Collective Dominance and Collusion

Collective Dominance and Collusion

Parallelism in EU and US Competition Law

New Horizons in Competition Law and Economics series

Marilena Filippelli

By examining the issue of collusion in EU and US competition law, this book suggests possible strategies for improving the antitrust enforcement against parallelism, by exploiting the most advanced achievements of economic analysis.

Chapter 6: Coordinated effects in EU merger control

Marilena Filippelli

Subjects: law - academic, competition and antitrust law


As preventive analysis, merger control cannot rest on a standard of absolute certainty about post-merger market evolution; nevertheless, it has to be extremely accurate, as both false positives and false negatives may be very detrimental to market functioning. In the case of coordinated effects, the structural complexity of merger control is exacerbated by the mechanism itself of coordination, which requires the assessment of merger effects on the merged entity and on its closer rivals, with the aim of predicting whether their relationship will be collusive or competitive. The intrinsic complexity of oligopolistic mergers affects their preventive assessment. After a period of uncertainty, EU merger control appears firmly linked to the Airtours conditions. However, this standard is anything but complete, as it describes the market conditions making it possible for companies to collude, but does not measure the real incentive to collude. Therefore, the analysis of oligopolistic mergers needs to be more accurate and should consider a broader realm of elements – in particular, the ability to collude, incentive to collude, and the real impact of mergers on market functioning. The approach suggested in this work combines a quantitative analysis, focused on the presence of market factors conducive to collusion and affecting the stability of coordination, with a qualitative analysis that looks for indicia likely to strengthen or weaken the suspicion of post-merger collusion, and also suggests exploiting the potential of commitments. The entire approach rests on the premise that mergers are supposed to have a positive impact on market functioning and, therefore,

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