Chapter 2: Theoretical framework for merger law and policy
The rapid expansion of merger control laws and competition laws generally has revitalized debate about what competition law is and should be about. Despite more than 100 years of modern competition law and the global proliferation of competition laws in recent decades, this fundamental question remains highly controversial. An examination of the theoretical foundation which informs competition policy and merger control in particular, is necessary to facilitate a meaningful appraisal of the current approach taken to merger control and to the identification of best practice in this regard. The identification of the foundation or objectives of merger regulation is also important for rationalizing interference in an otherwise free market economy, for transparency and predictability of process and, of increasing importance in today's global market environment, for facilitating greater levels of global cooperation and convergence. It remains, however, an exceedingly difficult task. Policy formulation for merger regulation generates heated debate at the national level which is exacerbated by the added complexities of transnational mergers. Even in jurisdictions where substantial convergence has been reached over appropriate policy objectives, there remains controversy over whether their implementation, in substantive law and enforcement, gives effect to those objectives or itself should be modified to best reflect articulated goals. In addition, existing national merger laws and policies rarely give much, if any, consideration to the interests of other nations whose economies may be affected by a proposed merger.
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