2004 Reg.139/2004 replaced the existing 4064/89 Merger Control Regulation, thus marking a milestone in EU merger control. The new regulation provided for the implementation of a new kind of substantive test as well as certain procedural changes. Compared to its practice prior to the defeats in the General Court in 2002, which was characterized by an interventionist tendency, the Commission demonstrated a more conservative and moderate approach.
Towards the end of the 90’s the growing dissatisfaction regarding the efficiency of the European’s Commission competition policy, especially in light of the imminent enlargement of the European Union, led to the publication of a White Paper that suggested several modifications to the competition policy’s function and structure. This process, also known as the modernization package of European merger, eventually led to the adoption of Council Regulation 139/2004 in early May 2004 (ECMR 04). It has been argued that the employment of such drastic changes came as a response to the overturning by the General Court of three sanctioning decisions of the DG for Competition. In these successful appeals, the General Court based its decision on the grounds that the DG for Competition applied the standard of proof of dominance in a very strict and rigid way. Consequently, in 2001 the European Commission published a Green Paper callin...
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...ies, Recital 29 of the new EUMR highlights their importance in the merger control assessment as a defense to mergers that might otherwise present problems in competition.
So as to define the impact of a merger on competition in the common market, it is suitable to consider the possible efficiencies claimed by the interested parties that might compensate the concentration’s negative effects on competition, and in particular the potential harm to consumers. If the efficiencies result in a balance between the “positive” and “negative” effects of a concentration, consequently the concentration might not significantly impede effective competition, in the common market or in a substantial part of it. To that end, the Commission should clarify the circumstances under which it may take efficiencies into account when determining the negative effects of a transaction.
“Processor Editorial Article - Antitrust Laws: Not Just For The Big Boys.” Editorial.Processor 19 Nov. 2004: 27+. Processor.com. Web. 29 Nov. 2011 .
According to the Mergers and Acquisition Law, there are several issues like fair trade, due diligence, merger and acquisition deals and cross-border regulations, all of which must be followed for being and continuing as merged business for Bournemouth and Poole.
Cost cutting, discontinuation of product or services ,technological changes, and consolidation due to mergers and acquisitions are commonly legal ac...
Professor Choi, in 2001 (on behalf of Rolls Royce), modeled the potential for conglomerate effects arising from the merged entity bundling goods, which could lead to a reduction in competition. He states that consumers must buy one engine along with one set of avionics, making the goods complementary, and assumed that the same price is charged to all consumers. Choi considers a market where there are only two engine suppliers (GE and Rolls Royce) and two avionics suppliers (Honeywell and ...
I am interest in the study of this topic because I am curious about the financial effects of such a merger.
Glader, M. (2006). Innovation markets and competition analysis: EU competition law and US antitrust law. Camberley, UK: Edward Elgar Publishing.
The purpose of this paper is to attempt to recompile information about the merger of two corporations; one of many taking places i...
Due to increasing consumer resentment towards ever-increasing monopolistic industries in the late 1800’s and early 1900’s, the government formulated antitrust laws to allow for a more competitive market. The legislations prohibit anticompetitive business practices such as price fixing, bid rigging, monopolization, and tying contracts.
The type of merger between Electronic Data System (EDS) and AT Kearney is called Forward vertical merger. Forward vertical merger is when two or more companies combines together in the same industry but different field or when two companies producing goods and services for a product. Electronic data system, the US information technology group, brought AT Kearney, the global strategy consultancy firm in a deal worth $96m. Electronic data system was firm involving producing information technology equipment’s bought AT Kearney an IT consultancy firm.
...: Reassessing Legitimacy in the European Union. Journal of Common Market Studies, 40 (4), pp. 603-24.
In addition to the pro-competitive economic effect some firms also experience what is known as a post-merger which is basically an incentive for a firm to raise downstream competitor costs by raising upstream market costs. Hence the increased price pressures the previously established downstream prices which cause conflict.
As the business, people put it, to maximize the wealth of shareholders (Peavler, 2016). This could be done by pursuing more of an immediate reason that will realize the shareholders wealth maximization goal. However, this main reason may fail to be realized as most mergers depict negative results.
Competition law in the European Union has developed from being an uncertain preoccupation of a few economists, lawyers and officials to one of the leading competition law system in the globe. Nonetheless, in agreement with most commentators, there are inherent flaws within the EU Commission’s procedures. This paper aims to provide an account of concerns in the current system, drawing comments from scholars and EU officials in order to demonstrate both benefits and shortcomings of the system. An overview of the legal and policy debate of the current EU Competition enforcement will be presented as the introduction. Policy concerns such as prosecutorial bias and self-incrimination in enforcement powers will be the main subjects for the purpose of this paper, followed by analysis of the EU commission structure, in particular checks and balances and the hearing process, both of which have been claimed being incompatible with the ECHR. A comparison with the US Antitrust system will also be paralleled through out this essay in order to demonstrate a clearer examination. This essay will conclude with the Commission’s flaws that have effected on the upcoming UK competition law reforms.
When two companies decide to combine forces and become one bigger, richer mega company, it is called merging. This process forms a new company, combining the money and ideas of what used to be two different entities into one. This, however, is not the only thing that results from merging two different companies, and since we will be discussing the merging of two companies in the pharmaceutical industry, the impact will be incredible. Of course, the merging of two companies will not only have positive impacts but it will have many negative side effects as well. Furthermore, depending on the size of the merging companies and the goals of the people leading these companies there will always be contradictions according to the long-term goals or short-term goals depending on what both parties’ interests are. Our company, Verduga Inc. is contemplating to merge with Coronado-Salinas Inc., so before we rush into such a merger we must contemplate the positive and negative aspects of such a move. When it comes to mergers there are always many possible positive and negative impacts due to the effects of merging; these effects more widely impact the fields on research and development, on employment and management, stocks and shareholders, monopolization, and ingenuity.
In this paper the effects of firms with market power on economic welfare will be briefly examined. The first part outlines some of the negative effects of market power; the second exemplifies some of the benefits of market power and the case of Microsoft is used to support these arguments. In conclusion, an overview of the role of competition authorities and competition policy is carried out.