Governments, Competition and Utility Regulation

Governments, Competition and Utility Regulation

Edited by Colin Robinson

Governments, Competition and Utility Regulation continues the series of annual books, published in association with the Institute of Economic Affairs and the London Business School, which critically reviews the state of utility regulation and competition policy.

Chapter 9: Do we need European merger control?

Jacques Steenbergen

Subjects: economics and finance, competition policy, public sector economics


Jacques Steenbergen and Leonard Waverman 1. 1.1 INTRODUCTION: MERGER CONTROL IN COMPETITION LAW Summary Our general answer to the question posed in this paper is: while it may be exaggerated to claim that we need European merger control, it is a useful competition policy instrument. However, fewer mergers should be banned or interfered with via divestitures/settlements. More reliance should be placed on ex post abuse law. The mergers stopped by the Commission should only be those that cannot be adequately dealt with if actual abusive behaviour emerges ex post. 1.2 Outline A certain degree of discomfort with merger control led in 2002 to (and was fuelled by) a wave of judgements of the Court of First Instance in Luxembourg that were critical of Commission decisions. After a brief discussion of these cases, there are three major issues to discuss: 1. How well does merger control work? Do competition agencies ban only potentially anticompetitive mergers and allow procompetitive mergers? 2. Should we rely totally, or at least more, on another leg of competition law – the prohibition of abuse of a dominant position? That rule does attack unilateral abusive behaviour or abuse of a jointly held dominant position. Why not allow mergers, and then end any abuse that does eventually follow? 3. What about subsidiarity? Do we need more or less EU merger control or can national governments alone or together handle cross-border EU or global mergers? 203 Robinson 02 chap06 203 17/6/05 7:41:55 am 204 Governments, competition and utility...

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